DCIT Vs Udai Shanker Awasthi (ITAT Delhi)
Section 153C Jurisdiction Invalid in Absence of Incriminating Material — Commission Allegation Based on Dumb Excel Sheet Rejected:
Revenue filed appeals against deletion of additions made u/s 153C r.w.s.143(3) alleging undisclosed commission income routed through overseas entities. The Tribunal dismissed Revenue’s appeals holding that assumption of jurisdiction itself was invalid due to absence of incriminating material belonging or relating to the assessee.
The alleged case was built mainly on statements of third parties and an excel sheet created by staff of another person during investigation. ITAT noted that:
- The excel sheet was merely a working paper prepared later for investigation and not a seized document.
- Assessee’s name did not appear in the excel sheet; many entries were vague such as “to be identified”.
- No direct evidence or foreign enquiry linked the assessee to alleged commission income.
- Even statements relied upon were retracted or lacked corroboration.
Further, Tribunal held that identical satisfaction notes were recorded for assessee and his son, showing AO himself was unsure about real beneficiary. Protective vs substantive additions indicated lack of certainty, rendering initiation u/s 153C mechanical and invalid.
Key Legal Findings:
- For non-searched person, incriminating material must specifically belong/pertain to assessee; suspicion or third-party statements are insufficient.
- Working papers created during investigation cannot be treated as seized incriminating material.
- Consolidated satisfaction note for multiple years also vitiates proceedings.
FULL TEXT OF THE ORDER OF ITAT DELHI
