DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI vs. NUTSHELL VYAPAAR PVT LTD., NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”, NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No. 5897/Del/2026, A.Y. 2014-15 Deputy Commissioner of Vs. Nutshell Vyapaar Pvt. Ltd. Income Tax, 4th Floor, IB, Office of the DCIT, Black Burn Lane, Central Circle 28, Bowbazar, Jhandewallan, New Delhi Kolkata- 711109 West Bengal �थायीलेखासं./जीआइआरसं./PAN/GIR No: AAACN8458J Appellant .. Respondent Cross Objection 332/Del/2026 In ITA No. 5897/Del/2026, A.Y. 2014-15 Nutshell Vyapaar Pvt. Ltd. Vs. Deputy Commissioner of 4th Floor, IB, Income Tax, Black Burn Lane, Office of the DCIT, Bowbazar, Central Circle 28, Kolkata- 711109 Jhandewallan, New Delhi West Bengal �थायीलेखासं./जीआइआरसं./PAN/GIR No: AAACN8458J Appellant .. Respondent

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Appellant by : Sh. Sumit Lalchandani, Adv. Sh. Vinod Gupta, AR Sh. Shivam Yadav, Adv. Respondent by : Shri Robin Rawal, CIT- DR Date of Hearing 20.08.2026 Date of Pronouncement 20.08.2026

O R D E R PER VIMAL KUMAR, JM: The application for condonation of delay of 26 days in filing appeal and the appeal filed by the Revenue and cross objections filed by the assessee are against order dated 19.01.2026 of ld. Commissioner of Income Tax (Appeals)- 27, New Delhi [hereinafter referred to as “the CIT(A)”] under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out of assessment order dated 31.03.2023 of ld. Assessing Officer/ DCIT, Central Circle-28, New Delhi (hereinafter referred to as ‘the AO’) u/s 153C of the Act for A.Y. 2014-15.

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of the act, the assessee filed return of income delcaring income of Rs. 34,880/- on 08.01.2022. A search and seizure procedure u/s 132 of the Act was carried out on the Alankit Group, Sh. Alok K Agarwal, his son Ankit Agarwal and some associates and key employees of Sh. Alok K Agarwal on 18.10.2019. Incriminating seized evidences recovered were found in the name of the assessee; hence, the case was centralized to Central Circle-28, New Delhi. Notice u/s 153C of the Act dated 28.12.2021 was issued. Further, notices u/s 143(2) of the Act dated 14.12.2022 and notice u/s 142(1) of the Act dated 15.12.2022 were issued. Notice u/s 143(2) of the Act dated 15.12.2022 was issued. Notices u/s 142(1) of the act issued to the assessee. The assessee filed submissions. Show cause notice dated 24.02.2023 and 06.03.2023 were issued. The assessee has reported its income in the ITR as income from business and profession and income from other sources. Satisfaction note prepared by jurisdictional assessing officer was provided to assessee vide notice dated 10.11.2022. Copy of incriminating seized documents in the form of ledger accounts along with the relevant extract of the statement of Sh. Sunil Kumar Gupta was also provided to assessee on 30.01.2023. On completion of proceedings, ld. AO vide order dated 31.03.2023 made addition of Rs. 25 lacs u/s 69A of the act.

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2.1 Against order dated 31.03.2023 of ld. AO, the assessee filed appeal before Ld. CIT(A) which was allowed vide order dated 19.01.2026.

“1. Whether on the facts and under the circumstances of the case and in law, the Ld.CIT(A) was justified in relying upon the judgement of Hon'ble Delhi High Court in the case of PCIT. Central-1, Delhi vs Ojjus Medicare Pvt. Ltd. (ITA No. 52 of 2024), even when the Revenue has filed a SLP against this decision of the Hon'ble Delhi High Court? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that 10 years block periods for assessment u/s 153C of the Income-tax Act, 1961, have to be calculated from the relevant AY in which date of satisfaction note drawn or from the date of issue of Notice /s 153C of the Act and not from the date of initiation of searcheven when Section 153C(1) of the Act clearly mentions that calculation of block period has to be done from the year of search? 3. Whether on the facts and under the circumstances of the case and in law, Ld.CIT(A) was justified in relying was justified in holding that block periods for assessment w/s 153C of the Income-tax Act, 1961, have to be calculated from the date of satisfaction note drawn or date of Notice issued u/s 153C of the Act, even

