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Judgment
PER KRINWANT SAHAY, AM:
Appeals in these cases have been filed by the assessee against the orders even dated 05.12.2025 passed by the ld. CIT(A)-29, New Delhi for Assessment Years: 2018-19 & 2019-20.
Grounds of appeal in both the cases are the same (though amount may vary) so they were heard together and order is being passed in the sake of brevity and convenience.
Grounds of appeal taken by the assessee in ITA No. 499/Del/2026 are as under:
“1.That on the facts and circumstances of the case and the provision of law, the ex-parte order passed by the Ld. CIT(A) is illegal, bad in law and against the principle of natural justice and thus the assessment order passed requires to be quashed.
2.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the initiation of reassessment proceeding u/s 147 is illegal and bad in law and thus assessment made requires to be quashed.
3.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the satisfaction/reasons recorded by the Ld. AD for initiation of reassessment proceeding u/s 147 is illegal, bad in law, mechanical and without application of mind and thus assessment made requires to be quashed.
4.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the approval obtained u/s 151 for initiation of proceeding u/s 147 is illegal and bad in law.
5.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the approval obtained u/s 1488 from the Addl. CIT before finalizing the assessment order is mechanical, without application of mind, illegal and bad in law and thus assessment order passed requires to be quashed.
6.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the addition made by the Ld. AO on the basis of digital data seized without providing the copy of the certificate u/s 65B of the Indian Evidence Act which is illegal and bad in law and thus assessment order passed requires to be quashed.
7.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in passing the appellate order despite the fact that protective addition has been made in the hands of the appellant and the order of the other persons in whose hands the substantive addition was made has not been adjudicated till yet by the Ld. CIT(A).
8.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in passing the appellate order without considering the adjournment letter filed during the course of the appellate proceeding wherein the adjournment was sought on the basis of reasons mentioned in the ground of appeal no. 7 above.
9.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in sustaining the addition of Rs. 1,23,12,161/-on protective basis made by the Ld. AO by estimating commission at 2.5 percent of Rs. 49,24,86,450/-on account of alleged foreign remittance transactions which was controlled and managed by Sh. Vipin Batra and Sh. Rupesh Kumar Batra and the appellant was having no connection with the same.
10.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in sustaining the addition of Rs. 2,00,000/- on account of loss shown under the head income from house property by claiming interest payable on borrowed capital
11.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the Ld. AO has erred in initiating the penalty proceeding u/s 270A r.w.s 274 of the IT Act.
12.That the interest charged u/s 234A and 2348 is illegal and without prejudice it is excessive.
13.That the appellant craves leave to reserve to itself the right to add, alter, amend, vary, modify and/or withdraw any ground(s) of appeal at or before the time of hearing modify and/or withdraw any ground(s) of appeal at or before the time of hearing.”
Grounds of appeal in ITA No. 500/Del/2026 are as under:
“1.That on the facts and circumstances of the case and the provision of law, the ex-parte order passed by the Ld. CIT(A) is illegal, bad in law and against the principle of natural justice and thus the assessment order passed requires to be quashed.
2.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the initiation of reassessment proceeding u/s 147 is illegal and bad in law and thus assessment made requires to be quashed.
3.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the satisfaction/reasons recorded by the Ld. AO for initiation of reassessment proceeding u/s 147 is illegal, bad in law, mechanical and without application of mind and thus assessment made requires to be quashed.
4.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the approval granted by the Ld. PCIT is also illegal and bad in law. Even no DIN has been mentioned on this approval as provided to the assessee in the e-filing portal and as per CBDT circular no. 19/2019 DIN has to be mentioned on the body of all the notice/order/ document issued to the assessee and thus assessment order passed requires to be quashed and thus assessment made requires to be quashed.
5.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the approval obtained u/s 148B from the Addl. CIT before finalizing the assessment order is mechanical, without application of mind, illegal and bad in law and thus assessment order passed requires to be quashed.
6.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the addition made by the Ld. AO on the basis of digital data seized without providing the copy of the certificate u/s 658 of the Indian Evidence Act which is illegal and bad in law and thus assessment order passed requires to be quashed.
7.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in passing the appellate order despite the fact that protective addition has been made in the hands of the appellant and the order of the other persons in whose hands the substantive addition was made has not been adjudicated till yet by the Ld. CIT(A).
8.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in passing the appellate order without considering the adjournment letter filed during the course of the appellate proceeding wherein the adjournment was sought on the basis of reasons mentioned in the ground of appeal no. 7 above.
9.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in sustaining the addition of Rs. 1,01,58,425/- on protective basis made by the Ld. AO by estimating commission at 2.5 percent of Rs. 40,63,36,998/-on account of alleged foreign remittance transactions which was controlled and managed by Sh. Vipin Batra and Sh. Rupesh Kumar Batra and the appellant was having no connection with the same.
10.That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the Ld. AO has erred in initiating the penalty proceeding u/s 270A r.w.s 274 of the IT Act.
11.That the interest charged u/s 234A and 234B is illegal and without prejudice it is excessive.
12.That the appellant craves leave to reserve to itself the right to add, alter, amend, vary, modify and/or withdraw any ground(s) of appeal at or before the time of hearing modify and/or withdraw any ground(s) of appeal at or before the time of hearing.”
During proceedings before us, the ld. counsel of the assessee emphasized on the facts that the ld. AO has passed order u/s 147 in both the cases, reopening case u/s 148 and assessment has been completed making addition on protective basis in the hands of the appellant. The ld. counsel also submitted that the order of the other persons in whose hands, the substantive addition was made has not been adjudicated till date by the ld. CIT(A). Accordingly, the ld. counsel requested that since protective assessment has been made after reopening the case, therefore, assessment order passed by the AO should be quashed.
Per contra, the ld. AR argued that in both these cases reopening was not in the normal course of assessment rather they were reopened because as per the new provisions applicable after 01.04.2021, search related cases are to be assessed u/s 147. In these cases, also a search and seizure operation was done by the Investigation Wing on 10.10.2021. Notice u/s 148 was issued on 20th March, 2024 after taking due approval of the Competent Authority and the assessment was completed on 17.03.2025. So, now it is compulsory for the AO to reopen a case u/s 148 in all search cases. The ld. DR further argued that it is true that protective assessment may not serve the purpose of revenue in most of the cases for collecting the taxes because once the substantive addition is deleted by the appellate authorities, protective assessment automatically goes and further that if the substantive addition is confirmed in that cases also protective assessment goes. But he pointed out that in case for some technical reason, substantive addition is deleted then the Revenue has no scope of collecting taxes if the protective assessment is not done and confirmed.
We have heard arguments of both the parties and we have also gone through the documents filed before us. We are of this considered view that, as pointed out by the ld. counsel of the assessee. The ld. CIT(A) has not as yet adjudicated the addition made on substantive basis. In fact, he should have adjudicated the case of substantive addition first and then he should have taken up the protective additions, case or at best he could have taken up both these cases and decided the issue simultaneously. But herein in this case he has not done it. Therefore, we are of this considered view that in the fitness of things these cases are remanded back to the ld. CIT(A) with the direction to decide the appeal on substantive addition first and thereafter the appeal on protective assessment should be taken up. With these remarks both these appeals /cases are remanded back to the file of the ld. CIT(A).
The findings given in ITA No. 499/Del/2026 will apply mutatis mutandis in ITA No. 500/Del/2026.
In the result, both the appeals filed by the assessees are allowed for statistical purposes.