DCIT Vs SEW Infrastructure Limited (ITAT Hyderabad)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) in Hyderabad has clarified that a taxpayer cannot make a fresh claim for deductions under Section 80IA of the Income Tax Act in response to a notice issued under Section 153A after a search. This judgment arises from the case between the Deputy Commissioner of Income Tax (DCIT) and SEW Infrastructure Limited.
The crux of the matter revolves around the interpretation of Section 153A of the Income Tax Act, which pertains to assessments following a search under Section 132. Tribunal reaffirmed that if an assessment is completed prior to a search, it remains unaffected unless there is incriminating evidence found during the search.
Background of the Case
The ITAT’s decision followed a careful analysis of arguments presented by both the counsel for SEW Infrastructure and the Senior Standing Counsel for the Revenue. The tribunal examined the provisions of Section 153A in conjunction with several judicial precedents, including the landmark ruling in PCIT Vs. Abhisar Buildwell (P.) Ltd.
In this context, the tribunal noted that when a search is conducted, all pending assessments from the six assessment years prior to the search are considered abated. This means that the Assessing Officer (AO) has the authority to assess or reassess total income based only on incriminating material unearthed during the search. If no such material is found, the AO cannot disturb a completed assessment.
