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Judgment
PER MANISH AGARWAL, A.M.
The captioned appeals are filed by assessee against the separate orders, both dated 29.09.2025 passed by Ld. Commissioner of Income Tax (Appeals)-25, Delhi [“Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of different assessment orders, both dated 26.02.2024 passed u/s 153C of the Act pertaining to Assessment Year 2016-17 & 2017-18 respectively.
Both the appeals are having common issues, therefore, they are decided by a common order.
First we take assessee’s appeal in ITA No.7696/Del/2025 for Assessment Year 2016-17.
ITA No.7696/Del/2025 [Assessment Year 2016-17]
Brief facts of the case are that the assessee has filed the return of income for the year under appeal on 23.09.2016, declaring total income of INR 11,86,680/-. As a result of search carried out u/s 132 of the Act in the case of Alankit Group, Shri Alok K Agarwal, his son, Shri Ankit Agarwal and other Associates on 18.10.2019, various documents found and seized during the search proceedings. From the examination of these documents, certain entries pertaining to the assessee which were not disclosed were found noted and therefore, the AO of the persons searched has recorded his satisfaction that these documents pertained to the assessee and handed over the satisfaction note alongwith the copy of seized material to the AO of the assessee in terms of note recorded on 01.06.2022, copy of the same is placed at pages 341 to 347 of the Paper Book filed before us. Thereafter, the AO of the assessee has recorded his satisfaction as placed at pages 318 to 320 of the Paper Book and initiated the proceedings u/s 153C of the Act for AYs 2014-15 to 2020-21. Thereafter, the notice u/s 153C of the Act was issued to the assessee on 22.06.2023 in response to which the assessee filed return of income, declaring same income as was declared in the return filed u/s 139(1) of the Act. Thereafter, the order passed the order wherein various additions were made u/s 69C & 69A of the Act towards the alleged accommodation entries of loss/profits obtained by the assessee and accordingly, total income of the assessee was assessed at INR 4,54,56,919/-.
Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 29.09.2025, dismissed the appeal of the assessee.
Aggrieved by the order of Ld. CIT(A), assessee is in appeal before the Tribunal by taking various Grounds of appeal mentioned in the appeal memo.
Ground of appeal Nos. 1 & 2 are with respect to the initiation of proceeding u/s 153C of the Act thought the same was barred by limitation as the satisfaction note for initiation of proceedings in the case of the assessee was recorded in FY 2023-24.
Before us, Ld. AR for the assessee submits that in the instant case, the satisfaction was recorded on 22.06.2023 i.e. falling in AY 2024-25 therefore, Six (06) preceding AYs for which the proceedings u/s 153C could be initiated to were from AY 2018-19 to AY 2023-24. This being so, the AYs 2016-17 & 2017-18 before us, fallen outside the period of 06 years and therefore, no proceedings could be initiated u/s 153C of the Act for these assessment years. The Ld. AR placed reliance on the judgment of Hon’ble Jurisdictional High Court in the case of PCIT v. Ojjus Medicare Pvt. Ltd. reported in (2024) 161 taxmann.com 160 and various other judgments of the Co-ordinate Bench of Tribunal in support of the case of the assessee towards exclusion of AYs 2016-17 & 2017-18 from the ambit of limitation u/s 153C of the Act.
On the other hand, Ld. CIT DR for the Revenue vehemently supported the orders of the lower authorities and submits that period of limitation should be reckoned from the date of search and not from the date of satisfaction note. Alternatively, he submits that even if the date of satisfaction note in the case of assessee is taken as date of search, the enhanced the period as per 4th Proviso to section 153A(1) of the Act come into play and accordingly, the AO has rightly invoked the provisions of section 153C for both the Assessment years.
