+ W.p.(C) 1892/2024 & Cm Appl. 7921/2024 (Stay) Arn Infrastructures India Limited v. Assisstant Commissioner Of Income Tax Cental Circle-28 Delhi & Ors

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: 18 September 2024 Judgment pronounced on: 26 September 2024 + W.P.(C) 1892/2024 & CM APPL. 7921/2024 (Stay) ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner Through: Mr. Ruchesh Sinha, Ms. Shilpa Choudhary & Mr. Pankaj Aggarwal, Advs. Choudhary & Mr. Pankaj Aggarwal, Advs. versus ASSISSTANT COMMISSIONER OF INCOME TAX CENTAL CIRCLE-28 DELHI & ORS. .....Respondents CIRCLE-28 DELHI & ORS. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 1893/2024 & CM APPL. 7924/2024 (Stay) ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner Through: Mr. Ruchesh Sinha, Ms. Shilpa Choudhary & Mr. Pankaj Aggarwal, Advs. Choudhary & Mr. Pankaj Aggarwal, Advs. versus ASSISSTANT COMMISSIONER OF INCOME TAX CENTAL CIRCLE-28 & ORS. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 2479/2024 & CM APPL. 10151/2024 (Stay) ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner Through: Mr. Ruchesh Sinha, Ms. Shilpa Choudhary & Mr. Pankaj Aggarwal, Advs. Choudhary & Mr. Pankaj Aggarwal, Advs. versus ASSISSTANT COMMISSIONER OF INCOME TAX CENTAL CIRCLE-28 DELHI & ORS. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 2480/2024 & CM APPL. 10153/2024 (Stay) ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner Through: Mr. Ruchesh Sinha, Ms. Shilpa Choudhary & Mr. Pankaj Aggarwal, Advs. ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner Through: Mr. Ruchesh Sinha, Ms. Shilpa Choudhary & Mr. Pankaj Aggarwal, Advs. versus ASSISSTANT COMMISSIONER OF INCOME TAX CENTAL CIRCLE-28 DELHI & ORS. .....Respondents .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 2481/2024 & CM APPL. 10155/2024 (Stay) ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner Through: Mr. Ruchesh Sinha, Ms. Shilpa Choudhary & Mr. Pankaj Aggarwal, Advs. ARN INFRASTRUCTURES INDIA LIMITED .....Petitioner Through: Mr. Ruchesh Sinha, Ms. Shilpa Choudhary & Mr. Pankaj Aggarwal, Advs. versus ASSISSTANT COMMISSIONER OF INCOME TAX CENTAL CIRCLE-28 DELHI & ORS. .....Respondents .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 5568/2024 & CM APPL. 23003/2024 (Stay) ANKUSH SALUJA ANKUSH SALUJA .....Petitioner Through: Mr. Bhupinder Jit Kumar & Mr. Nikhil Sharma, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CRICLE-5, DELHI & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar & Mr. Rishabh Nangia, JSCs. + W.P.(C) 5583/2024 & CM APPL. 23043/2024 (Stay) Signature Not Verified BHADANI FINANCERS PVT. LTD. .....Petitioner Through: Mr. Gautam Jain, Mr. Shaantanu Jain & Mr. Manish Yadav, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-8, NEW DELHI .....Respondent Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 5719/2024 & CM APPL. 23582/2024 (Stay), 52556/2024 (23 Days Delay in Rej.) DHARAMPAL SATYAPAL LTD (SUCCESSOR OF ABHISAR BUILDWELL PVT LTD) .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Rohit Jain, Mr. Aniket D. Agrawal, Mr. Deepesh Jain & Mr. Samarth Chaudhari, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 5721/2024 & CM APPL. 23586/2024 (Stay), 52554/2024 (23 Days Delay in Rej.) DHARAMPAL SATYAPAL LTD (SUCCESSOR OF ABHISAR BUILDWELL PVT LTD) .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Rohit Jain, Mr. Aniket D. Agrawal, Mr. Deepesh Jain & Mr. Samarth Chaudhari, Advs. versus + W.P.(C) 5719/2024 & CM APPL. 23582/2024 (Stay), 52556/2024 (23 Days Delay in Rej.) DHARAMPAL SATYAPAL LTD (SUCCESSOR OF ABHISAR BUILDWELL PVT LTD) .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Rohit Jain, Mr. Aniket D. Agrawal, Mr. Deepesh Jain & Mr. Samarth Chaudhari, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 5721/2024 & CM APPL. 23586/2024 (Stay), 52554/2024 (23 Days Delay in Rej.) DHARAMPAL SATYAPAL LTD (SUCCESSOR OF ABHISAR BUILDWELL PVT LTD) .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Rohit Jain, Mr. Aniket D. Agrawal, Mr. Deepesh Jain & Mr. Samarth Chaudhari, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 5732/2024 & CM APPL. 23609/2024 (Stay), 52575/2024 (23 Days Delay in Rej.) DHARAMPAL SATYAPAL LTD (SUCCESSOR OF ABHISAR BUILDWELL PVT LTD) .....Petitioner 52575/2024 (23 Days Delay in Rej.) DHARAMPAL SATYAPAL LTD (SUCCESSOR OF ABHISAR BUILDWELL PVT LTD) .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Rohit Jain, Mr. Aniket D. Agrawal, Mr. Deepesh Jain & Mr. Samarth Chaudhari, Advs. Mr. Rohit Jain, Mr. Aniket D. Agrawal, Mr. Deepesh Jain & Mr. Samarth Chaudhari, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 5787/2024 & CM APPL. 23954/2024 (Direction) M/S TIRUPATI BUILDINGS AND OFFICES PVT LTD .....Petitioner Through: Mr. Sumit K. Batra, Mr. Manish Khurana, Ms. Priyanka Jindal & Mr. Siddhanth Sarwal, Advs. Khurana, Ms. Priyanka Jindal & Mr. Siddhanth Sarwal, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr. Sunil Kumar Agarwal, SSC with Mr. Shivansh B. Pandya, with Mr. Shivansh B. Pandya, Mr. Viplav Acharya, JSCs & Mr. Utkarsh Tiwari, Adv. Utkarsh Tiwari, Adv. + W.P.(C) 3329/2024 & CM APPL. 13739/2024 (Stay) PARAM DAIRY LTD PARAM DAIRY LTD .....Petitioner Through: Mr. Rohit Jain, Mr. Deepesh Jain & Mr. Samarth Chaudhari, Advs. & Mr. Samarth Chaudhari, Advs. versus Signature Not Verified ASSISTANT COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar & Mr. Rishabh Nangia, JSCs. + W.P.(C) 6177/2024 & CM APPL. 25690/2024 (Stay) GOOD EARTH PLOTTED DEVELOPMENT PRIVATE LIMITED .....Petitioner Through: Mr. Gaurav Jain & Mr. Shubham Gupta, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX, CENTRA CIRCLE-2, NEW DELHI .....Respondent Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs. Shivendra Singh & Mr. Yojit Pareek, JSCs. + W.P.(C) 12832/2024 & CM APPL. 53526/2024 (Interim Relief) SATYA REALTORS PRIVATE LIMITED THROUGH DIRECTOR SANJAY GUPTA .....Petitioner SATYA REALTORS PRIVATE LIMITED THROUGH DIRECTOR SANJAY GUPTA .....Petitioner Through: Mr. Ved Jain, Mr. Nischay Kantoor & Ms. Soniya Dodeja, Advs. Kantoor & Ms. Soniya Dodeja, Advs. versus INCOME TAX OFFICER WARD 22(3) DELHI & ORS. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar & Mr. Rishabh Nangia, JSCs. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJAJ U D G M E N T YASHWANT VARMA, J. 1.This batch of writ petitions impugns the proceedings for reassessment initiated after the decision of the Supreme Court in Principal Commissioner of Income Tax, Central- 3 v. Abhisar Buildwell Private Limited[1]. Through: Mr. Ved Jain, Mr. Nischay Kantoor & Ms. Soniya Dodeja, Advs. Kantoor & Ms. Soniya Dodeja, Advs. versus INCOME TAX OFFICER WARD 22(3) DELHI & ORS. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar & Mr. Rishabh Nangia, JSCs. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJAJ U D G M E N T YASHWANT VARMA, J. 1.This batch of writ petitions impugns the proceedings for reassessment initiated after the decision of the Supreme Court in Principal Commissioner of Income Tax, Central- 3 v. Abhisar Buildwell Private Limited[1]. 2.The writ petitioners assail the validity of the reassessment action principally on the ground of being barred by time. It is their case that the reassessment action which had come to be initiated after the promulgation of Finance Act, 2021 would not qualify the pre-conditions which are introduced by virtue of the First Proviso to Section 149(1) of the Income Tax Act, 1961[2]. According to the writ petitioners, the initiation of action under Section 148 of the Act, when tested on the anvil of the First Proviso to Section 149(1), would lead one to the inevitable conclusion of the reassessment action being barred on the ground of limitation. 3.For sake of convenience, the writ petitioners had placed before us a tabular statement setting out the relevant details pertaining to each of the writ petitions forming part of this batch. The said table is extracted hereinbelow: 1 (2024) 2 SCC 433 2 Act Signature Not Verified 4.For the sake of completeness, we deem it appropriate to take note of the salient facts which underlie the lead writ petitions, being WP(C) 5721/2024 and WP(C) 1892/2024. 5.Dharampal Satyapal Ltd.[3], the writ petitioner, is the successor entity of Abhisar Buildwell Private Limited[4], a company incorporated under the Companies Act, 1956 and which had come into existence as a result of a demerger of the Rubber Thread Unit of the writ petitioner pursuant to a Scheme of Demerger approved by the concerned High Court on 11 September 2007. ABPL is stated to have filed a revised Return of Income for Assessment Year[5] 2007-08 on 29 September 2008. It appears that on 21 January 2011 a search and seizure operation was carried out in respect of the Dharampal Satyapal Group and which included ABPL. Consequently, ABPL came to be served a notice under Section 153A on 09 January 2012. The aforesaid proceedings ultimately culminated in an order of assessment being framed and which saw the Assessing Officer[6] ordering a disallowance of INR 10,64,45,327/- in respect of depreciation which had been claimed by ABPL. 6.The order of assessment dated 18 March 2013 was subjected to challenge by way of an appeal before the Commissioner of Income Tax (Appeals)[7]. That appeal came to be allowed on 25 April 2014 with the CIT(A) holding that the assessment would not sustain in the 3 DSL 4 ABPL 5 AY 6 AO 7 CIT(A) Signature Not Verified absence of any incriminating material having been unearthed in the course of the search. This since the disallowances were principally based on a special audit report and thus unconnected with the material gathered in the course of the search. 