POOJA MINING & MARBLES PRIVATE LIMITED,GURUGRAM vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2, NEW DELHI, NEW DELHI

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ITA 6094/DEL/2025Status: DisposedITAT Delhi22 May 2026AY 2021-227 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 since the additions were based on material impounded during a survey, the assessment framed under Section 143(3) was fundamentally defective. The assessment order was quashed.

What were the facts?

The assessee's appeal was filed with a significant delay, which was condoned. The assessment order included additions based on material impounded during a survey. The assessee argued that the assessment should have been framed under Section 147/148, not Section 143(3).

What were the issues?

Whether an assessment framed under Section 143(3) is valid when the additions are based on material impounded during a survey, or if reassessment proceedings under Section 147/148 should have been initiated.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 133A,Section 36(1)(va)

AI-generated summary — verify with the full judgment below

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

Before: SHRI YOGESH KUMAR U.S

For Appellant: Adv Sumit Lalchandani
Hearing: 04.05.2026Pronounced: 22.05.2026

1 ITA No. 6094/Del/2025 Pooja Mining & Marbles

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘G’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No. 6094/Del/2025 ( A.Y 2021-22) Pooja Mining & Marbles Private Vs Deputy Commissioner of Limited, 2nd Floor, H. No. K-45, Income Tax, Central Mayfield Gaden, Sector-51, Gurgaon Ciorcle-2, New Delhi PAN: AABCP2706L (RESPONDENT) (APPLICANT) Appellant by Adv Sumit Lalchandani Respondent by Sh. Shankar Lal Verma, Sr. DR Date of Hearing 04.05.2026 Date of Pronouncement 22.05.2026 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of

Ld. Commissioner of Income Tax (Appeals)-23 (‘Ld. CIT(A)’ for short),

New Delhi dated 04/02/2025 for the Assessment Year 2021-22.

2.

There is a delay of 152 days in filing the present Appeal. The

Assessee filed an application for condonation of delay contend that the

Assessee was having no knowledge of passing of the order impugned

as the mail sent by the Ld. CIT(A) could not be checked by the

Assessee and the Assessee came to know only when its Chartered

Accountant informed the passing of the order impugned, thus sought

for condonation of delay.

3.

We have heard both the parties and perused the material. For

the reason stated in the application for condonation of delay, the delay

of 152 days in filing the captioned appeal is hereby condoned.

2 ITA No. 6094/Del/2025 Pooja Mining & Marbles

4.

Brief facts are that, the Assessee is not business activity of

construction of buildings and trading business of stones and marbles.

The Assessee filed return of income declaring total income at Rs.

82,40,500/- and the same was processed u/s 143(3) of the Income Tax

Act, 1961 ('Act' for short) determining total income of Rs. 82,54,820/-.

5.

The case of the Assessee was selected for complete scrutiny and

an assessment order came to be passed u/s 143(3) of the Act by

making an addition of Rs. 44,96,010/- by applying NP rate of 8% and

also made addition of Rs. 14,318/- u/s 36(1)(va) of the Act. Aggrieved

by the assessment order dated 31/12/2022, Assessee preferredan

appealbefore the Ld. CIT(A). The Ld. CIT(A) vide order dated

04/02/2025,sustained the addition of Rs. 17,31,206/- made by the

A.O. on account of alleged bogus purchases. As against the order of

the Ld. CIT(A) dated 04/02/2025, Assessee preferred captioned

appeal.

6.

The Ld. Counsel for the Assessee vehemently submitted that the

entire genesis for framing the assessment order against the Assessee

is the survey conducted u/s 133A of the Act on 10/09/2021. Further

submitted that the addition is not based on any independent scrutiny

of return of income and the assessment proceedings has been initiated

and addition has been based on the alleged electronical/impounded

material gathered during survey proceedings u/s 133A of the Act. The

3 ITA No. 6094/Del/2025 Pooja Mining & Marbles

Ld. Counsel further submitted that, once the survey material formed

the basis for the addition, the A.O. was required to proceed under the

special statutory mechanism prescribed u/s 147/148 r.w.

Explanation 2 to Section 148 of the Act and the A.O. should also

comply with the mandatory procedure contemplated u/s 148 and

148B of the Act. Further submitted that the A.O. by passed the

statutory mandate and proceeded to complete the assessment u/s

143(3) of the Act, thereby assumed jurisdiction erroneously.

7.

