In JSP Projects (P) Ltd. v. Deputy Commissioner of Income Tax, Central Circle-13, Delhi (ITAT Delhi, order dated 09 January 2026), the Delhi Bench of the Income Tax Appellate Tribunal examined the validity of an assessment framed under Section 153C of the Income Tax Act, 1961 for Assessment Year 2014-15, pursuant to a search conducted in the case of the Alankit Group.

The assessee’s original assessment had been completed under Section 143(3) and had attained finality prior to the initiation of proceedings under Section 153C. The Assessing Officer assumed jurisdiction on the basis of documents and electronic data seized during the search of third parties, including ledger accounts and digital records, and made substantial additions under Sections 68 and 69C.

The Tribunal observed that the material relied upon by the Assessing Officer did not constitute incriminating material qua the assessee, as the entries were already recorded in the regular books of account and no undisclosed transactions were unearthed during the search. It was noted that the assessment order did not demonstrate any nexus between the seized material and undisclosed income of the assessee.

Placing reliance on the binding decisions of the Supreme Court in PCIT v. Abhisar Buildwell Pvt. Ltd. and DCIT v. U.K. Paints (Overseas) Ltd., as well as the Delhi High Court judgment in CIT v. Kabul Chawla, the Tribunal reiterated the settled legal position that in respect of completed or unabated assessments, no addition can be made under Section 153C in the absence of incriminating material found during search.

Accordingly, the Tribunal held that the assumption of jurisdiction under Section 153C was invalid and the assessment order was bad in law and void ab initio. The assessment was quashed on jurisdictional grounds, and all other issues raised on merits were rendered academic. The appeal of the assessee was allowed.

Source Link- https://itat.gov.in/public/files/upload/1767944514-Vr5Uu6-1-TO.pdf

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