2024 (4) TMI 543 - AT - Income Tax

Reassessment order under section 153A quashed for lack of incriminating material and jurisdiction

Rajiv Amritlal Patel Versus The DCIT, Central Circle-2 (4), Ahmedabad

The ITAT Ahmedabad allowed the assessee's appeal, quashing the reassessment order under section 153A. Following Gujarat HC's decision in Kaushik Devjibhai ... Assessment u/s 153A - addition made in respect of completed assessment in absence of any incriminating material - HELD THAT:- Hon’ble Gujarat High Court in the very recent judgement in the case of Kaushik Devjibhai Patel [2023 (5) TMI 1318 - GUJARAT HIGH COURT] and after considering Hon’ble Supreme Court judgement in the case of Abhisar Buildwell (P.) Ltd. [2023 (4) TMI 1056 - SUPREME COURT] as held no addition can be made in respect of completed assessment in absence of any incriminating material will not permit making of addition by the AO and that the AO has no jurisdiction to reopen the completed assessment. Decided in favour of assessee. Reopening of assessment - additions made are the accounts writing charges and FD interest income belonging to assessee’s wife were added as the income of the husband/assessee, denying the ITR filed by the assessee’s wife - HELD THAT:- The above additions are based only on the statement recorded u/s. 132[4] of the Act and without taking note of the Retraction Affidavit filed by the assessee with relevant evidences. This issue is already dealt by us in paragraph nos.7 to 7.5 of this order, which is squarely applicable to the facts of the present case also. Therefore, the reassessment order passed by the AO is without jurisdiction and bad-in-law, consequently the same is hereby quashed. In the result, the appeal filed by the assessee is hereby allowed. Issues Involved:1. Validity of assessment orders u/s 153A for Assessment Years 2014-15 to 2019-20.2. Validity of reassessment order u/s 147 for Assessment Year 2013-14.3. Clubbing of wife's and son's income in the hands of the assessee.4. Consideration of statements recorded u/s 132(4) and subsequent retraction affidavits.Summary of Judgment:1. Validity of Assessment Orders u/s 153A for Assessment Years 2014-15 to 2018-19:The Tribunal noted that for these years, no incriminating material was found during the search conducted on 28.01.2020. The assessments were concluded, and as per the settled proposition of law, no addition can be made in the absence of incriminating material. The Tribunal cited the Supreme Court's judgment in Abhisar Buildwell (P.) Ltd., confirming that no addition can be made for completed/unabated assessments without incriminating material. Consequently, the assessment orders for these years were quashed as being without jurisdiction and bad-in-law.2. Validity of Assessment Orders u/s 153A for Assessment Years 2019-20 and 2020-21:For these abated assessment years, the Tribunal observed that the additions were based solely on the statements recorded u/s 132(4) without any corroborating evidence. The Tribunal referenced the CBDT's Circular No.286/2/2013, which prohibits obtaining confessions during searches, and various judicial precedents that support the need for corroborative evidence. Thus, the assessment orders were quashed as being without jurisdiction and bad-in-law.3. Validity of Reassessment Order u/s 147 for Assessment Year 2013-14:The Tribunal found that the reassessment was based on the statement recorded u/s 132(4) and did not consider the retraction affidavits and relevant evidence. The additions of Rs. 70,000/- for accounting charges and Rs. 98,044/- for FD interest income, attributed to the assessee's wife, were deemed without jurisdiction and bad-in-law. The reassessment order was quashed.4. Clubbing of Wife's and Son's Income in the Hands of the Assessee:The Tribunal noted that the clubbing of income was done without any incriminating documents and solely based on statements recorded under duress, which were later retracted. The Tribunal emphasized that additions based on uncorroborated statements are not sustainable in law. Therefore, the additions were deleted.Conclusion:All the appeals filed by the assessee were allowed, and the assessment and reassessment orders were quashed for being without jurisdiction and bad-in-law. The Tribunal pronounced the order in the open court on 20-03-2024.