ITAT Delhi on Absence of Incriminating Material: Additions under Section 153A Deleted.

Headnote:

The Delhi ITAT held that additions made under Section 153A of the Income-tax Act, 1961, in respect of unabated assessment years without any incriminating material found during the search are unsustainable. Following the Supreme Court’s ruling in Abhisar Buildwell Pvt. Ltd., the Tribunal directed deletion of additions based on mere bank deposits, as they were not backed by any material unearthed during the search.

Background:

1. The assessee, Shri Bhagwat Dayal, director in several SRS Group entities, faced search proceedings under Section 132 on 06.06.2018.
2. Notices under Section 153A were issued on 03.12.2019 for A.Ys 2013–14 to 2016–17.
3. The Assessing Officer made additions based on bank deposits, despite no incriminating material being found during the search.
4. The CIT(A)-3, Gurgaon, upheld these additions through separate orders dated 28.01.2025.
5. The assessee appealed before the ITAT contending that the additions were beyond the scope of Section 153A since the assessments for the relevant years were unabated.

Tribunal’s Observations:

1. The Tribunal noted that all four assessment years (2013–14 to 2016–17) were unabated, and the additions were not supported by any incriminating material found during search.
2. It relied on the Supreme Court’s decision in Abhisar Buildwell Pvt. Ltd. v. ACIT, which settled the law that:
3. Jurisdiction under Section 153A is confined to assessments where incriminating material is found during search.
4. In case of completed/unabated assessments, no addition can be made in absence of such material.
5. The Assessing Officer may reopen such assessments only under Sections 147/148, if conditions are satisfied.
6. The Tribunal observed that the Revenue failed to rebut the absence of incriminating evidence and had merely relied on bank statements.

Decision:

1. The ITAT allowed all four appeals of the assessee.
2. It directed the Assessing Officer to delete the additions made under Section 153A for A.Ys 2013–14 to 2016–17.
3. As the appeals succeeded on the jurisdictional ground, other issues on merits were not adjudicated.

Legal Provisions Discussed:

1. Section 132, Income-tax Act, 1961 – Search and seizure.
2. Section 153A, Income-tax Act, 1961 – Assessment in case of search or requisition.
3. Sections 147 & 148, Income-tax Act, 1961 – Reassessment provisions.

Outcome:

All four appeals (ITA Nos. 2065–2068/DEL/2025) were allowed, and the impugned additions were deleted.

Order Pronounced: 30 October 2025

Signed By:

1. Shri Satbeer Singh Godara, Judicial Member
2. Shri Naveen Chandra, Accountant Member

Citation: 2025:ITATDEL:2065-2068

Case: Shri Bhagwat Dayal v. Dy. CIT, Central Circle-2, Faridabad

Court: Income Tax Appellate Tribunal, Delhi ‘G’ Bench

Coram: Shri Satbeer Singh Godara (Judicial Member) & Shri Naveen Chandra (Accountant Member)

Date of Decision: 30 October 2025

ITA Nos.: 2065–2068/DEL/2025 (A.Ys 2013–14 to 2016–17)