The Ld. Counsel also submitted that the additional ground of the

Assessee is deserves to be allowed by the Tribunal as per the settled

principal of law declared by the Hon'ble Supreme Court in the case of

NTPC Ltd. vs. CIT reported in 229 ITR 383 (S.C). Further, the Ld.

Assessee's Representative also relied on order of the Co-ordinate

Bench of the Chandigarh Tribunal in the case of Homelife Buildcon

Pvt. Ltd. vs. DCIT in ITA No. 880/Chd/2024, thus, sought for

allowing the Appeal.

8.

We have heard both the parties and perused the material

available on record. As per the law declared by the Hon'ble Supreme

Court of India in the case of NTPC Ltd. vs. CIT, the additional ground

raised by the Assessee should be admitted in the appellate stage.

Accordingly, the additional grounds of Appeal raised by the Assessee

is hereby admitted.

4 ITA No. 6094/Del/2025 Pooja Mining & Marbles

9.

It is not in dispute that survey operation has been conducted on

10/09/2021 u/s 133A of the Act on the Assessee and during the

survey operation certain electronic data in the form of excel

sheet/loose documents was impounded by the revenue. Pursuant to

the same, the assessment proceedings has been initiated and

assessment order has been passed u/s 143(3) of the Act on

31/12/2022. The A.O. made addition on allegation of bogus purchase

which is the subject matter to the present appeal and the said

addition emanates from material already found/impounded during the

course or survey. Thus, the foundation of the addition is not based on

any independent scrutiny of return of income and it is clear that the

electronic/impounded material gathered during the survey

proceedings u/s 133A of the Act was resulted in the addition.

10.

It is the specific case of the Assessee that once such survey

material formed the basis for alleged undisclosed income/bogus

purchases, the A.O. is required to proceed under the special statutory

mechanism prescribed u/s 147/148 of the Act read with explanation

2 to Section 148 of the Act by following mandatory procedure

contemplated u/s 148A/148B of the Act.

11.

In an identical situation the Co-ordinate Bench of the

Chandigarh Tribunal in the case of Homelife (supra) held that, once

5 ITA No. 6094/Del/2025 Pooja Mining & Marbles

the addition admittedly founded on material impounded during

survey, the assessment framed u/s 143(3) of the Act is fundamental

defective. The relevant portion of the order of the Tribunal is

reproduced as under:-

“"22. The core question before the Bench is whether, in the facts and circumstances of the case, the assessment ought to have been framed under section 143(3) or under section 147 of the Income-tax Act, 1961. From the plain reading of the statutory provisions and in light of Explanation 2 to section 148, it becomes abundantly clear that the legislature has widened the scope of reassessment, particularly through the Finance Act, 2021, which introduced significant changes to the reassessment regime. These amendments explicitly include instances involving third-party search material and make it incumbent upon the Assessing Officer (AO) to follow the procedure under section 148, including obtaining prior approval from the Principal Commissioner of Income Tax (PCIT).

23.

In the present case, the AO proceeded to frame the assessment under section 143(3) despite relying heavily on material found during searches conducted on third parties. The AO, instead of complying with the jurisdictional preconditions laid down under the reassessment provisions, proceeded without recording the mandatory satisfaction and without obtaining prior sanction from the competent authority. This conduct not only, violates the express mandate of law, but also renders the assessment a jurisdictional error. The AO has, in fact, gone a step further by bypassing the legal safeguards embedded in section 147, thereby vitiating the assessment proceedings ab initio.

25.

In the present case, where the AO has admittedly relied upon material seized during searches conducted on other persons, i.e., Sh. Ravi Kapoor and Sh. Ajay Kumar Prabhakar, it was mandatory for the AO to invoke the provisions of section 147 and not to bypass the statutory framework by proceeding under section 143(3). Granting such unfettered powers to the AO to rely on third-party material without adhering to the safeguards under 2021 section 147 would defeat the very purpose of the amendment and open the floodgates to arbitrary assessments."”

6 ITA No. 6094/Del/2025 Pooja Mining & Marbles

12.

In view of the above, considering the fact that the impugned

addition has been made on the basis of material impounded during

the survey, by following the ratio laid down in the case of Homelife

(supra), we are of the opinion that that the assessment framed u/s

143(3) is defective. Accordingly, the assessment order of the year

under consideration is hereby quashed.

13.

In the result, Appeal of the Assessee is allowed.

Order pronounced in the Open Court on this 22nd Day of May, 2026

Sd/- Sd/- (AMITABH SHUKLA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22/05/2026 R. Naheed * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT NEW DELHI

7 ITA No. 6094/Del/2025 Pooja Mining & Marbles

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