MR. NARAYANSINGH BHA vs. INGH RATHORE ,MUMBAIVS.DCIT, CENTRAL CIRCLE 8(4), MUMBAI

आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: These seven appeals by the assessee are directed against the separate orders passed by the learned Commissioner of Income- tax (Appeals)-50, Mumbai [hereinafter referred to as "the CIT(A)"]under section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"]. For AYs 2014-15 to 2019-20, the impugned orders are dated 31.10.2025, and for AY 2020-21, the impugned order is dated 13.10.2025. The said appeals arise from the assessment orders passed under section 143(3) read with section 153C of the Act by the Assessing Officer, Central Circle-8(4), Mumbai[hereinafter referred to as "Assessing Officer"], whereby additions and disallowances were made to the returned income of the assessee. Since the appeals involve common facts and common legal issue relating to validity of initiation and completion of assessment proceedings under section 153C of the Act, the same are heard together and are being disposed of by this consolidated order. Facts of the Case 2. The assessee is an individual and resident assessee. The assessments for the years under consideration were framed by the Assessing Officer, Central Circle-8(4), Mumbai. The assessee

3 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore was stated to be engaged in the business of imitation jewellery in the name and style of M/s. NavdurgaJewellers and was also a partner in the partnership firm, M/s. ManpasandJewellers. 3. A search and seizure action under section 132 of the Income-tax Act, 1961 was carried out by the DDIT(Inv.), Unit- 6(2), Mumbai, in the case of Shri Chandansingh B. Rathore, employee of M/s. NavdurgaJewellers, on 18.10.2019 during the Maharashtra State Assembly Election, 2019. The Assessing Officer recorded that information was received from V.P. Road Police Station in the main control of the Income Tax Department that V.P. Road Police Station had seized a sum of Rs.27,96,200/- from Shri Chandansingh B. Rathore at the office premises of M/s. NavdurgaJewellers situated at 60, 1st Bhoiwada, 2nd floor, Lachiram Building, Bhuleshwar, Mumbai 400 002, on 16.10.2019. The said information was passed to the DDIT(Inv.), Unit-6(2), Mumbai, for further necessary action. Thereafter, summons under section 131(1A) were issued on 17.10.2019 and the statement of Shri Chandansingh B. Rathore was recorded. In the said statement, he was asked to explain the source of cash found at the premises of M/s. NavdurgaJewellers. The Assessing Officer recorded that Shri Chandansingh B. Rathore replied that the sum seized by the police personnel pertained to the sale of his brother’s entity, M/s. NavdurgaJewellers. 4. The Assessing Officer further recorded that, as regards the assessee, incriminating material was found and seized during the course of search action, which was pertaining to the assessee and

4 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore had a bearing on determination of the total income of the assessee for the years under consideration. The Assessing Officer, therefore, proceeded to make the assessments in the manner laid down in Chapter XIV of the Act. 5. For AYs 2014-15 to 2019-20, the Assessing Officer recorded that pursuant to the order under section 127 of the Pr. CIT-19, Mumbai dated 01.09.2021, the assessee’s case was centralized with Central Circle-8(4), Mumbai. Thereafter, following the mandate of section 153C, notice under section 153C dated 31.12.2021 was issued by the DCIT, Central Circle-8(4), Mumbai, and was duly served on the assessee requiring him to furnish returns of income in the prescribed form. In response, the assessee furnished returns of income on 25.01.2022. Notices under section 143(2) were issued on 28.07.2022 and served on the assessee. Statutory notices under section 142(1) were also issued from time to time, in response to which the assessee filed submissions. 6. For AY 2020-21, the Assessing Officer recorded that the information was initially shared with the then jurisdictional Assessing Officer, ITO-23(2)(6), Mumbai, for taking necessary remedial action. Notice under section 153C dated 26.08.2021 was issued and duly served on the assessee on the same day. Meanwhile, pursuant to the order under section 127 dated 01.09.2021, the case was centralized with Central Circle-8(4), Mumbai. In response to the notice under section 153C, the assessee furnished return of income on 08.12.2021 declaring

