DCIT, CENTRAL CIRCLE, GHAZIABAD, GHAZIABAD vs. VIJAY KUMAR AGARWAL, HAPUR

It is noticed at the outset with the able assistance coming from both the sides that these assessees/ appellants seek to raise their twin additional grounds i.e. interalia challenging legality of the impugned assessments for want of a valid approval; and, for AYs 2021-22 and 2022- 23, their respective stand is that when counted from the date of search in issue i.e 02.06.2022, the learned lower authorities ought to have framed respective assessments in question u/s 148 r.w.s 147 than that u/s 143(3) of the Act.

Learned CIT-DR vehemently objects to assessees instant identical application(s) regarding both the foregoing additional grounds. Ms. Singh’s case is that it was the assessees’ bounden duty to have raised the same before the CIT(A) so as to get an comprehensive adjudication thereupon u/s 250(6) of the Act. She further opposes the assessees’ aforesaid plea for want of all the corresponding supportive material/ evidence before the tribunal as well.

We hardly see any reason to accept the Revenue’s foregoing objections against the assessees respective applications seeking to admit the foregoing twin additional substantive grounds. We wish to make it clear that hon’bleapex court in NTPC Limited v/s CIT (1998) 229 ITR 383 (SC) has already settled the issue that this tribunal could very well entertain such a pure legal ground going to root of the matter. This is indeed coupled with the tribunal’s Special Bench in All Cargo Global Logistics Ltd. vs. DCIT(2012) 137 ITD 287 (Mum) (SB) that we could very well admitan additional ground so as to determine the correct tax liability of an assessee subject to a rider that all the relevant facts form part of the records. We find that all these assessees have already filed paper book running into 45 pages in support of both these additional grounds. We, thus, admit the same in very terms. Page | 6 Next comes the first and foremost issue between the parties i.e. 5. validity of impugned assessments on account of the learned prescribed authority alleged failure in granting a proper approval u/s 148B of the Act. We are taken to the assessees’ detailed paper book wherein the learned prescribed authority i.e. Addl-CIT, Central Range, Meerut accorded its aforesaid identical approval for eg. Dated 29.03.2003 in Ms. Sonika Agarwal case; observing therein that he had occasion to go through the seized materials, appraisal reports and various documents from time to time. The matter admittedly did not end up to this stage. These assessees appear to have their filed respective “RTI” applications as to whether the said seized records etc; allegedly running into thousands of pages (23 to 25 in Paper Book annexure-A), had been sent to the learned prescribed authority or not. The Revenue’s stand in the said RTI matters intimated to these assessees reads “upon verification of the records all the case presently available; it is observed that no formal communication/ correspondence in this regard are placed on record”.] [This clinching factual position has gone unrebutted from the 6. Revenue side. We are of the considered view in these facts that both the learned lower authorities; and, more particularly, the learned Assessing Officer as well as the Additional CIT have failed to comply with this statutory mandate of a valid approval u/s 148B of the Act i.e a provision parimateria to Section 153D and not sustenable in law as perPCIT v. Siddarth Gupta (2023) 450 ITR 534 (All), ACIT v. Serajuddin and Co. [2024] 163 taxmann.com 118 (SC) PCIT v/s Anuj Bansal (2024) 165 taxmann.com 2 (Delhi) holding against the department that such an invalid approval vitiates the entire assessment itself. We, thus, find merit in the assessee’s instant first additional ground to quash all these impugned assessments as non–est ones in the eyes of law in very terms.] The outcome of these assessee’s above latter additional grounds 7. (supra) is hardly any different. We wish to reiterate here that once the learned lower authorities had carried out the search in issue dated 02.06.2022, both these impugned assessment years i.e AY: 2021-22 & 2022-23 ought to have been assessed only u/ 148 r.w.s 147 then u/ 143(3) of the Act. There is admittedly no denial to the fact that the learned prescribed authority had itself approved the impugned assessments u/s 148B of the Act (supra). We further take note of the Explanatory Memorandum of the Finance Bill; 2021. Further settling the issue in the assessees’ favour that such a case is covered under the newly introduced Section 147 only as per “three Assessment Years immediately preceding the assessment year reliable to the previous year in which this search is initiated…………….” Case law (2026) 182 taxmann.com 11 (Del) Montage Enteprise (P) Ltd. V/s DCIT has declined the Revenue’s very stand as well. We thus quash the impugned assessments for these latter assessment years 2021-22 and 2022-23 in above terms. Next comes unexplained investment to property addition of 8. Rs.3,42,34,540/- made to Ms. Sonika and Shammi Agarwal’s hands forming subject matter of our apt adjudication. Both the learned lower authorities have considered the total investment at Rs.6,53,38,873/- in the twin properties in question. Coming to the impugned sumn of Rs.3.42 (crores), learned counsel takes us to the seized document “Sanjeev Kumar Agarwal” indicating the same to be Rs.1,69,13,950/- only. We thus reject the Revenue’s vehement contentions and hold the assessee as entitled for further relief of Rs.1,73,20,590/- in above terms. Necessary computation shall follow. Lastly comes the final issue of cash addition of Rs.4,55,93,004/- 9. made in the assessee namely Ravinder Kumar Agarwal’s hands i.e.