The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals), New Delhi, pertaining to Assessment Year 2011-12, arising from an assessment framed under Sections 153A read with 143(3) of the Income-tax Act, 1961.

The assessee, engaged in infrastructure development on a BOT (Build-Operate-Transfer) basis, was subjected to search and seizure operations conducted on the DSC Group. Consequent to the search, the case was centralized and notice under Section 153A was issued. The Assessing Officer completed the assessment by making multiple disallowances and additions.

On appeal, the CIT(A) allowed the assessee’s legal ground by holding that in the absence of incriminating material found during the search, no additions could be made for the relevant assessment year. This conclusion was drawn by placing reliance on judicial precedents including CIT v. Kabul Chawla and CIT v. MGF Automobiles Ltd. Consequently, the assessment order was held to be without jurisdiction and other grounds were treated as academic.

Upon further appeal by the Revenue, the Tribunal observed that the assessment year under consideration was an abated assessment, as the statutory time limit for issuing notice under Section 143(2) had not expired on the date of search. This factual position was not disputed by the assessee. The Tribunal held that in cases of abated assessments, the Assessing Officer is empowered to make additions even in the absence of incriminating material.

Accordingly, the Tribunal set aside the order of the CIT(A), restored the matter to the file of the Assessing Officer, and directed a de novo assessment on all issues after granting adequate opportunity to the assessee.
The appeal of the Revenue was thus partly allowed for statistical purposes.

Source Link- https://itat.gov.in/public/files/upload/1767176720-duZUD3-1-TO.pdf

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