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when the position of law is clarified after the amendment introduced by Finance Act, 2017, that the block period of 6AYs and 10AYs as mentioned in sub-section (1) of Section 153C and Section 153A have same meaning and have to be calculated from the "assessment year relevant to the previous year in which search is conducted"? 4. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. 5. That the grounds of appeal are without prejudice to each other.” 6. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.” 6. The assessee pleaded cross objections on following grounds:

“1. That the impugned assessment order passed under Section 153C of the Income Tax Act, 1961 ('the Act') by the Assessing Officer ('AO') are fundamentally flawed, being without jurisdiction, barred by limitation, and passed in violation of the statutory framework governing such proceedings, thereby rendering them legally unsustainable. 2. That, on the facts and in the circumstances of the case and in law, the impugned assessment order passed under section 153C of the Act is barred by limitation and consequently without jurisdiction, having been passed beyond the period prescribed under section 153B of the Act, read with section 127 and other applicable provisions, and is therefore liable to be quashed. The Assessee craves leave to add to, alter, amend, and/or withdraw any ground or grounds of appeal either before or during the course of hearing the appeal.” 7. Ld. Authorized Representative for assessee submitted that the impugned assessment order is barred by limitation and without jurisdiction having been passed beyond prescribed under section 153B r.w.s. 127 of the Act. Reliance was placed on order dated 27.07.2026 in ITA No. 3823 to 3830/Del/2026 titled as Sudhir Agrawal vs. DCIT.

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other than searched person was recorded on 24.12.2021 page No. 184-207 of paper book. Notice issued u/s 153C of the Act in the case of assessee is dated 28.12.2021, page No. 317 of paper book and assessment order u/s 153C of the Act in the case of assessee dated 30.03.2023 is on page No. 100-157 of paper book. 10. A co-ordinate Bench of ITAT in ITA No. 5149/Del/2025 titled as Ajay Gupta vs. DCIT in order dated 16.02.2026 in para No. 2 to 7 is reproduced as under: “2. At the outset, the ld counsel for the assessee drew our attention to the first ground that the order passed by the ld AO u/s 144 r.w.s. 153C of the Act is barred by limitation and hence, without jurisdiction. The relevant grounds reads as under:- “1. That, the notice dated 29.06.2022 issued under Section 153C of the Income Tax Act, 1961 ('the Act') and the assessment order dated 16.03.2024 passed under Section 144 r.w.s. 153C of the Act by the Assessing Officer ('AO') are illegal, bad in law, barred by limitation and without jurisdiction.” 3. The ld counsel for the assessee explained that search u/s 132 of the Act was conducted on M/s. Hans Group on 06.01.2021. During the course of search incriminating documents were seized in relation to assessee herein also. The AO while completing the assessment in M/s. Hans Group of cases noted that certain seized documents pertained to an information contained thereon relevant to Ajay Gupta i.e. person other than searched person, hence, a satisfaction note was drawn on 28.06.2022 to initiate proceedings u/s 153C r.w.s. 153A of the Act in the case of the assessee for AYs. 2015-16 to 2020-21. The relevant assessment year before us is AY 2015-16. The ld counsel for the assessee stated that the assessee’s case was transferred to the Central Circle31, New Delhi by the order passed by the ld PCIT u/s 127 of the Act on 14.02.2022. The ld counsel for the assessee further stated that notice u/s 153C of the Act was issued to the assessee by ACIT, Central Circle-31, Delhi dated 29.06.2022. The original return of income was filed by the assessee u/s 139(1) of the Act on 29.09.2015 and in response to the notice u/s 153C of the Act, the assessee stated that the return originally filed may be treated as a return in response to the notice u/s 153C of the Act. Accordingly, the assessment was completed by the ld DCIT, Central Circle-31, New Delhi vide order dated 16.03.2024. According to the ld counsel, the assessment order passed u/s 153C r.w.s. 144 of the Act is barred by limitation. Ld counsel for the assessee stated that in terms of provisions of Section 153B(1)(b)(ii) of the Act, there are two limbs provided in this Clause (ii). Ld counsel for the assessee explained that as per Clause (ii), there are two limbs that provides the time limit for completion of assessment u/s 153C of the Act and the first limb of Clause (ii) of the said provision provides the time limit for completion of assessment within 12 months from the end of the Financial Year in which last authorization of search u/s 132 of the Act is executed. According to the ld counsel, as per this, time limit of assessment u/s 153C of the Act in the assessee’s case should have been completed by 31.03.2022 as date of search u/s 132 of the Act is dated 06.01.2021. The second limb of Clause (ii) of the said provision provides that time limit is 12 months from the end of the FY in which books of account or documents seized are handed over u/s 153C of the Act of that 3rd party. According to the ld counsel, the order passed u/s 127 of the Act dated 14.02.2022 with the same AO of the searched person as well as other than the searched person i.e. the assessee herein, is the same AO i.e. DCIT, Central Circle-31, Delhi. The ld counsel for the assessee stated that this issue now stands covered by the decision of the Hon’ble Bombay High Court in the case of Vijay Bihari Kandhari Vs. ACIT in Writ Petition No. 2764 of 2022

