The Gauhati High Court has held that the retracted statement alone is not sufficient for income tax addition, and there is no incriminating material found against the assessee.
The bench of Chief Justice Vijay Bishnoi and Justice Kaushik Goswami has observed that the Commissioner of Income Tax (Appeals) as well as ITAT, after carefully scrutinizing the material collected by the Assessing Officer, has recorded a finding of the fact that other than the retracted statement no other evidence/material was relied upon by the Assessing Officer to invoke the addition. The Commissioner of Income Tax (Appeals) and the ITAT were of the view that the piece of evidence, i.e. retracted statement cannot be termed as incriminating material.
The assessee/respondent submitted Income Tax Returns under Section 139(1) of the Income Tax Act, 1961 on 31.07.2014 declaring income of Rs.2,00,080. However, a search and seizure operation under Section 132 of the Income Tax Act was conducted on the residential premises of the sole respondent on 02.06.2016 and thereafter, in continuation of that, again a search was conducted.
On the basis of the search results, the case was selected for scrutiny under Section 153A of the Income Tax Act and a notice was issued to the assessee to file Return of Income within 15 days. In compliance of the notice under Section 153A of the Income Tax Act, the respondent e-filed his return of income and thereafter, proceedings were carried out and ultimately, the Assessing Officer has issued Assessment Order and assessed the income of the assessee.
The Commissioner of Income Tax (Appeals) allowed the appeal while recording a finding of fact that the Assessing Officer had invoked the jurisdiction under Section 153A of the Income Tax Act without there being any incriminating material whereas the law is well settled that in the absence of incriminating material, a completed assessment cannot be opened invoking the powers under Section 153A.
The assessee contended that during the course of hearing, learned counsel for the sole respondent has submitted that now it is well settled that in the absence of incriminating material, no addition can be made in respect of a completed assessment. The assessment was completed but the Assessing Officer without there being any incriminating material has passed the Assessment Order by invoking the provisions of Section 153A of the Income Tax Act, however, the same is not in accordance with law and therefore, the Commissioner of Income Tax (Appeals) as well as the ITAT has not committed any illegality in passing the impugned orders.
The assessee argued that the Commissioner of Income Tax (Appeals) as well as ITAT has recorded a finding of fact that no incriminating material was available on record and in the absence of the same, the Assessing Officer has erred in passing the Assessment Order while invoking the provisions of Section 153A of the Income Tax Act and the said finding of fact recorded by the Commissioner of Income Tax (Appeals) and ITAT is not liable to be interfered with and in such circumstances, no substantial question of law arises in this appeal and therefore, the present appeal is liable to be dismissed.
The court while dismissing the appeal of the department held that the retracted statement cannot be termed as incriminating material.
Case Details
Case Title: PCIT Versus Rohit Karan Jain
Case No.: ITA/5/2023
Date: 13.03.2025
Counsel For Appellant: S.C. Keyal
Counsel For Respondent: Priyanka Jain
