A section 153C assessment was made on me after a search on someone else, but nothing incriminating about me was found. Does the Abhisar Buildwell rule protect me too?
Yes. The Supreme Court dismissed a batch of Revenue appeals, holding that where no incriminating material was found during the search — either from the assessee or from the third party — the assessments under section 153C were rightly set aside by the High Court. The Court declined to interfere with those judgments. It did, however, record on the Revenue's request, made on the strength of Abhisar Buildwell, that it remains open to the Revenue to initiate reassessment proceedings under sections 147 and 148 in accordance with law, if that is permissible under the law.
Decided by the Supreme Court (Supreme Court of India — M.R. Shah J and C.T. Ravikumar J) on 2023-04-25, reported as Civil Appeal No. 6634 of 2021 with Civil Appeals Nos. 6656/2021, 6654/2021, 6653/2021, 7600/2019, 6744/2018, 6982/2021, 7033/2021, 6655/2021, 1504/2018, 3147/2019 and 6661/2021 (Supreme Court of India). It bears on section 153C, section 153A, section 148, section 147 of the Income Tax Act 1961, in Search, Survey & Block Assessment and Reassessment & Reopening matters.
Abhisar Buildwell settled the position for section 153A, that a completed or unabated assessment cannot be disturbed without incriminating material found in the search. This order carries the same rule across to section 153C, which is the provision that reaches the person other than the one searched, and it does so in a batch of appeals decided the same season. That makes it the citation for the 'no incriminating material, no section 153C addition' argument. Its second half matters just as much: the reassessment powers are saved, so an assessee who wins on this ground should expect a section 148 notice, and the Court's words are guarded — reassessment must be in accordance with law and only if permissible under the law, which leaves limitation and the conditions of sections 148 and 148A fully open to challenge.
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This was a batch of twelve appeals by the Revenue. In each, the assessment on the assessee had been made under section 153C of the Income-tax Act 1961, the provision that applies to a person other than the one searched where money, bullion, documents or information seized in a search under section 132 relate to that other person. The High Court had found, in every one of the cases, that no incriminating material was found during the search, either from the assessee or from the third party, and had set the section 153C assessments aside on that footing. The Revenue appealed. At the hearing the Additional Solicitor General, relying on paragraphs 11 and 13 of the Supreme Court's recent decision in Principal Commissioner of Income Tax, Central-3 v Abhisar Buildwell P. Ltd., in which the Revenue's powers of reassessment were saved even in the case of a block assessment under section 153A, asked the Court to record that the Revenue may be permitted to initiate reassessment proceedings under sections 147 and 148.
All the appeals were dismissed. Since no incriminating material was found in the case of any of the assessees, either from the assessee or from the third party, and the assessments were under section 153C, the High Court had rightly set aside the assessment orders, and those judgments did not require any interference. On the Revenue's separate prayer, the Court observed that it will be open to the Revenue to initiate reassessment proceedings in accordance with law and if it is permissible under the law. The appeals were accordingly dismissed and disposed of, and pending applications disposed of.
The order is short because the ground had already been covered. The Court took the High Court's factual finding as it stood — that in none of the cases was any incriminating material found in the search, whether from the assessee or from the third party — and treated that as decisive of the validity of the section 153C assessments. It did not restate the principle at length; the reasoning is that of Abhisar Buildwell, which the Revenue itself invoked, where the Court had held that in the absence of incriminating material found in the search, completed or unabated assessments cannot be disturbed under section 153A and only the reassessment machinery remains available. Applying that logic to section 153C, the absence of incriminating material left nothing on which the section 153C assessment could stand. The Court then dealt with the consequence the Revenue was anxious about. Because Abhisar Buildwell had expressly saved the Revenue's reassessment powers, the Court recorded the liberty in terms that concede nothing on the merits: reassessment may be initiated in accordance with law, and only if it is permissible under the law.
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-C of the Act
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Handle my notice → Ask a CA on WhatsAppYes. The Supreme Court dismissed a batch of Revenue appeals, holding that where no incriminating material was found during the search — either from the assessee or from the third party — the assessments under section 153C were rightly set aside by the High Court. The Court declined to interfere with those judgments. It did, however, record on the Revenue's request, made on the strength of Abhisar Buildwell, that it remains open to the Revenue to initiate reassessment proceedings under sections 147 and 148 in accordance with law, if that is permissible under the law. This was decided by the Supreme Court (Supreme Court of India — M.R. Shah J and C.T. Ravikumar J) and bears on section 153C, section 153A, section 148, section 147 of the Income Tax Act 1961. It is reported as Civil Appeal No. 6634 of 2021 with Civil Appeals Nos. 6656/2021, 6654/2021, 6653/2021, 7600/2019, 6744/2018, 6982/2021, 7033/2021, 6655/2021, 1504/2018, 3147/2019 and 6661/2021 (Supreme Court of India). Abhisar Buildwell settled the position for section 153A, that a completed or unabated assessment cannot be disturbed without incriminating material found in the search. This order carries the same rule across to section 153C, which is the provision that reaches the person other than the one searched, and it does so in a batch of appeals decided the same season. That makes it the citation for the 'no incriminating material, no section 153C addition' argument. Its second half matters just as much: the reassessment powers are saved, so an assessee who wins on this ground should expect a section 148 notice, and the Court's words are guarded — reassessment must be in accordance with law and only if permissible under the law, which leaves limitation and the conditions of sections 148 and 148A fully open to challenge. If it applies to you, the first step is this: In a section 153C matter, put the Department to proof of what incriminating material was found in the search and which of it relates to you and to the assessment year in question.
