Shashi Kala Soni vs Asstt. Commissioner Of Income Tax

O R D E R

“1.

That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the impugned assessment order passed U/s 143(3) of the IT Act, is illegal, bad in law and contrary to the facts.

2.

That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in not admitting the additional legal ground raised before him and also erred in ignoring the judgment of the Hon'ble Supreme Court in the case of NTPC vs. CIT, 229 ITR 383

3.

That on the facts and circumstances of the case and the provision of law, the assessment order passed u/s 143(3) is also illegal and bad in law as the satisfaction note has been recorded on 26.03.2019 by the AO of the searched party and accordingly the assessment of the year under consideration should have been made under section 153C of the IT Act.

4.

That on the facts and circumstances of the case and the provision of law, the proceeding initiated by way of issue of notice u/s 143(2) will also abate by virtue of second proviso of section 153A.

5.

That on the facts and circumstances of the case and the provisions of the law, the approval granted by the Ld. Addl. CIT u/s 153D is illegal, mechanical, without application of mind and bad in law and consequently the assessment made requires to be quashed.

6.

That without prejudice to the above ground, on the facts and circumstances of the case and the provisions of the law the approval granted by the Ld. Addl. CIT u/s 153D is also illegal and bad in law as no DIN has been mentioned on the approval which is in violation of CBDT circular no. 19/2019.

7.

That on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has erred in sustaining the addition of Rs. 1,52,00,000/- u/s 69A on account of unexplained investment in gold bullions.

8.

That without prejudice to the ground of appeal no. 6 above, on the facts and circumstances of the case and the provision of law, the Ld. CIT(A) has failed to appreciate the fact that the Ld. AO has erred in charging tax u/s 115BBE on the above said addition of Rs 1,52,00,000/-.

9.

That on the facts and the circumstances of the case and the provision of law the initiation of the penalty proceedings u/s 271AAC of the Income Tax Act, 1961 is illegal and bad in law.

10.

That on the facts and the circumstances of the case and the provision of law, the interest charged by the Ld. AO u/s 234, 2348 and 234C is illegal and without prejudice it is excessive.

11.

That the appellant craves leave to reserve to itself the right to add, alter, amend, vary, modify and/or withdraw any ground(s) of appeal at or before the time of hearing.”

“6.

Heard rival parties in the light of material available on records. Upon consideration of the facts of the case, we have noted that the Revenue had through its ground of appeal, challenged the decision of ld. CIT(A) in giving relief to the assessee on the basis of decision of Hon’ble Delhi High Court in the case of Ojjus Medicare Pvt. Ltd. (supra). We have noted that similar issue had come up for consideration in this Tribunal, in the case of M/s JSP Projects Private Limited in ITA Nos.3643, 3644, 3645, 3646 To 3647/DEL/2025 for Assessment Years: 2015-16, 2016-17, 2019-20, 2020-21 and 2021-22 dated 09.03.2026. In the said decision, it was held as under:-“….

14.

We have heard rival submissions in the light of material available on records. The short point raised by the Ld council for the assessee through its above-mentioned additional ground of appeal dated 25/02/26 is that AYs 2020-21 & 2021-22 fall within the block of six assessment years contemplated under section 153C read with section 153A. Once proceedings under section 153C were triggered on 14.02.2022, the assessment for AYs 2020-21& 2021-22 could only have been framed in accordance with section 153C read with section 153A. It has been submitted that in its case the search was conducted on 18/10/2019 and that the satisfaction qua assessee was recorded by the AO of searched person on 14/2/2022. In this regard, it is submitted that in respect of the assessment proceedings under section 153C of the Act, the block period of six assessment years has to be reckoned from the date on which the seized material is received by the Assessing Officer having jurisdiction over the assessee (i.e., the "other person"). Thus, it has been indicated that the block of 6 assessment years to be reckoned from the date of deemed search u/s 153C would be AY’s 2016-17 to AY’s 2021-22. However, in the present case, the Assessing Officer has framed the assessment for AYs 2020-21 & 2021-22 under section 143(3) of the Act, disregarding the mandatory scheme of section 153C. Such an assessment, having been framed outside the statutory framework applicable to a case falling under section 153C, is without jurisdiction and liable to be quashed. In support of its contentions the Ld council has placed reliance upon the principle laid down by the Hon'ble ITAT Delhi in the case of JASJIT SINGH VERSUS ACIT, CENTRAL CIRCLE-11, NEW DELHI AND VICE-VERSA, 2014 holding that the relevant date for computing the six assessment years under section 153C is the date of recording of satisfaction and receipt of seized material by the Assessing Officer of the assessee, and not the date of search in the case of the searched person. The relevant para of the above judgement is as under:

"13.

