TaxTMI 
TaxTMI 
2026 (1) TMI 1608
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....accordingly the said notice and the assessment order passed on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law, without jurisdiction and barred by limitation and CIT(A) erred in holding SO. 4. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is non-est as it does not have valid DIN. 5. On the facts and circumstances of the case and in law, the addition of Rs. 27,99,00,000/- made by the assessing officer on the account of alleged long term capital gain u/s 45 of the Act is beyond the scope of provisions of section 153A of the Act and, therefore, the addition made by the AO is liable to be deleted and CIT(A) erred in holding so. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition made by the assessing officer of Rs. 27,99,00,000/- on the account of alleged long term capital gain u/s 45 of the Act, and, therefore, the addition made by the A.O. is liable to be deleted." 3....
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....as found. Therefore, the A.O. committed grave error in passing the assessment order u/s 153A r.w. Section 143(3) of the Act and the proper provision should have been invoked by the A.O. was Section 153C of the Act. The Ld. Counsel has also relied on plethora of judicial precedents in support of his contention and sought for allowing the appeal. 5. Per contra, the Ld. Departmental Representative submitted that the Director of the Assessee Company himself admitted the transaction and the search has been conducted at the premises of the Assessee and the Assessee being a party for the transaction which has been confronted to the Assessee's Director and the Assessee's Director himself accepted the same. Further the Ld. Departmental Representative relying on the orders of the Lower Authorities and sought for dismissal of the Appeal. 6. We have heard both the parties and perused the material available on record. A search and seizure action has been initiated u/s 132 of the Act on 14/10/2020 in the case of Manoj Singh, wherein certain Excel file namely 'My data xlsx, Sunny xlsx' amongst other were found and seized. Based on the said Excel Sheet found during the course of search and s....
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....tax Act, 1961, it is evident that once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made, and assess or reassess it. According to the provisions of section 153A, in a case of search under section 132 or requisition under section 132A, the Assessing Officer gets jurisdiction to assess or reassess the "total income" in respect of each assessment year falling within six assessment years. Under the second proviso to section 153A, the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. According to sub-section (2) of section 132A, if any proceeding initiated or any order of assessment or reassessment made under subsection (1) has been annulled in ap....
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....he Assessing Officer assumes jurisdiction for assessment under section 153A; all pending assessments or reassessments shall stand abated. In case any incriminating material is found or unearthed, even in case of unabated or completed assessments, the Assessing Officer would assume the jurisdiction to assess or reassess the "total income" taking into consideration the incriminating material unearthed during the search and the other material available with the Assessing Officer including the income declared in the returns; and in case no incriminating material is unearthed during the search, the Assessing Officer cannot assess or reassess taking into consideration the other material in respect of completed assessments or unabated assessments, meaning thereby, in respect of completed or unabated assessments, no addition can be made by the Assessing Officer in the absence of any incriminating material having been found during the course of search under section 132 or requisition under section 132A of the Act. However, completed or unabated assessments can be reopened by the Assessing Officer in exercise of powers under section 147 or 148 of the Act, subject to fulfilment of the conditi....
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....nt was later on retracted no evidence has been led by the Revenue authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission. We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence, there is no Explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs: 6 lakhs on the basis of statement recorded by the AO under s. 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee." (emphasis, italicized in print, supplied) 22. Further, the position with respect to whether a statement recorded under s. 132(4) of the Act could be a standalone basis for making assessment was clarified by this Court in the case of CIT us. Harjeev Aggarwal (2016) 290 CTR (Del) 263 : (2016) 133 DTR (Del) 122 : 2016 SCC Online Del 1512, wherein, it was held....
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....n respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under s. 132. or requisition under s. 132A of the 1961 Act. However, the completed/unabated assessments can be reopened by the AO in exercise of powers under ss. 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under ss. 147/148 of the Act and those powers are saved." (emphasis, italicized in print, supplied) 26. This Court in the case of CIT us. Kabul Chawla (2015) 281 CTR (Del) 45 : (2015) 126 DTR (Del) 130: 2015 SCC Online Del 11555, has explicitly noted that the information/material which has been relied upon for assessment has to relate with the assessee. The relevant portion of the said decision is extracted herein below : "(iv) Although s. 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the....
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....Director of the Assessee Company Shri Subhash Chander Gupta. However, the said statement has been retracted/denied while filing the return of income u/s 153A of the Act and also during the assessment proceedings. It is also well settled law that mere statement of the Assessee without any supporting corroborative evidence cannot justify the addition. 10. The Hon'ble Supreme Court in the case of CIT vs. Mantri Share Brokers (P) Ltd. SLP (Civil) Diary No. 18434 of 2018, held that no addition u/s 69B of the Act can be made in the hands of an assessee where except statement of the Director of the assessee company offering additional income, there was no other material either in the form of cash, bullion, jewellery or document or in any other form to justify such additional income. Accordingly, the SLP, filed by the Revenue against the decision of Hon'ble Rajasthan High Court was dismissed. 11. Further in the case of Sanjay Singhal Vs. DCIT in ITA No. 708/CHD/2018 dated 20/09/2021, the Co-ordinate Bench of the Tribunal, Chandigarh Bench, deleted the addition in the similar circumstances, which is reproduced as under:- "However, during the course of hearing. Shri G.....