Facts of the Case

The Revenue (Appellant) filed appeals before the Delhi High Court against the order of the Income Tax Appellate Tribunal (ITAT) dated 12.10.2022 concerning Assessment Years (AYs) 2009-10, 2011-12, and 2013-14.

The Tribunal had held that no incriminating material was found during the search proceedings relating to the relevant assessment years. Additionally, the assessments for these years were already completed/unabated assessments.

The Revenue challenged the Tribunal’s findings, leading to the present appeals.

 Issues Involved

  1. Whether additions can be made under Section 153A in respect of completed/unabated assessments without any incriminating material found during search.
  2. Whether the issue is already settled by binding judicial precedents.

 Petitioner’s (Revenue’s) Arguments

  • The Revenue sought to challenge the ITAT’s order and justify additions made during assessment proceedings.
  • It was contended that the Tribunal erred in deleting additions.

However, during arguments, the Revenue fairly conceded:

  • No incriminating material was found during search for the relevant AYs.
  • The issue is covered by binding precedent.

 Respondent’s Arguments

  • The Respondent (Assessee) relied on settled legal position that:
    • In absence of incriminating material, no addition can be made under Section 153A for completed assessments.
  • Relied on judicial precedents confirming this principle.

 Court’s Findings / Order

The Delhi High Court held:

  • The issue is squarely covered by the judgment in
     CIT v. Kabul Chawla
  • The above principle has been affirmed by the Supreme Court in
     PCIT v. Abhisar Buildwell
  • Since:
    • No incriminating material was found, and
    • The assessments were completed,

No substantial question of law arises.

Final Order

  • All appeals filed by the Revenue were dismissed/closed.

 Important Clarification

  • For completed (unabated) assessments, additions under Section 153A:
     Cannot be made without incriminating material found during search
  • This principle is now settled law and binding across jurisdictions.

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

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