Loading judgment…
Facts
A search action on Swastik Group led to proceedings u/s 153C against the assessee. The assessment order was passed u/s 143(3) r.w.s. 254 and 153C, with additions made. The CIT(A) deleted some additions but made a new addition of Rs. 15,40,000/-.
Held
The Tribunal held that the satisfaction note recorded by the Assessing Officer was identical to one in a previous case, Deepak Purushottam Shah HUF (supra), which was a combined note for multiple assessment years. The addition of Rs. 15,40,000/- was made without reference to the material in the satisfaction note.
Key Issues
Whether the Assessing Officer validly assumed jurisdiction u/s 153C without a proper satisfaction note, and if additions made were based on material referenced in the satisfaction note.
Sections Cited
143(3), 144, 153C, 153A, 69A, 115BBE, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWAL
Present for: Assessee : Shri Jalaj Prakash, CA Revenue : Shri R A Dhyani, CIT DR Date of Hearing : 23.09.2025 Date of Pronouncement : 30.09.2025 O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by assessee is against the order of Ld. CIT(A), Pune-11, vide order no. ITBA/APL/S/250/2024-25/1065666391(1), dated 14.06.2024 passed against the assessment order by Assistant Commissioner of Income-tax, Central Circle-2, Thane, u/s. 143(3) r.w.s. 254 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 30.12.2019 for Assessment Year 2013-14.
Grounds taken by the assessee are reproduced as under: “1) On the facts and in the circumstances of the case and in law, the order of the learned Commissioner of Income-tax confirming the assessment order passed u/s. 143(3) r.w.s.254 r.w.s. 153C of the Income-tax Act, 1961 is both bad-in-law and bad-in-facts in so far as the assessment was completed without assuming valid jurisdiction in absence of recording of satisfaction in the case of searched.
2) On the facts and in the circumstances of the case and in law, the order of the learned Commissioner of Income-tax confirming the assessment order passed u/s. 143(3) r.w.s.254 r.w.s.153C of the Income-tax Act, 1961 is both bad-in-law and bad-in-facts in so far as the assessment was completed after assuming jurisdiction without appreciating the fact that the documents found from digital evidence of Swastik Group did not belong to the appellant. 3) On the facts and in the circumstances of the case and in law, the order of the learned Commissioner of Income-tax confirming the assessment order passed u/s. 143(3) r.w.s.254 r.w.s. 153C of the Income-tax Act, 1961 is both bad-in- law and bad-in-facts in so far as the assessment order was passed without generating DIN. ADDITION ON ACCOUNT OF UNEXPLAINED RECEIPT U/S.69A R.W.S.115BBE: RS.15,40,000/- 4) On the facts and in the circumstances of the case and in law, the order of the learned Commissioner of Income-tax has erred in retaining the addition of Rs.15,40,000/- made by the assessing officer on account of unexplained receipt u/s.69A r.w.s.115BBE.”
Through ground No. 1 and 2, assessee has contested strongly on the legal issue relating to ld. Assessing Officer completing the assessment without assuming valid jurisdiction in absence of recording of satisfaction and referring to documents found from digital evidence of Swastik Group which did not belong to the assessee and not referred to in the satisfaction note itself.
3.1. A search and survey action was carried out on Swastik Group on 31.07.2014. Subsequent to search, case of the assessee was taken up for proceedings u/s. 153C r.w.s. 153A for which notice u/s.153C was issued on 04.02.2015. Assessee had originally not filed its return u/s.139(1), however, subsequently return was filed in response to notice u/s. 153C on 31.03.2015, reporting total income at Rs.48,83,650/-. Assessment was completed by assessing total income at Rs. 1,88,76,514/- vide impugned assessment order passed u/s. 144 r.w.s. 153A r.w.s. 153C, resulting into a demand of Rs. 88,42,210/-. Details of additions made in the impugned assessment is tabulated below:
Pankaj B. Thakur (HUF) AY 2013-14 A.Y Returned Grounds of Amount Assessed Income as Addition (Rs.) Income per return filed u/s 153C 2013-14 48,83,650/- Contract Receipt 79,380 1,88,76,510 as per ITS stmt. Unsecured Loan 66,06,742 Sundry 73,06,742 Creditors 3.2. In the appeal preferred before ld. CIT(A), additions made by the ld. Assessing Officer were deleted. However, addition of Rs. 15,40,000/- was made by ld. CIT(A) in respect of sale of flats and shops during the year. Details of the results of first appeal are tabulated below: S. A.Y. Grounds of Amount CIT (A) by Remarks No. addition (Rs.) decision 1 2013-14 Contract 79,380 Deleted The then AO Receipt as per has accepted in ITS stmt. remand report 2 2013-14 Unsecured 66,06,742 Deleted The then AO Loan has accepted in remand report 3 2013-14 Sundry 73,06,742 Deleted The then AO Creditors has accepted in remand report 4 2013-14 Addition made 15,40,000 In para no. 51, by CIT(A) in CIT(A)'s order respect of sale dated of flats and 15.09.2017 shops during the year 3.3. There is no appeal by the Revenue on the relief granted by the ld. CIT(A). However, assessee is in appeal before the Tribunal for the addition made in respect of Rs. 15,40,000/- along with raising legal grounds on the assumption of jurisdiction by the ld. Assessing Officer Pankaj B. Thakur (HUF) AY 2013-14 in terms of satisfaction note recorded for initiating the impugned proceeding. Assessee had raised the legal issue in the first appeal on the validity of assumption of jurisdiction in absence of recording of satisfaction for the addition so made but was turned down holding it against the assessee. While adjudicating on this ground, ld. CIT(A) in para 12 observed that in view of judgments of judicial precedents, Assessing Officer had validly assumed jurisdiction u/s. 153C and dismissed the ground no. 1 and 2 raised by the assessee.
Before us, ld. Counsel for the assessee submitted that it is the second round of appeal before the Tribunal, since in the first round the matter was restored back to the file of ld. Assessing Officer for a fresh consideration. Before us, ld. Counsel for the assessee at the outset, submitted that the issue in the present appeal is squarely covered by the decision of the Coordinate Bench in another case of Deepak Purushottam Shah HUF vs. ACIT in and 5593/Mum/2024, dated 01.09.2025. The assessment years covered by this decision are Assessment Year 2012-13 and 2013-14. Present case before us is for Assessment Year 2013-14.
4.1. Ld. Counsel pointed out that satisfaction note referred in the present case is identical to what has been dealt by the Coordinate Bench in the said decision. It is arising out of the same search action in the case of Swastik Group. In that case, the assessment was completed u/s. 153C, r.w.s.144. The material referred to by the ld. Assessing Officer for making the addition did not form part of the satisfaction note. It was also pointed out that the said satisfaction note was recorded as a combined note covering assessment years 2009-10 to 2014-15. It referred to documents in Bundle No. 13, specifically pages 206 and 208, which relate to a land sale transaction Pankaj B. Thakur (HUF) AY 2013-14 with Tata Housing Development Company Ltd. Also, addition made in respect of sale proceeds of shop amounting to Rs. 15,40,000/- which was based on documents found in Bundle No.6 at pages 35-37 relating to shop No. 6-8 were also not referred to in the satisfaction note recorded by the ld. Assessing Officer. Thus, Coordinate Bench noted that the additions were beyond the satisfaction note recorded by the ld. Assessing Officer. On these set of facts, after considering judicial precedents, the Coordinate Bench deleted the addition of Rs. 15,40,000/- representing sale proceeds of shop for Assessment Year 2013-14 which was made without any reference to material stated in the satisfaction note.
4.2. Before us, satisfaction note in the case of the assessee was referred to which is identical to the one dealt by the Coordinate Bench in the decision referred above. It also refers to Bundle No. 13 in respect of transaction of sale of lands to Tata Housing Development Company. Further, from the perusal of the entire satisfaction note, there is no whisper of Bundle No. 6 in respect of addition made of Rs. 15,40,000/- in the case of the present assessee for transaction of sale of shops. Also, the satisfaction note is a combined note for Assessment Year 2009-10 to 2014-15.
4.3. Having found identical noting in the satisfaction note in the case of the assessee when compared with the one dealt by the Coordinate Bench in the case of Deepak Pushottam Shah (HUF) (supra), we find that the findings and observations of the Coordinate Bench squarely applies in the present case of the assessee. There was nothing contrary brought on record by the Revenue on these set of facts. Accordingly, by following the decision of the Coordinate Bench, (supra), we delete the addition of Rs.15,40,000/- made in the case of Pankaj B. Thakur (HUF) AY 2013-14 the assessee representing sale proceeds of shop, for which no reference has been made in the satisfaction note recorded by the ld. Assessing Officer. In the result, ground no. 1 and 2 raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.