Delhi ITAT Deletes Section 69A Addition in Section 153C Assessment: No Addition Permissible Without Incriminating Material in Unabated Assessment
Case Overview
| Particulars | Details |
|---|---|
| Case Name | Sumitra Devi Vs Deputy/ACIT (ITAT Delhi) |
| Assessment Year | 2017-18 |
| Forum | Income Tax Appellate Tribunal, Delhi Bench |
| Provisions Involved | Section 153C, Section 143(3), Section 69A, Section 132(4) — Income Tax Act, 1961 |
| Outcome | Appeal Allowed; Addition Deleted |
Background and Factual Matrix
The present matter concerns an appeal filed by the assessee, Smt. Sumitra Devi, against the order passed by the Commissioner of Income Tax (Appeals)-3, Gurgaon, dated 13.01.2026, bearing order no. 10516/CIT(A)-3/GGN/19-20. The proceedings originated under Section 153C read with Section 143(3) of the Income Tax Act, 1961.
The core dispute revolved around an addition of ₹19,42,500/- made by the Assessing Officer under Section 69A of the Act, treating the assessee's unsecured loans as unexplained money. This addition was subsequently confirmed by the first appellate authority, and the matter was carried in further appeal before the Delhi Bench of the Income Tax Appellate Tribunal.
Sequence of Events Leading to Assessment
The factual timeline, as it emerged before the Tribunal, may be appreciated as follows:
- The assessee, an individual, filed her original return of income for Assessment Year 2017-18 on 06.12.2017, declaring total income of ₹24,70,350/-.
- A search operation was conducted on 25.04.2017 in the cases of M/s. Skylark Group and connected entities.
- The assessee's case was subsequently centralized on 28.09.2018.
- The Assessing Officer recorded satisfaction under
Section 153Con 23.04.2019, noting that the seized material had a bearing on the determination of the assessee's total income. - A notice under
Section 153Cwas issued on the very same date — 23.04.2019. - Scrutiny proceedings were thereafter conducted, culminating in an assessment order dated 27.12.2019, wherein the impugned addition of ₹19,42,500/- was made.
A critical and undisputed fact throughout the proceedings was that the unsecured loans in question were fully disclosed and duly recorded in the assessee's regular books of account. The loans were not concealed, nor were they discovered during the course of the search.
Core Legal Issue: Abated or Unabated Assessment?
The principal legal question before the Tribunal was whether Assessment Year 2017-18, in the context of the assessee being an "other person" within the meaning of Section 153C, constituted an abated or an unabated assessment.
This distinction carries decisive legal consequences:
- In an abated assessment, the Assessing Officer enjoys wide powers to examine all issues afresh, much like a fresh assessment, and is not restricted to incriminating material alone.
- In an unabated assessment (i.e., an assessment where the period of limitation had already expired or the assessment had already been completed before the date relevant for
Section 153Cpurposes), additions can only be made if supported by incriminating material found during the course of the search.