5 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore total income of Rs.6,21,670/-. Thereafter, notice under section 143(2) was issued on 28.07.2022 and statutory notices under section 142(1) were issued from time to time and the assessments were completed. 7. The Assessing Officer examined the financial statements, bank accounts and other material available on record for the relevant assessment years. On noticing investments in M/s. ManpasandJewellers, deductions claimed under Chapter VIA and section 24(b), and substantial cash deposits in the bank accounts of the assessee and his proprietary concern, M/s. NavdurgaJewellers, the assessee was called upon to furnish necessary explanations and supporting evidence. 8. The Assessing Officer recorded that the assessee did not furnish satisfactory details or documentary evidence in respect of the issues raised in the notices issued under section 142(1). Accordingly, disallowance under section 14A read with Rule 8D was made on the ground that the investments were capable of yielding exempt income. The deductions claimed under sections 80C, 80D and 24(b) were also disallowed wherever the assessee failed to substantiate the same with supporting documents. 9. The Assessing Officer further noticed cash deposits in the bank accounts for AYs 2014-15 to 2019-20 and held that the assessee failed to reconcile the same with the books of account or establish that the deposits were duly accounted for and offered to tax. The said deposits were, therefore, treated as unexplained cash credits under section 68. For AY 2018-19, gift of

6 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore Rs.2,50,000/- credited in the capital account was also added under section 68 for want of explanation regarding its source.

Date of original Return in Assessment Income as per Assessed total return and response to order date / computation in income AY income section 153C section assessment declared order Rs.3,16,580/- Rs.37,62,960/- 2014- 27.06.2015, 25.01.2022, 16.03.2023, 15 Rs.3,16,580/- Rs.3,16,580/- section 143(3) r.w.s. 153C 2015- 25.02.2016, 25.01.2022, 16.03.2023, Rs.2,97,067/- Rs.26,16,180/- 16 Rs.2,97,070/- Rs.2,90,070/- as section 143(3) recorded in para 4, r.w.s. 153C while computation takes Rs.2,97,067/- 2016- 31.05.2017, 25.01.2022, 16.03.2023, Rs.5,81,066/- Rs.17,01,240/- 17 Rs.5,81,070/- Rs.5,81,070/- section 143(3) r.w.s. 153C 2017- 21.03.2018, 25.01.2022, 16.03.2023, Rs.4,23,936/- Rs.17,60,450/- 18 Rs.4,23,940/- Rs.4,23,940/- section 143(3) r.w.s. 153C 2018- 04.10.2018, 25.01.2022, 15.03.2023, Rs.7,10,423/- Rs.19,72,850/- section 143(3)

7 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore 19 Rs.7,10,420/- Rs.7,10,420/- r.w.s. 153C 2019- 04.10.2019, 25.01.2022, 15.03.2023, Rs.6,22,705/- Rs.9,58,220/- 20 Rs.6,22,710/- Rs.6,22,710/- section 143(3) r.w.s. 153C 2020- 20.12.2020, 08.12.2021, 15.03.2023, Rs.6,21,667/- Rs.36,76,030/- 21 Rs.6,21,670/- Rs.6,21,670/- section 143(3) r.w.s. 153C

8 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore 14. The assessee submitted before the learned CIT(A) that no incriminating material pertaining to the relevant assessment years was found during the course of search and that only cash of Rs.27,96,200/- was found and seized from Shri Chandansingh B. Rathore. The assessee also contended that the seizure had taken place during the Maharashtra State Assembly Election, 2019 and, therefore, the second proviso to section 153C(1) read with Rule 112F of the Income-tax Rules, 1962 was attracted. The learned CIT(A), however, rejected the said contentions and held that the Assessing Officer was justified in issuing notice under section 153C and in completing the assessments under section 153C of the Act. The learned CIT(A) further held that Rule 112F was not applicable, since the assessee himself had claimed that the seized cash belonged to his regular business activity and it was not established that the seized cash was connected with the election process. 15. As regards the disallowance made under section 14A read with Rule 8D, the assessee contested the action of the Assessing Officer. The learned CIT(A), however, held that it was clear from the assessment order that the assessee had claimed expenses against exempt income. The learned CIT(A), therefore, upheld the action of the Assessing Officer in making disallowance under section 14A read with Rule 8D in all the assessment years. 16. In respect of deductions claimed under sections 80C, 80D and 24(b), the assessee submitted that the supporting documentary evidence was called for by the Assessing Officer for

