Full Text
HIGH COURT OF DELHI
Date of Decision: 28.11.2025
PR. COMMISSIONER OF INCOME TAX-1 .....Appellant
Through: Mr. Vipul Agrawal (Sr. SC)
(Jr. SCs), Mr. Gaoraang Ranjan and Ms. Harshita Kotru (Advs.).
Through: None.
HON'BLE MR. JUSTICE VINOD KUMAR V. KAMESWAR RAO , J. (ORAL)
JUDGMENT
1. Exemption is allowed, subject to all just exceptions.
2. The application stands disposed of. CM APPL. 74732/2025 (delay in filing) CM APPL. 74733/2025 (delay in refilling)
3. These are two applications seeking condonation of 73 days delay in filing and also 692 days delay in refiling the appeal.
4. For the reasons stated in the applications, we condone the delay in filing as well as the delay in refiling the appeal.
5. The applications are disposed of.
6. The challenge in this appeal filed under Section 260A of the Income Tax Act, 1961 (the Act) is to an order dated 16.05.2023 passed by Income Tax Appellate Tribunal deciding two appeals, which includes ITA NO. 2624/DEL/2016, which is under challenge in this appeal.
7. We find that the appeal, which was filed before the Tribunal by the appellant/Revenue relates to the Assessment Year 2007-08. The grounds, which have been raised in the said appeal for the said year, are the following:
account of foreign travel expenses.
8. That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.2,60,00,000/- made by the AO on account of unexplained liabilities.
9. That the Ld. CIT(A) has erred in law and on facts in reducing the addition of Rs.10,00,000/- made by the AO on account of sales of Malwa upto Rs.5,00,000/-.
10. That the Ld. CIT(A) has erred in law and on facts in deleting the addition or Rs.2,75,00,000/- made by the AO on account of addition made on u/s 69B.”
8. The Tribunal while dismissing the appeal filed by the appellant/Revenue has in paragraph 7 onwards stated as under:
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 reopened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfillment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved."
9. From the above, it is now settled that in the case of unabated assessment years, the addition has to be based upon incriminating material and since ld. CIT (A) has given a categorical finding that additions in these years are not based upon incriminating material found during the search and this fact has not been rebutted by the ld. DR for the Revenue and in the grounds of appeal by the Revenue, we hold that assessments in both the years are not valid inasmuch as they are not based upon any incriminating material found during search.
10. Since we have held that assessment are invalid on account of jurisdiction itself the adjudication on merits of the additions is only academic interest, hence we are not engaging into the case.
11. Our above order applies mutatis mutandis to both the assessment years.
12. In the result, these appeals filed by the Revenue are dismissed.
9. On perusal of the order more specifically paragraph 9, it is noted, the Tribunal had observed that the CIT (Appeals) has given a categorical findings that during the years under consideration including the Assessment Year 2007-08, no incriminating material was found during the search, which could have resulted in the reassessment.
10. Based on the said conclusion drawn by the CIT (Appeal), the Tribunal for parity of reasons has dismissed the appeal filed by the appellant/Revenue. The same is a pure question of fact. Two authorities having taken a particular view that there was no incriminating material found during the search, which could have resulted in the reassessment, we are of the view that the Tribunal is justified in relying upon the judgment of the Supreme Court in the case of Principle CIT v Abhisar Buildwell Pvt. Ltd. Civil Appeal No. 6580/2021 decided on 24.04.2023 to dismiss the appeal.
11. As no substantial question of law arise, the appeal is liable to be dismissed. We order accordingly.
V. KAMESWAR RAO, J
VINOD KUMAR, J NOVEMBER 28, 2025 dd