{"id":51258,"date":"2021-07-31T11:52:49","date_gmt":"2021-07-31T06:22:49","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=51258"},"modified":"2024-06-05T16:42:47","modified_gmt":"2024-06-05T11:12:47","slug":"analysis-of-incriminating-material-im-and-search-assessment","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/analysis-of-incriminating-material-im-and-search-assessment\/","title":{"rendered":"Analysis of Incriminating Material (IM) and Search Assessment"},"content":{"rendered":"

Assessment of Income as per section 143(3) read with section 153A, must have nexus to the Incriminating Material (IM), if any, found during the course of search in respect of unabated assessment. There are various precedents to consider that where no IM was found during search in respect of assessment for the relevant AY which already was completed\/time barred on the date of search, no addition can be made on the re-appreciation<\/a> basis<\/a> of the regular account of the assessee.<\/p>\n\n\n\n

Incriminating material and search assessment: Legal View point<\/h2>\n\n\n\n

It can also be stated that the documents found or acquired after the search during assessment cannot be used against the assessee while framing assessment of unabated assessment orders and also in case where the time limit for issuance of notice u\/s 143(2) stood expired at the time of search.<\/p>\n\n\n\n

Hence, the jurisprudence with respect to it is that in absence of any reference to any incriminating material found during search in the assessment order, action of the AO in making adjustments of routine nature during search assessment under section 153A of the Act is impermissible.<\/p>\n\n\n\n

To provide a better view, it has been said that where no IM is found during the search relating to an AY, then the scope of assessment shall depend upon whether original assessment is pending or completed.<\/p>\n\n\n\n

If original assessment is pending on the search date, then the proceedings pertaining to pending assessments shall abate, and proceedings begun as a result of search shall be continued. The scope of assessment would include the issues arising from pending assessment, and freshly initiated proceedings will cover issues that can arise from the originally pending proceedings.<\/p>\n\n\n\n

Meaning of Incriminating Material<\/h2>\n\n\n\n

The word Incriminating Material<\/em> (IM) has been used quite often therefore, it is essential to know the meaning of IM. It has been a main issue while framing the search assessment order under section 153A of the Income Tax Act 1961, and it hasn’t been defined under the Act.<\/p>\n\n\n\n

Generally, the incriminating material can be in any form like evidence in the nature of:<\/em><\/p>\n\n\n\n