BHADRESH MANSUKHLAL DODHIA,BHIWANDI vs. DCIT-CC-3, THANE, THANE

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI NARENDER KUMAR CHOUDHRY (JUDICIAL MEMBER)

IT(SS)A No. 2221, 2220 & 2219/MUM/2025 Assessment Year: 2014-15, 2015-16 & 2016-17

Bhadresh Mansukhlal Dodhia, DCIT-CC-3, 60/100 New Mavji Compound, Room No. 12, A Wing, 6th floor, Vs. Behind Ratan, Talkies Narpoli, Ashar IT Park, Thane West, Bhiwandi-421302. Thane-400604 PAN NO. AFHPD 2871 E Appellant Respondent

: Ms. Simran Dhawan Assessee by Revenue by : Mr. Satyaprakash R. Singh, CIT-DR

: 04/09/2025 Date of Hearing Date of pronouncement : 25/11/2025

ORDER PER OM PRAKASH KANT, AM

These appeals by the assessee are arising from a common order dated 12.02.2025 passed by the Ld. Commissioner of Income- tax (Appeals), Pune-11 [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, 2015-16 and 2016-17, which arises from assessments completed under section 153A of the Income-tax Act, 1961 (“the Act”) for assessment years 2014-15, 2015-16 and 2016-17, raise common questions—both on jurisdiction and on merits. Given the

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overlapping facts, common seized material, and identical legal overlapping facts, common seized material, and identical legal overlapping facts, common seized material, and identical legal contentions, we heard all the appeals together and are being contentions, we heard all the appeals together and are being contentions, we heard all the appeals together and are being disposed of by this consol disposed of by this consolidated order for sake of convenience and idated order for sake of convenience and avoid repetition of facts. avoid repetition of facts.

2.1 In the present appeals, the assessee has assailed the validity In the present appeals, the assessee has assailed the validity In the present appeals, the assessee has assailed the validity of the assessments framed under section 153A of the Income-tax of the assessments framed under section 153A of the Income of the assessments framed under section 153A of the Income Act, 1961 (“the Act”) both on jurisdictional grounds and on merits. Act, 1961 (“the Act”) both on jurisdictional grounds and on merits. Act, 1961 (“the Act”) both on jurisdictional grounds and on merits. The common legal grievance across all three appeals is that the The common legal grievance across all three appea The common legal grievance across all three appea additions have been founded exclusively upon documents seized additions have been founded exclusively upon documents seized additions have been founded exclusively upon documents seized from the premises of third parties. According to the assessee, such from the premises of third parties. According to the assessee, such from the premises of third parties. According to the assessee, such material, if at all capable of supporting any addition, could only material, if at all capable of supporting any addition, could only material, if at all capable of supporting any addition, could only have been acted upon by invoking the machine have been acted upon by invoking the machinery of section 153C of ry of section 153C of the Act. The assessee, therefore, challenges the very assumption of the Act. The assessee, therefore, challenges the very assumption of the Act. The assessee, therefore, challenges the very assumption of jurisdiction under section 153A. On merits, the assessee has jurisdiction under section 153A. On merits, the assessee has jurisdiction under section 153A. On merits, the assessee has further objected to the action of the learned CIT(A) in altering the further objected to the action of the learned CIT(A) in altering the further objected to the action of the learned CIT(A) in altering the statutory provision applied statutory provision applied—namely, in sustaining the addition in sustaining the addition

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under section 69 instead of section 69D under section 69 instead of section 69D—and has also disputed the and has also disputed the character of the impugned amounts as unexplained investments. character of the impugned amounts as unexplained investments. character of the impugned amounts as unexplained investments.

3.1 The consistent case of the assessee is that the entire basis of The consistent case of the assessee is that the entire basis of The consistent case of the assessee is that the entire basis of the additions under section 69D is a set of “hundi papers” seized the additions under section 69D is a set of “hundi papers” seized the additions under section 69D is a set of “hundi papers” seized not from the assessee but from the premises of M/s Viral Textile, a not from the assessee but from the premises of M/s Viral Textile, a not from the assessee but from the premises of M/s Viral Textile, a proprietary concern of Shri proprietary concern of Shri Viral Dhanani and Jinesh Enter and Jinesh Enterprises, another proprietary concern of Shri Ninesh Dodhia. It is contended another proprietary concern of Shri Ninesh Dodhia. It is contended another proprietary concern of Shri Ninesh Dodhia. It is contended that the alleged hundis, though assumed by the Assessing Officer to that the alleged hundis, though assumed by the Assessing Officer to that the alleged hundis, though assumed by the Assessing Officer to pertain to the assessee, were never seized from his premises and pertain to the assessee, were never seized from his premises and pertain to the assessee, were never seized from his premises and could have been acted upon only under section 153C. The could have been acted upon only under section 15 could have been acted upon only under section 15 Assessing Officer, however, proceeded on the premise that the Assessing Officer, however, proceeded on the premise that the Assessing Officer, however, proceeded on the premise that the seized documents belonged to the assessee and invoked section seized documents belonged to the assessee and invoked section seized documents belonged to the assessee and invoked section 153A alone.

