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Judgment
PER KRINWANT SAHAY AM
Appeal in this case has been filed by the assessee against the order dated 20.02.2025 passed by the Ld. CIT(A)-25, New Delhi for the A.Y. 2019-20. Grounds of appeal are as under :-
“1.That the order passed by the Lal. A) and upheld by the Ed CIT(A) is contrary to the facts, had in law and must be quashed.
2.That the Ld. AO erred in law and on facts in upholding the addition of Rs. 7,00,000 us 69A without disproving the genuineness of the loan repayment, which was supported by confirmations, bank statements, and audited financials.
3.That the Ld. AO failed to appreciate that no cash was received 3 OR paid by the appellant, and no material was found in its possession during the search to justify the addition.
4.That the Ld. AO erred in law and on facts in upholding the addition of Rs. 21,000 us 69C as alleged commission purely un RO assumption, without any evidence of actual expenditure OR incurrence.
5.That the assessment is vitiated due to denial of opportunity in 5 cross examine third party witnesses whose statements were relied upon, violating principles of natural justice.
6.That the Ld. AO failed to consider that the sewed documents were found in possession of third parties and not the appellant. RA and hence cannot be used against the appellant without independent corroboration,
7.The Ld. AO alleged that the assessee has paid the commission 7 at 3 percent of the above mentioned amount i.c. Rs. 21,000, which is purely on assumption basis to be quashed.
8.That the penalty proceedings initiated u/s 271(1)(c) of the Income Tax Act, 1961 are bad in law and liable to be quashed, as the additions made in the assessment order are based on mere R assumptions, uncorroborated third-party material, and without any finding of deliberate concealment OR furnishing of inaccurate particulars of income by the appellant.
9.That the appellant craves the leave to add, amend, modify, DLEETE any of the grounds of appeal before OR at the time of hearing and all the above grounds are without prejudice to each other.”
During proceedings before us the ld. Counsel of the assessee has filed an additional ground which is in fact on legal issue. This additional ground is regarding the notice / assessment of validity of section 153C of the Act proceedings post 01.04.2021 where satisfaction has been recorded thereafter.
The submission filed by the assessee on this issue is reproduced as under :-
01.04.2021 where proceedings post Section 153C Invalidity of Additional Ground: thereafter satisfaction recorded 153C of Section regarding validity additional ground virtue of seeks to raise 01.04.2021 by The appellant u/s 153C is recorded after satisfaction could only be proceedings where which the proceedings 2021 asper became by Finance Act not Section 153C which amendmentmade of Section 147 and provision initiated under inapplicablethereafter. may please in nature primarily legal this ground is submitted that the case of It respectfully Hon'ble Supreme Court in of the view of the judgment per the said be admitted in reported in 229 ITR 383. As Ltd Power Company National Thermal and goes to the root of the matter and uhich ispurely legal issue WI judgement, be admitted foradjudication facts, should examination of does not require of theassessee. being legal objection as follows: Detailed submission of datesis as follows: 1. A representation Oct 2019 Alankit Group 18 Date of search on person- 24 June 2022 by AO of the searched Satisfaction recorded (Paper Book page 247) 2022 (Paper Book the AO of Assessee- 2 Dec Satisfaction recorded by page 248-249)
sub-section(3) reproduced apply of other day of April, 153C(1), search requisitioned by Assessing documents received by AO having jurisdiction recorded by searched person, relevant Thus, the searched material by AO searched by present submitted of 153C by the and, amended provisions, 01.04.2021, u/s 153C only the provision
6.view of the above, submitted that the u/s 153C is liable quashed the that the satisfaction in the of recorded only 02.12.2022 and Section 153C became inapplicable where the satisfaction recorded post 01.04.2021. the seeks the following judicial precedents of the Hon'ble Delhi ITAT, relevant extract quoted hereinafter:
M/s. Shivdham Buildtech Pvt. Ltd JCIT No.109 /DEL/2026 Dated 24.06.2026
The in appeal has assailed validity of the assessment order utззap п/s 153C 143(3) of the Act. It is undisputed fact that addition has been made in the hands of the protective
Alankit Group basis consequent search the drawn 18.10.2019. 153C(1), proviso by by Assessing by jurisdiction searched by of satisfaction emanating material handing i.e.,11.10.2022 recording records, date of receiving seized considered Act, Tic was amended sub-section(3) 01.04.2021 whereby reproduced apply relation
“(3)Nothing after requisitioned documents April, By 153C falls beyond 01.04.2021. u/s making corollary, after 01.04.2021 non-searched 153C of provisions applying Jurisdictional High Hon'ble explained by (supra), the of Ojjus (P.) of issued u/s find that the passed u/s ground of quashed decisions juriediction In this Geetanjali Bhayana (suprā Lekh Raj (supra). 4629/Del/2025 Dated Shaminder Singh 20.05.2026 squarely applies facts the hold Thus, respectfully following the decision of the the A.Y. that u/s.143(3) 153C
The Ld. Counsel of the assessee argued on the line of the written submission filed in support of the legal grounds which were raised as additional grounds during proceedings before us.
Per contra the ld. DR relied on the orders of the AO and the Ld. CIT(A).
We have considered the submission filed by the Ld. Counsel of the assessee on legal ground alognwith the additional ground during proceedings before us. Keeping in view the orders of the coordinate Bench in the case of Shaminder Singh (supra) and Geetanjali Bhanaya Vs. DCIT (supra) and Lekh Raj Vs. DCIT (supra). We find that since the satisfaction note has been recorded after 01.04.2021 in the case of the assessee who is other than the searched parties, therefore, the assessment was liable to be made u/s.147 of the Act and not u/s.153C of the Act on 10.03.2024. Therefore, in our considered view it is liable to be quashed on the legal issue raised by the assessee. Thus, the assessment order framed by the AO in this case is quashed.
The appeal filed on this additional ground which is legal in nature filed by the Ld. Counsel of the assessee is allowed.
Since we have quashed the assessment order passed u/s.153C on legal ground, so appeal on other grounds/ on merits just remains academic in nature. Accordingly, we are not inclined to adjudicate them.
In the result, the appeal filed by the assessee in this case is allowed.