THE PR COMMISSIONER OF INCOME TAX CIT (A) vs MR M A SIDDIQUE

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HC-KAR
NC: 2026:KHC:60679-DB
ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


CNR: KAHC010002712021




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 29 DAY OF OCTOBER, 2026

PRESENT

THE HON'BLE MR. JUSTICE S.G.PANDIT

AND

THE HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA

INCOME TAX APPEAL NO. 18 OF 2021
C/W
INCOME TAX APPEAL NO. 17 OF 2021,
INCOME TAX APPEAL NO. 20 OF 2021

IN ITA No. 18/2021:

BETWEEN:

1. THE PR. COMMISSIONER OF
INCOME TAX, CIT(A)
CENTRAL CIRCLE
C. R. BUILDING, QUEENS ROAD
BENGALURU-560001.

2. THE DEPUTY COMMISSIONER OF INCOME-TAX
CENTRAL CIRCLE-1
C R BUILDING
ATTAVARA, MANGALURU-575001.
…APPELLANTS

(BY SRI. DILIP M., ADVOCATE AND
SRI. Y.V. RAVIRAJ, ADVOCATE)

AND:











Digitally signed by
NANJUNDACHARI
Location: High
Court of
Karnataka


MR. M. A. SIDDIQUE,
DOOR NO.17-23-1625-2,
SUPREME COTTAGE D'SILVA LANE,
HIGH LAND FALNIR,

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HC-KAR
NC: 2026:KHC:60679-DB
ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


CNR: KAHC010002712021


MANGALURU-575002.
PAN: AKWPS 8837R
…RESPONDENT
(BY MISS. DR. SHEETAL BORKER, ADVOCATE FOR
SRI. MALLAHAR RAO, ADVOCATE)

THIS ITA/INCOME TAX APPEAL IS FILED UNDER
SEC-260-A OF INCOME TAX ACT 1961, ARISING OUT OF
ORDED DATED 17.08.2020 PASSED IN ITA NO.63/BANG/2020,
FOR THE ASSESSMENT YEAR 2013-2014 PRAYING TO
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS
PASSED BY THE INCOME TAX APPELLATE TRIBUNAL,
BENGALURU IN ITA NO.63/BANG/2020 DATED 17.08.2020 FOR
ASSESSMENT YEAR 2013-2014 ANNEXURE-C AND CONFIRM
THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING
THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF
INCOME TAX, CENTRAL CIRCLE-1, MANGALURU.

IN ITA NO. 17/2021
BETWEEN:
1. THE PR. COMMISSIONER OF
INCOME TAX, CIT (A)
CENTRAL CIRCLE,
C. R. BUILDING,
QUEENS ROAD,
BENGALURU-560001.

2. THE DEPUTY COMMISSIONER
OF INCOME-TAX
CENTRAL CIRCLE-1
C. R. BUILDING,
ATTAVARA,
MANGALURU-575001.
...APPELLANTS
(BY SRI. DILIP M., ADVOCATE AND
SRI. Y.V. RAVIRAJ, AVOCATE)

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HC-KAR
NC: 2026:KHC:60679-DB
ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


CNR: KAHC010002712021


AND:
MR. M. A. SIDDIQUE,
DOOR NO.17-23-1625-2
SUPREME COTTAGE D' SILVA LANE,
HIGH LAND FALNIR,
MANGALURU-575002.
PAN: AKWPS 8837R
...RESPONDENT
(BY MISS. DR. SHEETAL BORKER, ADVOCATE AND
SRI. MALLAHAR RAO, ADVOCATE)

THIS ITA/INCOME TAX APPEAL IS FILED UNDER
SEC-260-A OF INCOME TAX ACT 1961, ARISING OUT OF
ORDED DATED 17.08.2020 PASSED IN ITA NO.64/BANG/2020,
FOR THE ASSESSMENT YEAR 2014-2015 PRAYING TO
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS
PASSED BY THE INCOME TAX APPELLATE TRIBUNAL,
BENGALURU IN ITA NO.64/BANG/2020 FOR ASSESSMENT
YEAR 2014-2015 ANNEXURE-C AND CONFIRM THE ORDER OF
THE APPELLATE COMMISSIONER CONFIRMING THE ORDER
PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX,
CENTRAL CIRCLE-1, MANGALURU.

IN ITA NO. 20/2021:
BETWEEN:
1. THE PR. COMMISSIONER OF INCOME TAX,
CIT (A)
CENTRAL CIRCLE
C R BUILDING
QUEENS ROAD
BENGALURU-560001.

