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Facts
A search was conducted on the Tirupati Sunworld Group of Companies, and subsequently, a notice under Section 153C read with Section 153A was issued to the assessee for AY 2014-15. An addition of Rs. 11,30,000/- was made by the Assessing Officer, which was confirmed by the CIT(A), on the grounds that no incriminating material was found during the search.
Held
The Tribunal held that in the absence of any incriminating material found during the search, no addition can be made under Section 153C in an unabated assessment year, following the Supreme Court's decision in Abhisar Buildwell. Therefore, the Assessing Officer was directed to delete the additions.
Key Issues
Whether additions under Section 153C are sustainable in an unabated assessment year without any incriminating material found during a search.
Sections Cited
153C, 153A, 68, 133(6), 132, 132A, 147, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,
Before: SHRI ANUBHAV SHARMA, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, AM :- This appeal by the assessee is directed against the order of the ld.
ld. CIT(A), Delhi-31 dated 07.08.2025 pertaining to A.Y 2014-15.
The solitary substantive grievance of the assessee relates to the confirmation of addition of Rs. 11,30,000/- made by the Assessing Officer u/s 153C of the Income-tax Act, 1961 [the Act, for short] when of search.
Brief facts of the case are that there was a search on Tirupati Sunworld Group of Companies on 11.11.2014. The Assessing Officer of searched person, the Sunworld group of cases, recorded his satisfaction note on 10.10.2017 with regard to the assessee. The AO of the assessee, recorded his satisfaction on 27.03.2018 and accordingly, notice u/s 153C r.w.s 153A dated 27.03.2018 was issued to the assessee for AY 2014-15.
1. In response thereto, the assessee filed return of income declaring income of Rs. 43,030/- for AY 2014-15. Thereafter, addition was made by the Assessing Officer amounting to Rs. 11,30,000/-, which was challenged before the ld. CIT(A) claiming that the additions are devoid of any reference to incriminating material found during the course of search and the assumption of jurisdiction u/s 153C of the Act is bad in law.
After considering the facts and submissions, the ld. CIT(A) confirmed the action of the Assessing Officer, hence the aggrieved assessee is before us.
Before us, the ld. counsel for the assessee vehemently contended that A.Y 2014-15 was a completed case and not abated and addition in Page 2 of 6 incriminating documents found during the course of search.
Per contra, the ld. DR stated before us that the addition is made on the basis of unexplained deposits in the bank. The ld DR however, did not controvert the fact that no incriminating materials were found with regard to the addition and heavily relied on the orders of the Assessing Officer and the CIT(A).
We have heard the rival submissions and have carefully perused the orders of the authorities below and the relevant material on record.
1. We find that a search u/s 132 of the Act took place on 11.11.2014 and the assessee was issued notice u/s 153A for AY 2014-15 on 27.03.2018.
We also note that the admitted fact is that AY 2014-15 is unabated assessment year. We find that the additions u/s 68 of the Act are made on the basis of credit entry in the bank account of the assessee which was obtained u/s 133(6) of the Act from the Bank of India during the assessment proceedings. Thus, we find that the assessee’s averment that additions are not based on any incriminating materials, remains an uncontroverted fact.
The issue of addition in an unabated assessment year and the role of incriminating material is no longer res-integra and has been settled
“In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re- opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved”.
Page 4 of 6 addition made in the instant year is devoid of any incriminating materials found in the course of search on the Sunworld group of cases and therefore, is squarely covered by the decision in the case of Abhisar Buildwell. Respectfully following the decision of the Hon'ble Supreme Court (supra), we hold that no addition u/s 153C can be sustained in the year under consideration in absence of any incriminating materials found in the course of search. We accordingly, direct the Assessing Officer to delete the impugned additions in the year under consideration. Grounds of appeal raised on this count are allowed.