9 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore the first time vide notice dated 21.01.2023 issued under section 142(1), after lapse of several years from the relevant financial years and along with various other requirements. It was submitted that sufficient time was not granted to locate, compile and furnish old documents. The assessee, therefore, filed supporting documents such as bank statements, challans and other relevant papers before the learned CIT(A) as additional evidence. The learned CIT(A), considering the said plea, directed the Assessing Officer to grant proper opportunity to the assessee and to allow the claims after verification of details and genuineness in accordance with law. These grounds were, accordingly, allowed for statistical purposes. 17. With regard to the additions on account of cash deposits in bank accounts for AYs 2014-15 to 2019-20, the assessee submitted before the learned CIT(A) that the cash deposits were duly reflected in the bank book, cash book and personal bank statements and represented cash received in the ordinary course of business from cash sales. The assessee also contended that the relevant details and books were furnished during the appellate proceedings. The learned CIT(A) directed the Assessing Officer to grant opportunity of hearing to the assessee, verify the supporting documents, bank book, cash book and other details, and decide the issue in accordance with law. These grounds were also treated as allowed for statistical purposes. 18. For AY 2018-19, the assessee also challenged the addition of Rs.2,50,000/- made on account of gift. The assessee submitted

10 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore that the said amount represented accumulated gifts received from relatives on the occasion of his children’s birthday and the same was deposited in the bank account. The learned CIT(A) considered this issue along with the other matters requiring verification and directed the Assessing Officer to grant opportunity to the assessee and verify the supporting documents before deciding the issue as per law. 19. For AY 2020-21, the learned CIT(A) recorded that notices under section 250 were issued on 05.12.2024, 27.12.2024, 05.08.2025 and 22.09.2025, but there was no compliance from the assessee till the date of passing of the appellate order. The learned CIT(A), however, proceeded to decide the appeal on merits. The legal challenge to the validity of proceedings under section 153C and the objection based on Rule 112F were rejected for the reasons that the cash was seized from Shri Chandansingh Rathore, who had stated on oath that the cash belonged to M/s. NavdurgaJewellers, proprietary concern of the assessee, and that the assessee failed to establish that the seized cash had any connection with the election process. 20. In respect of the addition of Rs.27,96,200/- for AY 2020-21 on account of cash seized by the police, the learned CIT(A) noted the findings of the Assessing Officer that the assessee had claimed the cash to be out of cash sales and collections from debtors, but had failed to furnish PANs of the debtors, sales bills, GST returns and other corroborative evidence to show that the alleged sales and collections were duly recorded and reported.

11 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore The learned CIT(A) also noted that the assessee failed to substantiate the cash collection pattern and that the explanation regarding cash collection from debtors was treated by the Assessing Officer as an afterthought unsupported by evidence. Accordingly, the learned CIT(A) upheld the addition of Rs.27,96,200/- as unexplained money under section 69A read with section 115BBE. 21. The learned CIT(A) treated the levy of interest under sections 234A, 234B and 234C as consequential and directed the Assessing Officer to levy the same correctly as per law. The remaining grounds were treated as general in nature or as not requiring separate adjudication. Consequently, the appeals were recorded as partly allowed. 22. In these appeals, we shall first take up the preliminary legal grounds challenging the assumption of jurisdiction under section 153C of the Act, as the same go to the root of the assessment proceedings. The assessee has assailed the orders of the CIT(A) in upholding the validity of notice issued under section 153C and the consequent assessments framed under section 143(3) read with section 153C of the Act. The assessee has also raised a connected grievance that the CIT(A) has relied upon judicial precedents which, according to the assessee, are not applicable to the facts of the case, while not dealing with the binding precedents relied upon by the assessee. 23. The specific jurisdictional grounds in AYs 2014-15 to 2019- 20 are:

12 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore Initiation and completion of assessment proceedings under section 153C is not valid 1. The learned Commissioner of Income-tax (Appeals)-50, Mumbai [hereinafter referred to as „the Ld. CIT(A)] erred in upholding the action of the Assistant Commissioner of Income-tax, Central Circle – 8(4), Mumbai (hereinafter referred to as “the Assessing Officer”) in issuing notice under section 153C of the Income-tax Act, 1961 (the Act) as well as in passing an assessment order under the said section, defying the law laid down in second proviso to section 153C(1) of the Act read with Rule 112F of the Income-tax Rules, 1962 (the Rules). 2. The Ld. CIT(A) erred in upholding the action of the Assessing Officer in issuing notice under section 153C of the Income-tax Act, 1961 (the Act) as well as in passing an assessment order under the said section, without having the jurisdiction to do so. Erroneous application of judicial precents and ignoring binding precedents relied by the appellant The Ld. CIT(A) erred in placing reliance on judicial precedent which are not applicable to the facts involved in appellant‟s case and ignoring / not dealing with binding judicial precents which were relied by the appellant in the written submission as well as during physical hearing. 24. The above grounds being jurisdictional in nature are taken up together for adjudication. These grounds challenge the very validity of the proceedings initiated under section 153C of the Act and the consequent assessment orders passed under section 143(3) read with section 153C of the Act. Since the issue goes to the root of the matter and, if decided in favour of the assessee, would render the assessment orders unsustainable in law, the same are being adjudicated at the threshold. The connected ground alleging erroneous application of judicial precedents and non-consideration of binding precedents relied upon by the

13 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore assessee is also considered as part of the adjudication of the aforesaid legal grounds. 25. Since the assessee has pressed the aforesaid jurisdictional grounds and the same are being adjudicated first, the other grounds raised on merits, including the grounds relating to disallowance under section 14A read with Rule 8D, disallowance of deductions under sections 80C, 80D and 24(b), additions under section 68 / 69A and levy of interest, are not taken up separately at this stage. In view of our finding on the legal grounds, the remaining grounds would be rendered academic and would not require separate adjudication. 26. During the course of hearing before us, the learned Authorised Representative (AR) submitted that the assessments framed under section 143(3) read with section 153C of the Act for AYs 2014-15 to 2019-20 are without jurisdiction. He submitted that the search was conducted in the case of Shri Chandansingh B. Rathore on 18.10.2019 and the only material referred to by the Assessing Officer was seizure of cash of Rs.27,96,200/- on 16.10.2019 from the premises of M/s. NavdurgaJewellers. According to him, the said cash, even as per the case of the Department, related to the period relevant to AY 2020-21 and there was no seized material pertaining to AYs 2014-15 to 2019- 20 so as to justify initiation of proceedings under section 153C for those years. 27. He further submitted that the Assessing Officer has merely made a general observation that incriminating material pertaining

