Section 153C assessments are invalid for excluded block periods

Section 153C assessments are invalid for excluded block periods and unabated years lacking incriminating material.

Issue

Issue 1: Whether the block of six assessment years under Section 153C must be reckoned from the deemed date of search (the date the satisfaction note is recorded), thereby excluding years that fall outside this newly calculated window.
Issue 2: Whether the Assessing Officer can make protective additions under Section 68 during Section 153C proceedings for unabated assessment years when no incriminating material was found during the search.

Facts

A search and seizure operation was conducted on a third-party group on October 16, 2019.
The Assessing Officer (AO) of the assessee (the “other person”) recorded the mandatory satisfaction note on September 28, 2021, covering the assessment years 2012-13 and 2014-15 to 2017-18.
Based on this satisfaction note, notices were issued and assessments were framed under Section 153C read with Section 143(3).
For the assessment years 2014-15 to 2017-18, the original assessments had already concluded and were unabated (not pending) on the date the satisfaction note was recorded.
The AO made protective additions under Section 68, alleging the assessee acted as a conduit for routing and layering funds, despite the satisfaction note failing to identify any incriminating material belonging to the assessee.

Decision

On the Block Period (AY 2012-13): The deemed date of search for a non-searched person is the date the satisfaction note is recorded (September 28, 2021). Counting backward from the corresponding assessment year (AY 2022-23), the permissible six-year block extends only until AY 2013-14. Therefore, AY 2012-13 falls outside the scope of Section 153C and its assessment is quashed.
On Unabated Years (AYs 2014-15 to 2017-18): Since these years were unabated and the search yielded no incriminating material pertaining to the assessee, the AO lacked the jurisdiction to make additions. The protective additions are deleted, and the assessments are quashed.
Final Ruling: Decided entirely in favor of the assessee.

Key Takeaways

Deemed Search Date Dictates the Block: For third parties, the block of six years open to reassessment under Section 153C is calculated strictly from the year the satisfaction note is written, not the actual date the physical search took place on the prime target.
Incriminating Material is Mandatory: For completed, unabated assessment years, the revenue cannot make any additions (including protective ones) under Section 153C unless they are backed by specific incriminating material seized during the search.
Jurisdictional Boundaries: Assessing an asset or year that falls outside the legally calculated block period constitutes a fatal flaw that voids the entire tax order.

IN THE ITAT DELHI BENCH ‘A’

Rishi Pal

DCIT

Ms. Madhumita Roy, Judicial Member
and AMITABH SHUKLA, Accountant Member

IT Appeal Nos. 8982, 8984, 8985, 8986 & 8987 (Delhi) of 2025
[Assessment years 2012-13,2014-2015 to 2017-18]

JUNE 17, 2026

Ms. Monika Ghai and Sharad Agarwal, Advs. for the Appellant. Sanjay Pandey, CIT DR for the Respondent.

ORDER

Ms. Madhumita Roy, Judicial Member. – This bunch of five appeals by the same assessee are directed against the order of Ld. Commissioner of Income Tax-(Appeals)-31, New Delhi [hereinafter referred to as ‘ld. CIT(A)] all dated 28.10.2025 arising out of assessment order all dated 30.03.2023 passed by Dy. Commissioner of Income Tax, Central Circle, 27, New Delhi, under section 153C r.w.s. 143(3) of the Income Tax Act, 1961, for the Assessment Years 2012-13, 2014-15, 2015-16, 2016-17 and 2017-18, respectively. The word ‘Act’ herein this order would mean Income Tax Act, 1961.