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dated 17.11.2025 wherein, the Hon’ble Bombay High Court considered the decision of the Hon'ble Supreme Court in the case of Super Malls Pvt. Ltd Vs. PCIT 423 ITR 281 wherein, it is held that the requirement of transmitting the documents seized from the searched person would not arise if the AO of the searched person and the other person is one and same. There is no question of transmitting such seized documents to oneself. The ld counsel for the assessee drew our attention to the decision of the Hon'ble Supreme Court in the case of Super Malls (supra) wherein, it is held in para 6 as under:- "6. This Court had an occasion to consider the scheme of Section 153C of the Act and the conditions precedent to be fulfilled/complied with before issuing notice under Section 153C of the Act in the case of Calcutta Knitwears (supra) as well as by the Delhi High Court in the case of Pepsi Food Pvt. Ltd. (supra). As held, before issuing notice under Section 153C of the Act, the Assessing Officer of the searched person must be "satisfied" that, inter alia, any document seized or requisitioned "belongs to" a person other than the searched person. That thereafter, after recording such satisfaction by the Assessing Officer of the searched person, he may transmit the records/documents/things/ papers etc. to the Assessing Officer having jurisdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of such other documents relating to such other person, the jurisdictional Assessing Officer may proceed to issue a notice for the purpose of completion of the assessment under Section 158BD of the Act and the other provisions of Chapter XIV-B shall apply. 6.1 It cannot be disputed that the aforesaid requirements are held to be mandatorily complied with. There can be two eventualities. It may so happen that the Assessing Officer of the searched person is different from the Assessing Officer of the other person and in the second eventuality, the Assessing Officer of the searched person and the other person is the same. Where the Assessing Officer of the searched person is different from the Assessing Officer of the other person, there shall be a satisfaction note by the Assessing Officer of the searched person and as observed hereinabove that thereafter the Assessing Officer of the searched person is required to transmit the documents so seized to the Assessing Officer of the other person. The Assessing Officer of the searched person simultaneously while transmitting the documents shall forward his satisfaction note to the Assessing Officer of the other person and is also required to make a note in the file of a searched person that he has done so. However, as rightly observed and held by the Delhi High Court in the case of Ganpati Fincap (supra), the same is for the administrative convenience and the failure by the Assessing Officer of the searched person, after preparing and dispatching the satisfaction note and the documents to the Assessing Officer of the other person, to makea note in the file of a searched person, will not vitiate the entire proceedings under Section 153C of the Act against the other person. At the same time, the satisfaction note by the Assessing Officer of the searched person that the documents etc. so seized during the search and seizure from the searched person belonged to the other person and transmitting such material to the Assessing Officer of the other person is mandatory. However, in the case where the Assessing Officer of the searched person and the other person is the same, it is sufficient by the Assessing Officer to note in the satisfaction note that the documents seized from the searched person belonged to the other person. Once the note says so, then the requirement of Section 153C of the Act is fulfilled. In case, where the Assessing Officer

