Search-based s.153C tax assessments without incriminating material: additions struck down; revenue appeals dismissed, reassessment still possible.

For assessments framed under s.153C, the SC held that in the absence of any incriminating material unearthed during search-whether from the assessees or any third party-jurisdiction to sustain additions in s.153C assessments was not made out. On this legal basis, the HC was correct in setting aside the assessment orders, and the SC declined interference; the revenue's appeals were dismissed. The SC clarified that the revenue may initiate reassessment proceedings, if otherwise permissible in law.

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Issues Involved:
The judgment involves the assessment under Section 153-C of the Income Tax Act, 1961, the absence of incriminating material during search, the setting aside of assessments by the High Court, and the possibility of initiating re-assessment proceedings under Section 147/148 of the Act.

Assessment under Section 153-C:
The High Court found that no incriminating material was discovered during the search related to the Assessees. Consequently, the assessments under Section 153-C of the Act were rightly set aside by the High Court. The Revenue sought permission to initiate re-assessment proceedings under Section 147/148 based on certain observations in a recent decision. However, since no incriminating material was found in any of the cases, the High Court's decision to set aside the Assessment Orders was upheld by the Supreme Court. The appeals were dismissed as a result.

Initiation of Re-assessment Proceedings:
While the appeals were dismissed, the Supreme Court noted that the Revenue could initiate re-assessment proceedings in accordance with the law if permissible. The judgment emphasized that the Revenue's request to initiate re-assessment proceedings would be considered based on the legal provisions applicable.

Conclusion:
The Supreme Court upheld the High Court's decision to set aside the assessments under Section 153-C due to the absence of incriminating material. The appeals were dismissed, but the possibility of the Revenue initiating re-assessment proceedings under Section 147/148 was acknowledged, subject to legal provisions. The judgment concluded by dismissing all the appeals and allowing the Revenue to pursue re-assessment proceedings if legally permissible.

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