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Judgment
PER KRINWANT SAHAY AM
Appeal in this case has been filed by the revenue against the order dated 25.03.2026 passed by the CIT(A)/NFAC, Delhi for the A.Y. 2016-17. Grounds of appeal are as under :-
1.Whether on facts & circumstances of the case and in law, Ld. CIT(A) erred in deleting addition of Rs 75.65.548 on account of 1 unexplained money routed as bogus Long Term Capital Gain and Rs 4,68.000 on account of unexplained money as cash commission paid for such bogus Long Term Capital Gain?
2.Whether on facts & circumstances of the case and in law, Ld. CIT(A) erred in not appreciating that the investment of the assessee in shares of Anax Comtrade Ltd was a penny stock investment which was done through a precontrived design, of Sh. Aseem Gupta, in relation to amalgamation of this penny stock with a listed company whose shares would be rigged?
3.Whether on facts & circumstances of the case and in law, Ld. CIT(A) erred in holding that non mention of name of assessee in SEBI report shows non-involvement of the assessee, without considering that evidence regarding bogus LTCG had been 3 discovered from an email of Sh. Aseem Gupta, an accommodation entry operator who prompted the assessee to apply for shares of Anax Comtrade Ltd which was to be amalgamated in a BSE listed company and will get shares of the listed company which will lead to substantial gains?
4.Whether on facts & circumstances of the case and in law, Ld. CIT(A) erred in failing to take cognizance of order of SEBI under section 11(1), 11(4) and 11b of sebi act. 1992 in the matter of Yamini Investment Company Ltd. (WTM/AB/IVD/ID11/29124/2023-24) dated 4/09/2023 which is available in public domain and it directly inculpates Yamini Investment and gives clear cut finding on how shares of that company were rigged?
5.Whether on facts & circumstances of the case and in law, Ld. CIT(A) failed to appreciate that formal documentation submitted by the assessee does not address the critical aspect of genuineness of the transaction which needs to be examined against the stringent human probabilities and ground reality of camouflaging of money laundering transactions and not just on the face value of the documents?
6.Whether on facts & circumstances of the case and in law, Ld. CIT(A) failed to appreciate the detailed analysis done by the AO to prove rigging in Yamini Investments which is also evident from SEBI order under section 11(1), 11(4) and 11b of sebi act. 1992 in the matter of Yamini investment Company Ltd. (WTM/AB/IVD/ID11/29124/2023-24) dated 04.09.2023 ?
7.Whether on facts and circumstances of the case and in law, Ld. CIT(A) failed to appreciate the relevance of excel document found in ‘Dkrirish HP Laptop’ which contained records of sale of shares and expenses @ 6% on such sale of shares of ACME group, which includes Yamini Investments Ltd. ?
At the very outset the Ld. Counsel of the assessee brought it to the notice of the Bench that in this case which pertains to A.Y. 2018-19. A notice has been issued u/s.153C on 16.03.2022 which is after 01.04.2021. He also argued that the matter / documents pertaining to the assessee was handed over by the AO of the searched party to the AO of the assessee after 01.04.2021, therefore, as per the Hon’ble Supreme Court decision in the case of CIT Vs. Jasjit Singh (2023) 458 ITR 437 (SC). The date of transfer of material could be taken as the date of intimation/ search for the issuance of notice u/s.153C. Since this date comes after 01.04.2021, therefore, as per the Ld. Counsel of the assessee the assessment order should have been passed u/s.147 of the Act as the date of assessment order is 30.03.2023 but the Ld. AO instead of passing the order u/s.147 of Act, passed the order u/s.153C r.w.s. 143(3) of the Income Tax Act which is against the mandate of the Income Tax Act. Notice should have been issued u/s.148 of the Act instead of Section 153C of the Act. The Ld. AO cited the case laws of Hargovind v. ACIT [2025] 180 taxmann.com 197 (Madras HC) and Geetanjali Bhayana v. DCIT, in ITA No. 2227, 2228 and 2252/2025 order dated 27.01.2026 (ITAT, Delhi).
Per contra the ld. DR relied on the order of the AO.
We have considered the grounds of appeal filed by the revenue and the cross objection filed by the assessee. We have also taken on record various case laws discussed by the Ld. Counsel of the assessee. We find that it is very clear from the amendment brought in the Income Tax Act that after 01.04.2021 notices u/s.153C cannot be issued instead of notices should have been issued u/s.148 of the Act and the assessment should have been completed u/s.147 of the Act. But here in this case the AO of the assessee has recorded satisfaction on 16.03.2022 and passed the order on 30.03.2023 but instead of issuing the notice u/s.148 and passing the order u/s.147 the notice was issued u/s.153C of the Act and the assessment order was issued u/s.153C/143(3) of the Act. Therefore, in our considered view the action of the AO cannot be sustained. Therefore, the assessment order passed by the AO is hereby quashed.
Cross objection No.12/Del/2026 (A.Y. 2016-17)
In this case a cross objection has also been filed by the assessee in which grounds of appeal of cross objection are as under :-
“1.That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C/143(3) of the Act and that too without assuming jurisdiction as per law and without recording mandatory 'satisfaction' in accordance with law and without complying with the other mandatory conditions as laid down u/s 153C of the Act.
2.That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C/143(3) of the Act, which is bad in law, contrary to the provisions of the Act, and against the facts and circumstances of the case.
3.That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned assessment order dated 30-03-2023 without there being requisite approval in terms of section 153D of the Act and in any case approval, if any, is mechanical without application of mind and is no approval in the eyes of law.
4.That having regard to facts and circumstances of the case, Ld. CIT(A) has rightly deleted the addition of Rs.75,65,548/- made by the Ld. AO u/s 69A and Rs. 4,68,000/- alleged to be commission paid in relation to the transaction of sale of shares, and the same deserves to be upheld.”
Since we have quashed the assessment order passed by the AO on 30.03.2023 u/s.153C/143(3) of the Act, therefore, the cross objection filed by the assessee becomes infructuous, accordingly disposed of.
In the result, the appeal filed by the revenue as well as the cross objection filed by the assessee are dismissed.