PCIT Vs King Buildcon Pvt. Ltd. (Supreme Court of India)
The Supreme Court considered the Revenue’s appeal against the final judgment and order dated 22.4.2022 passed by the High Court of Delhi at New Delhi in ITA No. 100/2022. The dispute concerned additions made in proceedings under Section 153A of the Income Tax Act, 1961 where the assessments had attained finality before the search and no incriminating material was found during the search.
Read Delhi HC Judgment in this case: Section 153A Assessment cannot be arbitrary & must have nexus with seized material
Proceedings Before the Delhi High Court
Before the High Court, the Revenue contended that the Income Tax Appellate Tribunal had erred in deleting the additions by relying upon CIT Vs Kabul Chawla, 380 ITR 573. The Revenue stated that it had not accepted the decision in Kabul Chawla and had preferred an appeal before the Supreme Court.
The High Court referred to its earlier decision in PCIT vs. Neeta Gutgutia (2017) 82 com 287 Del, which had summarised the legal position in CIT Vs. Kabul Chawla concerning Section 153A. The principles reproduced by the High Court included that assessments pending on the date of search abate, whereas completed assessments could be interfered with under Section 153A only on the basis of incriminating material unearthed during the search. In the absence of incriminating material, a completed assessment could be reiterated.
