“search assessment”
The decision most relied on for search assessment is CIT v. Kabul Chawla (380 ITR 573), cited in 3,235 judgments on BharatTax.
Leading authorities on search assessment
In a search assessment under Section 153A, additions can only be made for completed or non-abated assessment years if incriminating material relevant to those years is found during the search, although notice under Section 153A(1) is mandatorily issued for six assessment years preceding the search.
An assessment under section 153A is without jurisdiction if there is an absence of incriminating material for an unabated assessment year.
In Section 153A proceedings, the scope of assessment extends to abated proceedings, enabling an assessee to raise fresh legal claims that could have been made in regular assessment proceedings.
For assessments under Section 153C, a notice is legally unsustainable if there is no incriminating material correlated to the specific assessment years for which reassessment is sought.
In search assessments under Section 153A, additions to income are permissible only if incriminating material is found during the search; in the absence of such material, completed assessments cannot be disturbed. A statement recorded under Section 132(4) and later retracted may not, on its own, constitute sufficient incriminating evidence for making additions.
In non-abated assessments, the Assessing Officer can make additions under section 153A based on books of accounts or documents found during a search but not produced during the original assessment, provided such material is incriminating.
A statement recorded under Section 132(4) of the Income Tax Act, 1961, does not by itself constitute incriminating material for making additions to income.
Completed assessments can be interfered with under Section 153A or 153C only on the basis of incriminating material unearthed during the search, necessitating a direct correlation between the discovered material and the power to assess or reopen concluded assessments.