Sumangal Jewels Pvt. Ltd. Vs DCIT (ITAT Kolkata)
If You Didn’t Search Me, You Can’t Assess Me – ITAT Slams Illegal 153A
This case deals with the very foundation of search assessments u/s 153A & whether the Revenue can validly invoke this provision without actually conducting a search on Assessee.
Department claimed that a search u/s 132 was conducted on 01.12.2015, & based on that, issued notices & completed assessments u/s 153A r.w.s. 143(3). AO made heavy additions towards unexplained share capital (₹1.22 crore) & unexplained expenses (₹11.85 lakh).
However, Assessee challenged the jurisdiction itself, arguing that:
- Its registered & principal business premises were located at 81, G.T. Road, Asansol.
- No search warrant was executed at that address.
- The so-called “search” was carried out at a Kolkata address which did not belong to Assessee, nor was it in its possession or control.
- Merely mentioning Assessee’s name in the panchnama does not amount to an actual search on Assessee.
Assessee submitted documentary evidence proving that the Kolkata premises belonged to a different entity, & therefore, no search was ever “conducted” on it, as required by Section 153A.
Assessee relied on the decision of the ITAT Kolkata in Room Alankar vs DCIT, which involved the same group & the same issue. In that case, Tribunal had held that “both initiation & conduct of search” are mandatory for invoking Section 153A. This decision was accepted by the department & had become final.
