Holding

The AO may assess or reassess total income under section 153A only for pending assessments and for completed assessments only if incriminating material is uncovered during the search; otherwise the Revenue must use the regular reassessment provisions of sections 147/148.

Summary

The Revenue challenged the Assessing Officer’s (AO) power to make additions to income tax assessments after a search under section 132/132A of the Income Tax Act, 1961. The central issue was whether, under section 153A, the AO could assess or reassess total income for completed or unabated assessments when no incriminating material was uncovered during the search. The Court examined the legislative history of section 153A, its purpose to replace the earlier block‑assessment regime of section 158BA, and the statutory language of the provisos. It held that the AO’s jurisdiction under section 153A is limited to pending assessments, and for completed assessments the AO may act only if incriminating material is found; otherwise the Revenue must rely on the regular reassessment provisions of sections 147/148. Consequently, the appeals and review petition filed by the Revenue were dismissed, confirming that no addition can be made to completed assessments in the absence of incriminating material.

Issues considered

Whether section 153A permits the Assessing Officer to assess or reassess total income for completed/unabated assessments without incriminating material discovered during a search.
Whether pending assessments/reassessments automatically abate upon the initiation of a search under section 132 or requisition under section 132A.
Whether the AO may consider material other than incriminating material found during the search when exercising powers under section 153A.
Whether the Revenue can resort to sections 147 and 148 for reassessment when no incriminating material is uncovered.

Legislation cited

Income Tax Act, 1961s. 132, s. 132A, s. 139, s. 143, s. 144, s. 147, s. 148, s. 153A, s. 158B, s. 158BA, s. 158BB, s. 158BC

Subjects

Income TaxSection 153ASearch and seizureBlock assessmentIncriminating materialAssessment jurisdictionReassessmentTax law interpretation

Judgment

[2023] 7 S.C.R. 899 899

PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 A
v.
ABHISAR BUILDWELL P. LTD.
(Civil Appeal No. 6580 of 2021)
APRIL 24, 2023 B
[M. R. SHAH AND SUDHANSHU DHULIA, JJ.]
Income Tax Act, 1961 – ss.153A, 132, 132A – Assessment
u/s.153A – Scope of – Whether in respect of completed assessments/
unabated assessments, the jurisdiction of AO to make assessment is
C
confined to incriminating material found during the course of search
u/s.132 or requisition u/s.132A or not – Held: In case of search
u/s.132 or requisition u/s.132A, the AO assumes the jurisdiction for
block assessment u/s.153A – All pending assessments/reassessments
shall stand abated – In case any incriminating material is found/
unearthed, even in case of unabated/completed assessments, the D
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
including the income declared in the returns – In case no
incriminating material is unearthed during the search, the AO cannot
E
assess or reassess taking into consideration the other material in
respect of completed assessments/unabated assessments– Thus, in
respect of completed/unabated assessments, no addition can be made
by the AO in absence of any incriminating material found during
the search u/s.132 or requisition u/s.132A – View taken by the Delhi
High Court in Kabul Chawla and the Gujarat High Court in Saumya F
Construction case is agreed with.
Income Tax Act, 1961 – s.153A – Object and purpose of –
Discussed.
Dismissing the appeals and the review petition, the Court
G
HELD: 1.1 That prior to insertion of Section 153A in the
statute, the relevant provision for block assessment was under
Section 158BA of the Act, 1961. The erstwhile scheme of block
assessment under Section 158BA envisaged assessment of
‘undisclosed income’ for two reasons, firstly that there were two
H
899
900 SUPREME COURT REPORTS [2023] 7 S.C.R.

A parallel assessments envisaged under the erstwhile regime, i.e.,
(i) block assessment under section 158BA to assess the
‘undisclosed income’ and (ii) regular assessment in accordance
with the provisions of the Act to make assessment qua income
other than undisclosed income. Secondly, that the ‘undisclosed
income’ was chargeable to tax at a special rate of 60% under
B
section 113 whereas income other than ‘undisclosed income’ was
required to be assessed under regular assessment procedure
and was taxable at normal rate. Therefore, section 153A came to
be inserted and brought on the statute. Under Section 153A
regime, the intention of the legislation was to do away with the
C scheme of two parallel assessments and tax the ‘undisclosed’
income too at the normal rate of tax as against any special rate.
Thus, after introduction of Section 153A and in case of search,
there shall be block assessment for six years. Search
assessments/block assessments under Section 153A are
triggered by conducting of a valid search under Section 132 of
D
the Act, 1961. The very purpose of search, which is a prerequisite/
trigger for invoking the provisions of sections 153A/153C is
detection of undisclosed income by undertaking extraordinary
power of search and seizure, i.e., the income which cannot be
detected in ordinary course of regular assessment. Thus, the
E foundation for making search assessments under Sections 153A/
153C can be said to be the existence of incriminating material
showing undisclosed income detected as a result of search. [Para
9.1][932-G-H; 933-A-D]
1.2 As per the provisions of Section 153A, in case of a search
F under Section 132 or requisition under Section 132A, the AO
gets the jurisdiction to assess or reassess the ‘total income’ in
respect of each assessment year falling within six assessment
years. However, it is required to be noted that as per the second
proviso to Section 153A, the assessment or re-assessment, if
any, relating to any assessment year falling within the period of
G six assessment years pending on the date of initiation of the search
under Section 132 or making of requisition under Section 132A,
as the case may be, shall abate. As per sub-section (2) of Section
153A, if any proceeding initiated or any order of assessment or
reassessment made under sub-section (1) has been annulled in
H appeal or any other legal proceeding, then, notwithstanding
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 901
v. ABHISAR BUILDWELL P. LTD.

anything contained in sub-section (1) or section 153, the A
assessment or reassessment relating to any assessment year
which has abated under the second proviso to subsection (1),
shall stand revived with effect from the date of receipt of the
order of such annulment by the Commissioner. Therefore, the
intention of the legislation seems to be that in case of search
B
only the pending assessment/reassessment proceedings shall
abate and the AO would assume the jurisdiction to assess or
reassess the ‘total income’ for the entire six years period/block
assessment period. The intention does not seem to be to re-
open the completed/unabated assessments, unless any
incriminating material is found with respect to concerned C
assessment year falling within last six years preceding the search.
Therefore, on true interpretation of Section 153A of the Act, 1961,
in case of a search under Section 132 or requisition under Section
132A and during the search any incriminating material is found,
even in case of unabated/completed assessment, the AO would
D
have the jurisdiction to assess or reassess the ‘total income’
taking into consideration the incriminating material collected
during the search and other material which would include income
declared in the returns, if any, furnished by the assessee as well
as the undisclosed income. However, in case during the search
no incriminating material is found, in case of completed/unabated E
assessment, the only remedy available to the Revenue would be
to initiate the reassessment proceedings under sections 147/48
of the Act, subject to fulfilment of the conditions mentioned in
sections 147/148, as in such a situation, the Revenue cannot be
left with no remedy. Therefore, even in case of block assessment
F
under section 153A and in case of unabated/completed assessment
and in case no incriminating material is found during the search,
the power of the Revenue to have the reassessment under
sections 147/148 of the Act has to be saved, otherwise the
Revenue would be left without remedy. [Para 11][935-A-H; 936-
A] G
1.3 If the submission on behalf of the Revenue that in case
of search even where no incriminating material is found during
the course of search, even in case of unabated/completed
assessment, the AO can assess or reassess the income/total
income taking into consideration the other material is accepted, H
902 SUPREME COURT REPORTS [2023] 7 S.C.R.

A in that case, there will be two assessment orders, which shall not
be permissible under the law. At the cost of repetition, it is
observed that the assessment under Section 153A of the Act is
linked with the search and requisition under Sections 132 and
132A of the Act. The object of Section 153A is to bring under tax
the undisclosed income which is found during the course of search
B
or pursuant to search or requisition. Therefore, only in a case
where the undisclosed income is found on the basis of
incriminating material, the AO would assume the jurisdiction to
assess or reassess the total income for the entire six years block
assessment period even in case of completed/unabated
C assessment. As per the second proviso to Section 153A, only
pending assessment/reassessment shall stand abated and the AO
would assume the jurisdiction with respect to such abated
assessments. It does not provide that all completed/unabated
assessments shall abate. If the submission on behalf of the
Revenue is accepted, in that case, second proviso to section 153A
D
and sub-section (2) of Section 153A would be redundant and/or
re-writing the said provisions, which is not permissible under
the law. [Para 12][936-B-E]
1.4 This Court is in complete agreement with the view taken
by the Delhi High Court in the case of Kabul Chawla and the
E Gujarat High Court in the case of Saumya Construction, taking
the view that no addition can be made in respect of completed
assessment in absence of any incriminating material. In case of
search under Section 132 or requisition under Section 132A, the
AO assumes the jurisdiction for block assessment under section
F 153A. All pending assessments/reassessments shall stand abated.
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
G the income declared in the returns. 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
H addition can be made by the AO in absence of any incriminating
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 903
v. ABHISAR BUILDWELL P. LTD.

