Loose Sheets Showing Cash Payments Cannot Trigger Extended Section 153A: ITAT Mumbai

Rudra Pratap Tripath Vs ACIT (ITAT Mumbai)

Section 153A Beyond Six Years Invalid Without Identifiable Undisclosed Asset; Cash Notings Alone Insufficient for Extended Section 153A Jurisdiction; ₹3.57 Crore Section 69B Additions Quashed for Invalid Section 153A Jurisdiction: ITAT Mumbai

Summary: The Mumbai Bench of the Income Tax Appellate Tribunal considered two appeals filed by the assessee against separate orders of the Commissioner of Income Tax (Appeals) for assessment years 2011-12 and 2012-13. The assessments had been completed under section 144 read with section 153A of the Income-tax Act, 1961, pursuant to a search conducted under section 132 on 17.09.2019. The Assessing Officer had made additions under section 69B of Rs.2,22,01,300/- for assessment year 2011-12 and Rs.1,35,05,000/- for assessment year 2012-13, relying on seized documents said to reflect cash payments towards purchase of land.

The assessee challenged the assumption of jurisdiction under section 153A, contending that the search took place in the previous year relevant to assessment year 2020-21 and that the ordinary six-year block extended from assessment years 2014-15 to 2019-20. Since assessment years 2011-12 and 2012-13 fell beyond that block, the assessee submitted that the notices could be sustained only if the conditions under the fourth proviso to section 153A and Explanation 2 were satisfied.

The Tribunal found that the Assessing Officer had reproduced the fourth proviso and the Explanation but had not independently demonstrated fulfilment of the jurisdictional conditions in clauses (a), (b) and (c). The seized material consisted of loose papers allegedly recording cash payments towards purchase of land, but the assessment orders did not establish that the alleged escaped income had actually culminated into or was represented by an identifiable asset falling within Explanation 2.

The Tribunal also distinguished the jurisdictional requirements of the fourth proviso from the evidentiary requirements for an addition under section 69B. According to the Tribunal, material capable of supporting an addition for unexplained investment could not automatically supply the jurisdiction required to invoke the extended period under section 153A.

The Tribunal further noted that the Revenue had initiated proceedings under section 148 for assessment year 2013-14 on substantially the same search material. In the Tribunal’s view, this circumstance further supported the assessee’s contention that the extended section 153A jurisdiction could not be invoked for assessment years 2011-12 and 2012-13 without demonstrating the specific jurisdictional facts required by the fourth proviso.

Accordingly, the Tribunal held that the notices issued under section 153A and the consequential assessment orders under section 144 read with section 153A for assessment years 2011-12 and 2012-13 were without jurisdiction and quashed them. The grounds challenging the additions on merits were left open as academic. Both appeals filed by the assessee were allowed.

Search and Assessment Proceedings

A search and seizure action under section 132 was conducted on 17.09.2019 in the case of Indian Logistic Group and its connected persons, including the assessee. Consequent to the search, notices under section 153A were issued for assessment years 2011-12 and 2012-13.

The Assessing Officer referred to Bundle No.6/Party MN-1 and Bundle No.18/Party AB-1 for assessment year 2011-12 and Bundle No.18 for assessment year 2012-13. According to the Assessing Officer, the seized material reflected cash payments allegedly made towards purchase of land.

Assessments were ultimately framed under section 144 read with section 153A, with additions under section 69B on account of alleged unexplained investment amounting to Rs.2,22,01,300/- for assessment year 2011-12 and Rs.1,35,05,000/- for assessment year 2012-13.

Assessee’s Objection to Section 153A Jurisdiction

The assessee challenged the very assumption of jurisdiction under section 153A. The search having taken place on 17.09.2019, the previous year of search corresponded to assessment year 2020-21. Accordingly, the assessee contended that the ordinary six assessment years under section 153A were assessment years 2014-15 to 2019-20.

Assessment years 2011-12 and 2012-13 therefore fell beyond the ordinary six-year period. The assessee submitted that notices for those years could consequently be issued only upon strict fulfilment of the conditions contained in the fourth proviso to section 153A read with Explanation 2.