7.The aforesaid order of the CIT(A) was assailed by the Revenue before the Income Tax Appellate Tribunal[8]. That appeal came to be dismissed on 04 July 2017 with the Tribunal taking note of the seminal decision rendered by this Court in Commissioner of Income-tax v. Kabul Chawla[9] and which had underlined the import and significance of incriminating material constituting the foundational ground for a search assessment. The decision of the Tribunal was thereafter subjected to challenge before this Court by way of ITA No. 239/2018 which too came to be dismissed on 24 July 2019. 7.The aforesaid order of the CIT(A) was assailed by the Revenue before the Income Tax Appellate Tribunal[8]. That appeal came to be dismissed on 04 July 2017 with the Tribunal taking note of the seminal decision rendered by this Court in Commissioner of Income-tax v. Kabul Chawla[9] and which had underlined the import and significance of incriminating material constituting the foundational ground for a search assessment. The decision of the Tribunal was thereafter subjected to challenge before this Court by way of ITA No. 239/2018 which too came to be dismissed on 24 July 2019. 8.This led to the filing of a Special Leave Petition before the Supreme Court. That petition constituted the lead matter in Abhisar Buildwell. The Supreme Court, while ruling on the scope and ambit of a search assessment in Abhisar Buildwell, took note of the consistent view which had been taken by different High Courts and which had in unison held that no additions could be made in respect of completed or unabated assessments in absence of any incriminating material having been gathered in the course of a search. This becomes apparent from the following observations as appearing in paragraph 25 of the report: “25.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 view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating 8 Tribunal 9 2015 SCC OnLine Del 11555 Signature Not Verified material. The lead judgment is by the Delhi High Court in Kabul Chawla, which has been subsequently followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in Saumya Construction, which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in CIT v. Mehndipur Balaji has taken a contrary view.” 9.The Supreme Court also took note of a decision handed down by the Gujarat High Court in Principal Commissioner of Income-tax v. Saumya Construction P. Ltd.[10] and which had resonated the view expressed by this Court in Kabul Chawla. This flows from a reading of paragraph 27 of the report which is extracted hereinbelow: “27.Thereafter in Saumya Construction, the Gujarat High Court, while referring the decision of the Delhi High Court in Kabul Chawla and after considering the entire scheme of block assessment under Section 153-A of the 1961 Act, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no addition can be made by the AO and the AO has no jurisdiction to reopen the completed assessment. In paras 15 and 16, it is held as under: (Saumya Construction case, SCC OnLine Guj) “15.On a plain reading of Section 153-A 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 132-A of the Act. Once a search or requisition is made, a mandate is cast upon the assessing officer to issue notice under Section 153-A 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 year relevant to theprevious year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under Section 153-A of the Act is linked with search and requisition under Sections 132 and 132-A 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 block period that was assessed, Section 153-A of the Act seeks to assess the total 10 2016 SCC OnLine Guj 9976 Signature Not Verified income for the assessment year, which is clear 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, 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 132-A, as the case may be, shall abate. Subsection (2) of Section 153-A 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 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, 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 153-A, 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 153-A of, the Act is annulled in appeal or any other proceeding. 