material found during the course of search under Section 132 or A
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. [Paras 8
B
and 14][932-E; 936-G-H; 937-A-B]
Commissioner of Income Tax, Central-III v. Kabul
Chawla (2015) 61 taxmann.com 412 (Delhi) dated
28.08.2015; Principal Commissioner of Income Tax-4
v. Saumya Construction (2016) 387 ITR 529 (Gujarat)
– approved. C

All Cargo Global Logistics Ltd. v. Deputy Commissioner
of Income Tax (2012) 18 ITR (Trib.) 106 (ITAT/Mum)
dated 06.07.2012; Commissioner of Income Tax- III,
Pune v. Sinhgad Technical Education Society (2017)
397 ITR 344 (SC) : (2018) 11 SCC 490 : [2017] 8 D
SCR 463; Principal Commissioner of Income Tax,
Ahmedabad v. Dipak Jashvantlal Panchal 2017 (2) TMI
862 (Gujarat); Commissioner of Income Tax- II, Thane
v. Continental Warehousing Corporation (Nhava Sheva)
Ltd. (2015) 374 ITR 645 (Bombay); Pr. Commissioner E
of Income Tax (Central), Bangalore and Ors. v. M/s.
Delhi International Airport Pvt. Ltd. and Ors. (2022)
443 ITR 382 (Karnataka); Commissioner of Income
Tax (Central)-III v. Kabul Chawla (2016) 380 ITR 573
(Delhi); Principal Commissioner of Income Tax,
Central-2, NewDelhi v. Meeta Gutgutia (2017) 395 ITR F
526 (Delhi); Chintels India Ltd. v. Deputy Commissioner
of Income Tax – Circle -8, Delhi (2017) 397 ITR 416
(Delhi); Sri. S.M. Kamal Pasha v. The Deputy
Commissioner of Income-Tax Central Circle – 6 (3) (2)
Bangalore (2022 (8) TMI 966 (Karnataka); Principal G
Commissioner of Income Tax-2 v. Jay Infrastructure and
Properties Pvt. Ltd. 2016 (10) TMI 1022 (Gujarat); Smt.
Jami Nirmala v. Principal Commissioner of Income Tax
(2021) 437 ITR 573 (Orissa); Smt. Smrutisudha Nayak
v. Union of India (2021) 439 ITR 193 (Orissa);
H
904 SUPREME COURT REPORTS [2023] 7 S.C.R.

A Commissioner of Income Tax, Kolkata v. Veerprabhu
Marketing Limited (2016) 388 ITR 574 (Calcutta);
Principal Commissioner of Income Tax-2, Kolkata v.
M/s. Salasar Stock Broking Ltd. 2016 (8) TMI 1131
(Calcutta); Pr. Commissioner of Income Tax-Central,
Jaipur v. Smt. Daksha Jain, Sirohi 2019 (8) TMI 474
B
(Rajasthan); Dr. A.V. Sreekumar v. The Commissioner
of Income Tax, Kochi and Assistant Commissioner of
Income Tax, Calicut (2018) 404 ITR 642 (Kerala); Pr.
Commissioner Of Income Tax v. Mehndipur Balaji 2022
SCC OnLine All 444 : (2022) 447 ITR 517 – referred
C to.
Case Law Reference
[2017] 8 SCR 463 referred to Para 4.2
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6580
D of 2021.
From the Judgment and Order dated 05.08.2019 of the High Court
of Delhi at New Delhi in Income Tax Appeal No. 240 of 2018.
With
Civil Appeal Nos. 4264 of 2018, 2648 of 2020, 6585 of 2021, 3044,
E
3045 of 2023, 6593 of 2021, 3043 of 2023, 9097 of 2022, 741 of 2023,
6582 of 2021, 721 of 2020, 6611 of 2021, R. P. (Civil) No. 223 of 2023 in
Civil Appeal No. 4484 of 2018, 9100, 9106, 9111 of 2022, 565-566, 567-
568, 824, 541, 540 of 2023, 14702 of 2015, 17533 of 2017, 6596, 7028,
7029, 6610, 7030, 6608, 6594 of 2021, 7338 of 2019, 6609, 6605 of 2021,
F 1505, 734 of 2020, 7016, 7017, 7015, 6584, 6589, 7026 of 2021, 9098-
9099 of 2022, 3053 of 2018, 7014, 6583, 7027, 6899 of 2021, 15617,
10267 of 2017, 7738-7739, 7736-7737, 7732-7735 of 2021, 10266, 10268
of 2017 and 7740-7743 of 2021.
N Venkataraman, A.S.G., Arijit Prasad, Kavin Gulati, Prateesh
G Kapoor, Arvind P. Datar, Salil Aggarwal, Sr. Advs., S A Haseeb, Zoheb
Hussain, Ms. Gargi Khanna, Ms. Niranjana Singh, Prahlad Singh, Rajan
Kumar Choursia, Prashant Singh II, Ms. Alka Agarwal, Raghvendra
Shukla, Ms. Shruti Shivkumar, V. Chandrashekhar Balaji, Ms. Amritha
Chandra Mouli, Rahul Vijaya Kumar, Raj Bahadur Yadav, Amrish Kumar,
Mrs. Anil Katiyar, Pawanshree Agrawal, Ms. Soumya Dhankani,
H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 905
v. ABHISAR BUILDWELL P. LTD.

Ms. Shubhangi Negi, Praveen Swarup, Salil Kapoor, Sumit Lalchandani, A
Ms. Ananya Kapoor, Sanat Kapoor, Rahul Tomar, Chandr Pratap Singh,
Ajay Kumar Giri, Ms. Sheena Taqui, Ms. Akansha Saini, Dhvanit Chopra,
Shiv Vinayak Gupta, Mrs. Bina Gupta, Ved Jain, Nischay Kantoor,
Ms. Richa Mishra, Subodh S. Patil, Sameer Rohatgi, Kartikey Singh,
Sourabh Tandon, Ms. Ranjeeta Rohatgi, M/s. Khaitan & Co., Atul
B
Shankar Mathur, Mrs. Priya Singh, Shubhankar, Ms. Apoorva Jha, Pratap
Venugopal, Ms. Surekha Raman, Sandeep Bagmar, Akhil Abraham Roy,
Nishith Patel, Abhishek Anand, Ms. Unnimaya S., M/s. K J John and
Co, Ms. Kavita Jha, Rohit Jain, Aniket D Agrawal, Vaibhav Kulkarni,
Rupesh Kumar, Ms. Pankhuri Shrivastava, Ms. Neelam Sharma,
Bhargava V. Desai, Rahul Gupta, Siddhartha Chowdhury, Mahir C
Aggarwal, Deepanshu, Praveen Swarup, Siddharth Ranka, A. Karthik,
Arsh Khan, Vikas Mehta, Tarun Gupta, Prakul Khurana, Rajat Sharma,
Abhishek Sharma, Atul Kumar, Yatinder Chaudhary, Davinder Singh
Khurana, Manoj Rajpoot, Vikrant, Dr. Rakesh Gupta, Ambhoj Kumar
Sinha, Somil Agarwal, Anshul Mittal, Subas Chandra Acharya, Akash
D
Agarwala, Harsh Raj Singh, Advs. for the appearing parties.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. As common question of law and facts arise in this group of
appeals, they are being disposed of by this common judgment and order. E

Civil Appeal No. 6580 of 2021 and other connected appeals as
mentioned above have been preferred by the Revenue. However Civil
Appeal No. 15617 of 2017 and other allied appeals as mentioned above
have been preferred by the respective assessees challenging the order
passed by the respective High Courts taking the view that in case any F
incriminating material is found during search then even completed
assessments can be assessed or reassessed taking into consideration
the incriminating material and other material in possession of the Assessing
Officer.
1.1 For the sake of convenience, Civil Appeal No. 6580 of 2021 G
filed by the Revenue be treated and considered as the lead matter.
2. The core issue involved in the present batch of appeals is the
scope of assessment under section 153A of the Income Tax Act, 1961
(hereinafter referred to as the ‘Act, 1961’). According to the Revenue,
the Assessing Officer (hereinafter referred to as the ‘AO’) is competent H
906 SUPREME COURT REPORTS [2023] 7 S.C.R.

