Effect of mistake by CIT in confirming order passed under section 153C read with Sec 153A of IT Act.

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
At the time of hearing before us, the learned counsel for the assessee argued at length. He stated that there was search at Chaurasia Group of cases. However, there was no search operation at the premises of the assessee company. The Assessing Officer took action under Section 153C read with Section 153A of the Income-tax Act, 1961 by issuing notice on 21st June, 2010. He stated that notice under Section 153C was issued on the basis of photocopy of the profit & loss account and balance sheet of the assessee company found from the premises of director/shareholder of the assessee company. That the search has taken place on 29th April, 2008 while the assessee has filed the return for AY 2004-05 i.e. the year under appeal on 22nd September, 2004 in which the audited profit & loss account and balance sheet was duly furnished. That what was found from the shareholder/director was only the photocopy of the audited profit & loss account and balance sheet while the original was already furnished by the assessee. That on these facts, it cannot be said that the photocopy of the profit & loss account and balance sheet is the document belonging to the assessee found and seized from some other person. That the photocopy of the balance sheet was given by the company to its director/shareholder and, therefore, it was belonging to such director/shareholder. Moreover, when the said profit & loss account and balance sheet is already furnished with the return of income and the income had been disclosed as per such profit & loss account and balance sheet, admittedly, there is no undisclosed income as per such profit & loss account and balance sheet. Therefore, such profit & loss account and balance sheet cannot be said to be incriminating document on the basis of which action under Section 153C can be taken. In support of this contention, he relied upon the decision of ITAT in the case of Sinhgad Technical Education Society Vs. ACIT in ITA Nos.114 to 117/PN/10.

Citation :
M/s DSL Properties (P) Ltd., 6/3, East Patel Nagar, New Delhi – 110 060. PAN: AABCD9629E.(Appellant) Vs. Deputy Commissioner of Income Tax, Central Circle-8 New Delhi.(Respondent)