TaxTMI 
TaxTMI 
2026 (8) TMI 1090
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....re of additions made, and the reasoning adopted by the authorities below are substantially similar and interwoven, these appeals were heard together and are being disposed of by way of this consolidated order. For the sake of convenience and clarity, Assessment Year 2011-12 has been taken as the lead year, and the findings rendered therein shall, except for variation in figures and quantum, apply mutatis mutandis to the remaining assessment years as well. 2. From a careful consideration of the grounds raised by the assessee, the impugned assessment orders, the appellate findings of the learned CIT(A), and the rival submissions placed before us, it emerges that the controversy involved in the present appeals lies within a well-defined legal framework, and the issues requiring adjudication by this Tribunal stand crystallized as under: (I) Whether the additions made by the Assessing Officer under sections 40A(3), 40(a)(ia), 37(1), 68 and 69A of the Act in the assessments framed under section 153A read with section 144 are legally sustainable in the absence of any incriminating material found during the course of search relatable to the respective assessment years. ....
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....provisions of section 142(2A) and directed special audit of the accounts of the assessee. It was observed by the Assessing Officer that the assessee was engaged in transactions involving multiple financial entries, cash deposits, credits, and fund movements which, in his opinion, warranted detailed and specialized examination through special audit. It was further recorded that the assessee, along with Shri Vipul Vidur Bhatt, was afforded opportunity in respect of such special audit proceedings and that Shri Vipul Vidur Bhatt conveyed that he had no objection to the proposed special audit. Though objections were raised by the assessee, the same were considered and rejected by the Assessing Officer, and the special audit was carried out in accordance with the statutory framework. It was also recorded that approval under section 153D was obtained from the Additional Commissioner of Income Tax after due consideration of facts and material placed on record, and merely because such approval was granted contemporaneously could not be construed as mechanical or without application of mind, since the approving authority had before him the draft assessment order and relevant material and gra....
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....d loans and suspense credits, and addition under section 69A amounting to Rs. 1,49,074/- on account of negative cash balance, holding that the assessee failed to explain nature and source of credits and failed to substantiate genuineness of transactions. 7. Similarly, in Assessment Year 2011-12, the Assessing Officer made additions under section 40A(3) amounting to Rs. 83,516/-, disallowance under section 40(a)(ia) amounting to Rs. 49,800/-, disallowance under section 37(1), addition under section 68 amounting to Rs. 1,61,96,747/-, and addition under section 69A amounting to Rs. 64,154/-, holding that the assessee failed to substantiate genuineness of expenses and credits. 8. Likewise, in Assessment Year 2012-13 and Assessment Year 2013-14, additions were made under similar provisions and on similar reasoning, treating expenses as non-genuine, credits as unexplained, and negative cash balances as unexplained money. 9. The learned CIT(A), after considering the assessment orders and submissions of the assessee, affirmed the additions made by the Assessing Officer and dismissed the appeals. The learned CIT(A) observed that the assessee failed to provide sufficient documentary....
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....ld be apposite to observe that the jurisdictional objection raised by the assessee, namely that none of the additions made in the impugned assessments are based upon any incriminating material found during the course of search, is not merely a technical plea but goes to the very foundation of the validity of the additions themselves. The assessee has specifically placed on record that the additions in all the years under appeal have been made under section 144 read with section 153A, and that despite detailed assessment proceedings and reference to various sources such as special audit observations, investigation findings, and statements, the Assessing Officer has nowhere identified any seized material or incriminating document relatable to the additions made. The assessee has further placed reliance upon settled principles of law that a pure jurisdictional issue can be raised at any stage of proceedings, and since the issue relates to the scope and jurisdiction under section 153A, the same deserves to be adjudicated as a threshold issue. 15. From a careful perusal of the assessment orders and the material placed before us, it is manifest that the Assessing Officer has made addi....
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....h, the very jurisdictional foundation for making such additions under section 153A in respect of unabated assessment years stands fundamentally eroded. 17. It is by now a well settled principle of law, conclusively laid down by the Hon'ble Supreme Court in the case of PCIT vs. Abhisar Buildwell (P.) Ltd. (2023) 149 taxmann.com 399 (SC) that in respect of unabated or completed assessments, additions under section 153A can be made only on the basis of incriminating material found during the course of search. The Hon'ble Supreme Court, after examining the scheme and legislative intent of section 153A, has held in unequivocal terms that in the absence of incriminating material discovered during search, the Assessing Officer does not possess jurisdiction to disturb concluded assessments or to make additions on issues which had attained finality. The rationale underlying this principle is that the object of section 153A is to bring to tax undisclosed income detected as a consequence of search, and not to provide an unfettered power of review or reassessment of concluded matters in the absence of any incriminating evidence. Thus, the existence of incriminating material found during sea....