Income assessments under Section 153A cannot be revised without incriminating evidence discovered during a search.

JUDGMENT

Manmeet Pritam Singh Arora, J. (Oral)

CM APPL.29956/2022 (condonation of delay)

For the averments made in the application, the delay of 177 days in filing the present appeal is condoned.

Accordingly, the application stands disposed of.

ITA 189/2022

1. The present Income Tax appeal arises out of common impugned order dated 6th October, 2020 passed by the Income Tax Appellate Tribunal (hereinafter referred to as the `ITAT') in ITA No. 6181/Del/2018 for assessment year 2010-11.

2. The facts giving rise to the present appeal are that the Investigation Wing of the Income Tax Department carried out a search and seizure operation against M/s K.R. Pulp & Papers Limited under Section 132(1) of the Income Tax Act, 1961 (hereinafter referred to `the Act') on 8th July, 2015 at various residential and business premises. The said company is stated to be managed and controlled by Shri Madho Gopal Agarwal, Shri Raj Gopal Agarwal and Shri Gopal Agarwal. The statement of Shri Gopal Agarwal was recorded on 8th July, 2015 and the statement of Shri Madho Gopal Agarwal was recorded during post search inquiry.

3. Pursuant to the aforesaid search, notice under Section 153A of the Act was issued on 26th September, 2016 by the Assessing Officer and the same was duly served upon the assessee. In response, the assessee filed her Income Tax Return declaring income of Rs.7,48,080/- on 2nd March, 2017. The Assessing Officer, after making reference to the documents discovered during the raid, vide order dated 29th December, 2017 made the following additions to the income of the assessee under Section 69B and Section 68 of the Act respectively:

4. Being aggrieved by the same, an appeal was filed by the assessee before the Commissioner of Income Tax (Appeals) [hereinafter referred to as `CIT(A)']. It is stated by the counsel for the appellant that, vide order dated 17th July, 2018, the CIT(A) allowed the appeal of the assessee, deleted additions and held that in the absence of any incriminating material, the Assessing Officer cannot re-apprise and review already completed assessment and settled issues before the date of search under Section 153A of the Act.

5. The department preferred an appeal before the ITAT which was dismissed vide an order dated 6th October, 2020.

6. The ITAT concluded that the additions made by the Assessing Officer for the assessment year under consideration was not based on any incriminating material found during the course of search on 8th July, 2015. It held that the documents referred to by the Assessing Officer pertains to the period w.e.f. 1st April, 2010 to 31st March, 2011 which relate to the assessment year 2011-12 and not for the impugned assessment year 201011. The ITAT observed that the original return of income was filed by the assessee for the assessment year under appeal on 28th September, 2011. The search was conducted on 8th July, 2015 and on the date of the search, the assessment under appeal was completed as the time period to issue notice under Section 143(2) of the Act for the said year has expired. The ITAT thus, observed that on the date of search i.e. on 8th July, 2015, assessment for the assessment year 2010-11 had attained finality and was not pending assessment. The ITAT, therefore, held that any additions over and above the earlier assessed income could not be made in the absence of any incriminating