The assessee also contended that the seized documents merely contained alleged notings of cash payments and did not establish that the payments culminated in acquisition of an identifiable immovable property or another asset covered by Explanation 2.

Assessing Officer’s Reasoning

The Assessing Officer rejected the jurisdictional objection. He referred to the seized documents and observed that the alleged cash payments towards purchase of land exceeded the monetary threshold prescribed under the fourth proviso to section 153A.

The assessment order reproduced the fourth proviso and the Explanation defining “asset” and concluded that the notice issued under section 153A was valid. The Assessing Officer thereafter proceeded with the assessments and made additions under section 69B for alleged unexplained investment.

Submissions Before the Tribunal

Assessee’s Submissions

The assessee submitted that the Assessing Officer had misconstrued the scope of the fourth proviso to section 153A. According to the assessee, the assessment order merely reproduced the statutory provision without recording the independent jurisdictional satisfaction required under clauses (a), (b) and (c).

The assessee further submitted that the seized material did not establish acquisition of an identifiable immovable property or another asset contemplated by Explanation 2. The additions were made under section 69B for alleged unexplained investment and not on the footing that an undisclosed asset exceeding the prescribed threshold had been found during the search.

The assessee also relied upon replies furnished before the Investigation Wing dated 09.12.2019 and 23.12.2019 and submitted that subsequent notices under section 142(1), which concerned the source of the alleged cash investment, related to the merits and could not retrospectively cure the absence of jurisdictional satisfaction.

It was further submitted that, for assessment year 2013-14, the Revenue had initiated proceedings under section 148 on substantially the same search material. The assessee contended that this demonstrated the Revenue’s own adoption of reassessment proceedings as the statutory mechanism for that year.

Revenue’s Submissions

The Departmental Representative relied upon the assessment orders and the orders of the CIT(A). It was submitted that the seized documents disclosed alleged cash payments towards purchase of land and that the amount exceeded the monetary threshold prescribed under the fourth proviso to section 153A.

The Departmental Representative accordingly contended that the Assessing Officer was justified in invoking the extended jurisdiction under section 153A and submitted that the assessments were based on incriminating material unearthed during the search.

Tribunal’s Findings on Section 153A Jurisdiction

Assessment Years Fell Beyond the Ordinary Six-Year Block

The Tribunal noted that the search under section 132 was conducted on 17.09.2019, falling in the previous year relevant to assessment year 2020-21. The ordinary six assessment years contemplated under section 153A consequently extended from assessment years 2014-15 to 2019-20.

Assessment years 2011-12 and 2012-13 were therefore beyond the ordinary six-year block. The Tribunal observed that the Revenue itself proceeded on this premise by relying specifically on the fourth proviso to section 153A.

The Tribunal therefore held that the validity of the proceedings had to be tested strictly against the jurisdictional requirements of the fourth proviso.

Fourth Proviso Contains Jurisdictional Conditions

The Tribunal observed that Parliament had enlarged the scope of section 153A beyond six assessment years while prescribing additional conditions for such extended jurisdiction. These conditions were treated as conditions precedent to the assumption of jurisdiction and not merely as procedural formalities.

The fourth proviso requires the Assessing Officer to have books of account or other documents or evidence revealing that income represented in the form of an asset, which has escaped assessment, amounts to or is likely to amount to Rs.50 lakh or more in the relevant assessment year or in aggregate in the relevant assessment years, besides fulfilment of the remaining statutory conditions.

The Tribunal also noted that Explanation 2 defines “asset” to include immovable property being land or building or both, shares and securities, loans and advances and deposits in bank account.

Loose Papers Did Not Establish an Identifiable Asset

The Tribunal found that the assessment orders referred to loose papers allegedly recording cash payments towards purchase of land. However, the orders did not establish that any identifiable immovable property actually came into existence as a consequence of the alleged payments.

The assessment orders did not identify the property, survey number, CTS number, registration particulars, title, ownership, beneficial ownership, possession or other particulars establishing acquisition of an immovable property. There was also no finding that any undisclosed land or building was found during the search.

The Tribunal therefore held that the existence of notings regarding alleged cash payments, by itself, did not establish that the alleged escaped income was represented in the form of an identifiable asset contemplated by Explanation 2.