A to consider all the material that is available on record, including that
found during the search, and make an assessment of ‘total income’.
Some of the High Courts have agreed with the said proposition. However,
according to the respective assessees and as per some of the High Courts’
decisions, if no assessment proceeding is pending on the date of initiation
of the search, the AO may consider only the incriminating material found
B
during the search and is precluded from considering any other material
derived from any other source.
3. Shri N. Venkataraman, learned Additional Solicitor General of
India has appeared on behalf of the Revenue and S/Shri Arvind P. Datar,
Kavin Gulati, Preteesh Kapoor, learned Senior Advocates and Shri Ved
C Jain, learned counsel have appeared on behalf of the respective assessees.
3.1 Shri N. Venkataraman, learned ASG has made the following
submissions on behalf of the Revenue:
i) It is submitted that under the Act, 1961, the charging section is
D section 4. It is submitted that thus the income tax is tax on ‘total
income.’ It is submitted that the term ‘total income’ has been
defined in section 2(45) of the Act, 1961, which means the total
amount of income referred to in section 5 and computed in the
manner laid down in the Act. It is submitted that as per section 5
of the Act, 1961, the ‘total income’ of any previous year of a
E person who is a resident includes all income from whatever source
derived. It is submitted that therefore the income tax is a tax on
all income from whatever source derived in the case of a resident-
assessee. Therefore, if any taxable income is left out, the resultant
figure would be ‘partial income’ and not ‘total income’. It is
F submitted that any interpretation of any provision of the Act, 1961
which seeks to exclude any portion of the ‘total income’ from the
ambit of taxation runs contrary to the scheme of taxation and
hence is impermissible. It is submitted that thus the income tax is
a tax on ‘total income,’ the assessee furnishes a return of ‘total
income’ (as per Section 139 of the Act, 1961) and the AO assesses
G ‘total income’ only.
ii) It is next submitted that while considering the issue involved,
the manner and mode of passing assessment/re-assessment orders
is required to be considered. It is submitted that section 139 of the
Act, 1961 requires an assessee to furnish his return of total income
H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 907
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

for the previous year. The return is processed under section 143(1). A
Sub-sections (2) and (3) contain provision for assessment of ‘total
income’ by the AO. It is submitted that there is a possibility that
income chargeable to tax has escaped assessment in the first
instance. Section 147 of the Act, 1961 enables the AO to assess
or reassess the case and bring to tax such income also. Thus, the
B
Act, 1961 contains elaborate machinery to facilitate determination
of ‘total income’ and collection of tax thereon.
iii) It is further submitted that the AO, in order to determine ‘total
income’ correctly, needs to collect information from the assessee
as well as third parties. The Statute contains many provisions
enable the Department to collect information relating to the C
assessee, directly as well as indirectly, so as to enable it to detect
tax evasion and make proper assessment of ‘total income’. Section
132 of the Act, 1961 is such a provision which enables to conduct
‘search and seizure’. It is submitted that section 132 of the Act,
1961 is a tool for collecting information relating to tax evasion by D
an assessee. There are other provisions to ensure that the
assessees are assessed correctly on their ‘total income’, namely,
sections 142, 131, 133, 133A and 285BA. It is submitted that apart
from this, the Department keeps getting information relating to
assessee from various sources, viz.:
E
(i) Suspicious Transaction Report from the Financial Intelligence
Unit (FIU)
(ii) Information from other taxation authorities viz. GST, and
Law Enforcement Agencies, viz. ED, etc.
(iii) Information from foreign tax jurisdictions under Automatic F
Exchange of Information as well as on request basis under
Tax Treaties and International conventions.
(iv) Gathering of documents and evidence from and based on
third party sources.
G
(v) It also collects information available in public domain and
gets the same from informants, tax evasion petitions, etc.
It is submitted that the information collected from all these
sources, including search and seizure, is eventually to be used for
assessing ‘total income’.
H
908 SUPREME COURT REPORTS [2023] 7 S.C.R.

A iv) Shri N. Venkataraman, learned ASG has taken us to the scheme
of assessment in a search case. It is submitted that for the period
prior to 30/06/1995, initially, there was no special provision for
assessment of search cases. Those assessments were made in
accordance with the regular provisions relating to assessment of
income, i.e., section 143(3) or section 147 of the Act, 1961.
B
Therefore, the assessment took into considering the incriminating
material found during the search as well as that coming to the
AO’s notice from any other source.
It is submitted that thereafter the Finance Act, 1995
introduced a special procedure for assessment of search cases.
C A set of provisions comprising of Sections 158B to 158BG was
introduced by Chapter XIV-B – Special procedure for assessment
of search cases. The salient features of Chapter XIV-B are as
follows:
(i) Any search initiated u/s 132 or 132A of the Act after 30th
D June, 1995, the AO shall proceed to assess the undisclosed
income in accordance with the provisions of Chapter XIV-B.
(ii) It mandated the assessment of the total undisclosed income
relating to the block period to be taxed at the rate specified under
Section 113 of the Act as the income of the block period,
E irrespective of the previous year or years to which such income
relates and irrespective of the fact whether regular assessment
for any one or more of the relevant assessment years is pending
or not.
(iii) Section 158B(a) defines “block period”-
F
“block period” means the period comprising previous years
relevant to six assessment years preceding the previous year in
which the search was conducted under section 132 or any
requisition was made under section 132A and also includes the
period up to the date of the commencement of such search or
G date of such requisition in the previous year in which the said
search was conducted or requisition was made:
Provided that where the search is initiated or the requisition is
made before the 1st day of June, 2001, the provisions of this clause
shall have effect as if for the words “six assessment years,” the
H words “ten assessment years” had been substituted;”
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 909
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

(iv) Section 158B(b) defines “Undisclosed Income”: A
“undisclosed income” includes any money, bullion, jewellery
or other valuable article or thing or any income based on any
entry in the books of account or other documents or transactions,
where such money, bullion, jewellery, valuable article, thing,
entry in the books of account or other document or transaction B
represents wholly or partly income or property which has not
been or would not have been disclosed for the purposes of this
Act, or any expense, deduction or allowance claimed under
this Act which is found to be false.”
(v) Consequently, post 30-06-1995, Assessing Officers are allowed C
to assess:
A. Undisclosed income
B. For the block period which is 6 years if the search is prior to
01.06.2001 and 10 years post 01.06.2001.
D
C. At the rate specified in Section 113.
D. The explanation to Section 158B(a) also mandated that the
assessment made under this Chapter shall be in addition to the
regular assessment in respect of each previous year included in
the block period.
E
E. The total undisclosed income relating to the block period shall
not include the income assessed in any regular assessment as
income of such block period.
F. The income assessed in this Chapter shall not be included in
the regular assessment of any previous year included in the block F
period.
(vi) Section 158BB provides the computation mechanism of
undisclosed income of the block period which is as follows:
(i) What can be taxed under this Chapter is only undisclosed income
of the block period. G

(ii) This undisclosed income should form part of the total income.
However, this chapter permits independent and separate
assessment for undisclosed income for the block period and
therefore cannot include the total income forming part of the regular
assessment. H
910 SUPREME COURT REPORTS [2023] 7 S.C.R.

A (iii) In other words, both the income forming part of the regular
assessment/reassessment falling under Section 143/147
respectively, and the assessment on undisclosed income for block
period would constitute together the total income.
(iv) However, the streams of assessment are independent and
B separate. The regular assessment/reassessment would be under
Section 143/147 respectively. Whereas, the assessment of
undisclosed income for block period would be a separate
assessment under Section 158BC(c).
(v) Three things are therefore clear. The spirit of the Income Tax
C Act is to tax total income. The regular assessment/reassessment
form one stream u/s 143/147 and, the block assessment of the
undisclosed income as yet another stream of undisclosed income.
(vi) As a result of two separate assessments for computation of
total income and taxation on it, Section 158BB allowed the following
D exclusions in computing the undisclosed income of block period to
be assessed u/s 158BA which are:
a. Assessment under Section 143 (assessment), Section 144
(best judgment assessment), and Section 147 (reassessment).
b. Where returns have been filed u/s 139 or notices have been
E issued u/s 142(1) or u/s 148, but assessments have not been
made till the date of search requisition, based on the income
disclosed in such returns.
c. Likewise, Section 158B(b) (Clauses c to f) proceeds to
excludes other possible permutations. The bottom line being, if
F the income is either disclosed or period for disclosure is yet to
get over, or assessed or reassessed or gets settled before the
settlement commission, or an assessment of undisclosed income
has been made already under clause c of section 158C.
d. Section 158BB(3) imposed the burden on the assessee to
G prove that any undisclosed income had already been disclosed
in any return of income filed by the assessee, before the
commencement of search or of the requisition, as the case
may be.
e. In short, assessment on undisclosed income for block period
H is an independent assessment from the rest of the assessments
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 911
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

all of which put together would rest in assessment in total A
income.
(vii) Section 158BC provides the procedure for block
assessment and determine the undisclosed income of the block
period in the manner laid down in Section 158BB and the
provisions of Section 142, Sub-Sections 2 and 3 of Section B
143, Section 144 and Section 145 of the Act and the AO would
proceed to pass an assessment order and determine the tax
payable u/s 158BC(c) of the Act. In other words, the order of
assessment on undisclosed income of block period gets passed
u/s 158BC(c) of the Act and the manner of computation shall
be in accordance with Section 158BB of the Act. C

(viii) Section 158BD provides the assessment of undisclosed
income of any other person. Section 158BE provides the time
limit for competition of block assessment. Section 158BF refers
to the inapplicability of the various provisions relating to interest
and penalties, and section 158BG identifies the competent D
authorities who can pass block assessment orders.
(v) It is submitted that the scheme under Chapter XIV-B, referred
to hereinabove, was in place for about eight years but failed to
yield the desired outcome. Therefore, the same came to be
replaced by another scheme by Finance Act, 2003. It is submitted E
that the salient features of the special procedure introduced in
2003 were as below:
(i) The scheme of parallel assessments were given a go-by.
There was to be a single assessment of ‘total income’,
incorporating undisclosed income found during the search F
as well as that found from any other source.
(ii) The concept of ‘block period’ was given a go-by. The
concept of ‘assessment year’ as the temporal unit was
restored.
G
(iii) Assessment had to be made u/s 153A, not under Sections
regularly employed for assessment/reassessment, i.e.
Section 143(3)/147.
(iv) Assessment u/s 153A was to be mandatory and automatic
in a case where search had been conducted.
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912 SUPREME COURT REPORTS [2023] 7 S.C.R.

