BSC PAINTS PVT LTD.,DELHI vs. DCIT, CENTRAL CIRCLE-30, DELHI

ITA 2824/DEL/2025Status: DisposedITAT Delhi29 September 2026AY 2019-208 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under section 153C dated 30.12.2022 was invalid and liable to be quashed. The reasoning was based on the fact that the assessee's case was centralized with the AO on or after 22.12.2022, vide order under section 127. Consequently, it was presumed that the condition of handing over of seized material before 1st April 2021, as required for initiating proceedings under section 153C, was not satisfied. The Tribunal noted that the revenue could not provide documentary evidence to controvert this factual position or prove that the date of deemed search was prior to 1st April 2021. In light of the above facts, circumstances, and judicial pronouncements in Ojjus Medicare and Harigovind, the Tribunal quashed the notice under section 153C. As the proceedings under section 153C were quashed, all other legal and factual grounds were rendered academic and not adjudicated upon. The operative direction was to quash the assessment proceedings.

What were the facts?

The assessee, BSC Paints Pvt. Ltd., is in appeal against the orders of the CIT(A) for Assessment Years (AYs) 2019-20 and 2020-21. The appeals arise from assessment orders passed under section 153C r.w.s. 143(3) by the DCIT, Central Circle-30, New Delhi. The original return for AY 2019-20 was accepted. Subsequently, a search action on 26.10.2020 on an entry operator and beneficiaries revealed that the assessee had made bogus purchases of Rs. 3,83,20,500/-. The assessee's case was centralized, and proceedings under section 153C were initiated. A notice under section 153C was issued on 30.12.2022, leading to an assessment order dated 29.03.2023. The CIT(A) dismissed the assessee's appeals. The dispute involves additions on account of disallowance of purchases.

What were the issues?

1. Whether the notice issued under section 153C of the Income Tax Act, 1961, dated 30.12.2022, is bad-in-law, barred by limitation, and without jurisdiction, and consequently, whether the assessment order passed is liable to be quashed? (Question of law) Assessee's Contention: The assessee argued that proceedings initiated after 1st April 2021 are invalid. The notice under section 153C was issued on 30.12.2022. The assessee relied on the decision in PCIT vs. Ojjus Medicare Pvt. Ltd. (2024) 465 ITR 101 (Del.) for the proposition that the date of search in the case of an 'other person' is the date of handing over of seized material as per the proviso to sub-section (1) of section 153C. Further, it relied on Harigovind vs. ACIT (2025) 180 taxmann.com 197, holding that no notice under section 153C could be issued if the date of deemed search is after 1st April 2021, in view of section 153C(3). Revenue's Contention: The revenue argued that the date of search was before 1st April 2021, hence the proceedings were validly initiated. The revenue filed written submissions with a report from the AO containing transaction details and ledger accounts but no comments on the relevant dates of handing over of seized material.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3),Section 37,Section 153A,Section 127,Section 153D

AI-generated summary — verify with the full judgment below

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

Before: SHRI VIKAS AWASTHY & SMT. RENU JAUHRI

Hearing: 15.09.2026Pronounced: 29.09.2026

Per Renu Jauhri, Accountant Member:

These two appeals by the assessee are directed against the orders dated 28.02.2025 of the Ld. Commissioner of Income Tax (Appeals)-30, New Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the assessment orders dated 29.03.2023 passed under section 153C r.w.s. 143(3) of the Income Tax Act, 1961

ITA No.- 2824 & 2825/Del/2025 BSC Paints Pvt. Ltd. . (hereinafter referred to as ‘the Act’) by Assessing Officer, DCIT, CC-30, New Delhi (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Ys.) 2019-20 and 2020-21 respectively. Due to common facts and circumstances involved, both the appeal

The order continues below.

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