Heard the contentions of both parties at length and perused the material available on record. Before going further, the satisfaction note recorded by the AO of the assessee is reproduced herein below:-
Proforma for recording of satisfaction about seized assets belonging to person other than the person searched (To be filed in by the Assessing Officer of other assessee)
1 Name of the group, if any, searched Alankit Group (D.O.S. 18.10.2019) 2 Name of the assessee in whose case assets( money, bullion, jewellery or other valuable article or thing) or papers (books of accounts or documents) seized u/s 132/requisitioned u/s 132A Sh. Alok Kumar Agarwal, Sh. Ankit Agarwal, M/s Alankit Limited, M/s Alankit Assignments Limited 3 PAN of searched assessee Sh. Alok Kumar Agarwal, (PAN: AAIPA1283A) Sh. Ankit Agarwal, (PAN: AGAPA5363L) M/s Alankit Limited, (PAN: AAACE1288P) M/s Alankit Assignments Limited (PAN: AAACA9483E) 4 Name and address of the persons to whom seized assets/papers as in (2) above belong/belongs Kamal Prakash Gupta 5 PAN of other person AAGPG3365G 6 Identification of the seized asset/papers which in the opinion of AO of the searched person ( 5 No 2), belong to the other person (5 NO 4) Annexure A-31 as HP Lap top was obtained/seized from the premises- 3584/4 Narang Colony, Gali No. 4, Tri Nagar, Delhi. (i)Details of Panchnama & Annexure through which relevant asset/document was seized/requisitioned* Panchanama dated 18.10.2019 and 21.10.2019 prepared in the case of Sh. Alok Kumar Agarwal, Sh. Ankit Agarwal, M/s Alankit Limited and M/s Alankit Assignments Limited at 3584/4 Narang Colony, Gali No. 4, Tri Nagar, Delhi. (ii) Date of above Panchnama 18.10.2019 and 21.10.2019 (iii) Address of the place/premises from where asset/paper was seized 3584/4 Narang Colony, Gali No. 4, Tri Nagar, Delhi. (iv) Description of relevant asset/paper(s) As per Annexure (v) The brief reasons on the basis of which the AO reached to the conclusion that the relevant seized asset/paper belongs to the other person (use Annexure if required) All these documents have been found and seized during the course of search u/s 132 of the Income Tax Act,1961 carried in the case of Sh. Alok Kumar Agarwal, Sh. Ankit Agarwal, M/s Alankit Limited and M/s Alankit Assignments Limited at 3584/4 Narang Colony, Gali No. 4, Tri Nagar, Delhi. In view of the description of the documents found and seized, I am satisfied that the documents belonging to Kamal Prakash Gupta (PAN-AAGPG3365G) i.e. the case belongs to a person other than the person searched. Therefore, this is a fit case to initiate proceedings u/s 153C of the Income Tax Act,1961. 7 Assessment year involved. A.Y. 2014-15 to 2020-21 (Sanjeev Bimbiriya) Dy. Commissioner of Income Tax, Circle -46(1), New Delhi (AO of the 'any other person' as per Section 153C of the IT Act, 1961)
Annexure
Recording of Satisfaction U/s 153C of the IT Act, 1961 about seized documents pertaining to person other than the person searched.
Name of beneficiary F.Y. Transactions done with Amount debited to beneficiary Amount Credited to Beneficiary Kamal Prakash Gupta 2013-14 DCPL 30,00,000/- - 2014-15 Cash 96,000/- 2,75,00,000/- 2015-16 Cash - 48,00,000/- DCPL 3,70,00,000/- 2016-17 Cash 15,35,645/- 39,76,946/- DCPL 15,00,000/- 50,00,000/- 2017-18 Cash 1,16,87,875/- - 1.A search action u/s 132 of the Income Tax Act was conducted in the case of Alankit Group from 18.10.2019. Accordingly, during the course of assessment proceedings u/s 153A of Alankit Group, Material/documents related to case of Kamal Prakash Gupta have been found.
2.Ledgers of Pradeep Kumar Gupta have been obtained from laptop of Sh. Sunil Kumar Gupta which was found and seized from the residence of Sh. Sunil Kumar Gupta, at 3584/4, Narang colony Gali No. 4 Tri Nagar Delhi. Sh. Sunil Kumar Gupta in his statement u/s 132(4) of the Income Tax Act (Enclosed as Annexure-A), has admitted that he made entries in his diaries dating thirty years back and in 'Tally' dating 20 years back the entries of F.Y. 2016-17 were booked in F.Y. 1996-97.
3.Further, from the ledger related to Sh. Pradeep Gupta, it has been seen that various beneficiaries including assessee Sh. Kamal Prakash Gupta (AAGPG3365G) have taken Bogus LTCG on share transactions. The Bogus LTCG taken by Sh. Kamal Prakash Gupta (AAGPG3365G) is tabulated below:
Name of beneficiary A.Y. Purchase Amount Sale Amount Bogus LTCG Cash paid against LTCG KAMAL PRAKASH GUPTA 2016-17 4,05,164 12,67,388/- 8,62,174/- 9,05,283/- 2018-19 14,38,286/- 18,21,763/- 3,83,476/- 3,83,476/- 4.Further, from the analysis of the ledgers, related to Sh. Pradeep Gupta, it is seen that various beneficiaries including assessee Sh. Kamal Prakash Gupta (AAGPG3365G) have also taken accommodation entries in form of bogus Loans/Advances/Sales/Purchase from entities controlled & managed by Sh. Alok K Agarwal. The entries taken by Sh. Kamal Prakash Gupta are tabulated below :
Name of beneficiary F.Y. Transactions done with Amount debited to beneficiary Amount Credited to Beneficiary Kamal Prakash Gupta 2013-14 DCPL 30,00,000/- - 2014-15 Cash 96,000/- 2,75,00,000/- 2015-16 Cash - 48,00,000/- DCPL 3,70,00,000/- 2016-17 Cash 15,35,645/- 39,76,946/- DCPL 15,00,000/- 50,00,000/- 2017-18 Cash 1,16,87,875/- - 5.In view of the above, I am satisfied that above mentioned documents pertain to and information contained in the said documents relate to Sh. Kamal Prakash Gupta (PAN: AAGPG3365G) i.e. the person other than the person searched under section 132 of the Income Tax Act, 1961 and it has a bearing on determination of total income of Sh. Kamal Prakash Gupta (PAN: AAGPG3365G) for assessment years 2014-15 to 2020-21.