A (v) Assessments u/s 153A were to be made for each of the
six assessment years preceding the assessment year
relevant to the previous year in which the search was
conducted.
(vi) As mentioned above, the second proviso stipulated that
B assessment/reassessment for any assessment year (out
of the 6 assessment years referred to above) pending on
the date of the initiation of the search would abate and a
single assessment would be made u/s 153A only.
It is submitted that the following are the salient features of Section
C 153A of the Act, 1961:
(i) Section 153A is a non-obstante provision to Sections 139,
147, 149, 151 and 153 and the jurisdictional cause of action to
initiate proceeding under this Section would be where a search
is initiated u/s 132 or books of accounts, other documents or
D any assets are requisitioned u/s 132 of the Act after 31st May,
2023.
(ii) The jurisdictional requirement to initiate proceedings u/s
153A would be a search u/s 132 or a requisition u/s 132A.
(iii) To permit the AO to issue notices for each assessment
E year falling within six assessments years.
(iv) Assess or reassess the total income of six assessment
years immediately preceding the assessment year relevant to
the previous years in which such a search is conducted or
requisition is made.
F
(v) The AO shall assessee or reassess in respect of each
assessment year falling within six assessment years and not
as a block, and for relevant assessment year/years.
(vi) Section 153A(2) states that if an order of assessment or
reassessment made u/s 153A(1) stands annulled in appeal or
G any other legal proceeding, the assessments and reassessments
which had abated under the second proviso to Sub pending on
the date of initiation of such u/s 132 or requisition u/s 132A
shall abate.

H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 913
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

(vii) Section 153A(2) states that if an order of assessment or A
reassessment made u/s 153A(1) stands annulled in appeal or
any other legal proceeding, the assessments and reassessments
which had abated under the second proviso to Sub-Section 1
shall stand revived w.e.f. the date of receipt of the order of
such annulment.
B
(viii) This revival is notwithstanding anything contained under
Sub-Section 1 of Section 153A or Section 153. The proviso to
Section 153A(2) states that such a revival shall again cease to
have effect if the order of annulment which gave rise to said
revival is set aside.
C
(vi) It is submitted that therefore the spirit of the Act, 1961 is to
assess the total income. The earlier regime allowed parallel
assessments namely regular assessment/reassessment
independently and simultaneously allowed assessment of
undisclosed income for the block period under Chapter XIV-B.
Whereas the new regime has abandoned the parallel assessment D
scheme and made it into one unified assessment, once a search
gets initiated under section 132 or books or requisition under section
132A. It is submitted that in the absence of any search under
section 132 or a requisition under section 132A, the assessment
of ‘total income’ should be carried out under section 143, 144 and E
147, i.e., regular assessment, best judgment assessment and
reassessment. It is submitted that prior to the new scheme, when
a search gets initiated or a requisition happens, the normal
assessment/reassessment was allowed to be carried on without
any interference and a block assessment of undisclosed income
was allowed to be made independently. However, the new scheme F
brought w.e.f. 01.06.2003 has dismantled this structure and Section
153A conceives the following sequence:
a. The jurisdictional exercise of power to initiate proceedings
u/s 153A would commence only upon initiation of a search
u/s 132 or a requisition u/s 132A and not before that. G
b. Once a search gets initiated or a requisition is made, the
assessment process under every other provision of the
Income Tax Act would abate.

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914 SUPREME COURT REPORTS [2023] 7 S.C.R.

A c. This is clear by virtue of the expression employed in Section
153A(1) “Notwithstanding anything contained in Section 139,
147, 148, 149, 151 and 153.” Being a non-obstinate provision,
Section 153A overrides all these provisions.
It is submitted that to what extent does the override operate is
B also brought clearly by Section 153A in the following manner:
I. 153A(1)(b) allows assessment and reassessment of total
income of Six assessment years immediately preceding
the assessment year relevant to the previous year in
which such a search is conducted or requisition is made
C and for the assessment year/years.
II. Parliament has chosen the expressions “asses” or
“reassess” the total income.
III. It is the total income and not the undisclosed income
that requires to be assessed u/s 153A. The expression
D “undisclosed income” which was defined under
erstwhile scheme Section 158B(b) has not found a
reference or mention under the new scheme.
IV. Likewise, each year in the six years in question needs
to be assessed independently and not as a block which
E again was defined under the erstwhile scheme u/s
158B(a), which is conspicuous by its absence under
the new scheme.
V. Therefore, twin conditions need to be satisfied under
Section 153A(1)-
F
A. Assessments have to be completed year wise and
not for block period and
B. Assessments have to be made for the total income
and not just for the undisclosed income.
G (vii) It is submitted that once this is evident and clear, the scope of
interpretation of the second proviso to section 153A(1) read with
Section 153A(2) becomes clear and unambiguous. It is submitted
that as per the scheme of Section 153A of the Act, 1961, two
parallel assessments have to be avoided. Therefore, any
assessment under Section 143, 144 and 147 pending on the date
H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 915
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

of initiation of search u/s 132 or making of requestion u/s 132A A
has to abate, and the same needs to be subsumed into Section
153A(1). The second proviso using the expression “shall abate”
should be read with the expressions “assessment” or
“reassessment” employed in the very same proviso, i.e., it must
be read with the expression employed in Section 153A(1)(b)
B
“assess or reassess the total Income” and finally with the
expression “notwithstanding” appearing as the opening phrase u/
s 153A(1) of the Act.
(viii) It is submitted that the expression “assessment” or
“reassessment” appearing in the second proviso and the
expressions “assess or reassess the total income” appearing in C
Section 153A (1)(b) have been employed carefully by the
Parliament to convey clear and distinct intentions. It is submitted
that the expression “assessment” or “reassessment” appearing in
the second proviso refers to the pending assessments under
sections 143, 144 and 147 which would abate. It is submitted that D
whereas “assess or reassess the total income” appearing in Section
153A(1)(b) signifies not the pending assessment or reassessment,
but the assessment to be made under section 153A for six
assessment years. It is submitted that again the Parliament has
been extremely careful in not employing the expression ‘total
income’ in the second proviso which expression has been carefully E
employed under section 153A(1)(b) of the Act, 1961. The omission
in the second proviso and the inclusion under Section 153A(1)(b)
is extremely significant. The omission under the second proviso is
necessary since those pending assessments gets abated upon an
initiation of a search under section 132 or a requisition under section F
133, since the total income is to be assessed or reassessed again
consequent to search or requisition. However, when it comes to
section 153A(10(b) it authorises the AO to assess or reassess the
‘total income’ consequent to search or requisition.
(ix) It is submitted that once a search or requisition is initiated, all G
pending assessments or reassessments would abate. They would
get subsumed into the assessment/reassessment to be passed under
section 153(1)(b) and the AO will pass one assessment order for
each of the six assessment years subsuming all pending
assessments and reassessments and such an order under section
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916 SUPREME COURT REPORTS [2023] 7 S.C.R.

A 153(1)(b) would be for the ‘total income’ for each of the six
assessment years. It is submitted that should the order of
assessment or reassessment under sub-section 1 get annulled,
the abated proceedings shall stand revived.
(x) Making above submissions, it is submitted that the assessment
B under section 153A is not a block assessment; it is not confined to
any undisclosed income; it is not confined only to any incriminating
material seized on account of initiation of search under section
132 or requisition under section 132A; the jurisdictional fact or
requirement to pass orders under section 153A(1)(b) is initiation
of a search under section 132 or requisition under section 132A
C and not the seizure of any incriminating material finding out an
undisclosed income. It is submitted that in the absence of any
statutory mandate, any interpretation that the scope of assessment
under section 153A should be limited to the incriminating material
found during the search is wholly erroneous and unsustainable,
D particularly considering the fact that Section 153A requires
assessment of ‘total income’ and the statute bars resort to the
regular provisions, viz., section 143(3)/147 for assessing the income
that may be relatable to the material coming on the AO’s record
from sources other than the search.
E (xi) It is submitted that when section 153A requires assessment
of ‘total income’, can it be interpreted so as to exclude a part of
the ‘total income’ while making the assessment? It is submitted
that if income based on incriminating material from sources other
than the search is excluded from assessment under section 153A,
how can the same be brought to tax? It is submitted that the
F language and meaning of Section 153A is plain and unambiguous,
i.e., if search under section 132 of the Act, 1961 is conducted in a
case, assessment of ‘total income’ for each of the six assessment
years pending the assessment year relevant to the previous year
in which such search is conducted, has to be made. It is submitted
G that therefore the decision of the Special Bench of the Tribunal in
the case of All Cargo Global Logistics Ltd. v. Deputy
Commissioner of Income Tax, (2012) 18 ITR (Trib.) 106
(ITAT/Mum) dated 06.07.2012 and the decision of the Delhi
High Court in the case of Commissioner of Income Tax,
Central-III v. Kabul Chawla, (2015) 61 taxmann.com 412
H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 917
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

(Delhi) dated 28.08.2015 are not in consonance with the plain A
language and meaning of Section 153A and in the process, defeats
the very purpose of the ‘charging section’ of the Act.
4. Learned counsel appearing for the respective assessees have
made the following submissions:
i) It is submitted that the core issue that arises in the present B
set of appeals is, as to whether in respect of completed
assessments/unabated assessments, whether the jurisdiction
of assessing officer to make assessment is confined to
incriminating material found during the course of search under
Section 132 of the Act or not, i.e., whether any addition can be C
made by the assessing officer in absence of any incriminating
material found during the course of search under section 132
of the Act, 1961 or not.
ii) It is submitted that it is the case on behalf of the Revenue
that the jurisdiction to assess the total income under section D
153A arises upon ‘search’ under section 132 and that the
jurisdiction is not contingent upon unearthing incriminating
material during the course of search. To the aforesaid, it is
submitted that while the jurisdiction to issue notice under section
153A may arise consequent to search, however, jurisdiction to
assess or reassess the income cannot be assumed merely on E
the basis of ‘search’ particularly when no incriminating material
is unearthed during the course of search. It is submitted that
the assessment under section 153A is not the same as regular
assessment under section 143(3) as is being contested by the
Revenue. It is submitted that under the scheme of the Act, F
1961, there are different provisions to make assessment, namely,
(1) regular assessment under section 143(3); (2) best judgment
assessment under section 144; (3) reassessment in case of
income having escaped assessment under section 147; and (4)
assessment under section 153A in consequence of search under
section 132. G
iii) It is submitted that the assessment under section 153A is a
special procedure for assessment in consequence of search
and is distinct from regular scrutiny assessment under section
143(3) or reassessment under section 147 of the Act, 1961. It
H
918 SUPREME COURT REPORTS [2023] 7 S.C.R.

A is submitted that section 153A bears the heading “assessment
in case of search or requisition”. That assessment under section
153A is required to be made after a search under section 132
or requisition under section 132A. That the crucial words
“search” and “requisition” appear in the substantive provision
and the provisos of Section 153A is accordingly to be read in
B
light of such provisions relating to search and requisition , i.e.,
sections 132 and 132A. That both the provisions 132 and132A
contemplate search and requisition where the assessee is not
likely to disclose his income and the said provisions can be
resorted to only in the circumstances stated therein. That section
C 132(1)(c) entitles the Revenue to carry out search in case the
specified officer has reason to believe that any person is in
possession of any money, bullion, jewellery or other valuable
article or thing etc. which have not been disclosed for the
purpose of the Act. That object of both the provisions, namely,
sections 132 and 132A is to unearth the income which the
D
assessee has not or is not likely to disclose. It is submitted that
since the assessment under section 153A is linked with search
and requisition under sections 132 and 132A of the Act, 1961,
it is evident that the object of the section is to bring to tax the
undisclosed income which is found during the course of or
E pursuant to the search or requisition.
iv) It is next submitted that now, in case time limit to make
regular assessment under section 143(3) is pending or an
assessment is underway as on the date of search, the said
assessment shall get abated and the AO will have jurisdiction
F to carry out assessment in respect of such abated assessment
dehors any incriminating material. However, in respect of
completed/unabated assessments, under section 153A of the
Act, 1961, an assessment has to be made in relating to the
search or requisition, namely, in relation to material disclosed
during the search or requisition. It is submitted that in case the
G Revenue is permitted to make assessment in respect of any
issue despite the fact that no incriminating material is found
during the course of search, the same would lead to the
expression “search” and “requisition” used in Section 153A
being rendered otiose. Not only that, search will become a tool
H to enlarge limitation period for making regular assessment under
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 919
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

section 143(3), which is not permissible. It is submitted that it A
is the settled position of law that what cannot be done directly,
cannot be done indirectly.
v) It is submitted that search and requisition can be undertaken
in limited circumstances stated under sections 132 and 132A
to unearth the income which the assessee has not or is not B
likely to disclose. Even in a case where there are bona fide
reasons to believe that the aforesaid circumstances stated in
sections 132 and 132A are present, however, upon undertaking
the search, if no incriminating material whatsoever is unearthed,
it naturally follows that the very belief that the circumstances
exist stands contradicted. In such circumstances, the contention C
of the Revenue that the AO shall still have the jurisdiction to
make addition on any issue, despite no incriminating material
having been found, shall tantamount to abuse of the process of
law and cannot be accepted. It is submitted that only on the
satisfaction of the conditions mentioned in sections 132 and D
132A and on recording reasons to believe, there can be search
or requisition. It is submitted that therefore in case no
incriminating material is found during the course of search, the
very reasons to believe forming the basis of search stands
vitiated and the search action may say to be bad in the eye of
the law. Consequently, the jurisdiction to assess or reassess E
ought to be read in a restricted manner in such circumstances,
i.e., the jurisdiction to assess or reassess ought to be restricted
to only incriminating material unearthed during the course of
search.
vi) It is further submitted that the ‘total income’ under section F
153A in respect of unabated assessments to be read in light of
sections 132 and 132A as the context requires so and omission
of expression “undisclosed income” has no bearing.
vii) As regards the contention on behalf of the Revenue that
earlier scheme of block assessment under Section 158BA G
envisaged assessment of “undisclosed income” whereas first
proviso to Section 153A(1) envisages assessment of “total
income” which manifests the intention of the legislation to bring
to tax “total income”, under Section 153A of the Act de hors
any incriminating material, it is submitted that the said submission H
920 SUPREME COURT REPORTS [2023] 7 S.C.R.

A is without appreciating the object behind introducing the 153A
regime as well as without appreciating the fact that definition
of “total income” under Section 2 is qualified by the expression
“unless the context otherwise requires.”
viii) It is submitted that the erstwhile scheme of block
B assessment under Section 158BA envisaged assessment of
“undisclosed income” for two reasons. First reason was that
there were two parallel assessments envisaged under the
erstwhile regime i.e. (i) block assessment under Section 158BA
to assess the undisclosed income and (ii) the regular assessment
in accordance with the provision of the Act to make assessment
C qua income other than undisclosed income. Second reason was
that the undisclosed income was chargeable to tax at a special
rate of 60% under Section 113 whereas income other than
undisclosed income was required to be assessed under regular
assessment procedure and was taxable at normal rate.
D ix) It is submitted that under Section 153A regime, the intention
of the legislation was to do away with the scheme of two parallel
assessments and tax the undisclosed income too at the normal
rate of tax as against any special rate. It is for such reason
that distinction made earlier qua undisclosed income vis-a-vis
E other income had been done away with under the regime of
Section 153A and it is for that reason that the procedure for
separate assessments qua undisclosed income and income other
than undisclosed income has been done away with. The
omission of word “undisclosed income” in Section 153A does
not mean that assessment consequent to search in the absence
F of any incriminating material being found during the course of
search, the AO shall assume jurisdiction to assess income de
hors incriminating material in respect of unabated assessments
as is being contested by the Revenue. The provision of 153A
still have to be read in light of Sections 132 and 132A. This
G intention of the legislation is also manifestly evident from a
plain reading of second proviso to sub-section (1) of Section
153A as well as from sub-section (2) of Section 153A of the
Act.

H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 921
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

x) It is submitted that the second proviso to sub-section (1) of A
Section 153A provides that assessment or reassessment, if any,
relating to the six assessment years referred to in the sub-
section pending on the date of initiation of search under Section
132 or requisition under Section 132A, as the case may be,
shall abate. Thus, where an assessment is pending as on date
B
of search, the same ‘abates’ and such assessments then can
be made by following the procedure under Section 153A and
the Revenue shall have the power to assess “total income” in
accordance with the provision of the Act. Accordingly, by way
of this second proviso, the intention of the legislation to do
away with two separate assessments is achieved. C
xi) Further, to give this second proviso force and to enable the
Revenue to make assessment qua “total income” as against
just undisclosed income, in the proceedings under Section 153A
itself, the expression “total income” has been used in first
proviso to Section 153A(1). Here, for the purpose of abated D
assessments, the expression “total income” shall undisputedly
derive its meaning from definition of “total income” provided
under Section 2 which means that the Revenue shall be
permitted to make assessment qua total income. Had the
expression “total income” not been used in the first proviso,
the Revenue would have not been able to bring to tax income E
other than undisclosed income even qua the abated
assessments. However, in contrast to abated assessments, in
case of completed assessments, where no assessment was
pending as on date of search, it is pertinent to mention that no
two assessments were taking place in the first place itself. F
Only one assessment took place in the earlier block assessment
regime wherein only undisclosed income could be brought to
tax that too when incriminating material was unearthed.
xii) It is further submitted that, in cases of unabated assessments
where no incriminating material whatsoever was unearthed, G
no addition could be made in the erstwhile regime as well. It is
humbly submitted that the intention of the Parliament was to
never tinker with such category of cases in the 153A regime.
This is because when no two assessments were taking place
in respect of such category of cases, there was no question of
H
922 SUPREME COURT REPORTS [2023] 7 S.C.R.