Jurisdictional Requirements Distinguished from Section 69B Addition

The Tribunal drew a distinction between the jurisdictional requirement under the fourth proviso to section 153A and the evidentiary requirement for making an addition under section 69B.

According to the Tribunal, seized material may, where jurisdiction has otherwise been validly assumed, provide evidence for examining whether an unexplained investment was made. However, the evidentiary foundation for an addition under section 69B cannot automatically constitute the jurisdictional foundation for invoking the extended period under section 153A.

The Tribunal observed that jurisdiction must precede adjudication on merits and cannot be derived from the addition ultimately proposed to be made.

No Independent Jurisdictional Satisfaction

The Tribunal found that the Assessing Officer had reproduced the fourth proviso and Explanation 2 but had not independently recorded how the jurisdictional conditions contained in clauses (a), (b) and (c) were satisfied.

The Tribunal held that mere reproduction of the statutory provision followed by a bald conclusion could not substitute the jurisdictional satisfaction contemplated by law. The jurisdiction had to rest upon objective satisfaction founded on the material available with the Assessing Officer.

Subsequent Assessment Proceedings Could Not Cure the Jurisdictional Defect

The Tribunal considered the assessee’s replies to the Investigation Wing dated 09.12.2019 and 23.12.2019 and the subsequent notices issued under section 142(1). It observed that those proceedings concerned explanations regarding the alleged cash investment and therefore related to the merits of the proposed additions.

According to the Tribunal, such subsequent enquiries could not retrospectively supply the jurisdictional satisfaction required for issuance of notice under section 153A. The validity of jurisdiction had to be tested on the date of issuance of the notice itself.

Revenue’s Section 148 Proceedings for Assessment Year 2013-14

The Tribunal also considered the fact that the Revenue had initiated proceedings under section 148 for assessment year 2013-14 on substantially the same search material and similar reasoning.

The Tribunal observed that if the Revenue itself considered reassessment proceedings to be the appropriate statutory mechanism for assessment year 2013-14, it was difficult to appreciate how assessment years 2011-12 and 2012-13 could be brought within section 153A without first satisfying the stringent jurisdictional conditions of the fourth proviso.

The Tribunal noted that the Department could not adopt inconsistent statutory routes on substantially the same material without demonstrating why the jurisdictional conditions applicable to the invoked provision were satisfied.

Tribunal’s Conclusion

The Tribunal held that the foundation for invoking the extended jurisdiction under the fourth proviso to section 153A was legally unsustainable. The seized material consisted of alleged cash notings in loose sheets, while the statutory requirement concerned escaped income represented in the form of an asset specifically contemplated by Explanation 2.

The Tribunal found that neither the seized material nor the assessment orders demonstrated that the alleged escaped income had become embodied in an identifiable asset. It also found no independent jurisdictional satisfaction satisfying clauses (a), (b) and (c) of the fourth proviso.

The Tribunal expressly clarified that it was not expressing any opinion on the merits of the additions under section 69B or on the evidentiary value of the seized documents. Those issues were left open because the proceedings failed at the jurisdictional stage.

Final Decision

The Tribunal held that the assumption of jurisdiction under section 153A for assessment years 2011-12 and 2012-13 was vitiated.

Accordingly, the notices issued under section 153A and the consequential assessment orders passed under section 144 read with section 153A for assessment years 2011-12 and 2012-13 were held to be without jurisdiction and quashed.

The remaining grounds challenging the additions on merits were rendered academic and were left open. Both appeals filed by the assessee were allowed.

Order pronounced on 15th July, 2026.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

These two appeals have been preferred by the assessee against the separate orders passed by the Ld. Commissioner of Income Tax (Appeals) for assessment years 2011-12 and 2012-13, arising out of the assessment orders dated 29.09.2021 passed under section 144 read with section 153A of the Income-tax Act, 1961 (“the Act”). Since both the appeals emanate from the same search action, involve common facts, identical seized material, identical reasoning adopted by the Assessing Officer and, more importantly, raise a common jurisdictional issue relating to the very assumption of jurisdiction under section 153A, they were heard together and are being disposed of by this consolidated order. For the sake of convenience, the facts are being referred to from assessment year 2011-12 and our findings shall apply mutatis mutandis to assessment year 2012-13 also.

