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Judgment
Per Renu Jauhri, Accountant Member:
These two appeals by the Assessee are directed against the two separate orders dated 03.10.2025 and 11.09.2025 of the Ld. Commissioner of Income Tax (Appeal)-25, New Delhi-110055, [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Order dated 27.02.2024 passed under section 153C of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the Assessing Officer, DCIT, Central Circle-26, New Delhi, (hereinafter referred to as the ‘AO’) pertaining to Assessment Years (A.Ys.) 2017-18 and 2018-19.
Additional Grounds of appeal filed by the Assessee (ITA No.- 7959/Del/2025 for A.Y. 2017-18) are reproduced as under:
"That the jurisdiction of the Ld. AO in passing the assessment order U/s 153C is vitiated in the present case, as in this case, the search was conducted on 18.10.2019 and the notice U/s 153C was issued after 1.04.2021, whereas the provisions of section did not exist after 1.04.2021 and hence the assessment proceedings are bad in law for the want of jurisdiction."
"That it is a trite law that the date of handing over of the documents/recording of the satisfaction note, is to be considered as the triggeringdate in the case of the other person, and such date in the present case, falls after 1.04.2021, when the provisions of section 153C were already repealed."
"That in the present facts of the matter, the Ld. AO does not have the jurisdiction to conduct assessment proceedings U/s 153C of the Income Tax Act in the case of the appellant and reliance in this regard is placed on the judgment of Harigovind v. ACIT [2025] 180 taxmann.com 197 (Madras) and other similar matters."
Additional Grounds of appeal filed by the Assessee (ITA No.- 7960/Del/2025 for A.Y. 2018-19) are reproduced as under:
"That the jurisdiction of the Ld. AO in passing the assessment order U/s 153C is vitiated in the present case, as in this case, the search was conducted on 18.10.2019 and the notice U/s 153C was issued after 1.04.2021, whereas the provisions of section did not exist after 1.04.2021 and hence the assessment proceedings are bad in law for the want of jurisdiction."
"That it is a trite law that the date of handing over of the documents/recording of the satisfaction note, is to be considered as the triggeringdate in the case of the other person, and such date in the present case, falls after 1.04.2021, when the provisions of section 153C were already repealed."
"That in the present facts of the matter, the Ld. AO does not have the jurisdiction to conduct assessment proceedings U/s 153C of the Income Tax Act in the case of the appellant and reliance in this regard is placed on the judgment of Harigovind v. ACIT [2025] 180 taxmann.com 197 (Madras) and other similar matters."
By way of the additional grounds, the assessee has challenged the validity of proceedings u/s 153C of the Act. As issues are common in both the appeals, A.Y. 2017-18 (ITA No.- 7959/Del/2025) is taken up first as the lead case.
Brief facts are that the assessee had filed original return declaring income of Rs. 67,86,900/- for A.Y. 2017-18 on 18.10.2017. On 18.10.2019, a search u/s 132 of the Act was conducted on the Alankrit group of cases, wherein it was found that the group entities were providing accommodation entries to different persons. During the course of search, some incriminating documents were also found relating to the assessee and thereafter his case was centralized.
A notice u/s 153C was issued on 15.06.2022 in response to which the assessee filed his return on 07.10.2023 declaring income of Rs. 67,86,900/-. Assessment was subsequently completed vide order dated 27.02.2024, at an income of Rs. 98,76,900/- after making addition u/s 69A & 69C of the Act in respect of bogus transactions of Rs. 30,00,000/- undertaken by the assessee and commission paid of Rs. 90,000/- thereon respectively.
Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), which was dismissed vide order dated 11.09.2025. Further aggrieved, the assessee is in appeal before the Tribunal.
Before us, Ld. AR has submitted that the proceedings u/s 153C are invalid as the notice was issued on 15.06.2022 and the provisions of section 153C were already repealed w.e.f. 1.4.2021. He has pointed out that the date of search in the case of ‘other person’ is to be taken as the date of handing over of incriminating material to the AO of such other person as per the provisions of section 153C of the Act. In the present case, it has been pointed out that since the incriminating material was handed over and notice u/s 153C was issued long after 1.4.2021, the proceedings are invalid in view of the provisions of section 153C(3), which provides that the provisions of this section do not apply to any search initiated on or after 1.4.2021.
On the other hand, the Ld. DR has argued that the search in this case was conducted in 2019 and therefore the proceedings have been validity initiated. Moreover, this issue has not been raised before the lower authorities and, therefore, the same cannot be entertained at this stage.
We have heard the rival submissions and perused the material available on record. We note that even though the search action in the case of Alankrit Group was conducted on 18.10.2019, the incriminating material was handed over to the AO of the assessee much later, apparently after 1.4.2021 based on which notice u/s 153C was issued on 15.06.2022. Ld. DR has not been able to controvert the claim of the AR regarding, handing over of incriminating material after 1.4.2021 and recording of satisfaction u/s 153C after the prescribed cut off date, despite being specifically directed to file requisite details and evidences in support of his contentions.
Hence, we are inclined to agree with the Ld. AR that the notice u/s 153C dated 15.06.2022 having been issued beyond the statutory cut-off date is bad in law and hence the same is hereby quashed.
In the result, the appeal of the assessee is allowed.
ITA No.- 7960/Del/2025
Since the facts and issues involved in the present appeal are identical to those adjudicated in ITA No. 7959/Del/2025, the findings and reasoning recorded therein are respectfully adopted mutatis mutandis. Accordingly, the present appeal in ITA No. 7960/Del/2025 is also allowed on the same terms.
In the result, both the appeals of the assessee are allowed for statistical purposes.