A doing away with the requirement of two parallel assessments.
In such category of cases, the expression “total income” cannot
be construed literally as per the definition provided under
Section 2 as the same would not only be contrary to the
objective of the legislation (which is to do away with two parallel
assessments) but also manifestly arbitrary as despite no
B
incriminating material being found and despite assessment
having been completed earlier, the Revenue will indulge into
roving enquiry to tinker with earlier assessment in the garb of
assessment under Section 153A. That cannot be permissible
and become a tool to bypass the period of limitation for regular
C assessment.
xiii) It is submitted that the expression “total income” in such
category of cases of completed assessments, where no
incriminating material is found, ought to be interpreted, not as
per definition provided under Section 2, but in light of the
D objective of Sections 132 and 132A, as the context so requires.
Since the assessment under Section 153A of the Act is linked
with search and requisition under Sections 132 and 132A of
the Act wherein the object of the section is to bring to tax the
undisclosed income which is found during the course of or
pursuant to the search or requisition, the expression “total
E income” for the purpose of first proviso Section 153A(1) is to
be read in such context and consequently, the expression “total
income” for the purpose of completed assessment cannot be
read to give unfettered powers to the Revenue to tinker with
the unabated assessments de hors any incriminating material.
F In such cases, the expression “total income” shall be read to
mean as under:
A. If an assessment has been made earlier, the “total
income” as per the assessment order is considered as the
“total income” for the purpose of Section 153A.
G B. Where no assessment has been made earlier but time
limit to initiate assessment proceedings have expired, the
return is treated as final (Refer: Chintels India Limited
Versus DCIT, [2017] 397 ITR 416 (Del)]. Accordingly,

H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 923
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

total income as per such return shall be treated as total A
income for the purpose of Section 153A in such cases.
xiv) It is submitted that thus, the expression “total income” under
Section 153A in respect of completed assessment, when read in
light of Sections 132 and 132A, shall mean the total income as per
assessment order passed under Section 143(3) where assessment B
had been made earlier or; total income as per return where no
assessment was made earlier but time limit to issue notice under
Section 143(2) has expired.
xv) Insofar as the words used ‘total income’ in section 153A of
the Act, 1961, it is submitted that before insertion of the new C
scheme of assessment under Section 153A, there was a concept
of block assessment in respect of the search period. There was
one assessment for the block period in respect of the undisclosed
income found during the search. This undisclosed income was
being taxed at a special rate of 60% and that is why, such income
was being identified separately as against the regular income for D
each of the assessment year. The above concept was given a go-
by on introducing this new scheme of assessment under section
153A which provided that assessment will be made for each of
the assessment year separately and the income found undisclosed
during the search will be taxed at the normal rate. Hence, in section E
153A, it has been stated that ‘total income’ will be assessed. This
means that while computing tax liability, income disclosed as well
as undisclosed income found during the course of search will be
clubbed to determine the ‘total income’ and tax to be computed
on the basis of such ‘total income’. Thus, on the basis of the
expression ‘total income’ in section 153A, the contention of the F
Revenue that the AO gets power to assess ‘total income’ which
will include even income without there being any incriminating
material found during the search in respect of assessments which
have not abated is not tenable. It is submitted that the meaning of
the expression ‘total income’ here will be income originally G
assessed and the income found during the course of the search.
On the basis of this expression ‘total income’, the AO cannot get
jurisdiction to make an assessment in respect of other material
available on record despite no incriminating material being found

H
924 SUPREME COURT REPORTS [2023] 7 S.C.R.

A during the course of the search. It is submitted that therefore
when the purpose of the search is to collect information and in
case no material is found in the search for the particular assessment
year, there is no justification for tinkering with the unabated
assessment. It is submitted that therefore in case no incriminating
material is found during the search, that jurisdiction comes to an
B
end and AO cannot use that opportunity to bring to tax income on
the basis of the material available on record.
xvi) It is submitted that further as per sub-section (2) of section
153A of the if any proceeding or any order of assessment or
reassessment made under sub-section (1) is annulled in appeal or
C any other legal provision, then the assessment or reassessment
relating to any assessment year which had abated under the second
proviso would stand revived. It is submitted that only the
proceedings that have been abated shall be revived. The
proceedings for other assessment years are not revived even if
D there is any income that has escaped assessment. Meaning thereby,
that intention of the legislation is to only give power to AO for
making assessments, which he was earlier having in respect of
assessments, which were pending as on date of search and not
the other assessments. It is submitted that had the intention of
legislature as is being contended On behalf of the Revenue that
E AO has power to make additions in those assessment years where
there is no incriminating material, the legislature would have
provided that in case of annulled assessments, in the case of
unabated assessments, the AO shall on the basis of the additions
made earlier will be empowered to reframe those assessments as
F well. It is submitted that restricting annulled assessments to only
abated assessments, is putting the wheel back to a situation as if
there was no search.
4.1 The submissions on behalf of the assessees in a tabulated
form thus are as under:
G

H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 925
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

A

B

C

D

E

F

G

H
926 SUPREME COURT REPORTS [2023] 7 S.C.R.

A

B

C

D

E

F

G

4.2 Learned counsel for the respective assessees have relied upon
the following decisions of this Court as well as various High Courts in
respect of their submission that no addition can be made in respect of
H completed assessment in absence of incriminating material:
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 927
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

Sl. No. Name of case Citation A
1. Commissioner of Income Tax-III, (2017) 397 ITR 344
Pune Vs. Sinhgad Technical (SC) : (2018) 11 SCC
Education Society 490
2. Principal Commissioner of Income (2016) 387 ITR 529
Tax-4 Vs. Saumya Construction (Gujarat)
3. Principal Commissioner of Income 2017 (2) TMI 862
Tax, Ahmedabad Vs. Dipak (Gujarat) B
Jashvantlal Panchal
4. Commissioner of Income Tax-II, (2015) 374 ITR 645
Thane Vs. Continental Warehousing (Bombay)
Corporation (Nhava Sheva) Ltd.
5. Pr. Commissioner of Income Tax (2022) 443 ITR 382
(Central), Bangalore and Ors. Vs. (Karnataka)
M/s. Delhi International Airport Pvt. C
Ltd. and Ors.
6. Commissioner of Income Tax (2016) 380 ITR 573
(Central)-III Vs. Kabul Chawla (Delhi)
7. Principal Commissioner of Income (2017) 395 ITR 526
Tax, Central -2, New Delhi Vs. Meeta (Delhi)
Gutgutia
8. Chintels India Ltd. Vs. Deputy (2017) 397 ITR 416 D
Commissioner of Income Tax – Circle (Delhi)
-8, Delhi
9. Sri. S.M. Kamal Pasha Vs. The (2022 (8) TMI 966
Deputy Commissioner of Income-Tax (Karnataka)
Central Circle – 6 (3) (2) Bangalore
10. Principal Commissioner of Income 2016 (10) TMI 1022
Tax-2 Vs. Jay Infrastructure and (Gujarat) E
Properties Pvt. Ltd.
11. Smt. Jami Nirmala Vs. Principal (2021) 437 ITR 573
Commissioner of Income Tax (Orissa)
12. Smt. Smrutisudha Nayak Vs. Union (2021) 439 ITR 193
of India (Orissa)
13. Commissioner of Income Tax, (2016) 388 ITR 574
Kolkata Vs. Veerprabhu Marketing (Calcutta)
F
Limited
14. Principal Commissioner of Income 2016 (8) TMI 1131
Tax-2, Kolkata Vs. M/s. Salasar Stock (Calcutta)
Broking Ltd.
15. Pr. Commissioner of Income Tax- 2019 (8) TMI 474
Central, Jaipur Vs. Smt. Daksha Jain, (Rajasthan)
G
Sirohi
16. Dr. A.V. Sreekumar Vs. The (2018) 404 ITR 642
Commissioner of Income Tax, Kochi (Kerala)
and Assistant Commissioner of
Income Tax, Calicut

H
928 SUPREME COURT REPORTS [2023] 7 S.C.R.

