Section 153C of the Income Tax Act

An appellate authority can admit additional grounds of appeal, even if not raised before, if they are purely legal in nature and all relevant facts for their adjudication are already on record. These grounds can include challenging jurisdictional issues.

In a search assessment under Section 153A, additions can only be made for completed or non-abated assessment years if incriminating material relevant to those years is found during the search, although notice under Section 153A(1) is mandatorily issued for six assessment years preceding the search.

When two equally plausible interpretations of a taxing provision are possible, or when conflicting views exist from non-jurisdictional High Courts, the interpretation that favors the assessee must be adopted.

In Section 153A proceedings, the scope of assessment extends to abated proceedings, enabling an assessee to raise fresh legal claims that could have been made in regular assessment proceedings.

For assessments under Section 153C, a notice is legally unsustainable if there is no incriminating material correlated to the specific assessment years for which reassessment is sought.

An adverse finding based on third-party statements or documents is unsustainable if the assessee is denied the opportunity to cross-examine the witnesses. The denial of cross-examination violates natural justice and renders the statements unusable against the assessee.

No income can be quantified or disallowance made under Section 153A of the Income-tax Act unless it is justified on the basis of material seized during the course of the search.

In assessments under Sections 153A and 153C, the Assessing Officer's jurisdiction to make additions for completed or unabated assessments is limited to income based on incriminating material found during the search and seizure operation. No additions can be made for these assessment years in the absence of such material.

In search assessments under Section 153A, additions to income are permissible only if incriminating material is found during the search; in the absence of such material, completed assessments cannot be disturbed. A statement recorded under Section 132(4) and later retracted may not, on its own, constitute sufficient incriminating evidence for making additions.

Income Tax Authorities, despite having wide powers, cannot make an assessment based on mere guess, suspicion, or conjecture without any evidence or material. An assessment must rest on principles of law and avoid presumptions of evasion.