ANANT ASSOCIATES PRIVATE LIMITED,UTTAR PRADESH vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 30 DELHI, DELHI

`IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “G” BENCH: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER

ITA No.3214/Del/2026 [Assessment Year: 2019-20] Anant Associates Private Limited, vs DCIT, Khasra No.385, Gulishtan Pur, Central Circle-30, Greater Noida, Delhi. Uttar Pradesh-201306. PAN-AABCA0653K APPELLANT RESPONDENT Appellant by Shri Pranshu Singhal, CA and Shri Rahul Bhardwaj, CA Respondent by Shri Jadhav Shukracharya Krupacharya, CIT-DR Date of Hearing 29.07.2026 Date of Pronouncement 19.08.2026

ORDER PER MANISH AGARWAL, AM: This appeal is filed by assessee against the order dated 28.01.2026 passed by Ld. Commissioner of Income Tax (A)-30, New Delhi [“Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 19.03.2025 passed u/s 153C of the Act pertaining to Assessment Year 2019-20.

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persons were recorded. It was found that some incriminating material were seized containing some entries related to the assessee. Subsequently, satisfactions were recorded by AO of the searched person on 10.03.2023 and the documents alongwith the satisfaction note were handed over to the AO of the assessee. Thereafter the AO of the assessee recorded his satisfaction note on 01.05.2023 and initiated the proceedings u/s 153 of the Act for the assessment year 2019-20 and, notice u/s 153C was issued on 01.05.2023. In compliance to the notice issued u/s 153C, the assessee filed return on 05.05.2023, declaring same income of Rs.54,45,640/- as was declared in the return of income filed u/s 139(1) of the Act. Thereafter, notice u/s 143(2) followed by statutory notices u/s 142(1) were issued alongwith detailed questionnaire from time to time to the assessee. After considering the submissions made and material furnished by the assessee, the AO assessed the income of the assessee at 84,45,900/- vide assessment order dated 19.03.2025 passed u/s 153C r.w.s. 143(3) of the Act wherein an addition of Rs. 30,00,256/- was made being purchases made from M/s RR Associates held as bogus and disallowed u/s 37 of the Act.

“1. On the facts and circumstances of the case and in law, the order passed by the Commissioner of Income Tax (Appeals) ('the Ld. CIT(A)') u/s 250 of the Act is bad both in the eyes of the law and on facts. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the proceedings initiated under Section 153C of the Act against the appellant and the assessment framed under Section 153C which are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eyes of the law and liable to be quashed. Page | 2

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3 On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the assessment order passed u/s 153C of the Act pursuant to an invalid notice issued u/s 153C of the Act being not signed either manually or digitally. 4. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the addition made by the Assessing Officer in the order passed u/s 153C of the Act, without any incriminating material having been found during the course of search in relation to the additions so made. 5. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the proceedings initiated under Section 153C of the Act and the assessment framed under Section 153C in the absence of a proper satisfaction being recorded by the AO of the searched person and AO of the assessee company that the incriminating material belonging to the assessee was found during the course of the search. (ii) That the addition has been confirmed despite the fact that the documents on the basis of which addition has been made do not belongs to, pertains to or relates to the assessee. 6. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the approval obtained by the AO under Section 153D of the Act which is not in accordance with the provisions of Section 153D of the Act and is thus, bad in law, illegal and invalid. (ii) That the said approval has been granted in a mechanical manner and as such the assessment order so passed is illegal and void-ab-initio 7. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the reassessment of income at Rs. 84,45,900/- as against the returned income of Rs. 54,45,640/-. 8 (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the disallowance of Rs. 30,00,256/- u/s 37 of the Act on account of alleged bogus purchases made by the assessee from M/s RR Associates. (ii) That the aforesaid addition has been confirmed arbitrarily rejecting the material and evidences brought on record by the assessee to show that the sales were made in regular course of the business out of the material that was purchased in the regular course of business. 9. (i) On the facts and circumstances of the case, Ld. CIT(A) has erred both on facts and in law in confirming the assessment which was made by placing reliance on the statement recorded of third party. (ii) That the addition was made without any corroborating evidence on record to substantiate the statement of the third party. 10. That the appellant respectfully craves for leave to add, amend, alter, omit or substitute any of the grounds of appeal at any time before or at the time of hearing of the appeal.

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possession, documents containing the transaction carried out by the assessee were found thus for the purpose of initiating the proceedings us/ 153C of the Act in the case of assessee, the date of search in the case of Anil Agarwal has to be considered. Ld. CIT DR thus submits that the AO has rightly initiated the proceedings u/s 153C of the Act which deserves to be held as valid proceedings. It is thus prayed for the confirmation of the initiation of proceedings u/s 153C of the Act in the present case.