A 5. We have heard learned counsel for the respective parties at
length.
The question which is posed for consideration in the present set
of appeals is, as to whether in respect of completed assessments/
unabated assessments, whether the jurisdiction of AO to make assessment
B is confined to incriminating material found during the course of search
under Section 132 or requisition under Section 132A or not, i.e., whether
any 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 132 A of the Act, 1961 or not.
C 6. It is the case on behalf of the Revenue that once upon the
search under Section 132 or requisition under Section 132A, the
assessment has to be done under Section 153A of the Act, 1961 and the
AO thereafter has the jurisdiction to pass assessment orders and to
assess the ‘total income’ taking into consideration other material, though
no incriminating material is found during the search even in respect of
D completed/unabated assessments.
7. At the outset, it is required to be noted that as such various
High Courts, namely, Delhi High Court, Gujarat High Court, Bombay
High Court, Karnataka High Court, Orissa High Court, Calcutta High
Court, Rajasthan High Court and the Kerala High Court have taken the
E view that no addition can be made in respect of completed/unabated
assessments in absence of any incriminating material. The lead judgment
is by the Delhi High Court in the case of Kabul Chawla (supra), which
has been subsequently followed and approved by the other High Courts,
referred to hereinabove. One another lead judgment on the issue is the
F decision of the Gujarat High Court in the case of Saumya Construction
(supra), which has been followed by the Gujarat High Court in the
subsequent decisions, referred to hereinabove. Only the Allahabad High
Court in the case of Pr. Commissioner Of Income Taxv.Mehndipur
Balaji, 2022 SCC OnLine All 444 : (2022) 447 ITR 517 has taken
a contrary view.
G
7.1 In the case of Kabul Chawla (supra), the Delhi High Court,
while considering the very issue and on interpretation of Section 153A
of the Act, 1961, has summarised the legal position as under:

H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 929
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

Summary of the legal position A
38. On a conspectus of Section 153A(1) of the Act, read with the
provisos thereto, and in the light of the law explained in the
aforementioned decisions, the legal position that emerges is as
under:
i. Once a search takes place under Section 132 of the Act, B
notice under Section 153A(1) will have to be mandatorily issued
to the person searched requiring him to file returns for six AYs
immediately preceding the previous year relevant to the AY in
which the search takes place.
ii. Assessments and reassessments pending on the date of the C
search shall abate. The total income for such AYs will have to
be computed by the AOs as a fresh exercise.
iii. The AO will exercise normal assessment powers in respect
of the six years previous to the relevant AY in which the search
takes place. The AO has the power to assess and reassess the D
‘total income’ of the aforementioned six years in separate
assessment orders for each of the six years. In other words,
there will be only one assessment order in respect of each of
the six AYs “in which both the disclosed and the undisclosed
income would be brought to tax”. E
iv. Although Section 153 A 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 AO which can be related to the evidence
found, it does not mean that the assessment “can be arbitrary F
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 seized material.”
v. In absence of any incriminating material, the completed
assessment can be reiterated and the abated assessment or
G
reassessment can be made. The word ‘assess’ in Section 153
A is relatable to abated proceedings (i.e., those pending on the
date of search) and the word ‘reassess’ to completed
assessment proceedings.

H
930 SUPREME COURT REPORTS [2023] 7 S.C.R.

A vi. Insofar as pending assessments are concerned, the
jurisdiction to make the original assessment and the assessment
under Section 153A merges into one. Only one assessment
shall be made separately for each AY on the basis of the findings
of the search and any other material existing or brought on the
record of the AO.
B
vii. Completed assessments can be interfered with by the AO
while making the assessment under Section 153 A only on the
basis of some incriminating material unearthed during the course
of search or requisition of documents or undisclosed income
or property discovered in the course of search which were not
C produced or not already disclosed or made known in the course
of original assessment.”
7.2 Thereafter in the case of Saumya Construction (supra), the
Gujarat High Court, while referring the decision of the Delhi High Court
in the case of Kabul Chawla (supra) and after considering the entire
D scheme of block assessment under Section 153A of the Act, 1961, had
held that in case of completed assessment/unabated assessment, in
absence of any incriminating material, no additional can be made by the
AO and the AO has no jurisdiction to re-open the completed assessment.
In paragraphs 15 & 16, it is held as under:
E “15. On a plain reading of section 153A of the Act, it is evident
that the trigger point for exercise of powers thereunder is a search
under section 132 or a requisition under section 132A of the Act.
Once a search or requisition is made, a mandate is cast upon the
Assessing Officer to issue notice under section 153A of the Act
F to the person requiring him to furnish the return of income in
respect of each assessment year falling within six assessment
years immediately preceding the’ assessment year relevant to the
previous year in which such search is conducted or requisition is
made and assess or reassess the same. Since the assessment
under section 153A of the Act is linked with search and requisition
G under sections 132 and 132A of the Act, it is evident that the
object of the section is to bring to tax the undisclosed income
which is found during the course of or pursuant to the search or
requisition. However, instead of the earlier regime of block
assessment whereby; it was only the undisclosed income of the
H block period that was assessed, section 153A of the Act seeks to
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 931
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

assess the total income for the assessment year, which is clear A
from the first proviso thereto which provides that the Assessing
Officer shall assess or reassess the total income in respect of
each assessment year, falling within such six assessment years.
The second proviso makes the intention of the Legislature clear
as the same provides that assessment or reassessment, if any,
B
relating to the six assessment years referred to in the sub-section
pending on the date of initiation of search under section 132 or
requisition under section 132A, as the case may be, shall abate.
Sub-section (2) of section 153A of the Act provides that if any
proceeding or any order of assessment or reassessment made
under sub-section (1) is annulled in appeal or any other legal C
provision, then the assessment or reassessment relating to any
assessment year which had abated under the second proviso would
stand revived. The proviso thereto says, that such revival shall
cease to have effect if such order of annulment is set aside. Thus,
any proceeding of assessment or reassessment falling within the,
D
six assessment years prior to the search or requisition stands abated
and the total income of the assessee is required to be determined
under section 153A, of the Act. Similarly, sub-section (2) provides
for revival of any assessment or reassessment which stood abated,
if any proceeding or any order of assessment or reassessment
made under section 153A of, the Act is annulled in appeal or any E
other proceeding.
16. Section 153A bears the heading “Assessment in case of search
or requisition”. It is well settled as held by the Supreme Court in a
catena of decisions that the heading of the, section can be regarded
as a key to the interpretation of the operative portion of, the section F
and if there is no ambiguity in the language or if it is plain and
clear, then the heading used in the section strengthens that meaning
From the heading of section 153, the intention of the Legislature
is clear, viz, to provide for assessment in case of search and
requisition. When, the very purpose of the provision is to make
assessment in case of search or requisition, it goes without saying G
that the assessment has to have relation to the search or requisition.
In other words, the assessment, should be connected with
something found during the search or requisition, viz., incriminating
material which reveals undisclosed income Thus, while in view of
the mandate of sub-section (1) of section 153A of the Act, in H
932 SUPREME COURT REPORTS [2023] 7 S.C.R.

A every case where there is a search or requisition, the Assessing
Officer is obliged to issue notice to such person to furnish returns
of income for the six years preceding the assessment year relevant
to the previous year in which the search is conducted or requisition
is made, any addition or disallowance can be made only on the
basis of material collected during the search or requisition. In case
B
no incriminating material is found, as held by the Rajasthan High
Court in the case of Jai Steel (India) v. Asst. CIT (supra), the
earlier assessment would have to be reiterated. In case where
pending assessments have abated, the Assessing Officer can pass
assessment orders for each of the six years determining the total
C income of the assessee which would include income declared in
the returns, if any, furnished by the assessee as well as undisclosed
income, if any, unearthed during the search or requisition. In case
where a pending reassessment under section 147 of the Act has
abated, needless to state that the scope and ambit of the
assessment would include any order which the Assessing Officer
D
could have passed under section 147 of the Act as well as under
section 153A of the Act.”
8. For the reasons stated hereinbelow, we are in complete
agreement with the view taken by the Delhi High Court in the case of
Kabul Chawla (supra) and the Gujarat High Court in the case of
E Saumya Construction (supra), taking the view that no addition can be
made in respect of completed assessment in absence of any incriminating
material.
9. While considering the issue involved, one has to consider the
object and purpose of insertion of Section 153A in the Act, 1961 and
F when there shall be a block assessment under Section 153A of the Act,
1961.
9.1 That prior to insertion of Section 153A in the statute, the relevant
provision for block assessment was under Section 158BA of the Act,
1961. The erstwhile scheme of block assessment under Section 158BA
G envisaged assessment of ‘undisclosed income’ for two reasons, firstly
that there were two parallel assessments envisaged under the erstwhile
regime, i.e., (i) block assessment under section 158BA to assess the
‘undisclosed income’ and (ii) regular assessment in accordance with the
provisions of the Act to make assessment qua income other than
H undisclosed income. Secondly, that the ‘undisclosed income’ was
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 933
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

chargeable to tax at a special rate of 60% under section 113 whereas A
income other than ‘undisclosed income’ was required to be assessed
under regular assessment procedure and was taxable at normal rate.
Therefore, section 153A came to be inserted and brought on the statute.
Under Section 153A regime, the intention of the legislation was to do
away with the scheme of two parallel assessments and tax the
B
‘undisclosed’ income too at the normal rate of tax as against any special
rate. Thus, after introduction of Section 153A and in case of search,
there shall be block assessment for six years. Search assessments/block
assessments under Section 153A are triggered by conducting of a valid
search under Section 132 of the Act, 1961. The very purpose of search,
which is a prerequisite/trigger for invoking the provisions of sections C
153A/153C is detection of undisclosed income by undertaking
extraordinary power of search and seizure, i.e., the income which cannot
be detected in ordinary course of regular assessment. Thus, the foundation
for making search assessments under Sections 153A/153C can be said
to be the existence of incriminating material showing undisclosed income
D
detected as a result of search.
10. On a plain reading of Section 153A of the Act, 1961, it is
evident that once search or requisition is made, a mandate is cast upon
the AO to issue notice under Section 153 of the Act to the person, requiring
him to furnish the return of income in respect of each assessment year
falling within six assessment years immediately preceding the assessment E
year relevant to the previous year in which such search is conducted or
requisition is made and assess or reassess the same. Section 153A of
the Act reads as under:
“153A. Assessment in case of search or requisition - (1)
Notwithstanding anything contained in Section 139, Section 147, F
Section 148, Section 149, Section 151 and Section 153, in the case
of a person where a search is initiated under Section 132 or books
of account, other documents or any assets are requisitioned under
Section 132-A after the 31st day of May, 2003, the Assessing
Officer shall— G
(a) issue notice to such person requiring him to furnish within
such period, as may be specified in the notice, the return of
income in respect of each assessment year falling within six
assessment years referred to in clause (b), in the prescribed
form and verified in the prescribed manner and setting forth H
934 SUPREME COURT REPORTS [2023] 7 S.C.R.

