DAISY TECHNOSOFT PVT. LTD., (NOW DREAM BUILDHOME PVT. LTD.,) ,KOLKATA vs. DCIT, CC 4(3),, KOLKATA

At the outset, we note that the appeal of the assessee is barred by limitation by 27 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R did not raise any objection in condoning the delay. After hearing the rival contentions and perusing the materials available on record, we find that the

The only issue raised by the assessee is against the order of ld. CIT (A) confirming the assessment order which is invalid and bad in law as same has been framed u/s 153C of the Income-tax Act, 1961 (the Act) read with section 153A/144 of the Act, which is bad in law and nullity in the eyes of law.

The facts in brief are that the assessee filed the return of income u/s 139 of the Act on 30.03.2017, declaring total income at ₹nil. During the course of search u/s 132 of the Act on 06.02.2020 on Shree Kuberji Group of Surat, wherein it was found that the assessee other than the search person, purchased a commercial property being ‘Shop No. F-1 at 1st Floor of 1850 sq. ft vide document no. 5143 dated 31.03.2016 at ‘Westfield Shopping Centre’ from Shree Kuberji Group wherein ‘on money’ transactions in cash took place outside the books of accounts in the payment of purchase consideration. Subsequently, the jurisdiction of the assessee was transferred from ITO ward 2(1) to ‘Central Circle -4(3). Pursuant to the said document, proceedings have been initiated by issuing notice u/s 153C of the Act on 07.03.2024. Thereafter, the ld. AO assessed the total income at ₹2,69,36,850/- and framed the assessment u/s 153C read with section 153A/ 144 of the Act, vide order dated 06.03.2025.

In the appellate proceedings, the ld. CIT (A) confirmed the action of the ld. Assessing Officer.

The ld. AR stated that Pursuant to a search action under section 132 of the Income-tax Act, 1961 carried on 06.02.2020 on Shree Kuberji group of Surat which a third- party search , a satisfaction was recorded on 08.02.2024, in the case of the assessee corresponding to Assessment Year 2023-24 and proceedings have been initiated under section 153C of the Act by issuing notice u/s 153C dated 07.03.2024. He further stated that the assessee has been treated as an "other person," and proceedings have been initiated under Section 153C of the Income-tax Act, 1961 and it can be seen from assessment order that where the date of handing over of seized material to the Assessing Officer (AO) of such other person being the assessee is stated to be 08.02.2024. Thus, the date of search in the case of assessee shall be deemed to be 08.02.2024. For this preposition reliance is placed on the decision of Delhi High Court in PCIT v. Ojjus Medicare Pvt. Ltd. reported in 465 ITR 101, wherein it has been categorically held that, in proceedings under Section 153C against an "other person," the relevant date for assumption of jurisdiction is the date of recording of the Satisfaction Note in the case of such other person, and not the date of search in the case of the searched person. He also referred to the provisions of "Section 153C(3) which provides that 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". Thus, there cannot be any confusion that no assessment can be framed u/s 153C w.e.f.

On the other hand, the ld. DR only relied on the orders of the ld. lower authorities.

After hearing the rival contentions and perusing the materials available on record, we find that in this case the search on third party i.e. on Shree Kuberji Group of Surat was conducted on 06.02.2020, wherein it was found that the assessee other than the searched person, purchased a commercial property being ‘Shop No. F-1 at 1st Floor of 1850 sq. ft vide document no. 5143 dated 31.03.2016 at ‘Westfield Shopping Centre’ from Shree Kuberji group wherein ‘on money’ transactions in cash took place outside the books of accounts in the payment of purchase consideration. On the basis of such document satisfaction note in case of assessee was recorded on 08.02.2024 and notice was issued to the assessee on 07.03.2024. Now the issue before us whether the assessment proceedings u/s 153C were validly initiated and assessment u/s 153C is valid or not. We have perused the first proviso to provisions of section 153C and find that where the search is conducted on the third party , the date of search would be the date of recording of satisfaction note by the AO of the searched persons and where the date of handing over the incriminating materials to the AO of the third persons is available , the date of search would be the date of handing over of such documents as such. Post amendment in terms of provisions section 153C(3), post 1.4.2021 any search is

In the result, the appeal of the assessee is allowed.