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of the searched person and the other person is the same, there can be one satisfaction note prepared by the Assessing Officer, as he himself is the Assessing Officer of the searched person and also the Assessing Officer of the other person. However, as observed hereinabove, he must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. In such a situation, the satisfaction note would be qua the other person. The second requirement of transmitting the documents so seized from the searched person would not be there as he himself will be the Assessing Officer of the searched person and the other person and therefore there is no question of transmitting such seized documents to himself. " (Emphasis supplied) 4. Hon'ble Supreme Court held that where the AO of the searched person and other than the searched person is the same, it is sufficient by the AO to note in the satisfaction note that the documents seized from the searched person belonged to the other person and once the notice was sent then requirement of Section 153C of the Act is fulfilled. In case where the Assessing Officer of the searched person and the other person is the same there can be one satisfaction note prepared by the Assessing Officer as he himself is the Assessing Officer of the searched person and also the Assessing Officer of the other person. The ld counsel for the assessee before us filed a chart of chronology of dates which reads as under:- Sl No. Particulars ITA No. 5149/Del/2025 Remakrs, if any 1. Search under Section 132 06.01.2021 of the IncomeTax 06.01.201 Act, 1961 (‘the Act’) 06.01.2021 2. Order passed under Section 127 of the Act 3. Date of Satisfaction note 28.06.2022 Issued by DCIT, drawn in the present case Cenral Circle-31, Delhi 4. Notice issued under 29.06.2022 Issued by ACIT, section 153C of the Act Cetral Circle-31, Delhi 5. Assessment order passed 16.03.2024 Passed by DCIT, under Section 153C/144 Central Circle-31, of the Act Delhi 5. From the above chart, the ld counsel explained that once the order u/s 127 of the Act is passed and the assessee’s case is transferred to the AO with whom the searched assessee’s case i.e. in the present case Hans Group are lying including the seized material of the assessee, the requirement as envisaged in provisions of Section 153C of the Act are fulfilled. Hence, he stated that limitation starts with date of 14.02.2022. Ld counsel for the assessee hence stated that the assessee’s case is squarely covered by the decision of the Hon'ble Supreme Court in the case of Super Malls (supra) and the decision of the Hon’ble Bombay High Court supra. When these facts are confronted with the ld CIT DR he stated that the Hon’ble Supreme Court in the case of Jasjit Singh reported in 2023 INSC 882 had held that the date of search of the third party would be the date on which the documents were handed over by the AO of the searched person to the AO of the third party. In the instant case, the date of handing over of seized documents to the AO of the assessee was 28-06-2022 on which date satisfaction note was

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recorded. Hence considering the limitation as per Clause(ii) of Section 153B of the Act, the AO of the assessee has got time to complete the assessment upto 31.3.2024 and hence the assessment framed on 16.3.2024 is not barred by limitation. 6. We have heard the rival contentions and gone through the material available on record. In the present case admittedly search was conducted on M/s. Hans Group on 06.01.2021, from where certain seized documents/ data pertain to an information contained thereon related to the present assessee Shri Ajay Gupta (person other than searched person) and accordingly initiated proceedings u/s 153C read with Section 153A of the Act in the case of the present assessee for AYs 2015-16 to 2020-21. Now the question arise what is limitation in this case. The case records of the present assessee was transferred to DCIT, Central Circle-31, New Delhi by the ld PCIT vide order passed u/s 127 of the Act dated 14.02.2022, on which date, the entire seized material came to be handed over to the AO of the assessee in terms of decision of the Hon'ble Supreme Court in the case of Super Malls (supra). Hence, reckoning the due date from 14.2.2022, the assessment order passed on 16.03.2024 is clearly barred by limitation. 7. In view of the aforesaid observations, we quash the search assessment framed u/s 153C of the Act for the AY 2015-16 for more than one reason. Accordingly, the ground No. 1 raised by the assessee is allowed for the year under consideration.” 11. From perusal of above material facts i.e. search dated 18.10.2019, order u/s 127 of the act dated 20.10.2020, recording of satisfaction note dated 24.12.2021, issuance of notice u/s 153C of the act dated 28.12.2021, it is evident that the records of assessee were transferred to DCIT, Central Circle-28, Delhi as per order dated 20.10.2020 page No. 314 to 316 of paper book. Hence, by respectfully following the judicial precedents, the limitation started from 20.10.2020 i.e. date of order u/s 127 of the Act, the assessment order dated 30.03.2023 is held to be barred by limitation. Accordingly, ground of appeal No. 1 is allowed. 12. Since, entire assessment is quashed on legal ground and other grounds of appeal No. 2 to 15 having become academic in nature are left open.” 11. In view of above material facts i.e. date of search u/s 132 of the act dated

18.10.2019 order u/s 127 of the act in the case of assessee dated 10.02.2021, date

of satisfaction note in case of assessee of AO of other searched person dated

24.12.2021, notice u/s 153C of the Act in case of assessee dated 28.12.2021, the

assessment order u/s 153C of the act dated 31.03.2023 has been rightly quashed

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by Ld. CIT(A). Accordingly, cross objections of the assessee are accepted and grounds of appeal of the Revenue are rejected.

Order pronounced in the open court on 20.08. 2026.

Sd/- Sd/- (SANJAY AWASHI) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 07.09.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI