Assessments under Section 153A of the Income Tax Act must rely on incriminating material found at the assessee's premises, not on third-party statements.

JUDICIAL MEMBER:

These captioned appeals by the respective assessees are directed against the order of the Commissioner of Income Tax (Appeals)-29, New Delhi [hereinafter referred to as “CIT(A)”] vide order dated 01.05.2018 pertaining to A.Y. 2015-16 arises out of the assessment order dated 29.12.2017 of the Income – tax Act, 1961 [hereinafter referred as ‘the Act’].

2. Since, the issues are common and appeals are connected, therefore, they are heard together and are being disposed off by this common order. First, we take up ITA No.4737/Del/2018 A.Y. 2015-16 as lead case.

3. The assessee has raised the following grounds of appeal:

1. Jurisdictional ground: That both the assessment orders of Ld AO and first appellate order of ld CIT-A are bad in law as entire asst, is framed without authority of law and ultra vires to provisions of the 1961 Act (income tax act, 1961) being without jurisdiction as it is mainly/chiefly based on stated material as emanating from search action u/s 132 on "other person", so it is framed in violation of mandate of special and specific provision of Section 153C of 1961 Act

2. Total Violation of principle natural justice: That both the assessment orders of Ld AO and first appellate order of Id CIT- A are bad in law as entire asst. is framed in total violation of principle of natural justice for non confrontation of relied upon material (statements etc) and lack of cross examination being offered to assessee us pleaded at asst. and first appeal stage.

3. No incriminating material unearthed from assessee's own search action u/s 132: That both the assessment orders of Ld AO and first appellate order of Id CIT-A are bad in law as entire asst. is framed u/s 153A, without any requisite "incriminating material" being unearthed from assessee's own search u/s 132 of 1961 Act;

4. Wrongful sustenance by ld CIT-A of impugned additions as made in impugned asst.: That both the assessment orders of Ld AO and first appellate order of Id CIT-A are bad in law in so far as impugned additions made /sustained are concerned same being based on invalid and perverse reasoning and without considering the detailed submissions and evidences placed from side of assessee;

5. Invalid approval u/s 153D: That both the assessment orders of Ld AO and first appellate order of ld CIT-A are bad in law being based on invalid approval u/s 153D of 1961 Act.

6. Non application of mind: That both the assessment orders of Ld AO and first appellate order of Id CIT-A are bad in law being passed without application of mind to material available on record.

4. The assessee has also raised additional grounds of appeal:

“That assessment framed u/s. 153A/143(3) for the period under consideration is void ab initio being passed on basis of invalid and mechanical approval u/s. 153D dated 29.12.2017 by competent authority ergo assessment framed as confirmed by Ld. CIT(A) deserves to be quashed and assessment may be declared as nullity”

4. The brief facts of the case are that assessee has filed return of income u/s 139(1) of the Acton 23-03-2016 declaring income of Rs 31,46,470/-. A search proceeding was conducted at the residential as well as business premises in the case of the assessee on 18.11.2015 by ADIT INV Wing, New Delhi. During the search proceeding certain documents were found and seized, the detail of which was given in the pachnama, attached and questionnaire dated 16.10.2017, subsequently the AO issued notice under section 153A of the Act and in response to that the assessee has filed Income tax return declaring income of Rs 31,46,470/-. Notices u/s 143(2) & 142(1) of the Act were issued. In the response of the notices ld.A.R of the assessee company attended the proceedings and filed the details reply. The A.O has issued the show cause notice to the assessee and his family members & Sajan Kumar Jain group as their share premium/ share capital/ Long Term Capital should not be treated as bogus as these entries were obtained through front companies which