16. Section 153-A 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 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 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 153-A of the Act, in 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 no incriminating material is found, as held by the Rajasthan High Court in Jai Steel (India) v. CIT,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 income of the assessee which would include income declared in the returns, if any, furnished by the asses see 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 could have passed under Section 147 of the Act as well as under Section 153-A of the Act." 10.The view expressed in Kabul Chawla ultimately came to be affirmed by the Supreme Court as would be evident from paragraph 28 which is extracted hereunder: 10.The view expressed in Kabul Chawla ultimately came to be affirmed by the Supreme Court as would be evident from paragraph 28 which is extracted hereunder: “28.For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in Kabul Chawla and the Gujarat High Court in Saumya Construction (P), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material.” 11.Proceeding then to expound upon the legal position, the Supreme Court rendered the following pertinent observations: “33. As per the provisions of Section 153-A, in case of a search under Section 132 or requisition under Section 132-A, 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 153-A, the assessment or reassessment, if any, relating to any assessment year 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 132-A, as the case may be, shall abate. As per sub-section (2) of Section 153-A, 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 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 Signature Not Verified be that in case of search 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 reopen the completed/ unabated assessments, unless any incriminating material is found with respect to assessment yearconcerned falling within last six years preceding the search. Therefore, on true interpretation of Section 153-A of the 1961 Act, in case of a search under Section 132 or requisition under Section 132-A 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 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 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 153-A 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. 34. 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, 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 153-A of the Act is linked with the search and requisition under Sections 132 and 132-A of the Act. The object of Section 153-A is to bring under tax the 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/ -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, the second proviso to Section 153-A and sub-section (2) of Section 153-A would be redundant and/or re-writing the said provisions, which is not permissible under the law. 35. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in Kabul Chawla and the Gujarat High Court in Saumya Construction 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.” 12.The batch ultimately came to be disposed of in the following terms: “36. In view of the above and for the reasons stated above, it is concluded as under: 36.1. That in case of search under Section 132 or requisition under Section 132-A, the AO assumes the jurisdiction for block assessment under Section 153-A; 36.2. All pending assessments/reassessments shall stand abated; 36.3. 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 36.4.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 132-A of the 1961 Act. -However, the completed/unabated assessments can be reopened 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.” 13.As is manifest from the above, the Supreme Court in unambiguous terms held that it would only be in cases where undisclosed income is found on the basis of incriminating material that the AO could be said to have validly assumed jurisdiction to assess income for the ten-year block assessment period constituting the subject matter of Section 153A. It thus held, while affirming the view taken by Signature Not Verified Page 13 of 56 the Delhi and the Gujarat High Courts, that no addition could be made in respect of completed assessments in the absence of any incriminating material. 