In absence of incriminating material,Assessing Officer cannot re-appraise completed search:Delhi HC.

PANASAM AKSHARA | Delhi HC | Aug 2, 2022

Case - PCIT v. Mamta Agarwal

The Income Tax Department Investigation wing carried out a search against M/s K.R.Pulp & Papers Limited under Section 132(1) of Income Tax Act,1961 at residential and business premises.Company is managed and controlled by Madho Gopal Agarwal,Raj Gopal Agarwal and Gopal Agarwal.The statements were recoded during post search inquiry.The notice was issued by Assessing Officer under Section-153A and was served upon assessee.The assessee has filed IT Returns declaring an income of Rs.5,40,550.Assessing Officer after making reference to documents discovered during raid,made additions to income of assessee under Sec-69B & 68 of Income Tax Act.Assessee filed appeal before CIT(A),it allowed the appeal and deleted the additions.In absence of incriminating material,the Assessing Officer cannot re-appraise and review an already completed assessment and settle issues before date of search under Section 153A according to CIT(A).The department preferred appeal before ITAT,it was dismissed.The ITAT concluded additions made by officer were not based on incriminating material found during the search.The ITAT observed that original return of income was filed by Assessee for the year under appeal.The search conducted,the assessment under appeal was completed as time period to issue under Section 143(2) for the expired year.The ITAT held that any additions over and above earlier assessed income could not be made in absence of any incriminating material found during course of search.The ITAT concluded that no material was found during the search so as to indicate any unaccounted investment made by the assessee.The ITAT determined that Assessing Officer made additions to unaccounted investment merely on basis of presumptions.The court held no material was placed on record to rebut the findings of ITAT.A bench of Justice Manmohan and Justice Manmeet Preetam Singh Arora held that no incriminating material is found during the search then no addition can be made in assessment under Section-153A and 153C of the Income Tax Act.