NISHANT AGGARWAL L/H OF LATE SH. NARENDRA AGGARWAL,FARIDABAD vs. DCIT, CC-14, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, E: NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.- 2857/Del/2026 [Assessment Year: 2016-17] Sh. Nishant Aggarwal L/H of late DCIT, Sh. Narendra Aggarwal, Central Circle-14, H. No. -467, Sector-21A, Vs New Delhi-110055. Faridabad, Haryana-121002. PAN- ACFPA3236M Assessee Revenue Assessee by Dr. Rakesh Gupta, Sr. Adv. & Sh. Deepesh Garg, Adv. Revenue by Shri Robin Rawal, CIT(DR) Date of Hearing 31.08.2026 Date of Pronouncement 16.09.2026 ORDER Per Renu Jauhri, Accountant Member:

This appeal by the assessee is directed against the order dated 24.02.2026 of the Commissioner of Income Tax, Appeal, Delhi-26, [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Order dated 27.12.2022 passed under section 153C r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the

ITA No.- 2857/Del/2026 Nishant Aggarwal DCIT, Central Circle-14, New Delhi (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2016-17. 2. The Assessee has raised the following grounds of appeal:

“ 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C/143(3) and that too without assuming jurisdiction as per law and without recording mandatory 'satisfaction' in accordance with law and without complying/following with the other mandatory conditions/procedure as laid down u/s 153C in accordance with law. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C/143(3), is illegal, bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of Rs. 3,25,00,000/- by treating the same as alleged unexplained money of the appellant under section 69A of the Income-tax Act, 1961, merely on the basis of alleged WhatsApp chats between Sh. Puneet Kulthia and the assessee and that too without there being any incriminating material found or seized during the course of search, by recording incorrect facts and findings, and in violation of the principles of natural justice, as the adverse material relied upon has neither been provided to the appellant nor any opportunity of cross-examination of the alleged deponents has been granted, and further without complying with the mandatory provisions of section 65B of the Evidence Act, 1872. 4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. A.O in making addition of Rs.3,25,00,000/- by treating it as alleged unexplained money of the appellant u/s 69A, is bad in law and against the facts and circumstances of the case. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned assessment order passed by Ld. AO as the same was passed without there being requisite approval in terms of section 153D and in any case approval, if any, is mechanical without application of mind and is no approval in the eyes of law.

ITA No.- 2857/Del/2026 Nishant Aggarwal been issued without DIN number as is must as held in the judgements of CIT (International Taxation) vs. Brandix Mauritius Holdings Ltd., ITA No. 163/2023, dated 20.03.2023 (Del), PCIT(E) vs. M/s Tata Medical Centre Trust, ITAT/202/2023, dated 26.09.2023 (Cal) and Ashok Commercial Enterprises vs. Asstt. CIT, WP No. 2595 of 2021, dated 04.09.2023 (Bom) and CBDT Circular No. 19/2019 dated 14.08.2019. 7. That in any case and in any view of the matter, the impugned addition made in the assessment order is wholly illegal and unsustainable in law, as the same have been made without there being any incriminating material found or seized during the course of search. 8. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. A.O. in charging interest u/s 234B and 234C of Income Tax Act, 1961. 9. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

Subsequently, a search u/s 132 of the Act was carried out in the case of Sh. Puneet Kulthia on 8.03.2017, during the course of which, various incriminating documents were found and seized. As some of these documents pertained to the assessee, Sh. Narendra Aggrwal, the AO of the searched person recorded his satisfaction and handed over the seized material to the AO of the assessee on 17.09.2021. Based on the same, the AO of the assessee recorded his satisfaction u/s 153C on 6.10.2021 and issued a notice on 9.10.2021 requiring the assessee to file his return of income.

ITA No.- 2857/Del/2026 Nishant Aggarwal In response to the notice u/s 153C, the assessee filed his return declaring income of Rs. 6,98,58,930/- on 7.11.2021.

During the course of assessment proceedings, on the basis of incriminating information and documents found during the course of search, the AO held that the assessee was taking accommodation entries through entities controlled by Sh. Puneet Kulthia and accordingly, made on addition of Rs. 3,25,00,000/- on account of unexplained money u/s 69A of the Act.

3.1 Aggrieved, the assessee’s legal heir, Sh. Nishant Aggarwal preferred an appeal before the CIT(A) which was dismissed vide order dated 24.02.2026.

Further aggrieved, the assessee is legal heir has filed an appeal before the Tribunal, raising multiple legal grounds besides challenging the impugned addition on merits.

3.2 We, therefore, first take up the legal ground relating to the validity of proceedings u/s 153C of the Act.

ITA No.- 2857/Del/2026 Nishant Aggarwal Further, as per the subsection (3) of section 153C, no notice could have been issued after 1.4.2021 and hence the entire proceedings u/s 153C in the assessee’s case are bad in law and liable to be quashed.

4.1 In support of his contentions, Ld. AR has placed reliance on the decision of the Hon’ble jurisdictional High Court in the case of PCIT vs. Ojjus Medicare Pvt. Ltd. (2024) 465 ITR 101 (Del.), wherein it has been affirmed that the date of search in the case of the other person is the date of handing over of seized documents by the AO of searched person to the AO of the other person.

Further, the ld. AR has placed reliance on the decision of the Hon’ble Madras High Court in the case of Harigovind vs. ACIT (2025) 180 taxmann.com 197, wherein it has been held that proceedings undertaken in such cases after 1.4.2021 u/s 153C were invalid and only proceedings u/s 148 could be initiated after this date.

4.2 Ld. AR has also placed on record, several decisions of the coordinate benches in which the proceedings u/s 153C have been quashed under similar facts and circumstances, relying on the above decisions.

ITA No.- 2857/Del/2026 Nishant Aggarwal satisfaction which was based on the satisfaction recorded by the AO of the searched person on 17.09.2021 and on this date seized incriminating material was handed over to the AO of the assessee.

In view of the proviso of section 153C(1), the deemed date of search in this case therefore, is 17.09.2021. Further, as per the proviso of section 153C(3), no notice in such cases could be issued after 1.4.2021 in view of section 153(3) of the Act as held by the Hon’ble Madras High Court in the case of Harigovind (supra).

6.1 Accordingly, we hold that the issue of notice u/s 153C on 9.10.2021 and the consequential assessment order are invalid and hereby quashed.

6.2 Since, the proceedings have been quashed, rest of the grounds are rendered academic and hence need no adjudication.

Order pronounced in the open court on 16.09.2026

Sd/- Sd/- [VIMAL KUMAR] [RENU JAUHRI] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 16.09.2026. Pooja. Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR 6

ITA No.- 2857/Del/2026 Nishant Aggarwal

Asst. Registrar, ITAT, New Delhi,

1 Date of dictation of Tribunal order 14.09.26 2. Date on which typed draft order is placed before 14.09.26 the dictating Member 3 Date on which typed draft order is placed before the other Member (in the case of DB) 4. Date on which the approved draft order comes to P.S/Sr.P.S 5. Date on which the fair Order is placed before the dictating Member for sign 6. Date on which the fair Order is placed before the other Member for sign ( in the case of DB) 7. Date on which the Order comes back to P.S./Sr.P.S for uploading on ITAT website Date of uploading, if not, reason for not 8. uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which order goes for xerox 11. Date on which order goes for endorsement 12. Date on which the file goes to the Superintendent/O.S. for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to dispatch section for dispatch the Tribunal Order 15. Date of dispatch of order Date on which file goes to Record Room after 16. dispatch the order