13.As is manifest from the above, the Supreme Court in unambiguous terms held that it would only be in cases where undisclosed income is found on the basis of incriminating material that the AO could be said to have validly assumed jurisdiction to assess income for the ten-year block assessment period constituting the subject matter of Section 153A. It thus held, while affirming the view taken by Signature Not Verified Page 13 of 56 the Delhi and the Gujarat High Courts, that no addition could be made in respect of completed assessments in the absence of any incriminating material. 14.It becomes relevant to note that the Supreme Court also pertinently observed that in case a search does not result in any incriminating material being found, the only remedy that would be available to the Revenue would be to resort to Sections 147/148 of the Act “subject to fulfilment of the conditions mentioned” in those provisions. This it held, since in its opinion, the Revenue could not have been left remediless. It thus observed that where a search does not result in any incriminating material being unearthed, the power of the Revenue to initiate reassessment action would stand preserved subject to the same being in conformity with the scheme of reassessment as embodied in Sections 147 and 148 of the Act. 15.The Supreme Court was again called upon to deal with the validity of a search assessment resting on no material gathered in the course thereof in Dy. Commissioner of Income Tax Central Circle 20 vs U.K. Paints (Overseas) Ltd[11]. The aforesaid appeal came to be dismissed on 25 April 2023 with the Supreme Court observing as under: “1. In this batch of appeals, the assessments in case of each Assessee were under Section 153-C of the Income Tax Act, 1961 (for short, 'the Act'). As found by the High Court in none of the cases any incriminating material was found during the search either from the Assessee or from third party. In that view of the matter, as such, the assessments under Section 153-C of the Act are rightly set aside by the High Court. However, Shri N Venkataraman, learned ASG appearing on behalf of the Revenue, taking the clue from some of the observations made by this Court in the recent decision in the case of Principal Commissioner of Income Tax, Central-3 v. Abhisar Buildwell P. Ltd., Civil Appeal No. 6580/2021, more 11 2023 SCC OnLine SC 818 particularly, paragraphs 11 and 13, has prayed to observe that the -Revenue may be permitted to initiate re assessment proceedings under Section 147/148 of the Act as in the aforesaid decision, the powers of the re-assessment of the Revenue even in case of the block assessment under Section 153-A of the Act have been saved. 2.As observed hereinabove, as no incriminating material was found in case of any of the Assessees either from the Assessee or from the third party and the assessments were under Section 153-Cof the Act, the High Court has rightly set aside the Assessment Order(s). Therefore, the impugned judgment and order(s) passed by the High Court do not require any interference by this Court. Hence, all these appeals deserve to the dismissed and are accordingly dismissed. 3.However, so far as the prayer made on behalf of the Revenue to -permit them to initiate the reassessment proceedings is concerned, it is observed that it will be open for the Revenue to initiate the reassessment proceedings in accordance with law and if it is permissible under the law. 4.With this, all these appeals are dismissed/disposed of.” 16.As would be apparent from the aforesaid extract of the said order, a prayer appears to have been made on behalf of the Revenue for an observation being entered enabling it to initiate reassessment proceedings under Section 147. While dealing with the aforesaid, the Supreme Court observed that it would be open for the Revenue to initiate reassessment in accordance with law and “if it is permissible under the law”. 