2. THE DEPUTY COMMISSIONER OF INCOME-TAX
CENTRAL CIRCLE-1
C R BUILDING,

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HC-KAR
NC: 2026:KHC:60679-DB
ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


CNR: KAHC010002712021


ATTAVARA
MANGALURU-575 001.
...APPELLANTS
(BY SRI. DILIP M ., ADVOCATE AND
SRI. Y.V. RAVIRAJ, ADVOCATE)


AND:
MR. M. A. SIDDIQUE,
DOOR NO. 17-23-1625-2
SUPREME COTTAGE DSILVA LANE
HIGH LAND FALNIR
MANGALURU-575002
PAN AKWPS 8837R
...RESPONDENT
(BY MISS. DR. SHEETAL BORKER, ADVOCATE AND
SRI. MALLAHAR RAO, ADVOCATE)

THIS ITA/INCOME TAX APPEAL IS FILED UNDER
SEC-260-A OF INCOME TAX ACT 1961, ARISING OUT OF
ORDED DATED 17.08.2020 PASSED IN ITA NO.62/BANG/2020,
FOR THE ASSESSMENT YEAR 2012-2013 PRAYING TO
FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED
ABOVE AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS
PASSED BY THE INCOME TAX APPELLATE TRIBUNAL,
BENGALURU IN ITA NO.62/BANG/2020 DATED 17.08.2020
FOR ASSESSMENT YEAR 2012-2013 ANNEXURE-C AND
CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER
CONFIRMING THE ORDER PASSED BY THE DEPUTY
COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1,
MANGALURU.

THESE APPEALS ARE COMING ON FOR FINAL HEARING,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA

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HC-KAR
NC: 2026:KHC:60679-DB
ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


CNR: KAHC010002712021


ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE S.G.PANDIT)

ITA No.18/2021 relates to assessment year 2013-14,
ITA No.17/2021 relates to assessment year 2014-15 and
ITA No.20/2021 relates to assessment year 2012-13.

2. The assessee in all the three appeals is one
Sri.M.A.Siddique. A search under Section 132 of the
Income Tax Act, 1961 (for short 'the Act') was conducted
on the business premises of Supreme Group on
24.11.2015 and consequently, assessment order dated
29.12.2017 was passed under Section 153(A) read with
Section 143(3) of the Act in all the above three appeals.
The Assessing Officer, the Deputy Commissioner of
Income Tax, Central Circle-1, Mangaluru on the basis of
incriminating documents seized/impounded and on the
basis of evidence gathered, made additions and issued
demand notice accordingly.

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ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


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3. Aggrieved by the said assessment order, the
respondent/assessee preferred appeal before the
Commissioner of Income Tax (Appeals) (for short,
‘CIT(A)’) and the CIT(A) by order dated 18.10.2019, partly
allowed the appeal of the respondent/assessee with an
observation that the Assessing Officer could not have
made additions relying on the documents which were very
much available at the time of original assessment under
Section 143 of the Act and he was of the further opinion
that no new materials were unearthed during the course of
search. He was also of the further opinion that no
proceedings under Section 143 of the Act were pending
and as such, no proceedings under Section 153A of the Act
could have been initiated. Against the order of the CIT(A),
the Revenue preferred ITA.No.63/Bang/2020 for the
assessment year 2013-14, ITA.No.64/Bang/2020 for the
assessment year 2014-15 and ITA.No.62/Bang/2020 for
the assessment year 2012-13. The Income Tax Appellate
Tribunal (for short, ‘the Tribunal’) by common order dated

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ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


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17.08.2020 dismissed the appeals filed by the
appellants/Revenue. Against which, the above three
appeals are filed for the assessment years 2014-15, 2013-
14 and 2012-13.

4. The above three appeals are admitted on
15.04.2021 to examine similar or identical substantial
questions of law which are raised in ITA.No.18/2021,
which reads as follows:
“ (1) Whether on the facts and circumstances
of the case, the Tribunal's order can be said as
perverse since Tribunal has held that assessment
order passed under Section 153A read with Section
143(3) of the Act is bad in law by holding that as
there were no new material, assessment is not
possible under Section 153A of the Act without
appreciating that there was no regular assessment
passed in case of assessee prior to date of search
and even otherwise assessing authority is
empowered to assessee or re-assess the total
income of assessee in consequence to search
conducted under Section 132 of the Act?

