Mr. Mohit Gupta is a Fellow Member of the Institute of Chartered Accountants of India, a commerce graduate from prestigious Ramjas College, Delhi University and an alumni of St. Xavier’s School, New Delhi. He is practicing as a Chartered Accountant for more than 15 years and managing the Direct Tax Advisory and Litigation practice of M/s. Dhanesh Gupta & Co., Chartered Accountants, New Delhi a renowned Chartered Accountancy firm in the core domain of direct taxation established in 1978. His forte is handing Income Tax Search and Seizure matters, matters before the Income Tax Settlement Commission and other direct tax litigation matters. As on today, he has wide experience of handling Income Tax Search and Seizure Cases, representing matters before the Income Tax Settlement Commission, ITAT and other appellate tribunals. He has been contributing articles in various professional magazines/journals and addressing various seminars on topics relating to Income Tax Search and Seizure, Income Tax Settlement Commission and other allied tax matters. He has to his credit plethora of well researched articles out of which many have appeared in leading journals. In Addition to the above, Mr. Mohit Gupta is a Special Auditor of the Income Tax Department and has carried out numerous Special Audits across the country on being appointed by the Income Tax Department which have plugged tax evasions, tax base erosion and other tax manipulative practices and in turn facilitated the Income Tax Department to collect huge tax revenues. Mr. Mohit Gupta has also been appointed as Special Auditor under other tax statutes and by other Investigation Agencies of the Government of India. Mr. Mohit Gupta, authored the periodical Newsletter on Income Tax Search and Seizure. The said newsletter contained well researched write ups / articles and judicial developments on the matters of Direct Taxation. The newsletter was circulated both electronically and otherwise. Recently, in the year 2016, Mr. Mohit Gupta have authored two comprehensive books on the Income Declaration Scheme’2016, titled as “Law Relating to Income Declaration Scheme’2016”. The said books were released by erstwhile Hon’ble Union Finance Minister, Shri. Arun Jaitley, Shri.Arjun Ram Meghwal, Minister of State for Finance and the Chairman of Central Board of Direct Taxes and many other dignitaries. He is based in New Delhi and may reached at [email protected], 91-9999008009.
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Dumb documents cannot alone support tax additions; corroborative independent evidence is required for assessment.
Non speaking seized records called Dumb Documents do not by themselves support tax additions; the deeming fiction under Section 132(4A) read with Section 292C is rebuttable and insufficient. Additions arising from search depend on assessments under relevant charging provisions and require independent, corroborative evidence - such as bank entries, investments outside books, promissory notes, loan agreements or witness statements - to establish that the notings represent taxable transactions. Absent such corroboration, loose papers, unsigned diary entries and undated slips lack evidentiary value and cannot form the sole basis for taxing undisclosed income. (AI Summary)
Income Tax
Search-based assessment reforms shift cases into the general reassessment regime, shortening limitation periods and centralising settlement.
For searches or requisitions on or after 1 April 2021, the special search-assessment regime is replaced by the general reassessment framework: assessments proceed under income-escaping-assessment provisions covering the three immediately preceding assessment years, with extended limitation where evidentiary assets exceed a prescribed threshold; attribution of seized materials to third parties still requires specified senior approval, and pre-notice enquiry and hearing requirements apply in non-search reassessment proceedings. (AI Summary)
Income Tax
Finality of settlement orders prevents assessing officers from reopening settled years except when the settlement is voided for fraud.
Orders of the Settlement Commission under section 245D(4) are conclusive and final as to matters stated therein; other income tax authorities lack jurisdiction to reopen those assessment years by general reassessment provisions. The statutory exception is where the Settlement Commission itself finds the settlement was obtained by fraud or misrepresentation, declares the settlement void and the proceedings in respect of matters covered are revived for completion under the Chapter XIX A revival mechanism. Revenue remedy lies to move the Commission under its voiding and revival powers, not to reopen by reassessment. (AI Summary)
Income Tax
Non-seizure of jewellery: guidelines limit seizure and shape assessment treatment of jewellery found in searches.
CBDT Instruction No. 1916 directs that specified quantities of jewellery and ornaments need not be seized during searches and permits exclusion of larger quantities based on family status and community customs; detailed inventories must be prepared for assessment. Several courts have treated possession within those quantities as reasonable and explained, but other authorities limit the Instruction's effect to seizure decisions and require the assessee to independently explain acquisition for assessment. (AI Summary)
Income Tax
Date of assessment conclusion: whether passing or service of the assessment order ousts settlement jurisdiction remains contested.
The core issue is whether an assessment proceeding ceases to be pending for settlement purposes when the assessment order is passed or only when it is served. Explanation (iiia) and amended CBDT guidance indicate completion on the date the assessment is made, supporting the departmental view that passing the order ousts pendency. However, several High Courts treat service as the decisive event, producing a conflict in authorities and practical uncertainty for taxpayers seeking to file settlement applications. (AI Summary)
Income Tax
Extrapolation technique in search assessments: limited applicability; must be justified by seized material and factual nexus.
Extrapolation projects income discovered for a limited period across the entire block period under section 153A only when seized material or corroborative indicia establish a nexus to other years. Block assessments retain year-wise units and require matching evidence for each year; absent additional records, assets, admissions or other cogent material, multiplication or blanket projection is arbitrary and unsustainable. (AI Summary)
Income Tax
Income tax search and seizure assessments show systemic deficiencies, low appeal sustainability, and weak inter agency coordination.
The Performance Audit finds statutory gaps and systemic failures in income tax search and seizure assessments: non centralisation of group cases, inconsistent and inadequately justified additions, low appellate sustainability of additions, delays in handing over appraisal reports, failures to use or verify statements under section 132(4), incorrect tax and penalty handling, and poor inter agency information sharing. The audit recommends legislative amendments (to restrict set offs and cover bogus transactions), time limits for notices under section 153A/153C, tighter centralisation and monitoring, mandatory Action Notes/Narrative Reports, consistent use of section 132(4) statements, and strengthened information sharing and accountability mechanisms. (AI Summary)
Income Tax
Prior approval requirement: approvals must reflect application of mind or assessments in search cases risk invalidation.
Assessments in search cases require prior approval by a Joint Commissioner level authority after substantive review; approvals granted mechanically or without sufficient time to examine seized material, appraisal reports and draft orders defeat the statutory safeguard and may render assessments vulnerable to annulment. Approving officers must receive the record timely and apply their mind, and last minute or perfunctory sanctions do not satisfy the mandatory purpose of prior approval. (AI Summary)
Income Tax
TaxTMI 
TaxTMI 
27 Feb 2021 
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