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Judgment
ORDER
PER BENCH:
These assessee’s three appeals ITA Nos. 878 to 880/Del/2026 arise against the Commissioner of Income Tax (Appeals)-27 (for short, ‘the CIT(A)’), New Delhi’s orders; all dated 29.11.2025, passed in DIN & Orders no. 10123/2020-21, 10146/2021-22 & 10111/2022-23, respectively, involving proceedings u/s 147/144 &144/143(3) of the Income Tax Act, 1961; hereinafter referred to as, ‘the Act’.
Heard both the parties at length. Case files perused.
Coming to the assessee’s former twin appeals ITA No. 878 & 879/Del/2026, learned counsel raises its identical first and foremost legal ground/argument challenging validity of the impugned reopening itself for want of a proper approval of the prescribed authority. There does not appear to be much a dispute between the parties that the assessee/appellant happens to be the person searched by the learned departmental authorities on 31.10.2022. And that the learned prescribed authority thereafter approved the Assessing Officer’s reopening action in its identical terms, reading as under:
16.Reasons for according Remarks: In view of proposal submitted by the approval/rejection by AO, I am satisfied that the case of M/s La-the specified authority Archplan Private Limited (PAN: AAACL1343A) for issuance of notice for A.Y 2022-23 is a fit case to issue notice u/s under section 148 of 148 of the Act, as per provisions of Explanation the Income Tax Act, 2(iv) of Section 148 of the Act and section 1961? 149(1)(a) of the Act, and initiate proceedings u/s 147 of the Income-tax Act, 1961. Therefore, approval is hereby granted for issuance of notice u/s 148 in this case. Name: VIVEK RAGHUNATH WADEKAR Date: 28/08/2024 Designation: PCIT (Central), Delhi-2
We wish to clarify here that both these learned prescribed authority’s approvals in the impugned twin assessment years are admittedly identically worked i.e. granted u/s 148 read with Explanation 2(iv) of the Act. It is in light of this clinching factual backdrop that Mr. Ankit Kumar refers to the said statutory provision; reading as under:
“iv) the Assessing Officer is satisfied, with the prior approval of Principal Commis-sioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee”
Mr. Ankit Kumar’s accordingly is that given the fact that the assessee’s itself happens to be the searched authority, both the learned lower authorities could not have been invoked the aforesaid statutory provision which applies in case of a person “other” than the searched assessee. This clinching factual position has gone unrebutted from the Revenue side when granting sufficient opportunity of hearing.
We accordingly of the considered view that the impugned reopening(s) in the assessee’s instant twin cases is not sustainable in law since approved by the learned prescribed authority under the wrong statutory provision i.e. section 148 explanation 2(iv) of the Act which could not be held as a curable defect. The same stands quashed in very terms therefore. This assessee succeeds in its instant twin appeals ITA Nos. 878 & 879/Del/2026 therefore.
Lastly comes the assessee’s third appeal ITA No. 880/Del/2026 directed against both the learned lower authorities’ respective findings making “protective” addition of Rs. 44 lakhs and substantive one of Rs. 2 lakhs in assessment order dated 31.03.2025 which has been restricted to 10% representing net profits on undisclosed sales in the lower appellate discussion. This what leaves the assessee’s aggrieved in the impugned last assessment year 2023-24.
That being the case, we are of the considered view that such a higher net profit ratio @ 10% is nowhere been justified in the lower appellate discussion going by the corresponding market comparables. Be that as it may, we hold that a lumpsump NP @ 8% herein would be just and proper with a rider that the same shall be treated as a precedent. Necessary computation shall follow as per law. This assessee’s instant appeal ITA No. 880/Del/2026 is partly accepted.
No other ground or argument has been pressed before us.
To sum up, these assessee’s former twin appeals No. 878 & 879/Del/2026 are allowed and its last appeal ITA No. 880/Del/2026 is partly allowed in above terms. A copy of this common order be placed in the respective case files.