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Facts
A search and seizure operation was conducted, leading to additions for disallowance of exempt income, unexplained unsecured loan/credit, unexplained gift, and on account of transfer/sales of shares. The assessee appealed against the order.
Held
The Tribunal held that the reasons recorded for assuming jurisdiction under Section 153C of the Act did not specify how the seized documents related to the assessee or indicated suppression of income. It found a non-application of mind by the Assessing Officer.
Key Issues
Whether the assumption of jurisdiction by the AO under Section 153C was valid and based on sufficient material, given the lack of specific links between seized documents and the assessee's income.
Sections Cited
153C, 132, 10(38), 68, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCHES: C : NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI ANUBHAV SHARMA
Assessment Year: 2012-13 Shri Kumar Saurav, Vs DCIT, C/o Shanker Mehta, Central Circle, Naya Gaon, Noida. Guljarbagh, Patna – 800 007. PAN: CKLPS6721H (Appellant) (Respondent) Assessee by : Dr. Rakesh Gupta, Advocate & Shri Somil Agarwal, Advocate Revenue by : Shri Dayainder Singh Sidhu, CIT-DR Date of Hearing : 07.05.2025 Date of Pronouncement : 28.05.2025 ORDER
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 23.07.2018 of the Commissioner of Income-tax (Appeals)-IV, Kanpur (hereinafter referred to as the Ld. First Appellate Authority or ‘the Ld. FAA’, for short) in Appeal No.CIT(A)-IV/KNP/11106/244-DCIT-CC-NOIDA/2016- 17 arising out of the appeal before it against the order dated 28.12.2016 passed u/s 153C/143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the DCIT, Central Circle, Noida (hereinafter referred to as the Ld. AO).
A search & seizure operation u/s 132 of the Income Tax Act, 1961 was conducted on 27.11.2014 in the case of Maconns, Meenu and Yadav Singh Group Noida covering its business premises and residences of Director their family members and other business associates concern and other key persons. During the course of search at the residence of Yadav Singh and Smt. Kusum Lata, A-38, Sector-27, Noida, allegedly various incriminating documents/loose sheets were found and seized. The assessee is one of the directors of M/s KS Ultratech Pvt. Ltd, group companies of Smt Kusum Lata. The case of the assessee was centralized and notice u/s 153C of the Act was shown to be issued on 13.07.2016 and the assessee filed return of income on 30.07.2016. subsequently, during assessment, addition on account of disallowance of exempt income claimed u/s 10(38) of the Act was made to the extent of Rs.5 lakhs and, further addition on account of unexplained unsecured loan/credit to the extent of Rs.34,63,890/- and addition on account of unexplained gift u/s 68 of Rs.11 lakhs and addition of Rs.72,97,500/- was made on account of transfer/sales of shares. Against this, the assessee had filed appeal before the ld.CIT(A) raising grounds on merits and also a ground on wrongful assumption of jurisdiction u/s 153C of the Act.
Now, before us also, the ld. counsel for the assessee primarily argued on grounds No.1 and 2 questioning the assumption of jurisdiction u/s 153C of the Act. The ld. Counsel submitted that there is no mention in the reasons recorded as to how these seized documents is related to the assessee and what is the incriminating effect. The ld. counsel has relied the judgement in the cases of : (i) CIT vs. Singhad Technical Education Society, [2017] 397 ITR 344; (ii) Saksham Commodities Ltd. vs. ITO in W.P(C) 1459/2004 and CM A 6031/2024 dated 09.04.2024; (iii) DCIT vs. UK Paints (Overseas) Ltd., Civil Appeal No. 6634 of 2021 dated 25.04.2023, (SC); (iv) Pavitra Realcon (P) Ltd. vs. ACIT, 87 taxmann.com 142 (ITAT Delhi); & (v) Pr. CIT vs. Abhisar Buildwell (P.) Ltd., (2023) 454 ITR 212 (SC).
The ld. DR has relied the orders of the ld. tax authorities below submitting that incriminating documents in the form of EW4 was specifically mentioned.
4. As we go through the material on record, we find that the reasons recorded for assumption of jurisdiction u/s 153C of the Act have been reproduced by the ld.CIT(A) at page No.5 of the appellate order and, certainly, apart from mentioning that the seized documents EW-4, Annexure-1 related to