THE ESTATE INVESTMENT COMPANY PRIVATE LIMITED,MUMBAI vs. DCIT CENTRAL CIRCLE 8(1), MUMBAI

ITA 3224/MUM/2025Status: DisposedITAT Mumbai17 October 2025AY 2020-2167 pages
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What did the Tribunal hold?

The Tribunal held that the assessment orders were void ab initio for want of jurisdiction, procedural legitimacy, and evidentiary support. The assessments were quashed as having been initiated by an officer lacking jurisdiction in contravention of the Faceless Assessment Scheme under section 151A. Furthermore, the assessment orders were invalidated for non-compliance with CBDT Circular No. 19 of 2019 due to the absence of a valid pre-generated DIN. Consequently, all consequential additions, including those towards alleged NOC receipts treated as capital gains and unexplained money under section 69A or 69C, were deleted and set aside. The Tribunal found no merit in the Revenue's grievance regarding the deletion of diary entries not marked 'KB', agreeing with the CIT(A) that only entries specifically identified, explained, and linked to the assessee could be considered. The Revenue's attempt to seek enhancement of income was dismissed, citing Supreme Court judgments in CIT v. Shapoorji Pallonji Mistry and Nirbheram Daluram v. CIT, which limit enhancement powers to material before the appellate authority and within the scope of the assessment. The Tribunal also dismissed the Revenue's grounds relating to violation of Rule 46A, finding no evidence of additional evidence being entertained by the CIT(A). All assessee appeals were allowed, and Revenue appeals were dismissed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard a batch of appeals concerning The Estate Investment Company Pvt. Ltd. (assessee) and the Deputy Commissioner of Income Tax (Revenue) for assessment years 2014-15 to 2022-23. These appeals arose from search and survey operations conducted on October 7, 2021, which led to the seizure of diaries, loose papers, and digital data. The Assessing Officer (AO) made additions based on these documents and statements recorded under section 132(4), including capital gains on alleged NOC receipts and unexplained money under section 69A. The assessee had challenged these additions, and the Commissioner of Income Tax (Appeals) granted partial relief. The Revenue also filed appeals against these reliefs.

What were the issues?

1. Whether the Tribunal had jurisdiction to entertain the appeals, considering the assessment orders were allegedly framed without jurisdiction and in contravention of the Faceless Assessment Scheme under section 151A, and without a valid pre-generated DIN as per CBDT Circular No. 19 of 2019. - Assessee's contention: The assessment orders were void ab initio due to lack of jurisdiction and procedural illegitimacy, and thus all consequential additions should be annulled. - Revenue's contention: Not recorded. 2. Whether additions made on account of alleged NOC receipts treated as capital gains and unexplained money under section 69A were justified based on seized diaries and statements. - Assessee's contention: The seized material, particularly diaries not marked 'KB', lacked corroborative proof and could not be attributed to the assessee without specific linkage. The CIT(A) correctly deleted these additions. - Revenue's contention: The CIT(A) erred in deleting additions relating to diary entries not marked 'KB' and in holding that they could not be attributed to the assessee without corroborative proof. The Revenue sought to sustain these additions as unaccounted income. 3. Whether the Revenue could seek enhancement of income at the appellate stage for certain unaccounted receipts wrongly omitted or under-assessed. - Revenue's contention: Certain unaccounted receipts were wrongly omitted or under-assessed, and the Revenue sought enhancement of income. - Assessee's contention: Not recorded. 4. Whether the CIT(A) had entertained additional evidence in violation of Rule 46A. - Assessee's contention: No evidence was produced before the CIT(A) in violation of Rule 46A. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 132,Section 132(4),Section 69A,Section 69C,Section 147,Section 148,Section 151A,Section 153A,Section 251,Section 234A,Section 234B,Section 234C

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Income Tax Appellate Tribunal, ‘E’ BENCH

Before: SHRI AMIT SHUKLA & SHRI ARUN KHODPIA

Heard together (2 matters)

ITA No. 3928/Mum/2025
ITA No.3012/Mum/2025

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