$~24
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision : 28.11.2025
+ ITA 686/2025
PR. COMMISSIONER OF INCOME TAX-1 .....Appellant
Through: Mr. Vipul Agrawal (Sr. SC) with Ms.
Sakshi Shairwal, Mr. Akshat Singh
(Jr. SCs), Mr. Gaoraang Ranjan and
Ms. Harshita Kotru (Advs.).
versus
M/S MIRAGE HOMES PVT. LTD. .....Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MR. JUSTICE VINOD KUMAR
V. KAMESWAR RAO , J. (ORAL)
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 :
"1. That the Ld. CIT(A) has erred in law and on facts in
holding that since no incriminating document was found
during the course of search for this year, assessment u/s
153A of the Act could not have been completed?
2. That the Ld. CIT(A) has erred in law and on facts in
holding that the AO could not have proceeded to frame
assessment u/s 153A in absence of incriminating material
without appreciating the fact the provisions of the section
153A of the I.T. Act provides for assessment and
reassessment of total income of assessee does not confine
assessment or reassessment to incriminating documents
only.
3. That the Ld. CIT(A) has erred in law and on facts in
wrongly appreciating the provision of section 153A of the
I.T. Act which clearly provides for assessment and
reassessment of total income and does not restrict the
scrutiny assessment only to the documents found and
seized during search.
4. That the Ld. CIT(A) has erred in law and on facts in
admitting the additional evidence filed before him without
confronting the same to the AO?
5. That the Ld. CIT(A) has erred in law and on facts in
deleting the addition of Rs.6,26,000/- made by the AO on
account of unexplained cash credit.
6. That the Ld. CIT(A) has erred in law and on facts in
deleting the addition of Rs.56,00,000/- made by the AO on
account of rent for non-genuine business purpose.
7. That the Ld. CIT(A) has erred in law and on facts in
deleting the addition of Rs.5,10,420/- made by the AO on
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 :
"7. Ld. Counsel of the assessee submitted that it was
settled by Hon'ble Delhi High Court in the case of Kabul
Chawla (2015) 61 taxmann.com 412 (Delhi) 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. He submitted that this issue has
now been concluded by the Hon'ble Apex Court in the case
of Pr. CIT vs. Abhisar Buildwell P. Ltd. & ors. in Civil
Appeal No.6580 of 2021 vide order dated 24.04.2023.
8. We note that in this case, a reading of the assessment
order shows that the additions were not based upon any
incriminating material or assets found during search. Ld.
CIT (A) has also given such finding. It is also not the case
that these are abated assessment years. In such situation,
the decision of Hon'ble jurisdictional High Court in the
case of Kabul Chawla (supra) squarely applies. The same
was duly affirmed by Hon'ble Supreme Court in the case
of Pr. CIT vs. Abhisar Buildwell P. Ltd. (supra) and
Hon'ble Supreme Court has held as under :-
"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 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:
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 re-
opened 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
