SUNIL KUMAR AGARWAL,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 16, DELHI, DELHI

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ITA 7231/DEL/2025Status: DisposedITAT Delhi29 April 2026AY 2021-223 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found merit in the assessee's legal ground challenging the validity of the section 143(3) assessment order. The assessment order was quashed as it was not framed under the appropriate section given the search conducted.

What were the facts?

The assessee's assessment year 2021-22 was subject to a search under section 132 on November 17, 2021. The assessee argued that this search covered the assessment year, and therefore, a regular assessment under section 143(3) was invalid.

What were the issues?

Whether a regular assessment under section 143(3) is valid when the assessment year is covered by a search conducted under section 132, and if section 147 proceedings should have been initiated instead.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA

Hearing: 09.04.2026Pronounced: 09.04.2026

PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2021-22, arises against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)/NFAC”], Delhi-26 order dated 19.09.2025 passed in DIN & Order No. ITBA/NFAC/S/250/2025-26/1080922303(1), involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

ITA No.7231/Del/2025 2. Learned counsel submits at the outset that the assessee wishes to press his first and foremost legal ground/ argument challenging validity of the impugned section 143(3) assessment order dated 04.02.2023 itself. This is for the precise reason that the learned departmental authorities admittedly appear to have carried out the section 132 search including the assessee on 17.11.2021. The assessee’s case in this factual backdrop is that since the impugned assessment year A.Y. 2021-22 is very well covered under the clinching statutory expression of “three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated”, the learned lower authorities could not have proceeded to frame only a “regular” assessment in his case in assessment year A.Y. 2021- 22 going by the aforesaid date of search. And that the only option available to them so to proceed against him u/s 147 of the Act as held in (2026) 182 taxmann.com 11 (Del) Montage Enterprises (P) Ltd. vs DCIT and other various judicial precedents to this effect.

3.

Faced with this situation, we find merit in the assessee’s instant first and foremost legal ground to reject the Revenue’s vehement contentions supporting the impugned section 143(3)

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ITA No.7231/Del/2025 assessment dated 04.02.2023 framed in his hands to quash the same in very terms.

All other remaining pleadings between the parties on merits stand rendered academic.

This assessee’s appeal is allowed. 4.

Order pronounced in the open court on 9th April, 2026.

Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 29.04.2026 Pooja Mittal/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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