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ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


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(2) Whether on the facts and in the
circumstances of the case, the Tribunal is right in
law in holding that assesssment order passed under
Section 153A of the Act is bad in law ignoring that
conditions prescribed under Section 153A of the Act
are fully satisfied to pass assessment order under
said section and as such order of assessment
passed in case of assessee is valid? ”

5. Heard learned counsel Sri.Y.V.Raviraj as well as
learned counsel Sri.Dilip.M., for appellants/Revenue and
learned counsel Miss.Dr.Sheetal Borkar for Sri.Mallahar
Rao.K., learned counsel for respondent/assessee. Perused
the entire appeal papers.

6. Learned counsel Sri.M.Dilip for
appellants/Revenue would submit that both the CIT(A) as
well as the Tribunal failed to properly appreciate the
material on record and without appreciating the material
on record have come to a wrong conclusion. Further,
learned counsel would submit that the Tribunal as well as
CIT(A) finding that there were no new material is perverse

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ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


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and without appreciating that there was no regular
assessment. Further, learned counsel would submit that
the conditions laid down under Section 153A of the Act is
fully satisfied. As such, both the CIT(A) and the Tribunal
could not have interfered with the assessment order. Thus,
he would pray for allowing the appeals.

7. On the other hand, learned counsel Miss.
Dr.Sheetal Borkar for the respondent/assessee would
support the order of the CIT(A) as well as the Tribunal by
contending that no new materials were found during the
search and as such there is no new material for addition.
Further, learned counsel would submit that there was no
proceedings pending under Section 143 of the Act. As
such, the appellants/Revenue could not have initiated
proceedings under Section 153A of the Act. Thus, it is
prayed for dismissal of the appeals.

8. Having heard the learned counsel appearing for
the parties and on perusal of the entire appeal papers, we

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ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


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are of the considered opinion that no substantial questions
of law would arise for consideration and the substantial
questions of law raised by appellant/Revenue is to be
answered against the Revenue and in favour of the
respondent/assessee.

9. There is no dispute that a search was conducted
under Section 132 of the Act on 24.11.2015 on the
business premises of the Supreme Group and the
respondent/assessee was the proprietor of the Supreme
Group. The CIT(A) on examination of the entire material
on record has rightly recorded that the proceedings under
Section 143 of the Act had been completed by the time
search was conducted on the business premises of the
respondent/assessee. In such circumstances, it was not
open for the appellants/Revenue to initiate proceedings
under Section 153A of the Act. Moreover, during the
course of search, no new materials were found or
unearthed to make any addition. The appellants/Revenue

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C/W ITA No. 17 of 2021
ITA No. 20 of 2021


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has not placed on record any material to indicate
unearthing of any new material during the course of
search. In the facts and circumstances of the present case,
the findings of either the CIT(A) or the Tribunal cannot be
said to be perverse. The finding of the CIT(A) as well as
the Tribunal is based on the material placed on record.

10. The Hon'ble Apex Court in the case of Principal
Commissioner of Income-Tax, Central-3 Vs. Abhisar
Buildwell (P.) Ltd. [(2023) 149 Taxmann.com 399 (SC)]
was examining the scope of assessment under Section
153A of the Act and at paragraph 14 it is held as follows:
“ 36. In view of the above and for the reasons
stated above, it is concluded as under:
(i) 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;

(ii) All pending assessments/reassessments shall
stand abated;

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ITA No. 18 of 2021
C/W ITA No. 17 of 2021
ITA No. 20 of 2021


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(iii) 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

(iv) 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 re-
opened 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.

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The question involved in the present set of appeals
and review petition is answered accordingly in
terms of the above and the appeals and review
petition preferred by the Revenue are hereby
dismissed. No costs.

Civil Appeals Nos. 7738-39, 7736-37, 7732-35 and
7740-43 of 2021 ”

The above decision makes it abundantly clear that in case
no incriminating material is unearthed during the search,
the Assessing Officer cannot assess or re-assess taking
into consideration the other materials in respect of
completed assessments/unabated assessments.

11. Further the Tribunal during the course of its
order has recorded that CIT(A) has given a categorical
finding that case of the assessee squarely falls outside the
purview of Section 153A of the Act because the
assessment has not abated and no new material was
found or unearthed during the course of search. Moreover,

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it is a concurrent finding of fact recorded by the CIT(A) as
well as the Tribunal.

12. The above decision would aptly apply to the fact
situation of the present appeals. Following the above
dictum of the Hon’ble Apex Court, the appeals are
dismissed, answering the substantial questions of law
against Revenue and in favour of respondent/assessee.



Sd/-
(S.G.PANDIT)
JUDGE


Sd/-
(DR.CHILLAKUR SUMALATHA)
JUDGE



DS, NC
CT:TSM