2. The assessee is an individual. A search and seizure action under section 132 of the Act was conducted on 17.09.2019 in the case of Indian Logistic Group and its connected persons, including the assessee. Consequent to the said search, notice under section 153A came to be issued for the impugned assessment years. During the course of assessment proceedings, the Assessing Officer referred to certain seized documents, namely Bundle No.6/Party MN-1 and Bundle No.18/Party AB-1 for assessment year 2011-12 and Bundle No.18 for assessment year 2012-13, which according to him reflected certain cash payments allegedly made towards purchase of land. Relying upon the said seized documents, the Assessing Officer ultimately framed the assessments under section 144 read with section 153A and made additions under section 69B on account of alleged unexplained investment, amounting to Rs.2,22,01,300/- for assessment year 2011-12 and Rs.1,35,05,000/- for assessment year 2012-13.

3. During the course of assessment proceedings, the assessee, apart from explaining the entries contained in the seized documents on merits, also raised a specific legal objection challenging the very assumption of jurisdiction under section 153A. It was contended that the search having been conducted on 17.09.2019, the assessment year relevant to the previous year of search was assessment year 2020-21 and, consequently, the normal block of six assessment years contemplated under section 153A would extend only from assessment years 2014-15 to 2019-20. Assessment years 2011-12 and 2012-13 admittedly fell beyond the said period. It was, therefore, submitted that notices under section 153A for these years could have been issued only upon strict fulfilment of the conditions prescribed in the fourth proviso to section 153A read with Explanation 2 appended thereto. According to the assessee, the statutory requirements were not fulfilled and, therefore, the proceedings themselves were without jurisdiction.

4. The Assessing Officer rejected the aforesaid objection. In the assessment order, he observed that the seized documents reflected alleged cash payments towards purchase of land exceeding the monetary threshold prescribed under the fourth proviso to section 153A. He reproduced the provisions of the fourth proviso together with the Explanation defining the expression “asset” and concluded that the notice issued under section 153A was validly issued. The objections of the assessee were thereafter rejected by referring back to the said discussion, and the Assessing Officer proceeded to complete the assessments by making additions under section 69B on account of alleged unexplained investment.

5. Before us, the Ld. Counsel for the assessee assailed the very assumption of jurisdiction under section 153A. He submitted that the Assessing Officer has fundamentally misconstrued the scope and ambit of the fourth proviso to section 153A. According to him, the assessment order merely reproduces the statutory provision without recording the independent jurisdictional satisfaction contemplated therein. It was contended that the Assessing Officer nowhere demonstrates how the jurisdictional conditions embodied in clauses (a), (b) and (c) of the fourth proviso stood satisfied. He further submitted that the seized documents merely contain certain alleged notings of cash payments and, even assuming such entries to be correct, neither the seized material nor the assessment order establishes that such alleged cash payments culminated into acquisition of any identifiable immovable property or any other asset contemplated under Explanation 2. The additions themselves have ultimately been made under section 69B on account of alleged unexplained investment and not on the footing that any undisclosed asset exceeding the prescribed monetary threshold was found during the course of search. Thus, according to him, the Assessing Officer has completely conflated the jurisdictional requirements of the fourth proviso with the evidentiary requirements for making an addition under section 69B.

6. Elaborating his submissions, the Ld. Counsel drew our attention to the assessment order itself to submit that the assessee had furnished detailed explanations before the Investigation Wing vide replies dated 09.12.2019 and 23.12.2019, explaining the seized documents immediately after the search. During the course of assessment proceedings also, notices issued under section 142(1) merely required the assessee to explain the source of the alleged cash investment reflected in the seized documents. These proceedings, according to him, pertained entirely to the merits of the proposed additions and could not retrospectively cure the absence of jurisdictional satisfaction required under the fourth proviso. He further submitted that it has also been brought on record that for assessment year 2013-14, which equally falls beyond the ordinary block of six assessment years reckoned from the date of search, the Revenue itself initiated proceedings under section 148 on substantially the same search material. According to him, once the Department itself considered the reassessment provisions to be the appropriate statutory mechanism for assessment year 2013­14, there was no legal basis to invoke section 153A for assessment years 2011-12 and 2012-13 on the very same material without first satisfying the stringent jurisdictional conditions prescribed in the fourth proviso.

7. Per contra, the Ld. Departmental Representative strongly relied upon the reasoning contained in the assessment orders as well as the impugned orders of the Ld. CIT(A). He submitted that the seized documents clearly disclosed alleged cash payments towards purchase of land and that the quantum reflected therein exceeded the monetary threshold prescribed under the fourth proviso to section 153A. According to him, the Assessing Officer was, therefore, fully justified in invoking the extended jurisdiction under section 153A. It was further contended that the additions having been made on the basis of incriminating material unearthed during the course of search, no infirmity could be found either in the assumption of jurisdiction or in the assessments framed by the Assessing Officer. The Ld. DR accordingly supported the orders of the authorities below.

8. We have carefully considered the rival submissions, perused the assessment orders, the impugned appellate orders, the seized documents referred to therein and the entire material placed before us. In our considered opinion, before examining the merits of the additions made under section 69B, it is incumbent upon us to first examine whether the Assessing Officer had validly assumed jurisdiction under section 153A itself. The controversy before us, therefore, is not whether the seized documents may ultimately justify an addition on merits. The foundational question which goes to the root of the matter is whether assessment years 2011-12 and 2012-13, admittedly lying beyond the ordinary six assessment years reckoned from the date of search, could at all be brought within the ambit of section 153A. If the assumption of jurisdiction itself is found to be contrary to the statutory mandate, then the entire superstructure erected thereon must necessarily fail, irrespective of the merits of the additions proposed by the Assessing Officer.

9. It is an undisputed factual position that the search under section 132 was conducted on 17.09.2019, falling in the previous year relevant to assessment year 2020-21. Consequently, the ordinary block of six assessment years contemplated under section 153A would extend only from assessment years 2014-15 to 2019-20. Assessment years 2011-12 and 2012-13 admittedly do not fall within the said block. Significantly, even the Assessing Officer has proceeded on this very premise. It is precisely for this reason that instead of invoking the ordinary jurisdiction under section 153A, he has sought to justify the issuance of notice by specifically referring to and reproducing the fourth proviso to section 153A together with the Explanation appended thereto. Thus, the Revenue itself accepts that these assessment years could be brought within the fold of section 153A only if the stringent jurisdictional requirements of the fourth proviso stood satisfied. Therefore, the validity of the impugned proceedings has necessarily to be tested strictly on the touchstone of the fourth proviso and not otherwise.

10. The legislative scheme is also clear and admits of no ambiguity. Parliament, while enlarging the scope of section 153A from six assessment years to ten assessment years, consciously did not confer an unrestricted power upon the Assessing Officer to disturb completed assessments merely because a search had taken place. Instead, the Legislature engrafted the fourth proviso as a jurisdictional safeguard by prescribing additional statutory conditions before completed assessments beyond six years could be reopened. These conditions are not procedural formalities. They constitute conditions precedent to the very assumption of jurisdiction. Unless the jurisdictional facts contemplated by the fourth proviso exist, the Assessing Officer does not acquire authority in law to issue notice under section 153A for such extended assessment years.

11. The fourth proviso mandates that the Assessing Officer must have in his possession books of account or other documents or evidence which reveal that the income represented in the form of an asset, which has escaped assessment, amounts to or is likely to amount to Rs.50 lakh or more in the relevant assessment year or in aggregate in the relevant assessment years, besides fulfilment of the remaining statutory conditions. Explanation 2 thereafter defines the expression “asset” to mean immovable property being land or building or both, shares and securities, loans and advances and deposits in bank account. Thus, Parliament has consciously employed restrictive language. It has not provided that every escapement of income discovered during search, or every loose paper evidencing some financial transaction, would automatically justify reopening of assessment years beyond six years. The Legislature has consciously confined the extraordinary jurisdiction only to cases where the escaped income is represented in one of the specified assets.

