BharatTax Research·Published 19 September 2026
The Supreme Court settled the incriminating-material question in 2023, and it settled it in the assessee’s favour. It also expressly saved the Department’s power to reopen the same years under section 147. Both halves matter.
The rule
Where an assessment for a year was completed and had not abated on the date of search, no addition can be made in the section 153A assessment unless incriminating material relating to that year was found during the search. The 153A notice still issues for all six years; what it permits the Assessing Officer to do with a non-abated year is what is limited.
CIT v. Kabul Chawla (2016) 380 ITR 573 (Del) set out the position in a summary at paragraph 37 that is quoted in judgment after judgment. Its load-bearing propositions:
- Once a search takes place under section 132, notice under section 153A(1) must mandatorily issue for the six preceding assessment years.
- Assessments and reassessments pending on the date of search abate, and the total income for those years is computed afresh.
- Assessments already completed on that date do not abate, and can be interfered with only on the strength of incriminating material unearthed in the search.
It is relied on in 3,235 judgments on BharatTax — the third most-cited authority in the corpus — and was applied as recently as 21 April 2026.
Is it still good law? Yes, and now on Supreme Court authority
For seven years Kabul Chawla was a Delhi High Court decision that other High Courts followed unevenly, and the Department contested. That ended on 24 April 2023.
PCIT v. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC), in Civil Appeal No. 6580 of 2021, affirmed the position: where no incriminating material is unearthed in the search, the Assessing Officer cannot assess or reassess in respect of completed or unabated assessments. As one Tribunal order in our corpus records it:
…in respect of completed or unabated assessments, no addition can be made by the Assessing Officer in the absence of any incriminating material having been found during the course of search under section 132 or requisition under section 132A of the Act.
Abhisar Buildwell is itself cited 1,251 times in the corpus, and in practice the two are now pleaded together as a pair.
The half that gets left out of the celebration. The same judgment saves the reopening route: completed or unabated assessments can be reopened under sections 147 or 148, subject to fulfilment of the conditions those sections impose.
So quashing a 153A addition for want of incriminating material does not close the year. It moves the Department to section 147. Those are different conditions, not lighter ones — the section 148A enquiry-and-show-cause procedure has to be gone through, and the section 149 limitation has to be met. Both are frequently where a post-Abhisar reopening fails: the Delhi High Court has quashed reassessment notices issued in reliance on the savings clause where they were already time-barred. Advising a client that the year is safe because the search assessment failed is advising them wrongly; so is assuming the reopening is a formality.
The problem it solved
Section 153A requires a notice for six years whenever there is a search, and says nothing express about what may be assessed in a year where the assessment was already complete and nothing turned up. Read literally, the provision appeared to hand the Assessing Officer a fresh assessment of total income for six years on the strength of a search that produced nothing for five of them. Kabul Chawla read the provisos as confining that power, and Abhisar Buildwell confirmed the reading.
How the Tribunal actually applies it
The fight is almost never about the rule. It is about whether a particular seized document is “incriminating material”. Four orders from the Chennai bench on the same day, apparently concerning related assessees, show how fine the line is:
| What was seized | Held | Outcome |
|---|---|---|
| Tally accounts already forming part of the returns filed; special audit report prepared after the search | Not incriminating — already disclosed, or derived from disclosed information | 153A quashed |
| Tally data seized in the search, later subjected to special audit | Incriminating — supported assumption of jurisdiction | Assessment upheld |
| Assessee’s own admission of being an accommodation entry provider, corroborated by documents found in the search | Incriminating | Assessment upheld |
| Cash deposited into a regular bank account disclosed in the return | Not incriminating — a disclosed regular account | Addition deleted |
The organising principle is disclosure, not seizure. Material that was already on the record does not become incriminating because a search party picked it up, and the Tribunal has said so of Tally data and of ordinary bank accounts alike. What tips it the other way is material the return did not reveal — or an admission that recharacterises what the return said.
Note also the timing point buried in those orders: a special audit report prepared after the search is not material found during the search. Where the same underlying data was seized and then audited, the characterisation went different ways.
When it will not help
Abated years. If the assessment was pending on the date of search, it abates and the Assessing Officer computes total income afresh. Kabul Chawla protects completed years only, and identifying which years had abated is the first thing to check.
Where the Department reopens under s.147. Expressly saved by Abhisar Buildwell, as above.
Section 153C cases need their own analysis. Where the assessee is not the person searched but material relating to them is found, the route is section 153C and the satisfaction and limitation questions differ. One Pune order in our sample upheld 153C proceedings precisely on the footing that the assessee was not the primary person searched.
Where material genuinely was found. The rule is a jurisdictional filter, not a defence on the merits. Once incriminating material for the year exists, the argument moves to what it proves.
Related provisions
Section 153A appears in 5,131 judgments in the corpus and section 153C in 3,371. Both sit on section 132, the search power itself. Since Abhisar Buildwell saves the reopening route, s.147 and s.148 now belong in the same file as the search assessment.
Where the citation figures come from
Citation figures come from an analysis of 292,668 ITAT, High Court and Supreme Court judgments on BharatTax.net. Kabul Chawla is relied on in 3,235 of them and Abhisar Buildwell in 1,251. “Cited” counts judgments mentioning the authority and does not distinguish a case followed from one distinguished.