14 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore to the assessee was found and seized, but no specific seized document, asset or material having bearing on determination of total income for AYs 2014-15 to 2019-20 has been referred to in the assessment orders. It was therefore contended that the jurisdictional requirement of section 153C was not satisfied and the assessments framed in consequence thereof are liable to be quashed. 28. The learned AR further submitted that the CIT(A), while upholding the validity of the proceedings under section 153C of the Act, has relied upon the judgement of Hon’ble Apex Court in case of K. Krishnamurthy v. Deputy Commissioner of Income- tax) [2025] 171 taxmann.com 413 (SC) which, according to him, are distinguishable on facts and do not govern the controversy involved in the present appeals. He submitted that the CIT(A) has not properly considered the binding judicial precedents relied upon by the assessee, particularly on the requirement that there must be specific seized material pertaining to the assessee and having a bearing on the determination of total income for the relevant assessment years. He, therefore, submitted that the notices issued under section 153C of the Act and the consequent assessment orders framed under section 143(3) read with section 153C for AYs 2014-15 to 2019-20 are without jurisdiction and deserve to be quashed. 29. The learned AR further submitted that the issue is squarely covered in favour of the assessee by the judgment of the Hon’ble Supreme Court in Principal Commissioner of Income-tax,

15 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore Central-3 v. Abhisar Buildwell (P.) Ltd., reported in [2023] 149 taxmann.com 399 (SC) / 454 ITR 212 (SC). He submitted that the Hon’ble Supreme Court has categorically held that in respect of completed or unabated assessments, no addition can be made in the absence of any incriminating material found during the course of search. He pointed out that in the present case, the only material referred to by the Assessing Officer is the cash of Rs.27,96,200/- seized on 16.10.2019, which, even according to the Revenue, pertains to AY 2020-21 and not to AYs 2014-15 to 2019-20. Therefore, in the absence of any seized incriminating material pertaining to the relevant completed assessment years, the notices issued under section 153C and the consequent assessments framed under section 143(3) read with section 153C for AYs 2014-15 to 2019-20 are without jurisdiction and liable to be quashed. 30. The learned Departmental Representative, per contra, relied upon the orders of the Assessing Officer and the CIT(A).He further submitted that the assessee had failed to furnish the necessary details and evidences in support of the claims made during the assessment proceedings and the additions were made after due consideration of the material available on record.In so far as AY 2020-21 is concerned, the learned DR specifically pointed out that the CIT(A) has recorded clear non-compliance on the part of the assessee during the appellate proceedings. 31. We have considered the rival submissions and have also perused the judicial precedents relied upon by the CIT(A) and by

16 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore the assessee. The principal controversy before us is whether, for AYs 2014-15 to 2019-20, the Assessing Officer could validly assume jurisdiction under section 153C of the Act in the absence of any seized incriminating material pertaining to the assessee and having a bearing on determination of total income of those years. 32. The CIT(A), while rejecting the assessee’s legal ground, has mainly proceeded on the premise that the expression “found in the course of search” is of wide amplitude. For this proposition, the CIT(A) has placed reliance on the judgment of the Hon’ble Supreme Court in K. Krishnamurthy v. DCIT [2025] 171 taxmann.com 413 (SC). The CIT(A) has reproduced paragraphs 40 and 41 of the said judgment and has observed that even material found from the premises of another person, or material unearthed during further investigation pursuant to search or interrogation of third parties, would constitute material “found in the course of search”. On that basis, the CIT(A) held that the details called for by the Assessing Officer during assessment proceedings and the bank information collected from the banks could also fall within the expression “found in the course of search”.The relevant extract from K. Krishnamurthy relied upon by the CIT(A) reads as under: “the expression „found in the course of search‟ is of a wide amplitude.” 33. The CIT(A) has also relied upon the judgment of the Hon’ble Madras High Court in St. Antony Educational and Social Society v. Central Board of Direct Taxes & Ors. [2023] 156

