ITAT: Proper Inspection Needed of Material Before Proceedings U/S 153

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT), proceedings under section 153 do not be invalidated without examining incriminating material found in the search.

The taxpayer, Ashok Developers & Builders Ltd has been involved in the business of construction and furnishes its income return showing a total income of Rs.6,61,44,100. A search & seizure operation u/s 132 of the income tax act was taken out in the taxpayer’s cases. The taxpayer has furnished an amended return of income of Rs.13,58,60,960 answering to the notice u/s 153A.

The Assessing Officer has finished the assessment u/s 143(3) r.w.s. 153A of the I.T. Act specifies the total income at Rs.20,78,40,695 via several additions.

The validity of the assessment proceedings before the CIT(A) has been challenged by the taxpayer according to the incriminating material was not found during the search and the statement recorded u/s 132(4) does not constitute any incriminating material. The CIT (A) carried the initiation of proceedings u/s 153A of the Act as invalid.

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The revenue and various incriminating materials were revealed and get seized while the search operation has been carried out and alleged, CIT (A) without acknowledging the copy of the Panchnama including various annexures, etc., seized in the search ruled that no incriminating material was discovered in the search proceedings.

Shri R.K. Panda, Accountant Member, and Shri Lalit Kumar, Judicial Member managed the CIT(A) with the direction to provide their finding for the kind of incriminating material revealed in the investigation and appeal has been furnished via the revenue that was permitted for statistical intentions.

Shri K.C. Devdas represents the taxpayer and Shri Rajendra Kumar represents the revenue.