6.Therefore, I am satisfied that Sh. Kamal Prakash Gupta is covered under Section 153C of the Income Tax Act, 1961 and assessment proceedings are required to be taken u/s 153C of the Act, for the A.Y.s 2014-15 to 2020-21 based on the satisfaction recorded by the AO of searched persons i.e. of Sh. Alok Kumar Agarwal, Sh. Ankit Aggarwal, M/s Alankit Ltd. and M/s Alankit Assignment. Accordingly, notices u/s 153C of the I.T. Act, 1961, is being issued for AYs 2010-11 to AY 2020-21.
A.Y.s Involved from 2014-15 to 2020-21.
Dated:
Encl.: As above.
(Sanjeev Bimbisariye) Dy. Commissioner of Income Tax Circle-46(1), New Delhi
The assessee has challenged the legality of the assessment order for AYs 2016-17 & 2017-18 on the ground that notices u/s 153C of the Act for both the years were issued after the limitation period. The claim of the assessee is that in the instant case satisfaction note was recorded by the AO of the assessee on 22.06.2023 when the documents and other books of accounts seized from the possession of the persons searched to be handed over to the AO of the assessee and thus the same should be treated as the date of search for the purpose of limitation period of 06 years. Therefore, what is relevant is that date of receipt of seized material or documents of non-searched persons i.e. assessee in the instant case. As observed above, the AO of the assessee i.e. non-searched person, has received the seized material and thereafter recorded his satisfaction for initiation of proceedings u/s 153C of the Act in the case of assessee on 22.06.2023 which is falling in AY 2024-25. Therefore, by respectfully following the judgement of hon'ble jurisdictional high court in the case of Jasjit Singh (supra), the date on which satisfaction note is recorded by the AO of the assessee i.e. 22.06.2023 should be the date of search and, therefore the period of 06 years has to be counted from AY 2024-25 and the 06 preceding AYs would be AY 2018-19 to Ay 2023-24 and the impugned assessment years before us, i.e. AY 2016-17 & 2017-18 are barred by limitation and thus, no notice u/s 153C could be issued for these 02 AYs.
Coming to the arguments of the Revenue that the impugned assessment years are falling under the extended period of 10 years. It is observed that for invoking the extended period, the AO has to record the specific satisfaction as provided under 4th Proviso to section 153A(1) of the Act according to which the AO has to record the satisfaction that income escaped is likely to be amount of INR 50 Lakhs or more for relevant AY or in all the relevant AYs. However, in the instant case, no such satisfaction was recorded by the AO of the assessee to extend the period of limitation from 06 years to 10 years so as to include the AY 2016-17 & AY 2017-18 within the period of limitation for the purpose of initiation of proceedings u/s 153C of the Act. As could be evident from the satisfaction note recorded herein above, the AO of the assessee has recorded his satisfaction for initiation of proceedings u/s 153C of the Act for 06 AYrs starting from AYs 2014-15 to AY 2020-21. Thus, even on this score, the claim of the Revenue that the impugned assessment years are covered under the extended period is devoid of any merits and accordingly, we hold that the notices issued u/s 153C of the Act is beyond the period of limitation and thus is invalid and the consequent order passed is hereby quashed. Accordingly, Grounds of appeal Nos. 1 & 2 raised by the assessee are allowed.
Since we have already allowed Grounds of appeal Nos. 1 & 2 raised by the assessee, the other Grounds of appeal became academic and infructuous hence, not adjudicated.
In the result, appeal of the assessee is allowed.
Now we take assessee’s appeal in ITA No.7695/Del/2025 for Assessment Year 2017-18.
ITA No.7695/Del/2025 [Assessment Year 2017-18]
In the above-mentioned paras, we decided the appeal of the assessee in ITA No.7696/Del/2025 for Assessment Year 2016-17 where we hold that the notice issued u/s 153C for AY 2016-17 is barred by limitation and thus, is invalid and quashed the consequent order passed u/s 153C of the Act. In the present appeal filed by the assessee, both the parties fairly admitted that the facts are identical to the facts in ITA No.7696/Del/2025 for AY 2016-17, thus, following the aforesaid observations in ITA No.7696/Del/2025 for AY 2016-17 which are Mutatis Mutandis applicable to the facts of this appeal filed by the assessee, the notice issued u/s 153C is held as invalid being barred by limitations and the consequent order passed is hereby quashed. In view of the above, all Grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
In the final result, both captioned appeals of the assessee in ITA No.7696 & 7695/Del/2025 for AY 2016-17 & 2017-18 respectively, are allowed.