GOPAL SHASHIDHARA,BANGALORE vs. DCIT, CENTRAL CIRCLE-1(4), BANGALORE

The learned AR submitted that the addition was made without any incriminating material. Apart from the cash seizure, no documents were found in the search to prove that the assessee had undisclosed income. The AO relied only on the assessee’s statement u/s 131 of the Act, which cannot by itself be treated as incriminating evidence. The ld. AR placed reliance on: • CIT v. IBC Knowledge Park (P) Ltd (2016) 385 ITR 346 (Kar.)

It was stressed that Hon’ble Supreme Court in the case of Abhisar Buildwell (SC) has settled the law that no addition can be made in respect of completed assessments unless incriminating material is found. The learned DR, in reply, submitted that the cash seizure and the assessee’s own statement clearly show that he was earning higher rental income than what was disclosed. The assessee failed to produce rent agreements or evidence to support the lower income offered in the return. Therefore, the AO was justified in making a reasonable estimate based on the statement, and the ld. CIT(A) was correct in confirming the same.

We have carefully considered the rival submissions of both the parties and perused the materials available on record. It is an admitted fact that except for the assessee’s statement, no incriminating documents were found during search to establish undisclosed rental income.

In the result, the appeal of the assessee is partly allowed. an appeal by the assessee for the assessment year 2014-15.

At the outset, the learned AR for the assessee before us submitted that the issues raised by the assessee in ground No. 7 and 8 are not pressed. Accordingly, we dismiss the same as infructuous.

For the remaining grounds of appeal with respect to the addition made by the AO under the head of house property and business income, .

In the result, the appeal of the assessee is partly allowed. appeals by the assessee for the assessment years 2015-16, 2016-17 and 2017- 18 .

At the outset, we note that there was no document of incriminating nature found during the search proceedings. Accordingly, in the absence of any incriminating document found during the search, the findings given by ITAT in for the assessment year 2013-14 will also be applicable for the years under consideration. As such, the issue raised by the assessee with respect to the incriminating material in the assessment year 2013-14 has been decided by us favouring assessee. At the time of hearing, the learned AR and the DR also agreed that whatever findings given in IT No. 748/Bang/2025 shall also be applicable for the cases on hand. Accordingly, we hold that the additions made by the authorities below are unsustainable in the absence of incriminating document found during the search. Accordingly, the ground of appeal of the assessee is hereby allowed.

In the result, all the appeal of the assessee are partly allowed.

The assessee has raised a ground that the assessment framed by the AO is invalid in the absence of any incriminating material found during the search u/s 132A of the Act.

At the outset, we note that the year under consideration is an abated assessment year. As per the settled law, in the case of an abated year, the AO has full jurisdiction to examine the return of income and frame assessment u/s 143(3) r.w.s. 153A even without reference to incriminating material. The concept of “no addition without incriminating material” is applicable only in respect of completed or unabated assessments, as clarified by the Hon’ble Supreme Court in PCIT v. Abhisar Buildwell (P) Ltd (2023) 454 ITR 212 (SC).

During the course of assessment, the AO noticed that the rental income declared by the assessee under the head “House Property” was .

On appeal, the ld. CIT(A) upheld the action of the AO. He observed that the assessee had failed to bring any evidence or explanation to reconcile the rental income declared in the return with that reflected in the rent agreement. Hence, the addition was confirmed. Being aggrieved by the order of learned CIT-A, the assessee is in appeal before us.

The learned AR submitted that the addition made by the AO and confirmed by the CIT(A) was only on a notional basis, without any cogent evidence, and therefore not sustainable.

On the other hand, the learned DR relied on the orders of the lower authorities and contended that once the assessee’s own rent agreement showed higher rent, the AO was justified in making the addition.

We have heard both the parties and perused the record. We note that the AO’s finding of understatement of rental income was based on the assessee’s own rent agreement vis-à-vis the income declared in the return. The assessee did not reconcile this mismatch either during assessment, before the CIT(A), or even before us. At the time of .

Before us, the learned AR submitted that the cash was found in the financial year 2018-19 relevant to assessment year 2019-20.

The learned DR, however, supported the orders of AO and ld. CIT(A) and argued that the assessee failed to explain the source of cash.

We have considered the rival submissions and examined the record. There is no dispute on the fact that cash was found from the possession of the assessee during the search and that the assessee could not satisfactorily explain its source. In principle, therefore, such cash is liable to be brought to tax under section 69A of the Act.

The only question which arises is the correct year of taxability. Section 69A specifically provides that where an assessee is found to be the owner of any money, bullion or valuable article and fails to explain the source, the same shall be deemed to be the income of the assessee for the financial year in which such money is found in his possession.

In the present case, the seizure took place on 07.05.2018, which falls in financial year 2018-19 relevant to assessment year 2019-20. Therefore, as per the mandate of section 69A of the Act, the cash, if unexplained, is assessable in AY 2019-20 and not in the assessment year presently under appeal.

The addition made by the AO and sustained by the CIT(A) in the impugned year is thus not in accordance with law. At the same time, our finding will not prevent the Revenue from initiating action in the correct .

In the result, the appeal of the assessee is partly allowed. an appeal by the assessee for the assessment year 2019-20

At the outset, the learned counsel for the assessee submitted that the assessment framed by the AO for the year under consideration is not sustainable in law because the assessment order passed by the AO is not duly signed. It was further pointed out that even the notice of demand issued under section 156 of the Act and the computation sheet raising the demand on the assessee have not been signed by the AO. According to the learned AR, in the absence of authentication by the signature of the AO, the assessment order is void ab initio and unenforceable in the eyes of law.

The learned AR invited our attention to the assessment order, the notice of demand under section 156, and the computation sheet placed in the paper book, and submitted that all these documents are unsigned. In support of this contention, reliance was placed on the order of the Tribunal in Reuters Asia Pacific Ltd. Vs. DCIT reported in 157 taxmann.com 705, wherein it was held that an unsigned order cannot be treated as a valid order under the Income-tax Act.

On the other hand, the learned DR could not effectively controvert the specific argument of the learned AR with reference to the record, nor could he show that the impugned documents bear the signature or authentication of the AO.

We have considered the rival submissions and carefully examined the record. The assessee’s contention is that the assessment order passed by the AO, the notice of demand issued under section 156, and the computation sheet are not signed by the AO, and therefore, they do not constitute valid orders in the eyes of law.

In the result, the appeal of the assessee is partly allowed.

In the combined results, all the appeals of the assessee are partly allowed.