Delhi High Court – Orders
M/S Triple S Stock And Shares Pvt Ltd vs Ito Ward-16(4) New Delhi on 13 March, 2026
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 164/2026, CM APPL. 13660/2026, CM APPL. 13661/2026
M/S TRIPLE S STOCK AND SHARES PVT LTD.....Appellant
Through: Mr. Deepankar Kumar and Ms.
Pankhuri Srivastava, Advs.
versus
ITO WARD-16(4) NEW DELHI .....Respondent
Through: Mr. Indruj Singh Rai, SSC, Mr.
Sanjeev Menon and Mr. Rahul Singh,
JSCs and Mr. Gaurav Kumar, Adv.
CORAM:
HON'BLE MR. JUSTICE DINESH MEHTA
HON'BLE MR. JUSTICE VINOD KUMAR
ORDER
% 13.03.2026
1. Having heard learned counsel for the parties, we are of the view that
following substantial questions of law arise for consideration:-
(i) Whether the Income Tax Appellate Tribunal
was legally justified in holding that the assessment
order did not abate?
(ii) Whether consequent to fresh assessment order
for Assessment Year 2006-07 being passed on
26.12.2011, the earlier assessment order (dated
29.12.2008) stand re-opened and merged with the
subsequent assessment order?
2. Admit. Issue Notice. Mr. Indruj Singh Rai, learned Senior Standing
Counsel for the Department-respondent accepts the notice.
3. Since the controversy in hand lies in a very narrow compass and the
issue is covered by judgment of this Court rendered in the case of
Commissioner of Income Tax v. Anil Kumar Bhatia reported in (2013)
352 ITR 493 so also by the judgment of Hon’ble the Supreme Court
ITA 164/2026 Page 1 of 8
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rendered in the case of Principal Commissioner of Income Tax, Central-3
v. Abhisar Buildwell Private Limited reported in (2024) 2 SCC 433, we
propose to decide the appeals at this stage itself.
4. The facts appertain are that the Assessing Officer (hereinafter
referred to as ‘AO’) had initially passed an assessment order dated
29.12.2008 under Section 143(3) of the Income Tax Act, 1961 (hereinafter
referred to as ‘the Act of 1961’) and disallowed the short term capital loss,
against which, the assessee preferred an appeal before the Commissioner of
Income Tax (Appeals), which was dismissed vide order dated 20.03.2014.
Thereafter, an appeal was preferred before the Income Tax Appellate
Tribunal (hereinafter referred to as ‘the Tribunal’).
5. In the meantime, a search was conducted at the appellant’s premises
on 26.03.2010 and an assessment under Section 153A and Section 143(3) of
the Act of 1961, for block period of six years (which included Assessment
Year 2006-07) was made on 26.12.2011.
6. Fortunately for the assessee, this time the AO did not disallow the
short term capital loss and such issue came to be decided in assessee’s
favour in the sense that the subsequent AO did not give any finding in
relation to allowability of the short term capital loss.
7. When the above referred appeal pending before the Tribunal came up
for hearing, the assessee’s counsel argued that the assessment order, which
was passed on 29.12.2008, stood abated.
8. Such argument of the assessee did not find favour with the Tribunal
and the Tribunal rejected appellant’s appeal vide its impugned order dated
16.12.2024.
9. Mr. Deepankar Kumar, learned counsel for the appellant argued that
ITA 164/2026 Page 2 of 8
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maybe the issue was not properly raised and argued before the Tribunal and
it was argued at the behest of the appellant that the assessment order stood
abated, but the fact situation and legal position is that once a fresh
assessment order was passed for the block assessment period for the very
same Assessment Year (2006-07), the earlier assessment made on
29.12.2008 stood re-opened and the same got merged in the subsequent
order dated 26.12.2011, passed under Section 153A of the Act of 1961.
10. He argued that if the correct legal position is considered and dealt
with in the light of the correct position of law as submitted, (in view of the
judgment of this Court rendered in the case of Anil Kumar Bhatia (supra)
and judgement of Hon’ble the Supreme Court rendered in the case of
Abhisar Buildwell Private Limited (supra)), the appeal filed by the
appellant before the Tribunal ought to have been disposed of as infructuous
with the corresponding setting aside of the assessment order dated
29.12.2008 or with a finding that the same got merged.