We find that there is no dispute on the relevant facts of the case that search and seizure operation u/s 132 of the Act in the case of Koutons was conducted on 19/02/2009 which is relevant to the F.Y. 01/04/2008 to 31/03/2009 and the relevant assessment year is 2009-10. It is also undisputed that the case of the assessee was centralized by ld. CIT u/s 127 of the Act and the jurisdiction of the assessee from Ward 25(3) to Central Circle 11 was transferred on 16/06/2009, hence previous year would be 01/04/2009 to 31/03/2010 and the A.Y will be 2010- 11. On the basis of these facts the contention of the assessee in the additional ground is that the assessment order framed u/s 143(3) of the Act for the assessment year in question is not valid and not maintainable. As per him, the date of search in the case of the present assessee would be the date i.e. 16/06/2009 when documents belonging to the assessee (found during the course of search) were handed over and jurisdiction for framing the assessment was transferred to the AO having jurisdiction for the assessment on the assessee. Taking into account the date 16/06/2009 as date of search in the case of the assessee, the contention of the Id. AR remained that the search year in the case of assessee would be A.Y. 2010-11 and six previous assessment years would be 2009-10 to 2003-04. In other words, the regular assessment u/s 143(3) of the Act in the present case should have been framed for the assessment year 2010-11 and the assessment for the assessment year under consideration should have been framed u/s 153C read with 143(3) of the I.T. Act. In support the above cited decisions were relied upon by the ld. AR

1.

The contention of the ld. CIT(DR on the contrary remained that the reference of proviso 1 of section 153C is only in relation to the second proviso to sub-section 1 of section 153A which speaks about the abatement of the pending proceedings of six assessment years and not regarding assessment of the preceding six assessment years which will be the same as in section 153A as well as in section 153C of the Act. In this regard she placed reliance on the decision of Hon'ble Delhi High Court in the case of SSP Aviation Ltd. vs. DCIT (supra).

2.

We find that an identical issue has been decided by Delhi Bench of the Tribunal in the case of DSL Properties P. Ltd. (supra) in favour of the assessee accepting the similar contention of the assessee. Similar view has been expressed by the Delhi Bench of the Tribunal in the case of V.K. Fiscal (supra) holding that the date of receiving of the seized documents would become the date of search and six years period would be reckoned from this date. For a ready reference para no. 19, 21, 22 & 23 of the decision of Delhi Bench of the Tribunal in the case of DSL Properties (supra) are being reproduced hereunder:

1.

We thus, find that the issue raised in the additional ground has been answered in favour of the assessee, by the Coordinate Delhi Bench of the Tribunal in the case of DSL Properties (supra).

2.

So far as decision of Hon'ble Delhi High Court in the case of SSP Aviation Ltd. vs. DCIT (supra) relied upon by the Id. CIT(DR) is concerned, we find that it is not helpful to the revenue as in that case also in para no. 14 of the judgment it has been held as under:

14.

"Now there can be a situation when during the search conducted on one person u/s 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the AO has to first be satisfied u/s 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the AO having jurisdiction over the other person. Thereafter, the AO having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the manner contemplated by the provisions of section 153A. Now a question may arise as to the applicability of the second proviso to section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search u/s 132 or the requisition u/s 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the AO having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date."

18.

In view of the above finding, the assessment framed u/s 143(3) of the Act for the A.Y. 2009-10 in the present case is not valid. Respectfully following the above cited decisions on an identical issue, the additional ground no. 4 in the present case is decided in favour of the assessee and in the result the assessment order is quashed as void….” 15. It was submitted that the aforesaid decision of the Hon'ble ITAT Delhi was carried in appeal by the Revenue before the Hon'ble Delhi High Court in Commissioner of Income Tax-14 versus Shree Jasjit Singh, 2015(8) TMI 982 – Delhi High Court, Dated. - August 11, 2015, wherein the Hon'ble High Court affirmed the findings of the Tribunal and upheld the view that the date of receipt of seized documents by the Assessing Officer of the "other person" is the deemed date of search for the purposes of section 153C of the Act. Thereafter, the matter was carried to the Hon'ble Supreme Court by the Revenue in Commissioner of Income Tax-14 vs Jasjit Singh, 2023(10) TMI 572 – Supreme Court, Dated.- September 26, 2023, wherein the Hon'ble Supreme Court dismissed the appeal of the revenue affirming the judgment of the Hon'ble Delhi High Court, thereby settling the legal position conclusively. The Ld council further argued that impugned findings also echo in the decision of Hon’ble Delhi High Court in the case of the Pr. Commissioner of Income Tax-central1 versus Ojjus medicare pvt. ltd. and others, 2024 (4) tmi 268 delhi high court, Dated-April 3, 2024. Relevant finding of the Hon'ble High Court were cited as under- "D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the "relevant assessment year" is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the nonsearched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted.

E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books, of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A."

16.

Per contra the Ld DR placed reliance upon the order of lower authorities

17.

We have noted that the facts of present case are identical to those discussed in judicial precedents supra. There is no dispute regarding the dated of recording of satisfaction of Ld AO of searched person. Accordingly in respectful compliance to the binding judicial precedents of Hon’ble jurisdictional High Court as well as of Hon’ble Apex court, we are of the considered view that the Assessment order for the AY 20-21 ought to have been passed by the Ld AO invoking provisions of section 153C and that consequently the passing of assessment order by issuing notice u/s 143(2) of the Act has caused an incurable and fatal defect in the assessment order per se. Accordingly we set aside and quash the assessment order for AY 2020-21 challenged by the assessee in its ITA number 3646/Del/2025 through the additional ground of appeal.”

7.

The appellant Revenue has not been able to point out any distinguishment of the facts of the present case vis a vis those considered in the judicial precedents discussed hereinabove. We have noted that ld. CIT(A) has correctly interpreted the facts of the case in the light of decision in the case of Ojjus Medicare Pvt. Ltd. (supra). Accordingly, in respectful compliance to the decision of the Hon’ble jurisdictional High Court in the case of Ojjus Medicare Pvt. Ltd. (supra), we dismiss the appeal of the Revenue.”