THE ACIT, CENTRAL CIRCLE-1(3), AHMEDABAD vs. SMT. HARSHABEN B. POPAT,, AHMEDABAD

ITSSA 504/AHD/2019Status: DisposedITAT Ahmedabad25 April 2025AY 2013-14124 pages
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What were the facts?

These 14 appeals by the Revenue and the Assessees (M/s. Benefit Tradelink Ltd., M/s. Elegance Realty Ltd., and Smt. Harshaben B. Popat) pertain to Assessment Years 2011-12 to 2015-16. The appeals arise from orders passed by the CIT(A)-11, Ahmedabad. A difference of opinion arose between the Division Bench members on specific issues, leading to a reference to the Hon'ble President of the Tribunal under Section 255(4) of the Income Tax Act, 1961, for nomination of a Third Member. The Third Member rendered his opinion on 07.04.2025, and the final order is based on the majority view.

What did the Tribunal hold?

The Tribunal, based on the majority opinion of the Accountant Member and the Third Member, held that in cases of search under Section 132 or requisition under Section 132A, the AO assumes jurisdiction for block assessment under Section 153A. All pending assessments/reassessments stand abated. Crucially, for unabated/completed assessments, if any incriminating material is found/unearthed, the AO can assume jurisdiction to assess or reassess the 'total income' by considering both the incriminating material and other material available with the AO, including income declared in returns. However, if no incriminating material is unearthed in completed/unabated assessments, the AO cannot make additions based on other material. Such completed assessments can only be re-opened under Sections 147/148, subject to their conditions. The appeals filed by the Department are dismissed, and the appeals filed by the Assessees are partly allowed for statistical purposes. The additions made on the basis of incriminating material as well as other materials are set aside to the file of the Ld. CIT(A) for examination on merits.

What were the issues?

1. Whether, in the case of unabated/completed assessment years, an assessment under Section 153A of the Act is to be completed solely on the basis of incriminating material found during a search, or if the Assessing Officer (AO) can also consider 'other material' available to them, in light of the Supreme Court's decision in PCIT v. Abhishar Buildwell (P.) Ltd. (Assessee's contention: Assessment under Section 153A must be based on incriminating material found during search. Revenue's contention: Section 153A allows assessment/re-assessment of total income for six years, and disallowing additions in the absence of seized material would render the scheme ineffective; Section 153A does not have the same stipulation as Section 158BB regarding reliance on evidence found as a result of search). 2. Whether, in the case of unabated/completed assessment years, the AO can make additions based on 'other material' found during a search, even if no incriminating material is unearthed, for an assessment year not pending on the date of search (Assessee's contention: No addition can be made in completed assessments without incriminating material. Revenue's contention: There is no legal impediment to making additions based on 'other material' found during search for a year whose assessment was not pending on the date of search).

Which sections of the Income-tax Act were involved?

Section 153A,Section 132,Section 132A,Section 255(4),Section 158BB,Section 147,Section 148

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आयकर अपीलीय अिधकरण, अहमदाबाद "ायपीठ “ए“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD "ी िस"ाथ" नौिटयाल,"ाियक सद" एवं "ी नर"" "साद िस"ा, लेखा सद" के सम"। ] ] BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T(SS).A. No.535/Ahd/2019 (Assessment Year: 2011-12) Assistant Commissioner of Vs. M/s. Benefit Tradelink Ltd., Income Tax, 508, Setu Sevanti, Opp. Central Circle-1(3), Bawarchi Restaurant, Off. Ahmedabad C.G. Road, Ahmedabad [PAN No.AADCB3468K] (Appellant) .. (Respondent) I.T(SS).A. No.506/Ahd/2019 (Assessment Year: 2012-13) Assistant Commissioner of Vs. M/s. Benefit Tradelink Ltd., Income Tax, 508, Setu Sevanti, Opp. Central Circle-1(3), Bawarchi Restaurant, Off. Ahmedabad C.G. Road, Ahmedabad [PAN No.AADCB3468K] (Appellant) .. (Respondent) I.T(SS).A. No.507/Ahd/2019 (Assessment Year: 2013-14) Assistant Commissioner of Vs. M/s. Benefit Tradelink Ltd., Income Tax, 508, Setu Sevanti, Opp. Central Circle-1(3), Bawarchi Restaurant, Off. Ahmedabad C.G. Road, Ahmedabad [PAN No.AADCB3468K] (Appellant) .. (Respondent)

IT(SS)A No.535/ahd/2019 & 13 Others ACIT vs. M/s.Benefit Tradelink Ltd. & Others Asst. Y

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