No alteration to completed assessments under Section 153A of the Income Tax Act can occur without discovery of incriminating material during the course of search; established legal principles support this limitation.

JUDGMENT

Manmohan, J. (Oral)--The matter has been heard by way of video conferencing.

2. Present appeal has been filed under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the`Act') challenging the order dated 31st May, 2019 passed in ITA No.7971/Del/2018 for the assessment year 2009-10.

3. In the present appeal, the following questions of law arise for consideration:

A. Whether the ITAT has erred in law in relying on the ratio held in CIT v. Kabul Chawla, 380 ITR 573 and in holding that completed assessment could not be interfered without incriminating material in view of the provision of law under Section 153 A of the Income Tax Act, 1961 which does not stipulate any such condition on the Assessing Officer?

B. Whether the ITAT has erred in law in relying on the ratio held in CIT v. Kabul Chawla, 380 ITR 573 and deleting the addition of Rs.6,00,00,000/- made by the AO on account of share capital under Section 68 of the Income Tax Act, 1961?

C. Whether ITAT has erred in dismissing the appeal of the Revenue by relying on the decision of the Hon'ble High Court in CIT v. Kabul Chawla, 380 ITR 573 CIT, without properly appreciating the provisions contained in section 153A of the IT Act which does not require to have any incriminating material found during the search and seizure action as an essential requirement for making an addition in the assessment?

D. Whether the ITAT has erred in dismissing the appeal of the Revenue by relying on the decision of the Hon'ble High Court in CIT v. Kabul Chawla, 380 ITR 573, without properly appreciating the provisions contained in section 153A which starts with the non-obstante clause which seeks to operate in the supersession of provisions contained in section 139, 147, 148, 149, 151 and 153?

E. Whether the ITAT has erred in dismissing the appeal of the Revenue by relying on the decision of the Hon'ble High Court in CIT v. Kabul Chawla, 380 ITR 573, without properly appreciating the provisions contained in section 153A which have been inserted w.e.f. 01.06.2003 after the provisions contained in section 158BC and other allied provisions contained in chapter XIV-B which were made inapplicable after 31.05.2003 as per section 158BI of the IT Act?

F. Whether the Hon'ble ITAT has erred in not appreciating the Hon'ble Allahabad High Court's decision in the case of CIT (Central) Kanpur vs. Rajkumar Arora, (2014) 211 Taxman 453 that the assessing officer has power to re-assess returns of assessee not only for undisclosed income which was found during search operation but also with regard to material that was available at the time of original assessment?

G. Whether the ITAT has erred in allowing the appeal of the assessee without examining the merits of the additions made u/S 68 of the I.T. Act, 1961 on account of receipt of share capital from undisclosed sources?

H. Whether the ITAT has erred in allowing the appeal of the assessee without examining that the assessee has failed to prove the genuineness of transactions as well as creditworthiness of the investing companies as well as the investors to the investing companies?

4. Admittedly, a learned predecessor Division Bench has dealt with interplay of Section 132 read with Section 153A of the Act in the case of Commissioner of Income Tax vs. Kabul Chawla, (2015) SCC OnLine Del 11555. The legal position summarised in Kabul Chawla (supra) is reproduced hereinbelow:

"37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under:

i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person sear