Scope of Section 153A requires incriminating material to sustain reassessments; absent such material additions must be deleted.

Section 153A permits reassessment of past years only to the extent undisclosed income is identified from incriminating material discovered during search or requisition; where earlier assessments had attained finality, additions under section 153A must be linked to such seized material. Ad hoc disallowances of expenses and an unexplained addition to salary, made without reliance on any incriminating or seized documents, cannot be sustained and must be deleted, resulting in allowance of the appeals in favour of the taxpayer.

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Issues: Whether additions/disallowances made by the Assessing Officer under section 153A r.w.s. 143(3) of the Income-tax Act, 1961 for assessment years 2013-14, 2015-16 and 2016-17 are sustainable in the absence of any incriminating material or seized documents found during search.

Analysis: The Tribunal examined the proviso to Section 153A and the statutory scheme governing assessment following search under Section 132/132A. The Court applied the legal principle that section 153A permits reassessment of total income for a block period only insofar as undisclosed income is found on the basis of incriminating material discovered during the course of search or requisition; where past assessments had attained finality (unabated assessments), additions can be sustained under section 153A only if connected to such incriminating material. The impugned additions in the present years were ad hoc disallowances of expenses and an addition to salary income, and neither the Assessing Officer nor the Commissioner (Appeals) identified or relied upon any seized or incriminating material to support those adjustments.

Conclusion: The ad hoc disallowances and the addition to salary made under section 153A r.w.s. 143(3) in the assessment years 2013-14, 2015-16 and 2016-17 are not sustainable in the absence of any incriminating material seized during the search; the additions are deleted and the appeals are allowed in favour of the assessee.

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