12. Equally significant is the language employed by Parliament. The Legislature has advisedly not used expressions such as “income relating to an asset”, “income intended for acquisition of an asset”, “income utilised for purchase of an asset” or “income evidenced by documents concerning an asset.” The expression used is “income represented in the form of an asset.” The word “represented” is neither accidental nor superfluous. It necessarily postulates that the alleged escaped income must have assumed the character of, or become embodied in, one of the specified assets enumerated in Explanation 2. Therefore, before invoking the extraordinary jurisdiction under the fourth proviso, the Assessing Officer was required to demonstrate, on the basis of cogent material available with him, not merely that certain alleged cash payments were reflected in loose papers, but that such alleged undisclosed income had in fact crystallised into or was represented by an identifiable immovable property or any other asset specifically contemplated by Explanation 2. Unless this jurisdictional fact is first established, the gateway provided by the fourth proviso cannot be crossed.

13. When we examine the assessment orders in the light of the aforesaid statutory scheme, we find a fundamental infirmity in the very assumption of jurisdiction. The Assessing Officer has undoubtedly reproduced the fourth proviso together with the Explanation defining the expression “asset”. However, beyond reproducing the statutory language, the assessment orders do not disclose any independent application of mind to the jurisdictional requirements contained therein. The Assessing Officer nowhere records how the jurisdictional conditions embodied in clauses (a), (b) and (c) of the fourth proviso stood fulfilled in the facts of the present case. The assessment order simply proceeds to conclude that notice under section 153A was validly issued. In our considered opinion, mere reproduction of the statutory provision followed by a bald conclusion cannot substitute the jurisdictional satisfaction contemplated by law. Jurisdiction cannot rest upon reproduction of the statute; it must rest upon objective satisfaction founded upon the material available with the Assessing Officer.

14. The infirmity becomes even more apparent when one examines the nature of the seized material itself. From the assessment orders, it is evident that the Assessing Officer has merely referred to certain loose papers allegedly recording cash payments towards purchase of land. However, neither the seized documents nor the discussion contained in the assessment orders establishes that any identifiable immovable property actually came into existence as a consequence of such alleged payments. There is no finding regarding the identity of the property, survey number, CTS number, registration particulars, title, ownership, beneficial ownership, possession or even that the alleged transaction ultimately culminated into acquisition of any immovable property. The assessment orders do not record that any undisclosed land or building was found during the course of search. At the highest, what emerges from the seized material is only an allegation that certain cash payments were proposed or allegedly made. Whether such allegation is ultimately correct or not is altogether a different issue. However, the existence of such notings, by itself, does not establish that the alleged escaped income stood represented in the form of an identifiable immovable property as contemplated by Explanation 2.

15. This distinction assumes considerable significance because the jurisdictional requirement under the fourth proviso is entirely different from the evidentiary requirement necessary for making an addition under section 69B. A seized document may, if jurisdiction is otherwise validly assumed, furnish evidence for examining whether any unexplained investment has been made. However, the evidentiary foundation for making an addition under section 69B cannot automatically become the jurisdictional foundation for invoking the extended period under section 153A. The Assessing Officer has, in our considered opinion, impermissibly conflated these two distinct concepts. Jurisdiction must precede adjudication on merits; it cannot be derived from the very addition proposed to be made.

16. In fact, the assessment orders themselves demonstrate that the Assessing Officer never proceeded on the footing that any undisclosed asset within the meaning of Explanation 2 had been discovered during the course of search. The additions have ultimately been framed only under section 69B on account of alleged unexplained investment represented by the alleged cash component reflected in the seized documents. Thus, what has ultimately been brought to tax is the alleged unexplained investment itself and not any identified undisclosed asset exceeding the prescribed monetary threshold. This itself demonstrates the fallacy in the jurisdictional assumption. Even assuming, for the sake of argument, that the seized documents may ultimately justify an addition under section 69B, such possibility belongs entirely to the merits of the assessment. It cannot, by itself, confer jurisdiction to invoke the extended period under the fourth proviso to section 153A. The jurisdictional facts required by Parliament must exist independently before the Assessing Officer can proceed to examine the merits of any proposed addition.

