Facts of the Case

The present appeals were filed by the Revenue before the Delhi High Court challenging the order of the Income Tax Appellate Tribunal (ITAT) concerning Assessment Years 2009–10, 2011–12, and 2013–14.

The Tribunal, through its common judgment dated 12.10.2022, held that no incriminating material was found during the course of search proceedings relating to the relevant assessment years.

It was also an undisputed fact that the assessments for these years had already been completed (unabated assessments) prior to the search.

 Issues Involved

  1. Whether additions can be made under Section 153A of the Income Tax Act, 1961 in respect of completed assessments when no incriminating material is found during search.
  2. Whether the Revenue’s appeal raises any substantial question of law.

Relevant Sections Involved

  • Section 153A – Assessment in case of search or requisition
  • Section 260A – Appeal to High Court

 Petitioner’s (Revenue’s) Arguments

  • The Revenue sought to challenge the findings of the ITAT.
  • It filed appeals with a delay of 89 days, which was condoned by the Court.
  • However, even the Revenue fairly conceded that:
    • No incriminating material was found for the relevant assessment years.
    • The issue is covered by binding judicial precedents.

Respondent’s Arguments

  • None appeared on behalf of the respondent (assessee).
  • The case was decided based on the record and settled legal position.

 Court’s Findings / Order

  • The issue is squarely covered by the judgment in
    CIT v. Kabul Chawla (2016) 380 ITR 573
  • The above principle has been affirmed by the Supreme Court in
    PCIT v. Abhisar Buildwell

Key Finding:

No addition can be made under Section 153A in respect of completed assessments in absence of incriminating material found during search.

  • Since the issue is already settled, no substantial question of law arises.
  • Accordingly, all appeals were dismissed.

 Important Clarification

  • This judgment reinforces the principle that Section 153A does not grant unfettered powers to reassess completed assessments.
  • Additions are strictly dependent on incriminating material found during search.
  • The ruling aligns with consistent jurisprudence protecting taxpayers from arbitrary reassessment.

 Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60827072023ITA4032023_120346.pdf

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