JSP Projects Private Limited Vs DCIT (ITAT Delhi)
Section 153C Assessment Quashed in Absence of Incriminating Material — ITAT Delhi Follows Abhisar Buildwell and Kabul Chawla
The Delhi Bench of the ITAT allowed the appeal of JSP Projects Pvt. Ltd. for AY 2014-15, holding that the assessment framed under section 153C was void ab initio due to the absence of incriminating material pertaining to the assessee.
The search was conducted in the case of the Alankit Group, and the AO invoked section 153C against the assessee based on ledger accounts and soft data allegedly found from third parties. The assessee’s original assessment for AY 2014-15 had already been completed under section 143(3), rendering it a completed/unabated assessment.
The Tribunal noted that:
- The seized material relied upon by the AO consisted of ledger extracts and soft data which were either already recorded in the books or did not belong to the assessee;
- No incriminating document qua the assessee was found during the search;
- Additions were primarily based on third-party statements and electronic data without independent corroboration or compliance with section 65B of the Evidence Act.
Relying on the binding judgments of the Supreme Court in Abhisar Buildwell (P) Ltd. and U.K. Paints (Overseas) Ltd., and the Delhi High Court in Kabul Chawla, the ITAT held that no addition can be made under section 153C in respect of completed assessments unless incriminating material is found during search.
Accordingly, the Tribunal quashed the assessment order under section 153C. Since the assessee succeeded on the jurisdictional ground, all other grounds—including limitation, satisfaction note defects, section 68 and 69C additions, and violation of natural justice—were held to be academic and left open. The appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
