ABHISAR ESTATES PRIVATE LIMITED,NEW DELHI vs. DCIT, CENTRAL CIRCLE

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ITA 7033/DEL/2025Status: DisposedITAT Delhi20 April 2026AY 2017-185 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 held that the deemed date of search for the assessee was 10.05.2022. As this date is after 01.04.2021, section 153C(3) of the Act, which prohibits assessments under section 153C for searches initiated on or after 01.04.2021, applies.

What were the facts?

A search was conducted in the Alankit Group on 18.10.2019. The Assessing Officer recorded satisfaction on 10.05.2022, and a notice under section 153C was issued to the assessee on 27.05.2022. The assessee argued that the assessment under section 153C was invalid due to an amendment to the section.

What were the issues?

The primary issue was the validity of the notice issued under section 153C and the subsequent assessment in light of the amendment to section 153C(3) of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 153C,Section 132,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “C”, DELHI

Hearing: 10/02/2026Pronounced: 10/02/2026

आयकर अपीलीय अधिकरण धिल्ली पीठ “सी”, धिल्ली श्री धिकास अिस्थी, न्याधयक सिस्य एिं श्री ब्रजेश कुमार ससिंह, लेखाकार सिस्य के समक्ष IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER आअसं. 7033/धिल्ली/2025 (धि.ि. 2017-18) ITA No. 7033/DEL/2025 (A.Y. 2017-18) Abhisar Estates P. Ltd., C-426, Defense Colony, New Delhi 110024 ...... अपीलार्थी/Appellant PAN: AAACA-2494-D बिाम Vs. Deputy Commissioner of Income Tax, Central Range-28, E-2 Jhandewalan Extension, .....प्रधििािी/Respondent New Delhi 110055 अपीलार्थी द्वारा/ Appellant by: S/Shri G.S Alag & Rajnish Dang, Chartered Accountants प्रधििािीद्वारा/Respondent by: Ms. Richa Gaharwar, CIT-DR सुििाई की धिधर्थ/ Date of hearing : 10/02/2026 घोषणा की धिधर्थ/ Date of pronouncement : 10/02/2026 आिेश/ORDER PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Principal Commissioner of Income Tax (Appeals)-25, New Delhi (hereinafter referred to as ‘the PCIT(A)’) dated 29.09.2025, for AY 2017-18.

2.

Shri G.S. Alag, appearing on behalf of the assessee assailing validity of the notice issued u/s.153C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.05.2022 and the consequent assessment order dated 05.03.2024 passed u/a.153C of the Act submits that, in light of the amendment by way of insertion of sub-section (3) to section 153C of the Act, the assessment in the case of the assessee could not have been made under the provisions of section 153C of

2 ITA No.7033/DEL/2025 (A.Y. 2017-18) the Act after 01.04.2021. Narrating facts of the case, he submits that a search and seizure action u/s.132 of the Act was carried out in the case of Alankit Group on 18.10.2019. After receipt of the seized and alleged incriminating material, the Assessing Officer (AO) of the assessee recorded satisfaction on 10.05.2022 (at pages 2 to 4 of the paper book). Thereafter, notice u/s.153C of the Act was issued to the assessee on 27.05.2022. The ld. AR submits that, as per the first proviso to section 153C(1) of the Act, the date on which the books of account or documents or assets seized are received by the AO having jurisdiction over the assessee (other person) that date shall be construed as the date of search u/s.132 of the Act in the case of other person. Where the date of receipt of books of account or documents, etc. by the AO of the other person is not available, the date on which satisfaction is recorded by the AO of the other person shall be treated as the date of search. In support of his submissions, the ld. AR placed reliance on the decision of Tribunal in the case of Geetanjali Bhayana vs. DCIT (183 taxmann.com 95-Delhi-Trib.). He further submitted that where the deemed date of search is on or after 01.04.2021, assessment u/s.153C of the Act cannot be initiated in view of the newly inserted sub-section (3) to section 153C of the Act w.e.f. 01.04.2021. In support of his arguments, he again placed reliance on the decision of Tribunal in the case of Geetanjali Bhayana vs. DCIT (supra).