11. Mr. Indruj Singh Rai, learned Senior Standing Counsel on the other
end submitted that the Tribunal was justified in passing the impugned order
dated 16.12.2024 in face of the submissions that were advanced on behalf of
the appellant.
12. He argued that in any case, the appellant-assessee was incorrect to
contend that the assessment order had abated. He argued that the assessment
order stands abated only in cases of pending assessment proceedings. But
since on the date of search and at the time of passing block assessment
orders for six years, the assessment order had already been passed on
29.12.2008, it cannot be said that said assessment order got abated.
13. He further argued that the manner in which the issue has been put
ITA 164/2026 Page 3 of 8
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forth now, (before this Court) is correct if tested in light of judgment of this
Court rendered in the case of Anil Kumar Bhatia (supra) and judgement of
Hon’ble the Supreme Court in the case of Abhisar Buildwell Private
Limited (supra).
14. Heard learned counsel for the parties.
15. In the case of Anil Kumar Bhatia (supra), this Court has observed
thus:-
“22. Now, there can be cases where at the time when the
search is initiated or requisition is made, the assessment or
reassessment proceedings relating to any assessment year
falling within the period of the six assessment years
mentioned above, may be pending. In such a case, the
second proviso to sub-section (1) of section 153A says that
such proceedings “shall abate”. The reason is not far to
seek. Under section 153A, there is no room for multiple
assessment orders in respect of any of the six assessment
years under consideration. That is because the Assessing
Officer has to determine not merely the undisclosed
income of the assessee, but also the “total income” of the
assessee in whose case a search or requisition has been
initiated. Obviously, there cannot be several orders for the
same assessment year determining the total income of the
assessee. In order to ensure this state of affairs, namely,
that in respect of the six assessment years preceding the
assessment year relevant to the year in which the search
took place there is only one determination of the total
income, it has been provided in the second proviso of sub-
section (1) of section 153A that any proceedings for
assessment or reassessment of the assessee which are
pending on the date of initiation of the search or making
requisition “shall abate”. Once those proceedings abate,
the decks are cleared, for the Assessing Officer to pass
assessment orders for each of those six years determining
the total income of the assessee which would include both
the income declared in the returns, if any, furnished by theITA 164/2026 Page 4 of 8
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assessee as well as the undisclosed income, if any,
unearthed during the search or requisition. The position
thus emerging is that where assessment or reassessment
proceedings are pending completion when the search is
initiated or requisition is made, they will abate making
way for the Assessing Officer to determine the total income
of the assessee in which the undisclosed income would also
be included, but in cases where the assessment or
reassessment proceedings have already been completed
and assessment orders have been passed determining the
assessee’s total income and such orders are subsisting at
the time when the search or the requisition is made, there
is no question of any abatement since no proceedings are
pending. In this latter situation, the Assessing Officer will
reopen the assessments or reassessments already made
(without having the need to follow the strict provisions or
complying with the strict conditions of sections 147, 148
and 151) and determine the total income of the assessee.
Such determination in the orders passed under section
153A would be similar to the orders passed in any
reassessment, where the total income determined in the
original assessment order and the income that escaped
assessment are clubbed together and assessed as the total
income. In such a case, to reiterate, there is no question of
any abatement of the earlier proceedings for the simple
reason that no proceedings for assessment or reassessment
were pending since they had already culminated in
assessment or reassessment orders when the search was
initiated or the requisition was made.”
16. Similarly in the case of Abhisar Buildwell Private Limited (supra)
Hon’ble the Supreme Court has held thus:-
“30. That prior to insertion of Section 153-A in the statute,
the relevant provision for block assessment was under
Section 158-BA of the 1961 Act. The erstwhile scheme of
block assessment under Section 158-BA envisaged
assessment of “undisclosed income” for two reasons,ITA 164/2026 Page 5 of 8
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firstly that there were two parallel assessments envisaged
under the erstwhile regime i.e.: (i) block assessment under
Section 158-BA to assess the “undisclosed income”, and
(ii) regular assessment in accordance with the provisions
of the Act to make assessment qua income other than
undisclosed income. Secondly, that the “undisclosed
income” was chargeable to tax at a special rate of 60%
under Section 113 whereas income other than
“undisclosed income” was required to be assessed under
regular assessment procedure and was taxable at normal
rate. Therefore, Section 153-A came to be inserted and
brought on the statute. Under Section 153-A regime, the
intention of the legislation was to do away with the scheme
of two parallel assessments and tax the “undisclosed”
income too at the normal rate of tax as against any special
rate. Thus, after introduction of Section 153-A and in case
of search, there shall be block assessment for six years.
