Section 153A of the Income Tax Act
The decision most relied on for Section 153A is National Thermal Power Co. Ltd. v. CIT (229 ITR 383), cited in 5,834 of the 18,957 judgments on BharatTax that turn on this section.
Leading authorities on Section 153A
Appellate authorities can consider new claims and additional grounds if the relevant facts are already on record. The purpose of assessment is to correctly determine tax liability, allowing both parties to raise issues.
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.
When two equally plausible interpretations of a taxing provision are possible, or when conflicting views exist from non-jurisdictional High Courts, the interpretation that favors the assessee must be adopted.
A penalty notice issued under section 274 read with section 271(1)(c) is invalid if it fails to specify whether the penalty proceedings are initiated for concealment of income or for furnishing inaccurate particulars of income. This non-specification vitiates the penalty proceedings.
An assessment under section 153A is without jurisdiction if there is an absence of incriminating material for an unabated assessment year.
An assessee cannot raise a new claim or a claim not made in the original or revised return of income for the first time directly before the Assessing Officer during assessment proceedings.
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.
The principle of consistency applies in tax matters, meaning a fundamental aspect found to be true in one assessment year should not be changed in a subsequent year if the order was not challenged.
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.
The Commissioner of Income Tax (Appeals) possesses co-terminus powers with the Assessing Officer and can direct the Assessing Officer to perform actions he failed to do, but cannot introduce a new source of income in the assessment. The appellate assessment must be confined to the items of income that were the subject matter of the original assessment.
