PCIT Vs S.S. Con Build Pvt. Ltd. (Delhi High Court)
Summary: The Delhi High Court dismissed the Revenue’s appeal challenging the ITAT order deleting an addition of Rs.33,91,35,982 made under section 68 of the Income Tax Act, 1961 for Assessment Year 2007-08. The Revenue contended that section 153A did not impose a condition requiring incriminating documents or assets to be found during a search before an assessment could be framed and challenged the Tribunal’s reliance on Commissioner of Income Tax v. Kabul Chawla, (2016) 380 ITR 573.
In Kabul Chawla, the Delhi High Court had held that, in the absence of incriminating material, the Assessing Officer could not re-appraise and review assessments already completed and settled before the date of search under section 153A. The Revenue submitted that it had not accepted Kabul Chawla and that Special Leave Petitions challenging the decision were pending before the Supreme Court.
The High Court, however, noted that although Kabul Chawla had been challenged, there was no stay of that judgment. Relying upon the Supreme Court decisions in Kunhayammed and Others v. State of Kerala and Another, (2000) 6 SCC 359 and Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association CSI Cinod Secretariat, Madras, (1992) 3 SCC 1, the Court dismissed the Revenue’s appeal as the controversy remained covered by the binding judgment of the predecessor Division Bench.
