Mohd. Akhalak vs ACIT

The instant batch of eleven appeals involves the twin assessees herein, namely, Mohd. Akhalak and Sh. Altaf having filed their respective four and seven appeals ITA Nos.8959 to 8962/Del/2025 for AYs 2018-19 to 2021-22 and ITA Nos. 8863 to 8869/Del/2025 for AYs 2015-16 to 2021-22 are directed against the Commissioner of Income Tax (Appeals)-3 [in short, the “CIT(A)”], Noida’s-33, orders dated 03.02.2025 (in former assessee, Mohd. Akhalak) and 18.02.2025 & 07.10.2025 (in latter assessee, Sh. Altaf) passed in cases no. CIT(A), Kanpur-4/11132/2017-18, 11337/2018-19, 11140/2019-20, 10055/2020-21, 10240/2014-15, 10727/2015-16, 12003/2016-17, 11131/2017-18, 11329/2018-19, 11139/2019-20 & 10054/2020-21; respectively. All the relevant proceedings herein are under section 153A r.w.s. 144 of the Act.

Heard both the assessees and the department at length. Case files perused.

For the reasons stated in the both the assessees’ condonation averments, delays of 243 days in the former appeals i.e. ITA Nos. 8959 to 8962/Del/2025 and 240 days in the latter cases i.e. ITA Nos.8863 to 8869/Del/2025; are condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

Next comes the relevant identical facts herein. A combined perusal of the instant eleven case files indicates that the police authority(ies) at Thana Kandhla had allegedly intercepted two cars on 05.11.2020 and seized cash totaling to Rs.25,42,550/- from four parties therein including the latter assessee Mohd. Akhalak. The learned Assessing Officer’s all the impugned assessments dated 21.03.2022 suggest that the said four persons stated before the police authorities that the cash seized in fact belonged to the former assessee Sh. Altaf engaged in cattle supply business. There is no dispute between the parties that the learned departmental authorities received the necessary information from the police and issued warrant of authorization against both these assessees under section 132A of the Act on 05.02.2021 which was executed on 10.03.2023 and the aforesaid cash of Rs.25,42,550/- stood seized. There is further no quarrel that all this led to initiation of section 153A proceedings against both these assessees finally culminating in the impugned assessments framed on 21.03.2022 inter alia estimating 8% GP of their business turnover and various other miscellaneous items involving varying sums, respectively, which stand upheld in the CIT(A) ex-parte lower appellate discussion.

It is in this factual backdrop that the learned counsel canvasses the assessees’ identical legal ground/additional ground that we ought to quash the impugned section 153A assessments for want of a valid approval under section 153D of the Act. We are afraid that the assessees’ instant legal ground hardly carries any merit in light of the legislative amendment inserting section 292BC in the Act vide Finance Act, 2026 w.e.f. 01.04.2021. We accordingly are of the considered view that the assessees’ instant legal ground carries no merit in light thereof and the same stands rejected therefore.

Next comes the yet another legal issue of validity of the impugned addition involving 8% GP estimation in “unabated” assessments upto AY 2019-20. We wish to emphasize here that the date of search herein as per section 132A warrant happens to be 05.02.2021 rendering all the assessments years upto 2019-20 involving these twin assessees’ appeals ITA Nos. 8959 & 8960/Del/2025 and ITA Nos. 8863 to 8867/Del/2025; respectively, as not liable to be “abated” under section 153A(1) 2^nd proviso of the Act. Meaning thereby that the impugned GP estimation @ 8% of the assessee’s alleged turnover is not based on any specific seized material forming a condition precedent in light of their lordships’ landmark decision in PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC). We thus reject the Revenue’s vehement contentions supporting the impugned GP estimation @ 8% in both these assessees corresponding appeals ITA Nos. 8959 & 8960/Del/2025 and ITA Nos. 8863 to 8867/Del/2025 in assessment years upto AY 2019-20. The same are hereby accepted in very terms therefore.

Next comes both these assessees’ remaining appeals ITA Nos.8961 & 8962/Del/2025 (in former assessee) and ITA Nos.8868 & 8869/Del/2025 (in latter assessee) “abated” as well as the one(s) pertaining to the search assessment year 2021-22 itself. Learned counsel vehemently submits that the impugned cash seized was neither disputed in principle nor the fact that the same was sought to be proved as declared in the relevant books of account etc. as well. We, however, note that both the lower authorities have proceeded ex-parte against these twin assessees. The fact also remains that possibility of various communication gaps etc. in such an instance could not be altogether ruled out. We accordingly deem it appropriate to restore these twin assessees’ remaining appeals ITA No.8961 & 8962/Del/2025 and ITA Nos.8868 & 8869/Del/2025 back to the learned Assessing Officer to decide the same afresh on merits as per law preferably within three effective opportunities of hearing subject to a rider that they shall plead and prove all the relevant facts within three effective opportunities, at their own risk and responsibility, in consequential proceedings. Ordered accordingly. These remaining four appeals ITA No.8961 & 8962/Del/2025 and ITA Nos.8868 & 8869/Del/2025 are accordingly accepted for statistical purposes. All other issues are kept open at this stage.

These twin assessees’ appeals ITA Nos. 8959 & 8960/Del/2025 and ITA Nos. 8863 to 8867/Del/2025 are allowed and ITA No.8961 & 8962/Del/2025 and ITA Nos.8868 & 8869/Del/2025 are allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files.