17 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore taxmann.com 283 (Madras) / [2024] 462 ITR 290 (Madras) while dealing with the assessee’s contention based on the second proviso to section 153C(1) read with Rule 112F of the Income-tax Rules, 1962. The CIT(A) observed that though the search action was conducted during the election period, the assessee had not established that Rule 112F was applicable. According to the CIT(A), the assessee himself claimed that the seized cash belonged to his business activity in the normal course and, therefore, the cash could not be treated as connected with the election process. 34. However, in our considered view, the reliance placed by the CIT(A) on K. Krishnamurthydoes not answer the legal issue arising in the present appeals for AYs 2014-15 to 2019-20. The said judgment was rendered in the context of penalty under section 271AAA of the Act and the issue before the Hon’ble Supreme Court was whether certain income constituted “undisclosed income” found during the course of search for the purpose of levy of penalty. The Hon’ble Supreme Court in that case was not concerned with the validity of assumption of jurisdiction under section 153C in respect of completed or unabated assessments where no incriminating material pertaining to the relevant assessment year was found during search. Therefore, the said judgment cannot be read as laying down that, even in the absence of any seized material having bearing on the total income of a completed assessment year, proceedings under section 153C can be validly initiated merely on

18 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore the basis of subsequent assessment enquiries or bank information collected during assessment proceedings. 35. The judgment in St. Antony Educational and Social Society is also distinguishable. That decision was considered by the CIT(A) only in the context of Rule 112F and election-related seizure. Even if the assessee’s plea based on Rule 112F is kept aside, the separate and substantive jurisdictional requirement under section 153C still remains to be satisfied. The Assessing Officer must be able to point out seized books of account, documents, assets or information pertaining to the assessee and having a bearing on determination of total income of the relevant assessment year. The decision in St. Antony Educational and Social Society does not dispense with this jurisdictional condition. 36. On the other hand, the assessee has placed reliance on the judgment of the Hon’ble Supreme Court in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. (supra) In the said judgment, the Hon’ble Supreme Court has held that the foundation for assessment under sections 153A / 153C is the existence of incriminating material showing undisclosed income detected as a result of search. 37. The relevant extract from Abhisar Buildwell reads as under: 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration

19 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition undersections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and sub-section (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction(supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 38. The assessee had also relied upon several earlier decisions, includingPr. CIT v. Meeta Gutgutia, PCIT v. Jignesh Shah, CIT v. Deepak Kumar Agarwal, PCIT v. Index Securities Pvt. Ltd., PCIT v. Best Infrastructure (India) Pvt. Ltd., CIT v. Kabul Chawla, Pr. CIT v. Devangi alias Rupa, and CIT v. IBC Knowledge Park (P.) Ltd. The CIT(A)’s order records that the assessee had relied upon these decisions for the proposition that no addition can be made under section 153C in the absence of incriminating material relating to the assessee and that, if incriminating material pertains to one year, the assessment

20 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore cannot be reopened for other years merely because they fall within the six-year period. 39. The ratio of these decisions now stands substantially affirmed by the Hon’ble Supreme Court in Abhisar Buildwell. The Hon’ble Supreme Court noted that various High Courts, including the Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and Kerala High Court, had taken the view that no addition could be made in respect of completed or unabated assessments in the absence of incriminating material. The Hon’ble Supreme Court specifically approved the line of decisions beginning with CIT v. Kabul Chawla and Pr. CIT v. Saumya Construction (P.) Ltd. 40. In the present case, for AYs 2014-15 to 2019-20, the only material referred to in the assessment orders and in the appellate orders is the cash of Rs.27,96,200/- seized on 16.10.2019 from the premises of M/s. NavdurgaJewellers. Even as per the facts recorded by the CIT(A), the said seizure arose during the period relevant to AY 2020-21. The CIT(A) has also recorded the assessee’s contention that apart from the said cash, no incriminating material relating to the assessee was found during the course of search proceedings or requisitioned for the relevant years. 41. Thus, the ratio of Abhisar Buildwell directly governs the controversy for AYs 2014-15 to 2019-20. The subsequent enquiry made by the Assessing Officer during assessment proceedings, or

