TaxTMI 
TaxTMI 
2017 (8) TMI 958
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....ctively. While admitting these appeals by the order dated 14th December 2016, this Court framed the following question for consideration: "Whether the ITAT fell into error in holding that the additions made in the course of proceedings under Section 153A/143(3) of the Income Tax Act, 1961 were not warranted having regard to the judgment of this Court in CIT v. Kabul Chawla 380 ITR 573" 2. It is not in dispute that, for the AYs in question, the assessments by were completed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 ('Act'). 3. On 2nd January 2012 a search under Section 132 of the Act was carried out in the Dharampal Satyapal Group, which is engaged in the business of manufacturing and trading of ....
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.... assessment order of the AO is concerned, it failed to discuss whether the documents seized in the course of search constituted incriminating material qua the AYs in question or whether it reflected a modus operandi adopted by the Assessee which could lead to an inference qua each of the AYs in question even though the material seized did not pertain to those AYs. 7. Before the Commissioner of Income Tax (Appeals) ['CIT (A)'], the question of assumption of jurisdiction under Section 153A of the Act was squarely raised. In para 3.3 of the order dated 21st June 2013, the CIT (A) noted that "a perusal of the reply filed before the Assessing Officer shows that there are large number of documents were seized, which has nexus of for quantifyin....
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....operandi of the assessee by the transfer of the goods and therefore the assessment under Section 153A made by the AO is purely on the basis of seized material found during the course of search." 9. The ITAT took it upon itself to analyse the seized material in great detail. This entire analysis is to be found in para 23 of the impugned order. At the end of the analysis the ITAT came to the following conclusions in para 24: "24. Based on this we have come to conclusion that: a. None of the material seized during the search relates to the year under appeal. b. None of the material found relate to the goods transfer to one unit from other for the period. c. None of the material relates to the purchases from sister concerns. d....
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....d lead to an inference regarding the same modus operandi adopted by the Assessee, for all the AYs in question, it constituted sufficient incriminating material to justify the assumption of jurisdiction under Section 153A of the Act. 11. In reply, Mr. Salil Agarwal, learned counsel appearing for the Assessee, pointed out that the decision in Smt. Dayawanti Gupta v. CIT (supra), in fact, did not contradict the decision of this Court in Commissioner of Income Tax v. Kabul Chawla [2015] 380 ITR 573 (Del). He pointed out that although an appeal by the Revenue against the said decision in Kabul Chawla is pending before the Supreme Court, there is no stay of the said judgment and, therefore, as far as this Court is concerned, the decision in Co....
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....erial pertains only to FY 2010-11. 13. If, even for FY 2010-11, what was seized did not constitute incriminating material, then the essential jurisdictional fact for justifying the assumption of jurisdiction under Section 153A of the Act did not exist. Learned counsel for the Assessee is therefore right in submitting that, in view of the above factual findings of the ITAT, the further question as to whether the said material was sufficient to reopen the assessments for the other AYs, with which these appeals are concerned, does not really arise. 14. Nevertheless, the Court is of the view that the decision of this Court in Commissioner of Income Tax v. Kabul Chawla (supra), which has been reiterated in Principal Commissioner of Income ....