A such other particulars as may be prescribed and the provisions
of this Act shall, so far as may be, apply accordingly as if such
return were a return required to be furnished under Section
139;
(b) assess or reassess the total income of six assessment years
B immediately preceding the assessment year relevant to the
previous year in which such search is conducted or requisition
is made:
Provided that the Assessing Officer shall assess or reassess
the total income in respect of each assessment year falling
C within such six assessment years:
Provided further that assessment or reassessment, if any,
relating to any assessment year falling within the period of six
assessment years referred to in this sub-section pending on
the date of initiation of the search under Section 132 or making
D of requisition under Section 132-A, as the case may be, shall
abate.
(2) If any proceeding initiated or any order of assessment or
reassessment made under sub-section (1) has been annulled in
appeal or any other legal proceeding, then, notwithstanding anything
E contained in sub-section (1) or Section 153, the assessment or
reassessment relating to any assessment year which has abated
under the second proviso to sub-section (1), shall stand revived
with effect from the date of receipt of the order of such annulment
by the Commissioner:

F Provided that such revival shall cease to have effect, if such order
of annulment is set aside
Explanation.—For the removal of doubts, it is hereby declared
that,—
(i) save as otherwise provided in this section, Section 153-B
G and Section 153-C, all other provisions of this Act shall apply
to the assessment made under this section;
(ii) in an assessment or reassessment made in respect of an
assessment year under this section, the tax shall be chargeable
at the rate or rates as applicable to such assessment year.”
H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 935
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

11. As per the provisions of Section 153A, in case of a search A
under Section 132 or requisition under Section 132A, the AO gets the
jurisdiction to assess or reassess the ‘total income’ in respect of each
assessment year falling within six assessment years. However, it is
required to be noted that as per the second proviso to Section 153A, the
assessment or re-assessment, if any, relating to any assessment year
B
falling within the period of six assessment years pending on the date of
initiation of the search under Section 132 or making of requisition under
Section 132A, as the case may be, shall abate. As per sub-section (2) of
Section 153A, if any proceeding initiated or any order of assessment or
reassessment made under sub-section (1) has been annulled in appeal
or any other legal proceeding, then, notwithstanding anything contained C
in sub-section (1) or section 153, the assessment or reassessment relating
to any assessment year which has abated under the second proviso to
sub-section (1), shall stand revived with effect from the date of receipt
of the order of such annulment by the Commissioner. Therefore, the
intention of the legislation seems to be that in case of search only the
D
pending assessment/reassessment proceedings shall abate and the AO
would assume the jurisdiction to assess or reassess the ‘total income’
for the entire six years period/block assessment period. The intention
does not seem to be to re-open the completed/unabated assessments,
unless any incriminating material is found with respect to concerned
assessment year falling within last six years preceding the search. E
Therefore, on true interpretation of Section 153A of the Act, 1961, in
case of a search under Section 132 or requisition under Section 132A
and during the search any incriminating material is found, even in case
of unabated/completed assessment, the AO would have the jurisdiction
to assess or reassess the ‘total income’ taking into consideration the
F
incriminating material collected during the search and other material which
would include income declared in the returns, if any, furnished by the
assessee as well as the undisclosed income. However, in case during
the search no incriminating material is found, in case of completed/
unabated assessment, the only remedy available to the Revenue would
be to initiate the reassessment proceedings under sections 147/48 of the G
Act, subject to fulfilment of the conditions mentioned in sections 147/
148, as in such a situation, the Revenue cannot be left with no remedy.
Therefore, even in case of block assessment under section 153A and in
case of unabated/completed assessment and in case no incriminating
material is found during the search, the power of the Revenue to have
H
936 SUPREME COURT REPORTS [2023] 7 S.C.R.

A the reassessment under sections 147/148 of the Act has to be saved,
otherwise the Revenue would be left without remedy.
12. If the submission on behalf of the Revenue that in case of
search even where no incriminating material is found during the course
of search, even in case of unabated/completed assessment, the AO can
B assess or reassess the income/total income taking into consideration the
other material is accepted, in that case, there will be two assessment
orders, which shall not be permissible under the law. At the cost of
repetition, it is observed that the assessment under Section 153A of the
Act is linked with the search and requisition under Sections 132 and
132A of the Act. The object of Section 153A is to bring under tax the
C undisclosed income which is found during the course of search or pursuant
to search or requisition. Therefore, only in a case where the undisclosed
income is found on the basis of incriminating material, the AO would
assume the jurisdiction to assess or reassess the total income for the
entire six years block assessment period even in case of completed/
D unabated assessment. As per the second proviso to Section 153A, only
pending assessment/reassessment shall stand abated and the AO would
assume the jurisdiction with respect to such abated assessments. It does
not provide that all completed/unabated assessments shall abate. If the
submission on behalf of the Revenue is accepted, in that case, second
proviso to section 153A and sub-section (2) of Section 153A would be
E redundant and/or re-writing the said provisions, which is not permissible
under the law.
13. For the reasons stated hereinabove, we are in complete
agreement with the view taken by the Delhi High Court in the case of
Kabul Chawla (supra) and the Gujarat High Court in the case of
F Saumya Construction (supra) and the decisions of the other High Courts
taking the view that no addition can be made in respect of the completed
assessments in absence of any incriminating material.
14. In view of the above and for the reasons stated above, it is
concluded as under:
G
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;
H
PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 937
v. ABHISAR BUILDWELL P. LTD. [M. R. SHAH, J.]

iii) in case any incriminating material is found/unearthed, even, in A
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
B
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 C
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. D
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.
Civil Appeal Nos.7738-7739/2021, 7736-7737/2021, 7732- E
7735/2021 and 7740-7743/2021
15. Insofar as the aforesaid Civil Appeals preferred by the assessee
– M/s Kesarwani Zarda Bhandar Sahson, Allahabad are concerned,
these appeals have been preferred against the impugned judgment and
order dated 06.09.2016 passed in ITA Nos. 270/2014, 269/2014, 15/2015, F
16/2015, 268/2014 and 17/2015, as also, against the order dated 21.09.2017
passed in the review applications.
It is required to be noted that the issue before the Allahabad High
Court was, whether in case of completed/unabated assessments, the
AO would have jurisdiction to re-open the assessments made under G
Section 143(1)(a) or 143(3) of the Act, 1961 and to re-assess the total
income taking notice of undisclosed income even found during the search
and seizure operation.
15.1 In view of the discussion hereinabove, once during search
undisclosed income is found on unearthing the incriminating material H
938 SUPREME COURT REPORTS [2023] 7 S.C.R.

A during the search, the AO would assume jurisdiction to assess or reassess
the total income even in case of completed/unabated assessments.
Therefore, the impugned judgment(s) and order(s) passed by the High
Court taking the view that the AO has the power to reassess the return
of the assessee not only for the undisclosed income, which was found
during the search operation but also with regard to material that was
B
available at the time of original assessment does not require any
interference. Under the circumstances, the aforesaid appeals preferred
by the assessee – M/s Kesarwani Zarda Bhandar, Sahson, Allahabad
deserve to be dismissed and are accordingly dismissed. In the facts and
circumstances of the case, no costs.
C Civil Appeal Nos. 15617/2017, 10267/2017, 10266/2017 &
10268/2017
16. Insofar as the aforesaid appeals filed by the assessee –
Dayawanti through legal heir against the impugned common judgment
and order dated 27.10.2016 passed by the High Court of Delhi at New
D Delhi in ITA Nos. 357/2015, 358/2015, 565/2015 and 566/2015. The
question before the High Court was, whether the Income Tax Appellate
Tribunal was justified in upholding the addition made on the basis of the
incriminating material during the course of search.
16.1 In view of the aforesaid discussion and the reasoning, all
E these appeals filed by the assessee – Dayawanti through legal heir fail
and the same deserve to be dismissed and are accordingly dismissed.
No costs.

Divya Pandey Appeals dismissed.
F (Assisted by : Abhishek Pratap Singh and Shevali Monga, LCRAs)

G

H