21 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore the bank statements collected from the banks, cannot by itself substitute the statutory requirement of seized incriminating material pertaining to the relevant completed assessment years. The reliance placed by the CIT(A) on K. Krishnamurthy is therefore misplaced in the facts of the present case, because that decision does not dilute or override the binding ratio of Abhisar Buildwell on the scope of assessment under sections 153A / 153C in respect of completed or unabated assessment years. 42. Accordingly, for AYs 2014-15 to 2019-20, in the absence of any incriminating material found during the course of search pertaining to those years and having a bearing on determination of total income of the assessee, the assumption of jurisdiction under section 153C of the Act is unsustainable. The legal grounds raised by the assessee are, therefore, liable to be allowed. 43. In so far as AY 2020-21 is concerned, the facts stand on a different footing from AYs 2014-15 to 2019-20. The cash of Rs.27,96,200/- was seized on 16.10.2019 from the office premises of M/s. NavdurgaJewellers, and the said date falls in the previous year relevant to AY 2020-21. The CIT(A) has recorded that Shri Chandansingh B. Rathore, in his statement, stated that the said cash belonged to M/s. NavdurgaJewellers, the proprietorship concern of the assessee. The assessment for AY 2020-21 was thereafter completed under section 153C of the Act by assessing the total income at Rs.36,76,030/-.

22 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore 44. However, it is also evident from the order of the CIT(A) that during appellate proceedings for AY 2020-21, notices under section 250 were issued on 05.12.2024, 27.12.2024, 05.08.2025 and 22.09.2025, but there was no compliance by the assessee. The CIT(A) further recorded that no submission and no documentary evidence to substantiate the grounds of appeal were furnished by the assessee, even after allowing sufficient time. 45. Therefore, unlike AYs 2014-15 to 2019-20, we do not consider it appropriate to decide the legal ground as well as the merits of the addition for AY 2020-21 at this stage. The judgment of the Hon’ble Supreme Court in PCIT v. Abhisar Buildwell (P.) Ltd., which has been relied upon by the assessee, deals with the scope of assessment in respect of completed / unabated assessment years in the absence of incriminating material. For AY 2020-21, the seized cash itself pertains to the relevant previous year and, therefore, the issue requires factual examination in the light of the material on record and the explanation of the assessee. 46. Similarly, the reliance placed by the CIT(A) on K. Krishnamurthy v. DCIT, wherein the Hon’ble Supreme Court observed that the expression “found in the course of search” is of wide amplitude, also requires consideration in the factual context of AY 2020-21. Since the assessee did not place his submissions and supporting material before the CIT(A), it would be proper that the CIT(A) examines the legal ground under section 153C, the objection based on the second proviso to section 153C(1) read

23 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore with Rule 112F, and the addition of Rs.27,96,200/- under section 69A, after granting due opportunity to the assessee. 47. Accordingly, the order of the CIT(A) for AY 2020-21 is set aside and the appeal for AY 2020-21 is restored to the file of the CIT(A) for fresh adjudication in accordance with law. The CIT(A) shall decide all grounds raised by the assessee, including the validity of proceedings under section 153C, applicability of Rule 112F, the addition of Rs.27,96,200/- under section 69A, and other disallowances, after granting reasonable opportunity of being heard. The assessee is directed to comply with the notices issued by the CIT(A) and to furnish the necessary submissions and evidence in support of his grounds. All contentions of both parties are kept open.Thus, the appeal for AY 2020-21 is allowed for statistical purposes. 48. In the result, the appeals of the assessee for AYs 2014-15 to 2019-20 are allowed on the preliminary legal ground challenging the validity of initiation and completion of assessment proceedings under section 153C of the Act. Consequently, the assessment orders passed under section 143(3) read with section 153C for these years are quashed. The remaining grounds raised on merits are rendered academic and are not separately adjudicated. 49. In so far as AY 2020-21 is concerned, the order of the CIT(A) is set aside and the matter is restored to the file of the CIT(A) for fresh adjudication in accordance with law after granting

24 ITA No. 8751 to 8756 & 8535/Mum/2026 Mr. Narayansingh Bhavsingh Rathore reasonable opportunity of hearing to the assessee. Accordingly, the appeal for AY 2020-21 is allowed for statistical purposes.

Order pronounced in the open court on 09.07.2026.

Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 09/07/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई/ DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai