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

ITA 3228/MUM/2025Status: DisposedITAT Mumbai17 October 2025AY 2015-1667 pages
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What did the Tribunal hold?

The Tribunal held that the assessment orders were annulled for want of jurisdiction and procedural legitimacy, particularly for being initiated by an officer lacking jurisdiction in contravention of the Faceless Assessment Scheme under section 151A, and for non-compliance with CBDT Circular No. 19 of 2019 due to the absence of a valid pre-generated DIN. Consequently, all consequential additions were set aside. Regarding the specific additions, the Tribunal confirmed the deletion of additions made towards alleged NOC receipts treated as capital gains and additions made under section 69A for unexplained money. The Tribunal found no merit in the Revenue's grievance concerning 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 plea for enhancement was also dismissed as not maintainable. The grounds raised by the Revenue regarding violation of Rule 46A were also dismissed. The assessees' appeals were allowed, and the Revenue's 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. and its connected entities for assessment years ranging from 2012-13 to 2022-23. The 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 challenged these additions, and the Commissioner of Income Tax (Appeals) granted partial relief. The Revenue appealed against the relief granted, while the assessee also filed appeals.

What were the issues?

1. Whether the Tribunal had jurisdiction to entertain the appeals, considering the assessee's contention regarding the annulment of assessment orders for want of jurisdiction and procedural legitimacy under section 151A and CBDT Circular No. 19 of 2019. 2. Whether additions made by the AO on account of alleged NOC receipts treated as capital gains were justified, and if the deletion of these additions by the CIT(A) was correct. 3. Whether additions made under section 69A for unexplained money based on diary entries not linked to NOC transactions were justified, and if the deletion of these additions by the CIT(A) was correct. Assessee's Contentions: The assessee argued that the assessment orders were void ab initio due to lack of jurisdiction and procedural non-compliance, including violation of the Faceless Assessment Scheme and absence of a valid DIN as per CBDT Circular No. 19 of 2019. They also contended that the CIT(A) correctly deleted additions based on stray and uncorrelated diary entries. The Revenue argued that the CIT(A) erred in deleting additions relating to diary entries not marked 'KB' and sought enhancement of income, claiming certain unaccounted receipts were wrongly omitted or under-assessed. The Revenue also raised grounds regarding violations of Rule 46A.

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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PER BENCH:

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