Search assessments/Block assessments under Section 153-
A are triggered by conducting of a valid search under
Section 132 of the 1961 Act. The very purpose of search,
which is a prerequisite/trigger for invoking the provisions
of Sections 153-A/153-C is detection of undisclosed
income by undertaking extraordinary power of search and
seizure i.e. the income which cannot be detected in
ordinary course of regular assessment. Thus, the
foundation for making search assessments under Sections
153-A/153-C can be said to be the existence of
incriminating material showing undisclosed income
detected as a result of search.
31. On a plain reading of Section 153-A of the 1961 Act, it
is evident that once search or requisition is made, a
mandate is cast upon the AO to issue notice under Section
153 of the Act to the person, requiring him to furnish the
return of income in respect of each assessment year falling
within six assessment years immediately preceding the
assessment year relevant to the previous year in which
such search is conducted or requisition is made and assess
or reassess the same.
ITA 164/2026 Page 6 of 8
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34.If the submission on behalf of the Revenue that in case
of search even where no incriminating material is found
during the course of search, even in case of
unabated/completed assessment, the AO can assess or
reassess the income/total income taking into consideration
the other material is accepted, in that case, there will be
two assessment orders, which shall not be permissible
under the law. At the cost of repetition, it is observed that
the assessment under Section 153-A of the Act is linked
with the search and requisition under Sections 132 and
132-A of the Act. The object of Section 153-A is to bring
under tax the undisclosed income which is found during
the course of search or pursuant to search or requisition.
Therefore, only in a case where the undisclosed income is
found on the basis of incriminating material, the AO would
assume the jurisdiction to assess or reassess the total
income for the entire six years block assessment period
even in case of completed/unabated assessment. As per the
second proviso to Section 153-A, only pending
assessment/reassessment shall stand abated and the AO
would assume the jurisdiction with respect to such abated
assessments. It does not provide that all
completed/unabated assessments shall abate. If the
submission on behalf of the Revenue is accepted, in that
case, the second proviso to Section 153-A and sub-section
(2) of Section 153-A would be redundant and/or re-writing
the said provisions, which is not permissible under the
law.”
17. In light of the above quoted portion of the judgment of this Court and
Hon’ble the Supreme Court and on perusal of the scheme of Section 153A
of the Act of 1961, we are of the considered opinion that upon a fresh
assessment made under Section 153A for a particular year being passed, the
previous assessment order(s) of block period become infructuous or
unenforceable, irrespective of the fact whether or not the issue or demand
ITA 164/2026 Page 7 of 8
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allowance/disallowance that was made previously has been dilated upon and
incorporated. In other words, the earlier assessment order loses its very
existence and they have to concede to the subsequent assessment made for
that assessment year. Therefore, both question No. 1 and 2 are answered in
affirmative. Resultantly, question No.1 is decided against the assessee but
question No.2 is decided in favour of the assessee.
18. The appeal is therefore, allowed.
19. The order of the Tribunal dated 16.12.2024 is set aside.
20. It is hereby held that on passing of the subsequent assessment order
under the block regime, the earlier assessment order stands re-opened and
the previous order stands merged in the subsequent assessment order and
becomes inoperative.
21. The earlier order dated 29.12.2008 became inoperative and hence it
has to concede to the order dated 26.12.2011 and as there was no
disallowance of the short term capital loss in case of the assessee (for the
Assessment Year 2006-07) in the subsequent order, such position shall
prevail.
22. All pending applications stand disposed of.
DINESH MEHTA, J.
VINOD KUMAR, J.
MARCH 13, 2026/cd
ITA 164/2026 Page 8 of 8
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