PUNIT JAIN,DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, DELHI

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ITA 9110/DEL/2025Status: DisposedITAT Delhi10 August 2026AY 2017-186 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that since the substantive addition made in the hands of another party for the same issue was deleted by a coordinate bench, the protective addition in the assessee's hands could not survive and was deleted. However, the addition on account of unexplained cash deposit was upheld as the assessee failed to substantiate the claim with documentary evidence.

What were the facts?

The Assessing Officer made additions on account of unexplained cash deposit and unexplained cash under Section 69A on a protective basis. The assessee appealed to the CIT(A) who upheld the AO's order. The assessee then appealed to the ITAT.

What were the issues?

Whether a protective addition can survive when the substantive addition has been deleted. Whether the addition on account of unexplained cash deposit is justified without sufficient documentary evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 69A,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI

Before: MS MADHUMITA ROY & SHRI KRINWANT SAHAY

For Appellant: Ca and Sh
For Respondent: Shri Rajesh Kumar Dhanetsa, SR
Hearing: 22/06/2026Pronounced: 10/08/2026

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE MS MADHUMITA ROY, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER

ITA No. 9110/Del/2025 (A.Y 2017-18) Punit Jain Vs. Deputy Commissioner 1271-72, First Floor, Gali of Income Tax, Central No. 2, Fiaz Ganj, Circle-16, New Delhi Bahadurgarh Road, Delhi- 110006, New Delhi (Appellant) (Respondent) PAN: AAJPJ0603P

Assessee by : Sh. Pranshu Singhal, Ca and Sh. Ashu Jain, CA Revenue by: Shri Rajesh Kumar Dhanetsa, SR (DR)

Date of Hearing 22/06/2026 Date of pronouncement 10/08/2026 O R D E R PER MADHUMITA ROY, J. M.: The instant appeal filed by the assessee is directed against the

order dated 31.08.2025 passed by the Ld. Commissioner of Income-

tax (Appeals)-Delhi-26 under Section 250 of the Income Tax Act,

1961 (hereinafter referred to as ‘the Act’) arising out of the

Assessment Order dated 30.12.2019 passed by the Assessment Unit,

Income-tax Department under Section 143(3) of the Act for

Assessment Year 2017-18.

2.

For A.Y. 2017-18 the assessee filed his return of income on

29.08.2017 declaring total income of Rs. 13,08,100/-. The case was

processed u/s 143(1) at the returned income. Subsequently, the

2 ITA No. 9099/Del/2025 Braham Prakash Vs. ITO

case was selected for complete scrutiny under CASS on account of

large cash deposited during demonetization period and abnormal

increase in sales with decrease in profitability as compared to earlier

years. Statutory notices issued under Section 143(2)/142(1) were

duly responded by the assessee. The AO completed the assessment

at Rs. 7,30,88,100/- by adding Rs. 2,80,000/- on account of

unexplained cash deposit u/s 68 and Rs. 7,15,00,000/- under

Section 69A on protective basis to the returned income. In appeal

the Learned CIT(A) affirmed the action of the Learned AO. Hence, the

assessee is in appeal before this Tribunal.

3.

Learned counsel for the assessee at the very outset submitted

that addition of Rs. 7,15,00,000/- was made on protective basis in

the hands of the assessee whereas the substantive addition in the

hands of Nitin Gupta has since been deleted by the coordinate

Bench vide order dated 13.08.2025 rendered in cross appeals filed

by the assessee and the revenue in ITA Nos. 1990 & 2195/Del/2023

for A.Y. 2017-18, by observing as under:

“These assessee’s and Revenue’s cross appeals ITA No.1990 & 2195/Del/2023 for assessment year 2017-18, arise against the Commissioner of Income Tax (Appeals)-31 [in short, the “CIT(A)”], New Delhi’s order dated 10.05.2023 passed in case no. 1121/21- 22, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case files perused.

3 ITA No. 9099/Del/2025 Braham Prakash Vs. ITO

2.

We note at the outset that there arise the twin legal issues of validity of the impugned section 143(3) assessment framed by the Assessing Officer dated 30th December, 2018 inter alia for want of a valid section 153D approval as well as on account of a fact that the learned lower authorities had neither initiated section 148 or section 153C proceedings herein, as the case may be.

3.

