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Judgment
Per Renu Jauhri, Accountant Member:
This appeal by the assessee is directed against the order dated 08.09.2025 of the Commissioner of Income TAX (Appeals)-3, Noida, [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Order dated 31.03.2025 passed under section 147 of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the DCIT, Central Circle, Meerut, (hereinafter referred to as the ‘AO’) pertaining to Assessment Years (A.Y.) 2020-21.
Grounds of appeal filed by the assessee are reproduced as under:
“1.That the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has grossly erred both in law and on facts in upholding the impugned assessment order passed by the Ld. Assessing Officer, without appreciating that the assessment proceedings were erroneously initiated by the Jurisdictional Assessing Officer rather than the National Faceless Assessment Centre, as mandated under the Faceless Assessment Scheme. In view of the procedural infirmity and jurisdictional lapse, the impugned assessment order is vitiated in law and liable to be quashed. Accordingly, the additions sustained therein may kindly be deleted.
2.That the Learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the impugned assessment order passed by the Ld. Assessing Officer, without considering that no copy of the approval granted by the specified authority under Section 151 of the Act was furnished to the appellant during the course of the assessment proceedings. In the absence of such statutory approval being made available to the assessee, the initiation and completion of the proceedings suffer from a jurisdictional defect. Accordingly, the impugned assessment order is rendered invalid in law and deserves to be quashed, and the consequential additions made therein may kindly be deleted.
3.That the Learned Commissioner of Income Tax (Appeals) has erred in law and on facts in upholding the impugned assessment order passed by the Ld. Assessing Officer, without appreciating that the initiation of the assessment proceedings was vitiated by borrowed satisfaction, being solely based on information received from the office of the Deputy Director of Income Tax (Investigation), Unit-2, Chandigarh. In the absence of independent application of mind by the jurisdictional Assessing Officer, the very foundation of the assessment stands invalid. Accordingly, the impugned assessment order deserves to be quashed.
4.That the Learned Commissioner of Income Tax (Appeals) has erred in law by upholding the additions made by the Ld. Assessing Officer without appreciating that no certificate under Section 65B of the Indian Evidence Act, 1872 was furnished prior to relying upon the Excel sheet purportedly seized from the premises of a third party during the course of a search. In the absence of such mandatory certification, the said electronic record is inadmissible in evidence, and any reliance placed thereon is untenable in law. Accordingly, the impugned assessment order is vitiated and deserves to be quashed, and the resultant additions are liable to be deleted in totality.
5.That the Learned Commissioner of Income Tax (Appeals) had erred in law and facts of the matter by upholding the addition of Rs. 14,80,000/- u/s 69 of the Act without considering the submissions filed by the appellant during the course of the impugned assessment proceedings as well as the impugned appellate proceedings. Accordingly, the impugned assessment order is vitiated and deserves to be quashed, and the resultant additions are liable to be deleted in totality.
6.That the appellant craves right to amend, add, DLEETE OR 6 withdrawing any of the Ground of Appeal during the course of hearing.”
Sole substantive issue involved in this appeal pertains to addition of Rs. 14,80,000/- u/s 69 of the Act based on paper found during the course of search conducted in the Omaxe Group. Although, several legal grounds have also been raised, the AR has, at the outset, submitted that the legal grounds are not being pressed.
Brief facts of the case are that the assessee filed her original return for A.Y. 2020-21 on 31.03.2021 declaring total income of Rs. 2,10,000/- from rent, interest and other sources. Subsequently, a search action u/s 132 of the Act was carried out on 14.03.2022 on Omaxe Group of cases, pursuant to which details of cash amounts paid by individual customers, including the assessee, were found in an excel file. Accordingly, a notice u/s 148 of the Act was issued to the assessee on 31.08.2024 as per the prescribed procedure as it was noticed by the AO that the assessee had paid consideration in cash amounting to Rs. 14,80,000/- for purchase of immovable property during F.Y. 2019-20. Although, the assessee denied having made any cash payment, the AO, based on the analysis of data disseminated by the Investigation Wing, observed that the amounts mentioned in Excel files were not entered in the books of accounts of the company and these amounts, maintained in hundreds were suppressed by a factor of hundred. Thus, by multiplying the amount of Rs. 14,800/-mentioned against assessee’s name by 100 the AO made an addition of Rs. 14,80,000/- on account of unexplained cash investment and finalized the assessment u/s 147 of the Act vide order dated 31.03.2025.
Aggrieved with the AO’s order, the assessee preferred an appeal before the CIT(A). Vide order dated 08.09.2025, CIT(A) upheld the action of the AO. Further aggrieved, the assessee has preferred an appeal before the Tribunal.
Before us, the Ld. AR has submitted that the addition has been made on the basis of third-party information, and no independent enquiries / verification were made by the AO before making the addition. Moreover, there is no basis of making extrapolating by multiplying the amount of Rs. 14,800/- mentioned against the assessee’s name by 100. In fact, response to notice u/s 133(6) issued by the AO to the Omaxe Group, the company has denied receiving any cash from the assessee. He has further argued that the addition was made without providing opportunity to cross examine the statements / documents being relied upon even though a specific request was made to the AO in this regard.
Ld. AR has further placed reliance on several decisions of the co-ordinate benches of the Tribunal, wherein under identical facts and circumstances, the cases of the assessees who purchased properties from the Omaxe Group have been decided in their favour. Specifically, reliance has been placed on the order of the co-ordinate bench of the Tribunal in ITA No. 5622/Del/2025 in the case of ITO vs. Surender Kumar Goyal, wherein it was held as under:
“ 4. We have given our thoughtful consideration to the Revenue’s and the assessee’s respective vehement stands. The Revenue could hardly dispute the clinching fact that the impugned addition is very much based on extrapolation of the amount emerging from the alleged loose sheet i.e. "83498" to the extent of adding "00"; coming of Rs.83,49,800/-. We afforded fair opportunity to the department to support the impugned extrapolation by way of substantiation thereof based on any material discussed in assessment order. No such records have seen in the light of the day till date. This is indeed coupled with the fact that section 292C statutory presumption qua such seized records also goes against the department itself as there is further no scope of any extrapolation in absence of relevant supportive evidence as well. We thus deem it appropriate to go by the actual figure in the seized document "83498" only to uphold the impugned addition to the very extent against the assessee in these peculiar facts and circumstances. The Revenue instant sole substantive grievance is partly accepted in very terms. Necessary computation shall follow.”
We have heard the rival submissions and perused the material available on record. After considering the facts and circumstances, in the light of the decision of the coordinate bench of Tribunal in the case of Surender Kumar (supra), we are of the considered view that the AO as not justified in extrapolating the amount of Rs. 14,800/- mentioned in the seized documents against the assessee’s name to Rs. 14,80,000/- and, therefore, only addition to the extent of Rs. 14,800/- deserves to the upheld. We, therefore, direct the AO to reduce the addition made u/s 69 of the Act accordingly.
In the result, appeal of the assessee is partly allowed.