17. Another significant aspect cannot escape our notice. The assessee had specifically objected before the Assessing Officer that assessment years 2011-12 and 2012-13 were beyond the ordinary block of six assessment years and, therefore, the notices issued under section 153A were without jurisdiction. The assessee had also furnished detailed replies before the Investigation Wing vide communications dated 09.12.2019 and 23.12.2019 explaining the seized documents. Thereafter, during the assessment proceedings, notices issued under section 142(1) merely called upon the assessee to explain the source of the alleged cash investment reflected in the seized papers. These proceedings undoubtedly pertain to the merits of the proposed additions. However, none of these proceedings disclose the jurisdictional satisfaction contemplated by the fourth proviso. The validity of jurisdiction has to be tested on the date of issuance of notice under section 153A itself. Such jurisdiction cannot be retrospectively supplied by subsequent enquiries undertaken during assessment proceedings. Equally, the Assessing Officer, while rejecting the assessee’s jurisdictional objection, merely referred back to the earlier discussion reproducing the statutory provision without independently examining whether the jurisdictional conditions prescribed under the fourth proviso actually stood fulfilled. This, in our view, falls far short of the statutory requirement.

18. There is yet another circumstance which considerably fortifies the assessee’s contention. It has been brought on record that for assessment year 2013-14, which also falls beyond the normal block of six assessment years reckoned from the date of search, the Revenue itself initiated proceedings under section 148 on substantially the same search material and on similar reasoning. This conduct of the Department assumes considerable significance. If, on the same search material, the Revenue itself considered the reassessment provisions to be the appropriate statutory mechanism for assessment year 2013-14, then it is difficult to appreciate how assessment years 2011-12 and 2012-13, which are even older assessment years and equally beyond the normal six-year block, could be brought within section 153A without first satisfying the stringent jurisdictional conditions prescribed under the fourth proviso. The Revenue cannot adopt two inconsistent statutory routes on substantially the same material merely by asserting that notice under section 153A was validly issued. Once the Department itself proceeded under section 148 for assessment year 2013-14, it was incumbent upon it either to adopt the appropriate statutory mechanism for the present assessment years also, subject to limitation and other statutory safeguards, or to demonstrably establish the jurisdictional facts required under the fourth proviso. No such independent satisfaction is discernible from the assessment orders. Consequently, the very assumption of jurisdiction under section 153A for assessment years 2011-12 and 2012­13 becomes legally unsustainable.

19. Having regard to the aforesaid discussion, we are of the considered opinion that the very foundation on which the Assessing Officer has sought to invoke the extended jurisdiction under the fourth proviso to section 153A is legally unsustainable. The jurisdictional edifice erected by the Revenue rests entirely upon certain alleged cash notings contained in loose sheets, whereas the statute requires the Assessing Officer to demonstrate that the escaped income is represented in the form of an asset as specifically defined under Explanation 2 to the fourth proviso. The assessment orders, however, do not demonstrate that the alleged escaped income had assumed the character of or become embodied in any identifiable asset contemplated by the statute. On the contrary, the entire exercise undertaken by the Assessing Officer ultimately culminates only in additions under section 69B on account of alleged unexplained investment. The distinction between these two concepts is fundamental and cannot be obliterated. While the latter may furnish the basis for an addition if jurisdiction otherwise exists, the former alone can confer jurisdiction for invoking the extraordinary power contained in the fourth proviso to section 153A.

20. We may also clarify that we are not persuaded to accept the proposition that every alleged cash payment reflected in a seized document would, by itself, satisfy the expression “income represented in the form of an asset.” The Legislature has consciously employed a restrictive expression and has further chosen to define the expression “asset” through Explanation 2. Therefore, the burden squarely lies upon the Revenue to demonstrate, from the seized material itself and from the satisfaction recorded by the Assessing Officer, that the alleged escaped income had in fact culminated into or was represented by an identifiable asset falling within the statutory definition. In the present case, neither the seized documents nor the assessment orders disclose such jurisdictional facts. The assessment orders merely proceed on the footing that certain alleged cash payments towards purchase of land were reflected in loose papers. However, there is no finding that such alleged cash payments ultimately culminated into acquisition of any identifiable immovable property; no specific property has been identified; no title, ownership, beneficial ownership, registration, possession or acquisition has been established; nor has the Assessing Officer recorded any finding that the alleged escaped income stood represented in any such identified asset. In absence of these foundational jurisdictional facts, the invocation of the fourth proviso cannot be sustained.

