RADICO KHAITAN LIMITED,RAMPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-31, NEW DELHI, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “E” BENCH: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER

ITA No.2890/Del/2026 [Assessment Year : 2020-21] RADICO KHAITAN vs ITO, WARD 48(2), NEW LIMITED, DELHI RAMPUR DISTILLARY, JAO: ITO, WARD 46(4), BAREILLY ROAD, NEW DELHI RAMPUR, UTTAR PRADESH-244901 PAN:AAGPG3246A APPELLANT RESPONDENT Appellant by Shri Ashwani Kumar, CA & Sh. Ankur Agarwal, CA Dr. Rajinder Kaur, CIT(DR) Respondent by Date of Hearing 13.08.2026 Date of Pronouncement 19.08.2026

ORDER PER MAHAVIR SINGH, VP : This appeal filed by the assessee emanates from the order of the Ld. Commissioner of Income Tax (Appeals-30), Delhi ([CIT(A)] in appeal no. CIT(A), Delhi-30/10830/2019-20 dated 14.2.2026 arising from the assessment order passed by the Assessing Officer dated 23.3.2024 under Section 153C r.w.s. 153A of the Income Tax Act (‘the Act’ in short) for AY 2020-21.

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jurisdiction u/s. 153C of the /Act. The primary jurisdictional issue requiring adjudication is whther the notice issued u/s. 153C of the Act dated 29.3.2023 complied with the requirement prescribed u/s. 153C of the Act or not.

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was issued on 29.3.2023 requiring the assessee to furnish return of income for the year under consideration within 30 days from the service of said notice. In this case original return was filed by the assessee u/s. 139(1) of the Act on 9.2.2021 declaring income of Rs. 286,75,98,960/- for the year under consideration. The return was processed u/s. 143(1) of the Act on 27.12.2021 at income of Rs. 286,77,31,230/-. The Assessing Officer after going through the contents of incriminating documents recorded satisfaction note dated 29.3.2023 and issued notice under section 153C of the Act on 29.3.2023 requiring the assessee to file return of income for relevant assessment year 2020-21 and in response to the same, the assessee e-filed the return of income on 27.4.2023 declaring income of Rs. 284,43,93,610/-. Notice u/s. 143(2) was issued and served upon the assessee on 1.5.2023. The notices u/s. 142(1) alongwith the questionnaire were issued through ITBA requiring assessee to file its submissions. In response, asssessee submitted its reply. AO noted that assessee has incurred unaccounted expenditure in the fork of commission paid amounting to Rs. 1,53,02,785/- on sale of IMFL but failed to record such expenses in the book of accounts. The explanation offered by the assessee was not found satisfactory by the AO. Thus, he made the addition of Rs. 1,53,02,785/- on account of unexplained expenses and assessed the income at Rs. 288,30,34,015/-. Against the action of the AO, assessee preferred the appeal before the CIT(A), who vide his impugned order dated 14.2.2026 dismissed the appeal of the assessee. Aggrieved, assessee is in appeal before us. 4. At the time of hearing, Ld. AR for the assessee submitted order passed by the AO is illegal and ab inito void. The assumption of jurisdiction by the AO u/s. 153C that as per first proviso of the Act is illegal and hence, all the subsequent Page | 3

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proceedings are also liable to be quashed. In this case notice u/s. 153C of the Act was issued to the assessee company on 29.3.2023 on the basis of documents / material relating to the assessee company allegedly seized during the course of search operations on 27.2.2020 conducted on the Raipur Group. It was further argued that in the present case the satisfaction note in terms of section 153C was recorded on 29.3.2023. According to the Ld. Counsel for the Assessee in view of the decision of the Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh reported in 458 ITR 437 (SC) wherein search conducted at 3rd party premises and seized material were handed over, the date of handing over of the seized material was to be construed as date of initiation of search action, the other person in terms of provisions of section 153C of the Act. Further the Hon’ble Supreme Court has confirmed the decision of the Delhi High Court. Accordingly, learned counsel for the assesse argued that in terms of satisfaction note recorded by the Assessing Officer dated 29.3.2023 when he received the seized material. Ld. Counsel further argued that as there is amendment in the provisions of sub-section 3 of section 153C whereby as per first proviso there is a bar for invoking the provisions of section 153C of the Act with effect from 1 April 2021. Ld. Counsel stated that in the present case also the documents were received by the AO of the assessee on 29.3.2023 on which date he recorded his satisfaction which is enclosed in the APB that means the AO issued notice u/s. 153C of the Act is bad in law whereas assessment should have been framed u/s. 148 read with section 143(3) of the Act. For this proposition, Ld. Counsel for the assessee relied on the decision of the CIT vs. Jasjit Singh (Supra) and the also the decision of the Hon’ble Madras High Court in the case of Harigovvind vs. ACIT 485 ITR 509 (Madras). 5. When these facts were confronted to the Ld. CIT (DR) she could not controvert the above fact situation, but she relied on the assessment order and the order of the learned CIT. Page | 4

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section 132 – would take his own time to forward the papers and materials belonging to the third party, to the concerned AO. In that even if the date would virtually “relate back” as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is disproportionate. For instance, if the papers are in fact assigned under section 153C after a period of four years, the third party assessee’s prejudice in writ large as it would have to virtually preserve the records for at least 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of section 153- C supports the interpretation which this Court adopts. 7. Further, Hon’ble Madras High Court in the case of Harigovind vs. ACIT (Supra) has considered this issue and held that in case where search is initiated after 1st April 2021 the provisions of section 153C will not apply and assessment can only be framed in terms of section 148 of the Act. Hon’ble Madras High Court considered decision of Honorable Supreme Court in the case of CIT versus Jasjit Singh (supra) and has held as under:- 47. A reading of the above shows that the Hon’ble Apex Court had rejected the contention of the respondent and hence, it is clear that the first proviso to Sub-Section (1) of Section 153C is not only for the purpose of abatement but also for all other purposes, viz., initiation of search for other person in terms of section 153C(3) of the Act. In such case, the date of initiation of search for the petitioner is the date, on which the documents were handed over to the JAO of the petitioner, i.e., 25.11.2022 is the date of initiation of search for the petition. 48. In terms of Sub-Section (3) of Section 3 of Section 153C, the provision of Section 153C will not apply for any search, which is initiated on or after 1.4.2021. 49. As stated above, in this case, the date of handing over of seized material to the petitioner’s JAO is on 25.11.2022 And the said date is the date of initiation of search for the Page | 6

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petitioner. Thus, in the present case, it is crystal clear like cloudless sky that the initiation of search was subsequent to 1.4.2021, for which, the provisions of section 153C will not apply. Therefore, the impugned notices dated 7.2.2023 is unsustainable and the same were issued without authority and against the provisions of sub-section (3) of Section 153C of the Act. 50. In such view of the matter, all the impugned notices are liable be quashed and accordingly, all the impugned notices dated 7.2.2023 issued by the 2nd respondent are quashed.” 8. As the issues are covered, in the present case notice under section 153C of the Act dated 29.03.2023 is without jurisdiction and hence quashed and its consequent assessment is also quashed. As regards other pleadings are concerned the same have become academic. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 19.08.2026.

Sd/- Sd/-

(KRINWANT SAHAY) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT SRBhatnagar Date: 19-08-2026 Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order,

Assistant Registrar, ITAT, Page | 7

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Delhi Bench