Sh. Rattan Prakash Mishra vs Income Tax Officer

PER SATBEER SINGH GODARA, JM

These assessee’s five appeals ITA Nos.3205, 3348 & 3442 to 3444/Del/2026 for assessment years 2011-12, 2013-14 & 2014-15 to 2016-17 arise against the Commissioner of Income Tax (Appeals)-3 [in short, the “CIT(A)”], Gurgaon’s common order dated 26.08.202, passed in case nos. 11284, 11294, 12295, 11297 & 11298 CIT(A)-3/GGN/2019-20, involving proceedings under sections 153C r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’); respectively.

2 For the reasons stated in the assessee’s condonation averments, delays of 146 days, 148 days and 150 days in filing of the instant appeals ITA Nos. 3205, 3348 & 3442 to 3444/Del/2026; respectively, are condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

Heard both the parties. Case files perused.

It transpires during the course of hearing that the assessee’s all the instant five appeals raise the first and foremost legal issue of validity of the impugned section 153C assessments itself; all dated 17.12.2019; framed by the learned ITO, Ward-2(2), Faridabad, for want of a valid satisfaction recorded thereunder.

We advert to the basic identical relevant facts in all these appeals. There does not appear to be any dispute between the parties that the learned departmental authorities had carried out the relevant search in issue dated 28.02.2017 in M/s. ELVI group of companies. And that they found/seized the alleged corresponding incriminating material in the nature of various documents relating to the assessee Sh. Rattan Prakash Mishra indicating the corresponding interest and loan transactions etc. This made the learned Assessing Officer of the said searched party(ies) to record his former round of satisfaction to the very effect in the assessee’s case which was forwarded to the jurisdictional Assessing Officer finally culminating in the impugned assessment forming subject matter of adjudication. Needless to say, both the learned lower authorities have added the impugned loan transactions or interest payment(s); as the case may be, as the assessee’s undisclosed income in all these assessment years.

That being the case, we sought to examine the relevant incriminating material relating to the assessee as compiled in paper-book at pages 125 & 128 of Annexure A-5 and pages 13 of Annexure A-1; respectively to the very effect. The Revenue draws strong support therefrom that the same duly proves the assessee’s undisclosed loan and interest transactions forming subject matter of impugned addition(s) in all these assessment years.

We have given our thoughtful consideration to the assessee’s and the Revenue’s foregoing respective stands. We notice that apart from the fact that the four parties including the assessee/appellant had put in their respective signatures along with the amount, months and monthly installments details, nothing comes out therefrom as to who had paid or received the loan or agreed to pay the interest component thereupon; as the case may be. We further wish to emphasize here that section 292C of the Act indeed carries presumption of correctness of such seized documents’ contents only against the searched than any third party. And also that the CBDT’s landmark circular issued wayback on 10.03.2003 settled the issue that any addition based on an admission or confession; as the case may be, does not carry any significance as the same ought to be based on the specific seized material only. We thus quote Commissioner of Income Tax v. S.M. Aggarwal [(2007) 293 ITR 43 (Del.)] to conclude that both the learned lower authorities’ respective assessment(s) and lower appellate findings adding the assessee’s undisclosed loan and interest transaction; as the case may be, are not sustainable in law. We thus delete the same in all these assessment years in very terms therefore.

It is made clear before parting that the learned counsel has indeed sought to challenge validity of section 153C assessment(s) herein as beyond the specified period of “six assessment years” as well. We are of the considered view that the same stands rendered infructuous in light of our foregoing detailed discussion on merits.

These assessee’s five appeals ITA Nos. 3205, 3348 & 3442 to 3444/Del/2026 are allowed. A copy of this common order be placed in the respective case files. A copy of this common order be placed in the respective case files.