3.However, so far as the prayer made on behalf of the Revenue to -permit them to initiate the reassessment proceedings is concerned, it is observed that it will be open for the Revenue to initiate the reassessment proceedings in accordance with law and if it is permissible under the law. 4.With this, all these appeals are dismissed/disposed of.” 16.As would be apparent from the aforesaid extract of the said order, a prayer appears to have been made on behalf of the Revenue for an observation being entered enabling it to initiate reassessment proceedings under Section 147. While dealing with the aforesaid, the Supreme Court observed that it would be open for the Revenue to initiate reassessment in accordance with law and “if it is permissible under the law”. 17.It appears that after the Supreme Court had rendered judgment on Abhisar Buildwell, a Miscellaneous Application[12]came to be filed at the behest of the Revenue seeking appropriate clarifications including the waiver of limitation in terms as contemplated in Section 150(2). That application came to be disposed of on 12 May 2023 with the Supreme Court holding: “Present Miscellaneous Application has been preferred by the Revenue seeking following prayers: 12 MA Signature Not Verified "(a) This Hon'ble Court may clarify that the waiver of limitation as stipulated in section 150(2) is to be read in respect of the date of issue of notice for reassessment under section 148 (i.e.) if as on the date the assessment under section 153A or section 153C was passed, a notice under section 148 could have been issued as per the law then in force, then fresh proceedings for reassessment of such income not arising from the incriminating material found in search can now be initiated pursuant to the findings of this Hon'ble Court in the present appeals/application and may further clarify as follows: (i) That the findings in para 11 and 14 would apply to all the proceedings pending in all the forums including before this Hon‟ble Court. (ii) That even though the appeals of the Revenue are dismissed in respect of assessments passed under 153A and 153C, in the absence of incriminating material found during the search, in respect of such income which was found to have escaped assessment other than through incriminating material, the assessing officers would be entitled to reassess such income in terms of section 147/148 read with section 150. (iii) That the Assessing Officer, may if found necessary initiate fresh proceedings within 60 days from date of disposal of this application following the procedure stipulated in section 147-151 of the Act as is in force now." 2. Having gone through the averments made in the application and the prayers, we are of the opinion that the prayers sought can be said to be in the form of review which requires detail consideration at length looking into the importance of the matter. Therefore, the present application in the form of clarification is not entertained and we relegate the Revenue to file an appropriate review application for the relief sought in the present application and as and when such review application is filed the same can be heard in the open court. 3. In view of the above and without further entering into the merits of the application and/or expressing anything on merits on the prayers sought in the present application, the present application is not entertained and we relegate the Revenue to file an appropriate review application seeking the reliefs which are sought in the present application and as and when such review application is filed the same be heard and decided and disposed of in the open court. 4.At the cost of repetition, we observe that as we have not entered into the merits of the present application and we relegate the Revenue to file an appropriate review application, the review application be decided and disposed of in accordance with law and on its own merits. 5. With this present application stands disposed of.” 3. In view of the above and without further entering into the merits of the application and/or expressing anything on merits on the prayers sought in the present application, the present application is not entertained and we relegate the Revenue to file an appropriate review application seeking the reliefs which are sought in the present application and as and when such review application is filed the same be heard and decided and disposed of in the open court. 4.At the cost of repetition, we observe that as we have not entered into the merits of the present application and we relegate the Revenue to file an appropriate review application, the review application be decided and disposed of in accordance with law and on its own merits. 