153C.Assessment of income of any other person.— (1) “Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,— (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned

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have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in subsection (1) of section 153A Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated. ( 2) Where books of account or documents or assets seized or requisitioned as referred to in subsection (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year— (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. (3) Nothing contained in this Section shall apply in relation to a search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132A on or after the 1st day of April, 2021.”

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of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. As observed above, in the present case, the AO of the assessee has received the seized material from the AO of the person searched on 10.03.2023 thus the date of search in the case of assessee should be 10.03.2023. This view is supported by the judgement of Hon’ble Jurisdictional High Court in the case of Ojjus Medicare (supra), the headnote reads as under: “Section 153C of the Income-tax Act, 1961 - Search and seizure - Assessment of any or person (Block assessment) - Assessment years 2010-11 to 2013-14 - Whether first proviso to section 153C, and which has been consistently recognized to also embody commencement point for reckoning six or ten assessment years’, shifts relevant date from date of initiation of search or a requisition made to date of receipt of books of account or documents and assets seized by jurisdictional Assessing Officer of non- searched person - Held, yes Whether furthermore where date of handing over of documents was not available, date of issuance of satisfaction Note by Assessing Officer under section 153C would be pertinent for purpose of First Proviso to section 153C - Held, yes - Whether significant difference between computation of relevant assessment year for identification of six assessment years and to construct a block of ten assessment years is that while six assessment years’ hinge upon phrase “immediately preceding” assessment year pertaining to search year, ten assessment years’ are liable to be computed or reckoned from end of assessment year relevant to year of search - Held, yes - Whether thus, in instant case where satisfaction note were issued between 1-4- 2021 and 31-3-2022, relevant assessment year would be 2022-23 and assessment years’ 2010-11, 2011-12 and 2012-13 would clearly fall outside block period of ten assessment years as provided under section 153C read with section 153A - Held, yes [Paras 85, 86, 96 and 97] [In favour of assessee].”

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"153C(3).nothing contained in this Section shall apply in relation to a search initiated under Section 132 or books of account, other documents or any assets requisition under Section 132A on or after the 1st day of April, 2021" which means, if the search is initiated subsequent to 01.04.2021, the provision of Section 153C will not apply and accordingly, no proceedings can be initiated against the other person. 42. According to the petitioner, the date of handing over of the seized materials, i.e., 25.11.2022, is the date of initiation of search. If the said contention of the petitioner is accepted, obviously, the issuance of impugned notices dated 07.02.2023 by the 2nd respondent is without any authority and contrary to Sub-Section (3) of Section 153C of the Act and thus, the same is liable to be quashed. 43. In terms of Sub-Section (1) of Section 153C of the Act, for the purpose of calculating the six years period, the date of handing over of the materials to the petitioner's JAO has to be construed as the date of initiation of search for other person. Further, in terms of first proviso to Sub-Section (1) of Section 153C, for the purpose of abatement also, the date of handing over of the materials to the petitioner's JAO has to be construed as the date of initiation of search for the other person. In such view of the matter, this Court is unable to comprehend the submissions made by the learned counsel for respondents that yet another date is available for the purpose of initiation of search in respect of the other person. 44. Certainly, there cannot be two different dates for initiation of search for the other person. Hence, for all practical purpose, the initiation of search would be the same date and it is apparent upon reading the provisions of Section 153C of the Act. In the provision of Section 153C(1) of the Act, the date of initiation of search is mentioned as the date of handing over of materials and as per the first proviso, the same date would apply for the purpose of abatement also. When such being the case, no other date will come into picture for the purpose of determination of initiation of search for other person. At this juncture, it would be apposite to refer the judgement rendered by the Hon'ble Apex Court in Jasjit Singh (supra), wherein, it was held on the aspect as to whether the first proviso to Section 153C would apply only for the purpose of abatement of pending proceedings or otherwise. 45. When a similar contention was raised before the Hon'ble Supreme Court in the aforesaid case of Jasjit Singh (supra), the same was recorded in the said judgement as "..The revenue argued that the proviso to Section 153C(1), is confined in its application to the question of abatement". However, while deciding the said issue, the Hon'ble Apex Court had arrived at a conclusion and rendered its judgement by stating that

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".the revenue's argument is insubstantial and without merit".. When such being the case, it is clear that the Hon'ble Apex Court had rejected the contention of the revenue that "the first proviso to Section 153C(1), is confined in its application to the question of abatement", which means, as per the law laid down by the Hon'ble Apex Court, the said provision is not only for the purpose of abatement but also for all the other practical purposes. 46. For ready reference, the relevant portion of the judgement rendered in the case of Jasjit Singh (supra) is extracted hereunder: "9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. 10. This Court is of the opinion that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials - of the search party, under Section 132 - would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event 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 dis-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third party assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 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. [**Emphasis supplied] 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 petitioner. 48. In terms of Sub-Section (3) of Section 153C, the provision of Section 153C will not apply for any search, which is initiated on or after 01.04.2021.

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ITA No.3214/Del/2026