Completed search assessments require assessee-linked incriminating material and separate section 153D approval for each year.

In a completed search assessment, additions under section 153A cannot be sustained on the basis of material seized from a third party's premises; such material, if relied upon, must meet the section 153C satisfaction requirement, and in the absence of incriminating material found in the assessee's own search, the additions fail. A common and combined approval under section 153D for multiple assessment years is also invalid where it does not show separate, independent application of mind to each draft assessment order and the material on record; a mechanical composite approval vitiates the assessments. On these grounds, the impugned assessments and consequential penalties did not survive.

---

---

Issues: (i) whether additions in a completed assessment under section 153A could be sustained when the material relied upon was seized from a third party and not from the assessee's premises; (ii) whether the common and combined approval under section 153D for multiple assessee-years was valid.

Issue (i): whether additions in a completed assessment under section 153A could be sustained when the material relied upon was seized from a third party and not from the assessee's premises

Analysis: The assessment year was an unabated year. The additions were based on notebooks and related material seized from the premises of a third party, not from the assessee's own searched premises. The Court noted that the material was sought to be used in the assessee's assessment under section 153A, whereas such third-party material, if relied upon, could only justify proceedings under section 153C after the statutory satisfaction requirement. In the absence of incriminating material found in the assessee's search and in view of the completed nature of the assessment, the additions could not be sustained.

Conclusion: The assessment under section 153A was liable to be quashed on this ground, in favour of the assessee.

Issue (ii): whether the common and combined approval under section 153D for multiple assessee-years was valid

Analysis: The approval under section 153D was granted through a common communication covering multiple cases and assessment years. The requirement of section 153D is prior approval for each assessment year, and such approval must reflect independent application of mind to the draft assessment order and the material on record. A combined mechanical approval does not satisfy the statutory mandate and vitiates the assessment proceedings.

Conclusion: The approval under section 153D was invalid and the assessment was quashed on this ground as well, in favour of the assessee.

Final Conclusion: All the quantum and consequential penalty appeals were allowed, and the impugned assessments and penalties did not survive.

Ratio Decidendi: For a completed search assessment, additions under section 153A cannot rest on material seized from a third party without recourse to section 153C and its satisfaction requirement, and approval under section 153D must be separate for each assessment year with real application of mind.

---