21. Equally, we find considerable force in the contention of the assessee that the Assessing Officer has mixed up the jurisdictional requirements of the fourth proviso with the evidentiary requirements for making an addition under section 69B. The assessment orders themselves reveal that the Assessing Officer has proceeded throughout on the premise that the seized documents reflected certain unexplained cash payments and, therefore, additions were liable to be made under section 69B. The entire discussion thereafter revolves around the source and explanation of such alleged investment. Such enquiry undoubtedly pertains to the merits of the proposed additions. However, before embarking upon such enquiry, the Assessing Officer was first required to establish that the statutory jurisdiction under the fourth proviso itself stood attracted. The jurisdictional enquiry and the enquiry on merits operate in two distinct fields and one cannot be substituted for the other. Jurisdiction must necessarily precede adjudication. It cannot be derived from the addition ultimately proposed to be made.

22. We are also unable to overlook the fact that the Assessing Officer himself has not recorded any independent satisfaction demonstrating fulfilment of the jurisdictional conditions contemplated under clauses (a), (b) and (c) of the fourth proviso. Beyond reproducing the statutory provision, the assessment orders do not disclose any analysis whatsoever as to how those statutory conditions stood fulfilled. The rejection of the assessee’s objection is equally cryptic and merely refers back to the earlier discussion. Such mechanical reproduction of the statutory provision, in our considered opinion, cannot be equated with the objective satisfaction contemplated by Parliament before completed assessments beyond six years are reopened.

23. We are further fortified in our conclusion by the conduct of the Revenue itself. It is an admitted position that for assessment year 2013-14, which equally falls beyond the normal six assessment years reckoned from the date of search, the Department itself initiated proceedings under section 148 on substantially the same search material. Once the Revenue itself considered the reassessment provisions to be the appropriate statutory mechanism for assessment year 2013-14, it becomes difficult to appreciate how assessment years 2011-12 and 2012-13, which are even earlier years and equally beyond the normal six-year block, could have been brought within section 153A without first satisfying the stringent jurisdictional conditions prescribed under the fourth proviso. Though each assessment year is undoubtedly separate, the Revenue cannot, on substantially the same search material and identical reasoning, adopt inconsistent statutory routes without demonstrating why the jurisdictional conditions applicable to one provision stood fulfilled while invoking another. The absence of any such explanation in the assessment orders further reinforces the conclusion that the assumption of jurisdiction under section 153A suffers from an inherent legal infirmity.

24. We may hasten to add that our conclusion is confined entirely to the jurisdictional validity of the proceedings initiated under section 153A. We have consciously refrained from expressing any opinion whatsoever on the merits of the additions proposed under section 69B or on the evidentiary value of the seized documents. Whether the seized documents ultimately justify any addition under the appropriate provisions of the Act is an issue which does not arise for our consideration once the very assumption of jurisdiction under section 153A is found to be unsustainable. The merits of the additions are, therefore, expressly left open.

25. In view of the foregoing discussion, we hold that the Assessing Officer has failed to establish the jurisdictional facts necessary for invoking the fourth proviso to section 153A in respect of assessment years 2011-12 and 2012-13. The assessment orders merely proceed on the basis of certain alleged cash entries contained in loose papers and ultimately culminate in additions under section 69B on account of alleged unexplained investment. However, neither the seized material nor the assessment orders demonstrate that the alleged escaped income was represented in the form of an identifiable asset as specifically contemplated under Explanation 2 to the fourth proviso, nor do they disclose the independent jurisdictional satisfaction mandated by law. Consequently, the assumption of jurisdiction under section 153A itself stands vitiated.

26. Accordingly, the notices issued under section 153A and the consequential assessment orders passed under section 144 read with section 153A for assessment years 2011-12 and 2012-13 are held to be without jurisdiction and are hereby quashed. Since the assessments themselves have been quashed on the preliminary jurisdictional issue, all the remaining grounds raised by the assessee challenging the additions on merits are rendered academic and, therefore, require no separate adjudication. They are accordingly left open.

27. In the result, both the appeals filed by the assessee are allowed.

Order pronounced on 15t^h July, 2026.