ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE,SECOND FLOOR vs. SHIVA CEMENT LIMITED, ROURKELA, SUNDARGARH
Facts
The Revenue appealed the CIT(A)'s deletion of additions made under section 68 (unexplained cash credit) and section 40a(i)(a) (disallowance for non-deduction of TDS) for AY 2009-10 and 2010-11. The additions were based on share capital and premium increases and consultancy charges, which the AO deemed unexplained and unsubstantiated. The CIT(A) deleted these additions, holding that the AO lacked jurisdiction under section 153A as there was no incriminating material found during the search.
Held
The Tribunal held that for unabated assessment years, jurisdiction under section 153A requires that the impugned material must be collected during the search and must be incriminating. In this case, the additions were made based on financial statements and ledger copies gathered post-search, and no incriminating material was found. The assessee was not provided with seized documents despite requests, and the AO failed to show any specific incriminating material.
Key Issues
Whether the Assessing Officer had jurisdiction under Section 153A to make additions when no incriminating material was found during the search and assessment proceedings were unabated.
Sections Cited
68, 40a(i)(a), 194J, 153A, 147, 148, 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “DB” BENCH, CUTTACK
Before: SHRI DUVVURU RL REDDY, VP & SHRIRAJESH KUMAR, AM
Per Rajesh Kumar, AM:
These cross appeals are against the orders of the Commissioner of Income-tax (Appeals), Bhubaneswar-2(hereinafter referred to as the “Ld. CIT(A)”] even dated 26.07.2024 for the AYs2009-10 & 2010- 11.
The facts in brief are that the assessee filed the return of income u/s 139(1) of the Act on 30.09.2009 declaring total loss of ₹1,88,93,962/-. A search u/s 132 of the Income-tax Act, 1961 (the Act) was conducted by the Investigation wing in the case of assessee and his group concerns on 24th and 25th September, 2014. Accordingly, the case of the assessee was centralized vide order passed u/s 127 of the Act by PCIT, Sambalpur on 07.04.2015 and 05.01.2016. Accordingly, notices u/s 153A of the Act was issued on 19.02.2016, which was complied with by the assessee by filing the return of income showing the same income as the original return of income. Thereafter, the statutory notices along with questionnaire were issued and duly served upon the assessee. Pertinent to state that the assessee filed a writ petition before the Hon'ble High Court at Cuttack challenging the validity on 153A of the Act, which was quashed by the Hon'ble Court vide its final order dated 29.09.2021. During the assessment proceedings the ld. AO asked the assessee to furnish the information/ details about the share capital issued, subscribed and paid up during the financial year relevant to the assessment under consideration but according to the AO, the assessee did not make any compliance thereto. Thereafter, the assessee was granted another opportunity vide letter dated 15.11.2016, to furnish
The assessee challenged the said assessment before the ld. CIT (A) and the ld. CIT (A) allowed the appeal of the assessee by holding that in case of unabated assessment on the date of search the ld. AO has jurisdiction to make addition on the basis of seized incriminating material only and not otherwise. However, in the instant case the ld. CIT (A) noted that there was no incriminating material and the additions were made on the basis of audited balance sheets/ documents filed by the assessee before the ld. Assessing Officer. The ld. CIT (A) while deleting the addition held as under: -
ITA No. 392/CTK/2024 for A.Y. 2010-11 06. The issue raised in this appeal is similar to one as decided by us in ITA No. 388/CTK/2024 for A.Y. 2009-10. Accordingly, our decision would, mutatis mutandis, apply to this appeal of assessee in ITA No. 392/CTK/2024 for A.Y. 2010-11. Hence, the appeal of Revenue in ITA No. 392/CTK/2024 is dismissed
CO Nos. 2 & 3/CTK/2025 07. The assessee has not pressed the cross objections and therefore, dismissed.
In the result, the appeals of the Revenue as well as the COs of the assessee are dismissed.
Order pronounced in the open court on 26.08.2025.
Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Kolkata, Dated: 26.08.2025 Sudip Sarkar, Sr.PS
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Cuttack
