Our Partner Sachit Jolly was appointed as Amicus Curiae to assist the Delhi High Court in a matter dealing with post-search assessments. Agreeing with the submissions made by Mr. Jolly, the Court held that the ratio of Kabul Chawla decision was not diluted by the Dayawanti ruling. The High Court also appreciated the assistance rendered by Mr. Jolly.

Delhi HC dismisses Revenue’s appeal on validity of post-search assessments, made in absence of incriminating material, as devoid of substantial questions of law. Revenue relied upon coordinate bench ruling in Dayawanti to submit that a statement recorded under Section 132(4) during the search operation can be treated as incriminating material based on which an addition can be sustained. Amicus Curiae submitted that there were no abated assessments, thus, no addition could be made without any incriminating material and there was, in fact, neither any fresh information/material unearthed during the search operation nor any statement under Section 132(4) was recorded which could be classified as incriminating material. HC observes that coordinate bench ruling in Dayawanti relied upon by the Revenue was in peculiar facts and does not dilute Kabul Chawla’s ratio. With regard to Punjab & Haryana HC and SC rulings in Assessee’s case relied upon by the Revenue, HC holds that SC directions were given after Revenue conducted search; thus, they cannot form incriminating material found during the search.