2022 (10) TMI 853

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....n holding that the addition which was not based on incriminating material found during the search could not be made in assessment under Section 153A of the Income Tax Act, 1961 (for short 'Act') and, consequently, deleted the addition without going into merits of the same. 3. He states that the ITAT has erred in relying upon the judgement of this Court in CIT vs Kabul Chawla (2016) 380 ITR 573 ignoring the fact that Revenue's SLPs on similar issue are pending before the Supreme Court in many other cases including CIT v Continental Warehousing Corporation (Nhava Sheva) Ltd., (2015) 374 ITR 645. 4. Upon a perusal of the paper book, this Court finds that both the CIT(A) and the ITAT have given concurrent findings of fact that no incr....

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....pectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous....

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....brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 6. Even, this Court in Principal Commissioner of Income Tax vs. Bhadani Financiers Pvt. Ltd., 2021 SCC OnLine Del 4430 has held that where the assessment of the respondents had attained finality prior to the date of search and no incriminating documents or materials had been found and seized at the time of sea....