5. With this present application stands disposed of.” 18.Close on the heels of judgment being pronounced in the Abhisar Buildwell batch and the disposal of the subsequent MA that had been preferred therein, the Central Board of Direct Taxes[13] came to issue Instruction No. 1/2023 on 23 August 2023. Since the same would be of some significance, we deem it appropriate to extract those instructions in their entirety hereinbelow: “ INSTRUCTION NO. 1 OF 2023 [F. NO. 279/MISC./M-54/2023-ITJ], DATED 23-8-2023 1. On 24-4-2023, the Hon'ble Supreme Court delivered a judgment in a batch of Income-tax matters, the lead matter being Principal Commissioner of Income-tax, Central-III v. Abhisar Buildwell Pvt. Ltd. (CA No. 6580 of 2021) (hereinafter referred to as the Case). The matter of the civil appeal pertained to the scope and ambit of section 153A/153C of the Income-tax Act, 1961 (hereinafter referred to as the Act). 2. The Hon'ble Supreme Court in Civil Appeal No. 6634 of 2021 in the case of DCIT Central Circle 20 v. U.K. Paints (Overseas) Ltd. [2023] 150 taxmann.com 108 delivered a judgement on 25-4-2023 and dealt with the same issue as was in the case of Abhisar Buildwell case in regard to section 153C of the Act. The Hon'ble Supreme Court in the last paragraph of the judgement held that, "However, so far as the prayer made on behalf of the Revenue to permit them to initiate the reassessment proceedings is concerned, it is observed that it will be open for the revenue to initiate the reassessment proceedings in accordance with law and if permissible under the law." Background 3. Notices under section 153A were issued for block period (six assessment years prior to year of search) and orders were passed considering incriminating material and other material available with the Assessing Officer (hereinafter referred to as the AO). Further, for a search initiated or requisition made after 1-4-2017, notices for four more years (7[th] to 10th) could also be issued, if the income represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year. In some cases, orders were passed considering only other material available in the record in the absence of incriminating material. Hon'ble Delhi High Court delivered a decision on 28-8-2015 in the case of Kabul Chawla [ITA No. 707 of 2014 (Commissioner of Income-tax (Central)-III v. Kabul Chawla)]. It was held that the AO does not have jurisdiction for passing order under Section 153A in the absence of incriminating material found during the search under section 132 or requisition made under section 132A of the Act. 4. Hon'ble Supreme Court in the cases of Abhisar Buildwell (cited supra) and U.K. Paints (Overseas) Ltd. (cited supra), accordingly provided power to the AO to reopen the completed/unabatedassessments u/s 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under section 147/148 of the Act, in cases where no incriminating material is found during the search. 4. Hon'ble Supreme Court in the cases of Abhisar Buildwell (cited supra) and U.K. Paints (Overseas) Ltd. (cited supra), accordingly provided power to the AO to reopen the completed/unabatedassessments u/s 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under section 147/148 of the Act, in cases where no incriminating material is found during the search. 5. The implementation of the judgment of Hon'ble Supreme Court is required to be done in uniform manner. Accordingly, in exercise of its power under section 119 of the Act, the Central Board of Direct Taxes (hereinafter referred to as “the Board”) directs that the following may be taken into consideration while implementing this judgment. 6. Scenarios and action suggested to betaken 6.1 Considering that (i) significant time has elapsed from the decisions received in completed cases wherein the assessment was made based on the „other material‟ and to provide tax certainty to the taxpayers, the Board has decided that no action is required to be taken under section 147/148 of the Act in cases (except cases covered by paragraph 7.2.1 below) where decisions of the appellate authorities have become final because these decisions have not been contested further in appeal.Further, it is decided that the said judgement is required to be applied in the following cases only: (a) The lead and tagged cases in the said judgment. (b) All cases which are pending at appellate levels or before AO or any tax authority. (c) All cases in which contrary decisions has been given by appellate authorities after the Apex Court judgment in the Abhisar Buildwell case dated 24-4-2023. 