3.

Per contra, Ms. Richa Gaharwar, representing the Department strongly supported the assessment order and the order of the CIT(A) and submitted that the assessment in the case of assessee u/s.153C of the Act was made consequent to incriminating documents found during the course of search and seizure action in the case of Alankit Group. From the search material, it was evident that the

3 ITA No.7033/DEL/2025 (A.Y. 2017-18) assessee had made cash payment of Rs.4,91,830/- for which no cogent explanation was furnished. Accordingly, the AO made an addition of Rs.4,91,000/- under section 69A of the Act.

4.

Both sides heard, orders of the authorities below examined. The short issue for consideration in the present appeal is whether the notice issued u/s.153C of the Act and the consequent assessment made thereunder are valid in the facts and circumstances of the case. The relevant dates, i.e., the date of search in the case of Alankit Group (18.10.2019); the date of satisfaction note (10.05.2022); and the date of notice u/s. 153C of the Act (27.05.2022), are not in dispute. The first proviso to section 153C(1) of the Act mandates that, in the case of “other person,” the the date of search shall be the date of receiving books of account or documents or assets seized or requisitioned by the AO having jurisdiction over such other person. In the present case, the date of receipt of books or seized material by the AO of the assessee does not emanate from the record. Therefore, the date of recording satisfaction shall be deemed to be the date of receipt of books or seized material by the AO of the assessee [Re: Ojjas Healthcare Pvt. Ltd., 161 taxmann.com 160 (Delhi)]. Thus, in the present case, the relevant date would be 10.05.2022.

5.

Now, as the date of search is after 01.04.2021, the provisions of section 153C of the Act would not apply in light of sub section (3) to section 153C of the Act inserted by the Finance Act, 2021. For the sake of ready reference, the newly inserted sub section (3) by the Finance Act, 2021 is reproduced herein below: -

“(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.”

4 ITA No.7033/DEL/2025 (A.Y. 2017-18)

6.

In light of sub section (3) to section 153C of the Act, no assessment can be made u/s.153C of the Act after 01.04.2021. The Hon’ble Madras High Court in the case of Hargovind vs. ACIT, 180 taxmann.com 197, after placing reliance on the decision rendered in the case of CIT vs. Jagdish Singh, 155 taxmann.com 155 (SC) held as under:

“41. The provisions of Sub-Section (3) of Section 153C states that "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.” (Emphasized by us) 7. Similar view has been taken by the Coordinate Bench of the Tribunal in the case of Geetanjali Bhayana (supra) following the decision in the case of Hargovind vs. ACIT (Supra).

8.

Thus, in facts of the case and the decisions discussed, we find merit in the jurisdictional issue raised by the assessee. Thus, we hold that the notice issued u/s.153C of the Act dated 28.05.2022 and the subsequent assessment proceeding arising from the said notice are bad in law, hence, are quashed.

5 ITA No.7033/DEL/2025 (A.Y. 2017-18)

9.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on Tuesday the 10th day of February, 2026.

Sd/- Sd/- (BRAJESH KUMAR SINGH) (VIKAS AWASTHY) लेखाकार सिस्य/ACCOUNTANT MEMBER न्याधयक सिस्य/JUDICIAL MEMBER धिल्ली / Delhi, धििांक/Dated 20/04/2026

NV/- प्रतितिति अग्रेतििCopy of the Order forwarded to : अपीलार्थी/The Appellant , 1. प्रधििािी/ The Respondent. 2. 3. The PCIT धिभागीय प्रधिधिधि, आय.अपी.अधि., सिल्ली /DR, ITAT, धिल्ली 4. गार्ड फाइल/Guard file. 5.

BY ORDER,

//True Copy// (Asstt. Registrar) ITAT, DELHI

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