2. All appeals of the assessee are containing common grounds and therefore the same were heard together and for the purposes of convenience are being adjudicated by this common order. Further, we have noted that in all its appeals, the assessee has raised legal grounds challenging jurisdiction sufficiency and validity of the assessment. The Latin legal maxim Sublato fundamento cadit opus that corresponds to hypothesis that a superstructure does not survive on weak foundation is essential part of jurisprudence. This maxim literally translates to, “If the foundation is removed, the superstructure falls”. It is a well-established principle in law, especially in cases where the initial action or underlying basis of a legal right is found to be invalid, causing all subsequent actions dependent on it to fail. Another related maxim with a similar meaning is Debile fundamentum fallit opus, which translates to “Where there is a weak foundation, the work fails”. As grounds of appeal concerning legal grounds are concerning, the presumption of lack of jurisdiction with the Ld.AO to pass the assessment order as well as validity of assessment, we would like to take the same first. It is trite law that a superstructure does not survive on weak foundation. Considering small difference in the legal challenges raised by the assessee, we would be adjudicating the issues appeal wise.

ITA No.8982/Del/2025 AY 2012-13

3. The assessee has raised following grounds of appeal in ITA No.8982/Del/2025 for AY 2012-13:

That the Appellant denies his liability to be assessed at total income of Rs. 38,59,300/- as against the returned income of Rs 870/- and Rs. 4,71,750/-(Agripitural Income) and accordingly denies his liability to pay tax, cess, surcharge and interest demanded thereon.

That having regard to the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) [*Ld. CIT(A)] has erred in law and on facts in upholding the assumption of jurisdiction by the Ld. Assessing Officer [‘Ld. AO’] under section 153C r.w.s 143(3) of the Income Tax Act, 1961, without recording the requisite satisfaction as mandated by law, without obtaining the necessary approval, and without adhering to other mandatory procedural requirements prescribed under the Act, thereby rendering the entire assessment invalid and liable to be quashed.

That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153C r.w.s. 143(3) is bad in law and against the facts and circumstances of the case.

That having regard to the facts and circumstances of the case and in law, the notice u/s 153C dated 30.09.2021 issued by Deputy Commissioner of Income Tax, Central Circle -27 does not contain Document Identification Number (DIN) and therefore the same is invalid and non-est on account of being in direct violation to the Circular No.19/2019 dated 14.08.2019 issued by Central Board of Direct Taxes and accordingly be liable to be quashed and deemed to have never been issued.

That having regard to the fact and circumstances of the case, the Ld. CIT(A) has further erred in law and on facts in confirming the action of the Ld. AO in making a protective addition of Rs. 34,91,000/- under section 68 of the Act as amount credited in bank, as per para 5.6 of the assessment order, without bringing on record any incriminating material and without appreciating the submissions and evidences placed on record.

That having regard to the facts and circumstances of the case, the Ld CIT(A) has erred in law and on facts in confirming the action of the Ld. AO in making a protective addition of Rs. 2,25,000/-under section 69 of the Act, in respect of the amount credited in the bank accounts of the assessee, as unexplained investments as per para 5.7 of the order, without bringing on record any incriminating material and without appreciating the submissions and evidences placed on record.

That having regard to the fact and circumstances of the case, the Ld. CIT(A) has further erred in law and on facts in confirming the said additions by recording incorrect facts and findings, without providing the opportunity of cross-examination, and without observing the principle of natural justice, thereby rendering the addition bad in law and liable to be deleted.

That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest under sections 234A and 234B of Income Tax Act, 1961.

4. The main issue arising from the appeal of the Assessee , raised through its legal ground of appeal number 2 is regarding the decision of ld. CIT(A) in not giving relief to the assessee by not relying upon the judgment of Hon’ble Delhi High Court in the case of Pr. CIT (Central-1) v. Ojjus Medicare (P.) Ltd. 465 ITR 101 (Delhi)/2024 (4) tmi 268 (Delhi), of this tribunal in Smt. Geetanjali Bhayana v. Deputy Commissioner of Income-tax etc .

5. Heard both the parties. Case file perused.

6. The ld. AR informed us that in this case search had taken place in one Navin Mahipal Group of cases on 16.10.2019, inter alia, leading to recovery of incriminating documents implicating the assessee. Notice u/s 153C was issued to the assessee on 30.09.2021. In the instant case, satisfaction note of the AO of the assessee was drawn on 28.09.2021. The Revenue has however premised that date of search would be deemed as 16.10.2019.