7. In this regard, the AOs would have to divide the cases impacted by the judgment into two broad categories i.e., (I) pending/abated assessments, and (II) completed/unabated assessments. —Pending/abated assessments 7.1 The AO would be required to ascertain assessments falling in the category of assessments that became abated on the date of search or requisition. In such cases, if any proceedings initiated or any order of assessment or reassessment have been annulled in appeal or in any other legal proceedings the same shall stand revived from the date of receipt of order of annulment as per provisions of section 153A(2) of the Act, and AO would need to take necessary action as per provisions of section 153A(2) read with section 153(8) of the Act, in respect of such pending/abated assessments. Provisions of Section 153A(2) and Section 153(8) of the Act are reproduced as hereunder for ready reference: Section 153A(2) "[(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 contained in subsection (1) or section 153, the 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 [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.]" Section 153(8) "Notwithstanding anything contained in the foregoing provisions of this section, subsection (2) of section 153A or sub-section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within a period of one year W.P.(C)-5721-2024 189 from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later." —Completed/unabated assessments 7.2 In respect of cases that were unabated/completed at the time of issue of notices under section 153A/153C and assessments made, the following scenarios will emerge: Section 153(8) "Notwithstanding anything contained in the foregoing provisions of this section, subsection (2) of section 153A or sub-section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within a period of one year W.P.(C)-5721-2024 189 from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later." —Completed/unabated assessments 7.2 In respect of cases that were unabated/completed at the time of issue of notices under section 153A/153C and assessments made, the following scenarios will emerge: 7.2.1 In the lead and all the tagged cases, necessary action u/s 148/147 need to be taken in the situation stated by the Court in the para 14(iv) of the said order in view of section 150 of the Act. The AO will be required to reopen the cases following the currently applicable procedure for reopening i.e., following the procedure prescribed under section 148A of the Act as inserted by Finance Act, 2021 in accordance with the law laid down by Hon'ble Supreme Court by its order dated 4-5-2022 in Union of India v.AshishAgarwal case (2022 SSC Online SC 543). In view of the specific provisions of section 153(6) of the Act, all the cases reopened u/s 147/148 of the Act will be required to be completed by 30th April, 2024. 7.2.2 Cases where appeal is pending (filed either by the Department or assessee or both). Further, as and when the appeals are disposed of by the appellate authorities, action might be required to be taken by AO in appropriate cases under sections 147/148 of the Act read with section 150 of the Act. It is reiterated that the AO will be required to reopen the cases following the currently applicable procedure for reopening as given in para 7.2.1, above. 7.2.3 In all cases where the decisions of appellate authorities rendered after the Apex Court judgment in the Abhisar Buildwell case dated 24-4-2023 are inconsistent with the same, necessary action may be taken to fife Miscellaneous Application (MA) and Notice of Motion (NoM) to the ITAT and High Court, respectively, requesting the review of the decision in line with the Abhisar judgment, with a prayer of condonation of delay, wherever necessary. It is brought to attention that the time limit for filing Miscellaneous Application before ITAT is 6 months from the end of the month in which order is passed by the ITAT, as per section 254 of the Act. On receipt of the decision of the Hon'ble ITAT/High Court, as the case may be, necessary action as per law and extant instruction should be taken. Suggestive template for Miscellaneous Application and Notice of Motion is attached for reference purpose. The facts of the case will be required to be mentioned in the Miscellaneous Application or Notice of Motion. 8. Procedure required to be followed by the field formations to comply with the Supreme Court judgment: 8.1 The procedure required to be followed by the AO, in compliance with the order of the Hon'ble Supreme Court, is as und