DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1, JALANDHAR, JALANDHAR vs. SH. SUMESH CHADHA, LUDHIANA

ITA 133/ASR/2026Status: DisposedITAT Amritsar30 September 2026AY 2020-217 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessees were indeed searched persons, as confirmed by the Assessing Officer's categorical statements in the impugned assessment orders that both assessees were covered under the search and seizure operation carried out on 29.10.2020. Consequently, the Assessing Officer should have assumed jurisdiction under Section 153A of the Act, not Section 153C. The Tribunal noted that the only addition made by the Assessing Officer pertained to jewellery found during the search conducted at the assessees' premises, meaning the material was found as a result of a search on the assessees themselves, not a third party. Therefore, proceeding under Section 153C was erroneous and against the statutory mandate, rendering the assumption of jurisdiction invalid. The Tribunal relied on a coordinate bench's decision in a similar case ('Shri Pawan Kumar vs. DCIT'). Accordingly, the Tribunal upheld the decision of the learned First Appellate Authority, dismissing the Department's appeals.

What were the facts?

The appeals by the Department concern Assessment Year 2020-21 and arise from orders of the CIT(A) Ludhiana. The Assessing Officer initiated proceedings under Section 153C of the Income-tax Act, 1961, following a search and seizure operation under Section 132 on 29.10.2020, which covered the assessees, Smt. Geeta Chadha and Shri Sumesh Chadha, and the IJM Group. During the search at the assessees' premises, gold jewellery worth Rs. 4,88,66,000/- and silver worth Rs. 15,92,238/- were found. The assessees were issued notices under Section 142(1) to explain the source of these items. The Assessing Officer added the value of the jewellery to the assessees' income under Section 69A, holding that the source was unexplained. The assessees appealed, arguing that since they were searched persons, proceedings should have been under Section 153A, not 153C.

What were the issues?

1. Whether, upon the facts and circumstances, the Ld. CIT(A) erred in law by holding that the initiation and completion of proceedings under Section 153C were without valid jurisdiction, given that the search action under Section 132 was conducted at the residences and lockers of the assessees (who were searched persons). 2. Whether, upon the facts and circumstances, the Ld. CIT(A) erred in law by holding that the proper course was to proceed under Section 153A, ignoring the facts that the search action under Section 132 was conducted in the case of Sh. Chander Shekhar Marwaha & others, and that the Assessing Officer brought out specific facts in the assessment order and remand report. 3. Whether, upon the facts and circumstances, the Ld. CIT(A) erred in law in deleting the additions of Rs. 77,81,050/- made by the Assessing Officer on account of unexplained jewellery, ignoring the facts brought out by the Assessing Officer in the assessment order and remand report. Assessee's Contention: The assessees contended that since a search and seizure operation under Section 132 was carried out in their case, and they were the searched persons, proceedings should have been initiated under Section 153A, not Section 153C. Revenue's Contention: The revenue argued that the search action was conducted in the case of Sh. Chander Shekhar Marwaha & others, and the CIT(A) erred in proceeding under Section 153A, ignoring the facts presented by the AO.

Which sections of the Income-tax Act were involved?

Section 132,Section 153C,Section 142(1),Section 69A,Section 153A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI GIRISH AGRAWAL, HON’BLE

For Appellant: Shri Parikshit Aggarwal, CA And Ms.Shruti Khandelwal, Advocate
For Respondent: Shri Prashant Singh, Sr. DR

Heard together (2 matters)

ITA Nos. 123/ASR/2026
ITA Nos. 133/ASR/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER: SHRI SAKTIJIT DEY, V.P.: Captioned appeals by the Department, in respect of two different assessees, arise out of separate orders of learned Commissioner of Income Tax (Appeals) [in short,”ld. CIT(A)] Ludhiana, for the Assessment Year 2020-21. Asst. Year: 2020-21

2.

The common grounds raised by the Department in both the appeals read as under:

1.

“Whether upon facts and circumstances of the case, the L.d. CIT(A) has erred in law holding that the initiation and completion of proce

The order continues below.

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