7. The assessee had however contended that the ld. AO has recorded his satisfaction on 28.09.2021 and issued corresponding notice u/s 153C on 30.09.2021. It has been argued that in this case, 28.09.2021 would be deemed as date of search and the block of ten years would start from AY 2013-14 and end on AY 2022-23. Thus, AY 2012-13 would not form part of any search case block and hence cannot be assessed u/s 153C of the Act. The assessee had contended before the ld. CIT(A) that the decision of Hon’ble Delhi High Court in the case of Ojjus Medicare (supra) is applicable in its case. The ld. First Appellate Authority did not concur with the views and dismissed assessee’a appeal.

8. The ld. DR placed reliance upon the order of the lower authorities.

9. The ld. Counsel for the assessee reiterated the arguments taken before the ld. CIT(A) and placed reliance upon the decision in the case of Ojjus Medicare (supra).

10. We have noted that the facts of the present case are evenly covered with the decision of this Tribunal in the case of JSP Projects Private Limited v. Dy.CIT [ IT Appeal Nos.3643 to 3647/DEL/2025,dated 9-3-2026] for Assessment Years: 2015-16, 2016-17, 2019-20, 2020-21 and 2021-22, vide order dated 09.03.2026. The relevant paragraphs are extracted hereunder:-

“14. We have heard rival submissions in the light of material available on records. The short point raised by the Ld council for the assessee through its above-mentioned additional ground of appeal dated 25/02/26 is that AYs 2020-21 & 2021-22 fall within the block of six assessment years contemplated under section 153C read with section 153A. Once proceedings under section 153C were triggered on 14.02.2022, the assessment for AYs 2020-21& 202122 could only have been framed in accordance with section 153C read with section 153A. It has been submitted that in its case the search was conducted on 18/10/2019 and that the satisfaction qua assessee was recorded by the AO of searched person on 14/2/2022. In this regard, it is submitted that in respect of the assessment proceedings under section 153C of the Act, the block period of six assessment years has to be reckoned from the date on which the seized material is received by the Assessing Officer having jurisdiction over the assessee (i.e., the “other person”). Thus, it has been indicated that the block of 6 assessment years to be reckoned from the date of deemed search u/s 153C would be AY’s 2016-17 to AY’s 2021-22. However, in the present case, the Assessing Officer has framed the assessment for AYs 2020-21 & 2021-22 under section 143(3) of the Act, disregarding the mandatory scheme of section 153C. Such an assessment, having been framed outside the statutory framework applicable to a case falling under section 153C, is without jurisdiction and liable to be quashed. In support of its contentions the Ld council has placed reliance upon the principle laid down by the Hon’ble ITAT Delhi in the case of JASJIT SINGH VERSUS ACIT, CENTRAL CIRCLE-11, NEW DELHI AND VICE-VERSA, 2014 holding that the relevant date for computing the six assessment years under section 153C is the date of recording of satisfaction and receipt of seized material by the Assessing Officer of the assessee, and not the date of search in the case of the searched person. The relevant para of the above judgement is as under:

