Raj Kumar vs DCIT

PER M. BALAGANESH, A. M.:

The appeals in ITA Nos. 1500, 1501 and 1502/Del/2025 for AYs 2018-19 to 2020-21, arise out of the order of the ld Commissioner of Income Tax (Appeals)-30, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 13.12.2024 against the order of assessment passed u/s 153C r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 13.03.2023 by the Assessing Officer, DCIT, Central Circle-30, New Delhi (hereinafter referred to as ‘ld. AO’). Identical issues involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.

The first identical preliminary legal issue raised by the assessee is challenging the validity of assumption of jurisdiction u/s 153C of the Act in the hands of the assessee.

We have heard the rival submissions and perused the materials available on record. A search and seizure operation u/s 132 of the Act was conducted on 26.10.2020 in the case of Sanjay Jain and Mehta Group at various residential and business premises. While examining the seized documents of the searched persons, certain documents were found to be belonging to the assessee. The satisfaction note was prepared after examining the contents of the seized documents both by the AO of the searched person as well as by the ld AO of the assessee for initiation of proceedings u/s 153C of the act in the hands of the assessee herein. Satisfaction note in case of the assessee was recorded and notice u/s 153C of the Act stood issued to the assessee on 30.09.2022. In response to the notice, the assessee filed income tax return for all the years. Thereafter the assessments stood completed for the years under consideration u/s 153C r.w.s. 143(3) of the Act by the ld AO vide independent order dated 30.03.2023.

The assessee had challenged the validity of assumption of jurisdiction u/s 153C of the Act before the ld CIT(A), which stood dismissed by the ld CIT(A). On perusal of the satisfaction note for initiation of proceedings u/s 153C of the Act, it is noticed that the ld AO had not mentioned the fact that the documents seized that were handed over by the AO of the searched person to the ld AO of the assessee has a bearing on determination of total income of the assessee herein for the years under consideration. This requirement is a pre condition for initiating proceedings u/s 153C of the Act on the assessee as held by the Hon’ble Jurisdictional Delhi High Court in the case of Saksham Commodities Limited Vs. ITO reported in 464 ITR 1.

Respectfully following the said decision, we have no hesitation to hold that the very assumption of jurisdiction u/s 153C of the Act by the ld AO is flawed in the facts and circumstances of the instant case for want of mentioning of the fact whether the seized documents that were received from the AO of the searched person allegedly belonging to the assessee has a bearing on the determination of total income of the assessee qua the years under consideration. Since, the assessment is quashed, the other grounds raised by the assessee need not be gone into and they are left open.

In the result, the appeals of the assessee are partly allowed.