Top Stories Pending Assessment get Abated u/S 153 A of Income Tax Act, after Conducting Search and obtaining Information: ITAT [Read Order] Pending assessment get abated under Section 153 A of Income Tax Act, 1961 after conducting search and obtaining information, rules , ITAT By Aiswarya Krishnadas – On January 28, 2024 11:00 am – 2 mins read The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) observed that Pending assessment get abated under Section 153 A of Income Tax Act, 1961 after conducting search and obtaining information The assessee submitted their income tax return on July 18, 2014, disclosing an income of Rs. 14,48,100/-. Subsequently, the return underwent scrutiny assessment under Section 143(3) of the Income-tax Act, 1961. Following the issuance of statutory notices, an order dated December 30, 2016, was passed, wherein the assessed income was revised to Rs. 94,12,810/-. This adjustment involved the inclusion of Rs. 79,64,709/- attributed to fictitious long-term capital gains. The case sheds light on potential discrepancies and raises questions about the accuracy of the initially declared income.

The counsel representing for the assessee Vinod Bindal findings of search and seizure operations carried out at the offices of numerous stockbrokers. It was alleged that during these operations, the Investigation Wing unearthed information indicating that the assessee was implicated as one of the beneficiaries involved in the manipulation of shares, specifically in the context of earning long-term capital gains. This assertion pointed towards a broader network of individuals potentially engaging in illicit activities related to stock market transactions.

The counsel for the revenue Vivek Vardhan strongly asserted that the scrutiny assessment of the tax return was initiated through the Computer Assisted Scrutiny System ( CASS ). In the course of these assessment proceedings, crucial information was reportedly obtained from the Investigation Wing ( INV Wing ) regarding alleged fictitious long-term capital gains. This information, according to the counsel stemmed from search and seizure operations conducted under section 132 of the Income-tax Act. 1961 The counsel for the revenue contended that, as a result, the legal principles established by the Supreme Court do not directly apply to the specific circumstances of this case.

The two member bench of the tribunal comprising Astha Chandra ( Judicial member ) and N.K.Billaiya ( Accountant member ) contention was that even if the assessments were in progress, the occurrence of a search and the subsequent revelation of information to the Revenue triggered the abatement of pending assessments, as outlined in Section 153A of the Income-tax Act. It was crucial to note that proceedings under section 153C were a direct consequence of actions initiated under Section 153A. Therefore, as established by the Supreme Court in the case of Vikram Singh Bhatia, the contested assessment order should have been formulated in accordance with the provisions of Section 153C of the Act. Accordingly, the assessment order was quashed and the appeal of the assessee was allowed.