This was a batch of twelve appeals by the Revenue. In each, the assessment on the assessee had been made under section 153C of the Income-tax Act 1961, the provision that applies to a person other than the one searched where money, bullion, documents or information seized in a search under section 132 relate to that other person. The High Court had found, in every one of the cases, that no incriminating material was found during the search, either from the assessee or from the third party, and had set the section 153C assessments aside on that footing. The Revenue appealed. At the hearing the Additional Solicitor General, relying on paragraphs 11 and 13 of the Supreme Court's recent decision in Principal Commissioner of Income Tax, Central-3 v Abhisar Buildwell P. Ltd., in which the Revenue's powers of reassessment were saved even in the case of a block assessment under section 153A, asked the Court to record that the Revenue may be permitted to initiate reassessment proceedings under sections 147 and 148. The matter was decided on 2023-04-25 by the Supreme Court (Supreme Court of India — M.R. Shah J and C.T. Ravikumar J). On those facts the Supreme Court held as follows. All the appeals were dismissed. Since no incriminating material was found in the case of any of the assessees, either from the assessee or from the third party, and the assessments were under section 153C, the High Court had rightly set aside the assessment orders, and those judgments did not require any interference. On the Revenue's separate prayer, the Court observed that it will be open to the Revenue to initiate reassessment proceedings in accordance with law and if it is permissible under the law. The appeals were accordingly dismissed and disposed of, and pending applications disposed of.
The order is short because the ground had already been covered. The Court took the High Court's factual finding as it stood — that in none of the cases was any incriminating material found in the search, whether from the assessee or from the third party — and treated that as decisive of the validity of the section 153C assessments. It did not restate the principle at length; the reasoning is that of Abhisar Buildwell, which the Revenue itself invoked, where the Court had held that in the absence of incriminating material found in the search, completed or unabated assessments cannot be disturbed under section 153A and only the reassessment machinery remains available. Applying that logic to section 153C, the absence of incriminating material left nothing on which the section 153C assessment could stand. The Court then dealt with the consequence the Revenue was anxious about. Because Abhisar Buildwell had expressly saved the Revenue's reassessment powers, the Court recorded the liberty in terms that concede nothing on the merits: reassessment may be initiated in accordance with law, and only if it is permissible under the law. In the words reproduced by the source cited on this page: "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-C of the Act"
It was decided by the Supreme Court on 2023-04-25 and is reported as Civil Appeal No. 6634 of 2021 with Civil Appeals Nos. 6656/2021, 6654/2021, 6653/2021, 7600/2019, 6744/2018, 6982/2021, 7033/2021, 6655/2021, 1504/2018, 3147/2019 and 6661/2021 (Supreme Court of India). Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 153C, section 153A, section 148, section 147, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. All the appeals were dismissed. Since no incriminating material was found in the case of any of the assessees, either from the assessee or from the third party, and the assessments were under section 153C, the High Court had rightly set aside the assessment orders, and those judgments did not require any interference. On the Revenue's separate prayer, the Court observed that it will be open to the Revenue to initiate reassessment proceedings in accordance with law and if it is permissible under the law. The appeals were accordingly dismissed and disposed of, and pending applications disposed of. It arises in Search, Survey & Block Assessment and Reassessment & Reopening matters, on section 153C, section 153A, section 148, section 147 of the Income Tax Act 1961, and was decided by Supreme Court of India — M.R. Shah J and C.T. Ravikumar J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Distinguish material found in the search from material already on record or gathered later; only the former supports an addition under section 153C on an unabated assessment. Expect a reassessment notice after a win on this ground and check limitation under section 149 and compliance with section 148A before conceding it. Read this order with Abhisar Buildwell, which supplies the reasoning; this order applies it and does not restate it.
Still good law. An order of April 2023 applying Abhisar Buildwell, decided by the same Bench in the same period. No later decision was available here to check it against. Date scope: by the closing limb of s.153A(1) that section reaches only a search initiated, or a requisition made, after 31 May 2003 and on or before 31 March 2021, and s.153C is excluded by its own sub-section (3) from any search initiated on or after 1 April 2021, so this entry is authority on the s.153A and s.153C regime and on nothing else — a search initiated between 1 April 2021 and 31 August 2024 is a reassessment under ss.147 to 151 as they stood immediately before the Finance (No. 2) Act 2024, by force of s.152(3), and a search initiated on or after 1 September 2024 falls under the substituted Chapter XIV-B. The incriminating-material requirement worked out in this line rests on the words of s.153A and s.153C, which spoke only of assessing or reassessing total income and carried no material limb of their own; s.158BB(2) of the substituted Chapter has its own and considerably wider undisclosed-income limb, and whether the same requirement holds under it has not been decided, so the point should not be assumed either way for a block assessment. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The source page carries the order in the Supreme Court's daily-orders series, not a law-report text, and no reporter citation is printed, so the case numbers are given instead. The order is brief: it does not name the High Court whose judgments were under appeal, identify the assessment years, describe the search or the material, or set out the reasoning of Abhisar Buildwell that it applies. The names of the other eleven assessees do not appear in the order. What Abhisar Buildwell decided has been described here from the way this order and the Revenue's submission characterise it, since that judgment itself was not read. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
All the appeals were dismissed. Since no incriminating material was found in the case of any of the assessees, either from the assessee or from the third party, and the assessments were under section 153C, the High Court had rightly set aside the assessment orders, and those judgments did not require any interference. On the Revenue's separate prayer, the Court observed that it will be open to the Revenue to initiate reassessment proceedings in accordance with law and if it is permissible under the law. The appeals were accordingly dismissed and disposed of, and pending applications disposed of.
TaxSphere, “Dy. CIT v U.K. Paints (Overseas) Ltd”, https://taxnotice.vittsphere.com/caselaw/case/dy-cit-v-u-k-paints-overseas-ltd/ (validity last checked 2026-08-29)
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