We now advert to the basic relevant facts in the instant twin cross appeals. There is not dispute that the learned departmental authorities had carried out the search in question dated 25.11.2016 in Mr. MohitGarg& Others’ cases wherein “certificates/documents belonging to the assessee were seized” as per the assessment order dated 30.12.2018. The assessee filed his return on 28.03.2018 declaring total income/loss of Rs.9,84,010/- . The Assessing Officer issued section 143(2) notice dated 28.09.2018; and, thereafter, he finalized his assessment in question inter alia making various additions which are not discussed herein since we are dealing with the above twin legal issues at this stage. The assessee appears to have challenged the Assessing Officer’s foregoing action before the CIT(A) who has partly accepted his lower appeal. This is what leaves both these parties aggrieved who have preferred their respective cross appeals herein. 4. We now come to the above former issue of validity of the impugned assessment for want of a section 153D approval. Learned counsel has invited our attention to page 10 in his paperbook indicating a common approval dated 29.12.2019 involving total eight persons including the assessee at serial no. 3 in assessment years 2011-12 to 2016-17.

4.

It is in this factual backdrop that we sought to verify the clinching fact herein as to whether there is any separate approval for the impugned assessment year 2017-18 in the assessee’s case or not. No satisfactory reply has come from the Revenue side throwing sufficient light on the issue. We are thus constrained to hold that there was a common approval in the assessee’s and other seven persons’ cases which has already been held as not a substantive compliance to the provisions of the Act in ACIT Vs. Serajuddin and Co. [2024] 163 taxmann.com 118 (SC), PCIT Vs. Anuj Bansal [2024] 466 ITR 254 (SC), PCIT Vs. MDLR Hotels (P) Ltd. [2024] 166 taxmann.com 327 (Delhi), PCIT Vs. Shiv

4 ITA No. 9099/Del/2025 Braham Prakash Vs. ITO

Kumar Nayyar [2024] 163 taxmann.com 9 (Delhi) and PCIT Vs. Sapna Gupta [2023] 147 taxmann.com 288 (All.) already deciding the very issue in assessee’sfavour and against the department. Their lordships further hold that such a mechanical exercises of section 153D approval could not be mechanically finalized in absence of the prescribed authority having properly applied its mind. We thus decide the above former legal question in the assessee’sfavour and against the department to conclude that the impugned assessment framed by the Assessing Officer on 30th December, 2018 is itself a non-est one in the eyes of law.

5.

The outcome would be hardly any different qua the above latter legal issue as well wherein the learned departmental authorities appear to have proceeded against the assessee based on some seized document belonging to him (supra). That being the case, we are of the considered view that in absence of either section 148 reopening proceedings or section 153C proceedings; as the case may be, the learned departmental authorities could not have proceeded against the assessee in the assessment year 2017-18 which happens to be the year of a search. We further wish to quote PCIT Vs. Naveen Kumar Gupta (2024) 168 taxmann.com 574 (Del) that even section 148 proceedings could be initiated in such an instance. We are of the considered view in this backdrop that whether in section 148 or section 153C proceedings, learned Assessing Officer could not have simply proceeded against the assessee u/s 143(3) assessment, and, therefore, we quash his impugned assessment on this latter aspect as well. The Revenue’s corresponding vehement submissions on both these issues are hereby rejected in very terms. All other pleadings between the parties herein stand rendered academic.

6.

This assessee’s appeal ITA No.1990/Del/2023 is allowed and Revenue’s cross appeal ITA No.2195/Del/2023 is dismissed, in above terms. A copy of this common order be placed in the respective case files.”

4.

Ld. DR could not controvert the aforesaid factual position.

Since the substantive addition made in the hands of Nitin Gupta on

5 ITA No. 9099/Del/2025 Braham Prakash Vs. ITO the same issue has been deleted by the Coordinate Bench of the

Tribunal the protective addition made in the hands of the instant

assessee cannot survive. Accordingly, addition of Rs. 7,30,88,100/-

made in hands of the assessee on protective basis is hereby deleted.

5.

As regards addition of Rs. 2,80,000/- the assessee’s stand is

that the Assessing Officer added 10% of the cash deposit of Rs.

28,00,000/- as unexplained cash credit on guess work and

estimation. However looking into the fact that assessee could not

substantiate his claim by adducing clinching documentary evidence

in support of impugned cash deposit we do not find any reason to

interfere with the orders of authorities below on this count. Ground

is rejected.

6.

In the result assessee’s appeal is partly allowed.

Order pronounced in the open court on 10/08/2026.

Sd/- Sd/- (KRINWANT SAHAY) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10/08/2026 R. Naheed, Sr PS

6 ITA No. 9099/Del/2025 Braham Prakash Vs. ITO Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi

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