“13. We find that there is no dispute on the relevant facts of the case that search and seizure operation u/s 132 of the Act in the case of Koutons was conducted on 19/02/2009 which is relevant to the F.Y. 01/04/2008 to 31/03/2009 and the relevant assessment year is 2009-10. It is also undisputed that the case of the assessee was centralized by Id. CIT u/s 127 of the Act and the jurisdiction of the assessee from Ward 25(3) to Central Circle 11 was transferred on 16/06/2009, hence previous year would be 01/04/2009 to 31/03/2010 and the A.Y will be 2010-11. On the basis of these facts the contention of the assessee in the additional ground is that the assessment order framed u/s 143(3) of the Act for the assessment year in question is not valid and not maintainable. As per him, the date of search in the case of the present assessee would be the date i.e. 16/06/2009 when documents belonging to the assessee (found during the course of search) were handed over and jurisdiction for framing the assessment was transferred to the AO having jurisdiction for the assessment on the assessee. Taking into account the date 16/06/2009 as date of search in the case of the assessee, the contention of the Id. AR remained that the search year in the case of assessee would be A.Y. 2010-11 and six previous assessment years would be 2009-10 to 2003-04. In other words, the regular assessment u/s 143(3) of the Act in the present case should have been framed for the assessment year 2010-11 and the assessment for the assessment year under consideration should have been framed u/s 153C read with 143(3) of the I.T. Act. In support the above cited decisions were relied upon by the Id. AR

The contention of the ld. CIT(DR on the contrary remained that the reference of proviso 1 of section 153C is only in relation to the second proviso to sub-section 1 of section 153A which speaks about the abatement of the pending proceedings of six assessment years and not regarding the assessment of the preceding six assessment years which will be the same as in section 153A as well as in section 153C of the Act. In this regard she placed reliance on the decision of Hon’ble Delhi High Court in the case of SSP Aviation Ltd. v. DCIT (supra).

We find that an identical issue has been decided by Delhi Bench of the Tribunal in the case of DSL Properties P. Ltd. (supra) in favour of the assessee accepting the similar contention of the assessee. Similar view has been expressed by the Delhi Bench of the Tribunal in the case of V.K. Fiscal (supra) holding that the date of receiving of the seized documents would become the date of search and six years period would be reckoned from this date. For a ready reference para no. 19, 21, 22 & 23 of the decision of Delhi Bench of the Tribunal in the case of DSL Properties (supra) are being reproduced hereunder:

We thus, find that the issue raised in the additional ground has been answered in favour of the assessee, by the Coordinate Delhi Bench of the Tribunal in the case of DSL Properties (supra).

So far as decision of Hon’ble Delhi High Court in the case of SSP Aviation Ltd. v. DCIT (supra) relied upon by the Id. CIT(DR) is concerned, we find that it is not helpful to the revenue as in that case also in para no. 14 of the judgment it has been held as under:

14. “Now there can be a situation when during the search conducted on one person u/s 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the AO has to first be satisfied u/s 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the AO having jurisdiction over the other person. Thereafter, the AO having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the manner contemplated by the provisions of section 153A.

Now a question may arise as to the applicability of the second proviso to section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search u/s 132 or the requisition u/s 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the AO having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date.”

18. In view of the above finding, the assessment framed u/s 143(3) of the Act for the A.Y. 2009-10 in the present case is not valid. Respectfully following the above cited decisions on an identical issue, the additional ground no. 4 in the present case is decided in favour of the assessee and in the result the assessment order is quashed as void…………………. “

15. It was submitted that the aforesaid decision of the Hon’ble ITAT Delhi was carried in appeal by the Revenue before the Hon’ble Delhi High Court in Commissioner of Income Tax-14 versus Shree Jasjit Singh, 2015 (8) TMI 982 – Delhi High Court, Dated. – August 11, 2015, wherein the Hon’ble High Court affirmed the findings of the Tribunal and upheld the view that the date of receipt of seized documents by the Assessing Officer of the “other person” is the deemed date of search for the purposes of section 153C of the Act. Thereafter, the matter was carried to the Hon’ble Supreme Court by the Revenue in Commissioner of Income Tax-14 v. Jasjit Singh, 2023 (10) TMI 572 – Supreme Court, Dated.- September 26, 2023, wherein the Hon’ble Supreme Court dismissed the appeal of the revenue affirming the judgment of the Hon’ble Delhi High Court, thereby settling the legal position conclusively. The Ld council further argued that impugned findings also echo in the decision of Hon’ble Delhi High Court in the case of the Pr. Commissioner of Income Tax-central-1 versus Ojjus medicare pvt. ltd. and others, 2024 (4) tmi 268 – delhi high court, Dated- April 3, 2024. Relevant finding of the Hon’ble High Court were cited as under-

“D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “relevant assessment year” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted.

E. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs’ would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books, of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A.”

16. Per contra the Ld DR placed reliance upon the order of lower authorities.

17. We have noted that the facts of present case are identical to those discussed in judicial precedents supra. There is no dispute regarding the dated of recording of satisfaction of Ld AO of searched person. Accordingly in respectful compliance to the binding judicial precedents of Hon’ble jurisdictional High Court as well as of Hon’ble Apex court, we are of the considered view that the Assessment order for the AY 20-21 ought to have been passed by the Ld AO invoking provisions of section 153C and that consequently the passing of assessment order by issuing notice u/s 143(2) of the Act has caused an incurable and fatal defect in the assessment order per se. Accordingly we set aside and quash the assessment order for AY 2020-21 challenged by the assessee in its ITA number 3646/Del/2025 through the additional ground of appeal.

11. The respondent Revenue could not put up anything on record to suggest any distinguishment of facts. In its decision in the case of Ojjus Medicare (supra), Hon’ble Delhi High Court has laid down that the date of recording of satisfaction note/receipt of seized documents by the AO of the person other than the searched person, shall be deemed as date of search for calculation of the block of years. In the instant case, in view of any evidence to the contrary, the date of recording of satisfaction note shall be deemed as date of search. To the extent, we have noted that the conclusion drawn by Ld. CIT(A) are not in agreement with the true facts of the case. Accordingly, in respectful compliance to the decision of the Hon’ble Delhi High Court as well as of the Co-ordinate Bench of this Tribunal discussed hereinabove, we are of the considered view that the order of the ld. CIT(A) is not based upon true interpretation of the facts of the case. We therefore set-aside the order of the ld. CIT(A) and quash the assessment order u/s 153C dated 30.03.2023 for AY 2012-13. The appeal of the assessee in ITA No.8982/Del/2026 qua its legal ground of appeal no.2 is therefore allowed.

12. As the assessee has succeeded before us with respect to its legal grounds of appeal no.02, all other grounds of appeal including those on merits have rendered academic.

13. In the result, the appeal of the assessee is allowed.

14. The assessee has raised following grounds of appeal for AY 2014-15, 201516, 2016-17 and 2017-18:

ITA No.8984/Del/2025 AY 2014-15

That the Appellant denies his liability to be assessed at total income of Rs. 49,05,000/- as against the returned income of Rs NIL/- and Rs. 5,12,433/- (Agricultural Income) and accordingly denies his liability to pay tax, cess, surcharge and interest demanded thereon.

That having regard to the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’] has erred in law and on facts in upholding the assumption of jurisdiction by the Ld. Assessing Officer [‘Ld. AO’] under section 153C r.w.s 143(3) of the Income Tax Act, 1961, without recording the requisite satisfaction as mandated by law, without obtaining the necessary approval, and without adhering to other mandatory procedural requirements prescribed under the Act, thereby rendering the entire assessment invalid and liable to be quashed.

That having regard to the fact and circumstances of the case, the Ld. CIT(A) has further erred in law and on facts in confirming the action of the Ld. AO in making a protective addition of Rs. 49,05,000/- under section 68 of the Act as amount credited in bank, as per para 5.6 of the assessment order, without bringing on record any incriminating material and without appreciating the submissions and evidences placed on record.

That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in making the addition of Rs.99,06,893/- under the head “Income from Other Sources” as reflected in the Tax Computation Sheet, despite there being no discussion, finding, or reasoning for such addition in the assessment order, thereby rendering the addition arbitrary, unjustified, and bad in law.

ITA No.8985/Del/2025 AY 2015-16

That the Appellant denies his liability to be assessed at total income of Rs.14,06,000/- as against the returned income of Rs NIL/-and Rs.5,36,780/-(Agricultural Income) and accordingly denies his liability to pay tax, cess, surcharge and interest demanded thereon.

That having regard to the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) (‘Ld. CIT(A)’] has erred in law and on facts in upholding the assumption of jurisdiction by the Ld. Assessing Officer [‘Ld. AO’] under section 153C r.w.s 143(3) of the Income Tax Act, 1961, without recording the requisite satisfaction as mandated by law, without obtaining the necessary approval, and without adhering to other mandatory procedural requirements prescribed under the Act, thereby rendering the entire assessment invalid and liable to be quashed.

That having regard to the fact and circumstances of the case, the Ld. CIT(A) has further erred in law and on facts in confirming the action of the Ld. AO in making a protective addition of Rs. 14,06,000/- under section 68 of the Act as amount credited in bank, as per para 5.6 of the assessment order, without bringing on record any incriminating material and without appreciating the submissions and evidences placed on record.

That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in making the addition of Rs.28,18,862/- under the head “Income from Other Sources” as reflected in the Tax Computation Sheet, despite there being no discussion, finding, or reasoning for such addition in the assessment order, thereby rendering the addition arbitrary, unjustified, and bad in law.

ITA No.8986/Del/2025 AY 2016-17

That the Appellant denies his liability to be assessed at total income of Rs.16,03,000/- as against the returned income of Rs NIL/- and Rs.5,64,390/-(Agricultural Income) and accordingly denies his liability to pay tax, cess, surcharge and interest demanded thereon.

That having regard to the fact and circumstances of the case, the Ld. CIT(A) has further erred in law and on facts in confirming the action of the Ld. AO in making a protective addition of Rs.16,03,000/- under section 68 of the Act as amount credited in bank, as per para 5.6 of the assessment order, without bringing on record any incriminating material and without appreciating the submissions and evidences placed on record.

That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in making the addition of Rs.32,10,301/- under the head “Income from Other Sources” as reflected in the Tax Computation Sheet, despite there being no discussion, finding, or reasoning for such addition in the assessment order, thereby rendering the addition arbitrary, unjustified, and bad in law.

ITA No.8987/Del/2025 AY 2017-18

That the Appellant denies his liability to be assessed at total income of Rs.1,90,000 /- as against the returned income of Rs NIL/- and Rs.5,32,475 /-(Agricultural Income) and accordingly denies his liability to pay tax, cess, surcharge and interest demanded thereon.

That having regard to the fact and circumstances of the case, the Ld. CIT(A) has further erred in law and on facts in confirming the action of the Ld. AO in making a protective addition of Rs.1,90,000/- under section 68 of the Act as amount credited in bank, as per para 5.6 of the assessment order, without bringing on record any incriminating material and without appreciating the submissions and evidences placed on record.

15. The only issue raised through its legal ground of appeal number 02, by the assessee, in all the above appeals is regarding non-availability of any seized material with the Ld. AO which could have warranted a legal invocation of proceedings u/s 153C of the Act. We have noted that facts of all the years are identical and hence we will consider the figures for AY 2014-15 qua ITA No.8984/Del/2025. The decision taken therein shall apply mutatis mutandis in AYs 2015-16, 2016-17, 2017-18 as well.

16. The ld. Counsel for the assessee drew our attention to the satisfaction note drawn by the ld. AO dated 28.09.2021 placed in its paper book at page no.8 to 23 for AYs 2010-11 to AY 2020-21. The ld. Counsel has vehemently argued that AYs 2014-15, 2015-16, 2016-17 and 2017-18 were completed/unabated assessment no addition was permissible to be made u/s 153C of the Act unless some incriminating material concerning assessee was found during the course of search. The ld. Counsel submitted that perusal of the impugned satisfaction note alludes that nothing incriminating concerning the assessee was found. The ld. Counsel further argued that the addition has been made merely on protective basis treating the bank account of the assessee unexplained with an underlying allegation that the assessee was used as a conduit by Shri Mahesh Nagar for routing and layering of funds. It was fiercely contested that the addition is purely made on this hypothesis and that is not based upon incriminating documents. In support of its contentions, the ld. Counsel drew our attention to the decision of Hon’ble Apex Court in Pr. CIT v. Abhisar Buildwell (P.) Ltd. [2023] 454 ITR 212 (SC) (SC) and Hon’ble Delhi High Court in Saksham Commodities Ltd. v. ITO 464 ITR 1 (Delhi) holding that no assessment is permissible in the case of unabated assessments in cases where there is no incriminating material on records. The ld. Counsel for the assessee accordingly pleaded for quashing the assessment proceedings culminating in order u/s 153C of the Act dated 30.03.2023.

17. The ld. DR placed reliance upon the orders of the lower authorities.

18. We have noted that the issue of validity of assessment proceedings under section 153C of the Act with respect to availability of incriminating material has been subject of extensive consideration in various decisions of this Tribunal. We have noted that in a catena of decisions of this Tribunal, the ratio laid down in the case of Abhisar Buildwel and several other cases has been extensively examined and relied upon. Thus, in the case of JSP Projects Private Ltd. v. Dy.CIT [IT Appeal No.3594 (Del) of 2025] for Assessment Year 2014-15, a co-ordinate Bench of this Tribunal in its order dated 09.01.2026 held as under:-

“4. It is the case of the assessee that the assessment order under section 153C for AY 2014-15 is void ab initio and is bad in law. The ld. counsel for the assessee submitted that search in case of Alankit Group was conducted on 18.10.2019 under section 132. The AO of the searched person handed over the seized documents to the AO of the assessee on 14.02.2022. Reference was invited to relevant satisfaction note placed on page-71 and 72 of the paper book filed by the assessee. The ld. Counsel submitted that in the present case, Return of Income was filed on 29.11.2014 and assessment under section 143(3) was completed on 06.12.2016. Thus, the assessment had attained finality. It was submitted that the issue is now res-integra that completed assessments could not be disturbed in the assessment under section 153C in the absence of any incriminating documents. The ld. Counsel argued that a perusal of the satisfaction note and the assessment order under section 153C (supra) clearly shows that no incriminating documents was specifically seized as belonging to the assessee. It was argued that the seized material reproduced in the assessment order on pages 25, 31 to 33 alludes ledger accounts which contained disclosed entries and those which were duly accounted for in the books of accounts.

5. In support of her contentions, the Id. Counsel placed reliance upon the decision of Hon’ble Apex Court in Abhisar Buildwell (454 ITR 212 (SC) (SC) holding that where no incriminating material found during search, no addition can be made in respect of completed assessment. Thus, it was held that

“14. In view of the above and for the reasons stated above, it is concluded as under: (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 reopened 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.

The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs.”

6. It was submitted that Hon’ble Supreme Court following the ratio of Abhisar Buildwell (supra) has applied the same ratio to section 153C of the Act vide SC order in the case of DCIT Central Circle 20 V. M/S U.K. Paints (Overseas) Ltd. [2023] 454 ITR 441 (SC), dated April 25, 2023.

“In this batch of appeals, the assessments in case of each Assessee were under Section 153-C of the Income Tax Act, 1961 (for short, ‘the Act’). As found by the High Court in none of the cases any incriminating material was found during the search either from the Assessee or from third party. In that view of the matter, as such, the assessments under Section 153-C of the Act are rightly set aside by the High Court. However, Shri N Venkataraman, learned ASG appearing on behalf of the Revenue, taking the clue from some of the observations made by this Court in the recent decision in the case of Principal Commissioner of Income Tax, Central -3 v. Abhisar Buildwell P. Ltd. , Civil Appeal No. 6580/2021, more particularly, paragraphs 11 and 13, has prayed to observe that the Revenue may be permitted to initiate re-assessment proceedings under Section 147/148 of the Act as in the aforesaid decision, the powers of the re-assessment of the Revenue even in case of the block assessment under Section 153-A of the Act have been saved.

As observed hereinabove, as no incriminating material was found in case of any of the Assessees either from the Assessee or from the third party and the assessments were under Section 153-C of the Act, the High Court has rightly set aside the Assessment Order(s). Therefore, the impugned judgment and order(s) passed by the High Court do not require any interference by this Court.

Hence, all these appeals deserve to the dismissed and are accordingly dismissed.”

7. Further, reliance was placed upon the decision of Hon’ble jurisdictional High Court in the case of CIT v. Kabul Chawla 2015 SCC OnLine Del 11555, holding that the information/material which has been relied upon for assessment has to relate with the assessee.

“(iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment “can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material.”

8. Per Contra, ld. DR placed reliance upon the orders of authorities below.

9. We have heard rival submissions in the light of materials placed on record. We have noted from the order of the ld. CIT(A) that the same concerns raised by the assessee have not been adequately handled. The decision of the ld. CIT(A) is primarily based upon lukewarm response to appellate proceedings. The facts of the case have not been properly analyzed by the First Appellate Authority. As regards, non-availability of incriminating document, we have found sufficient force in the arguments raised by the appellant. Perusal of the assessment order alludes that the ld. Assessing Officer has primarily made the addition on the basis of search and seizure operation carried out in the residential premises of one Shri Sunil Kumar Gupta an alleged close confidant of the Alankit Group and its Directors as well as information available in the seized HP laptop of Shri Gupta. Heavy reliance has also been placed upon the sworn statement of Shri Gupta under section 132(4) dated 18.10.2019. There is nothing substantial in the reasons recorded or the order under section 153C which allude towards any incriminating material found qua the assessee. The judicial precedents on the subject pronounced by Hon’ble Apex Court and Hon’ble Delhi High Court are categorically clear in laying down that no addition under section 153C can be made in cases where no incriminating material has been found. Accordingly, in respectful compliance to the decision of Hon’ble Apex Court in Abhisar Buildwell, U.K. Paints (Overseas) Ltd. , and of Hon’ble Delhi High Court in Kabul Chawla (supra), it is held that the order under section 153C passed by the ld. AO in the case of the assessee is bad in law and therefore the order of lower authorities is set-aside and the order under section 153C is quashed. The ground of appeal no.1 raised by the assessee is allowed.

10. The assessee has succeeded on its legal grounds qua jurisdictional sufficiency, all the other grounds of appeal raised by the assessee nos. 2 to 10 on other legal grounds as well as the merits of the addition, have become academic in nature and hence left open.

11. In the result, the appeal of the assessee is allowed……………. “

19. Thus, we have noted that the Hon’ble Apex Court in the case of Abhisar Buildwel clearly laid down that no valid assessment is possible in case of unabated assessments in the absence of any incriminating material on records. Accordingly, in respectful compliance to the decision of Hon’ble Apex Court, we set-aside the order of the ld. CIT(A) and allow the legal ground of appeal no.2 raised by the assessee in ITA No.8984/Del/2025 for AY 2014-15.

20. As we have allowed legal ground of appeal no.2 raised by the assessee in ITA No.8984/Del/2025 for AY 2014-15, all other grounds raised by the assessee including legal grounds and those on merits have been rendered academic.

21. In the result, the appeal of the assessee in ITA No.8984/Del/2025 for AY 2014-15 is allowed.

22. As the facts of the case in assessee’s appeal in ITA No.8984/Del/2025 for AY 2014-15 are identical to those in ITA Nos.8985, 8986 and 8987/DEL/2025 for Assessment Years 2015-16, 2016-17 and 2017-18, the decision taken therein shall apply mutatis mutandis to these appeals also.

23. In the result, all the appeals of the assessee for Assessment Years 2012-13, 2014-15, 2015-16, 2016-17 and 2017-18 are allowed.