Regular Books of Accounts cannot be termed as Incriminating Material

PCIT Vs Param Dairy Ltd. (Delhi High Court)

Regular Books Of Accounts Maintained By Assessee Can Not Be Termed As Incriminating Material To Frame Assessment Under Section 153A , All Addition On Basis Of Such Material Is Therefore Invalid

The ITAT, in the impugned order has held that in the audited report filed by the assessee along with the report, cash book, ledger, bank book etc. were mentioned; that the respondent assessee was maintaining books on TALLY Accounting Software which was seized during the search and was being treated as incriminating material; however, regular books of account of the assessee, by no stretch of imagination, could be treated as incriminating material to form basis of framing assessment under Section 153A read with Section 143(3) of the Act. It was further held that assessment for the Assessment Years 2008-2009 and 2009-2010 were completed under Section 143(3) vide orders dated 28th July, 2010 and 31st May, 2011 respectively and audited books of account were thoroughly examined and details of purchase of milk must have been scrutinized as it was part of audited financial statement of accounts; as per Kabul Chawla supra, completed assessments can be interfered only on the basis of some incriminating material unearth during the search. With respect to the Assessment Years 2010-2011 to 2012-2013, the ITAT held that though no assessment was framed under Section 143(3) but it could safely be concluded that the period of limitation for issuing a notice under Section 143(2) expired much before the date of the search; reliance was placed on Chintels India Ltd. Vs. Deputy Commissioner of Income-Tax (2017) 397 ITR 416 (Delhi) holding that once an assessee does not receive a notice under Section 143(2) of the Act within the stipulated period, such an assessee can take it that the return filed by him has become final and no scrutiny proceeding are to be undertaken with respect to that return. Appeal of the revenue is dismissed.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. The appeals impugn the common order dated 19th November, 2019 of the Income Tax Appellate Tribunal (ITAT) in ITA Nos.3988 to 3992/DEL/2019 for the Assessment Years 2008-2009 to 2012-2013 preferred by the respondent assessee as well as in ITA Nos.5023 to 5027/DEL/2019 for the Assessment Years 2008-2009 to 2012-2013, preferred by the appellant Revenue.

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