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“Assessment of income of any other person. Assessment of income of any other person. 68 153C. 69 [(1)] 70[Notwithstanding anything contained in [Notwithstanding anything contained in section 139, [Notwithstanding anything contained in section 147, section 148 section 148, section 149, section 151 and and section 153, where the Assessing Officer is satisfied that, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, any money, bullion, jewellery or other valuable article or thing, any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, seized or requisitioned, 71belongs to; or (b) any books of account or any books of account or documents, seized or requisitioned, documents, seized or requisitioned, pertains or pertain to, or any information contained therein, pertains or pertain to, or any information contained therein, pertains or pertain to, or any information contained therein, relates to, relates to, a person other than the person referred to in a person other than the person referred to in section 153A section 153A, then, the books of account or documents or assets, books of account or documents or assets, seized or requisitioned shall seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such be handed over to the Assessing Officer having jurisdiction over such be handed over to the Assessing Officer having jurisdiction over such other person] 72[and that Assessing Officer shall proceed against each [and that Assessing Officer shall proceed against each [and that Assessing Officer shall proceed against each such other person and issue notice and assess or r such other person and issue notice and assess or reassess the income eassess the income of the other person in accordance with the provisions of section 153A, of the other person in accordance with the provisions of of the other person in accordance with the provisions of if, that Assessing Officer is satisfied that the books of account or if, that Assessing Officer is satisfied that the books of account or if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the documents or assets seized or requisitioned have a bearing on t documents or assets seized or requisitioned have a bearing on t determination of the total income of such other person 73[for six determination of the total income of such other person determination of the total income of such other person assessment years immediately preceding the assessment year assessment years immediately preceding the assessment year assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or relevant to the previous year in which search is conducted or relevant to the previous year in which search is conducted or requisition is made and] for the requisition is made and] for the relevant assessment year or years relevant assessment year or years referred to in sub-section (1) of section (1) of section 153A] :] 74 [Provided that in case of such other person, the reference to the date that in case of such other person, the reference to the date that in case of such other person, the reference to the date of initiation of the search under of initiation of the search under section 132 or making of requisition or making of requisition under section 132A section 132A in the second proviso to 75[sub-section (1) of] section (1) of] sec- tion 153A shall be construed as reference to the date of receiv shall be construed as reference to the date of receiv shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the books of account or documents or assets seized or requi books of account or documents or assets seized or requi Assessing Officer having jur Assessing Officer having jurisdiction over such other person :] isdiction over such other person :] 76 [Provided further Provided further that the Central Government may by rules that the Central Government may by rules 77 made by it and published in the Official Gazette, specify the class or made by it and published in the Official Gazette, specify the class or made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or Assessing Officer shall not be required to issue notice for assessing or Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately reassessing the total income for six assessment years immediately reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which preceding the assessment year relevant to the previous year in which preceding the assessment year relevant to the previous year in which search is conducted or requisition is made earch is conducted or requisition is made 78[and for the relevant [and for the relevant

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assessment year or years as referred to in sub assessment year or years as referred to in sub-section (1) of section (1) of section 153A] except in cases where any assessment or ] except in cases where any assessment or reassessment has reassessment has abated.] 79 [(2) Where books of account or documents or assets seized or [(2) Where books of account or documents or assets seized or [(2) Where books of account or documents or assets seized or requisitioned as referred to in sub requisitioned as referred to in sub-section (1) has or have been received section (1) has or have been received by the Assessing Officer having jurisdiction over such other person by the Assessing Officer having jurisdiction over such oth by the Assessing Officer having jurisdiction over such oth after the due date for furnishing the return of income for the after the due date for furnishing the return of income for the after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is assessment year relevant to the previous year in which search is assessment year relevant to the previous year in which search is conducted under section 132 section 132 or requisition is made under or requisition is made under section 132A and in respect of such assessment year and in respect of such assessment year- (a) no return of income has been furnished by such other person no return of income has been furnished by such other person no return of income has been furnished by such other person and no notice under sub and no notice under sub-section (1) of section 142 section 142 has been issued to him, or issued to him, or (b) a return of income has been furnished by such other person but a return of income has been furnished by such other person but a return of income has been furnished by such other person but no notice under sub no notice under sub-section (2) of section 143 section 143 has been served and limitation of serving the notice under sub and limitation of serving the notice under sub and limitation of serving the notice under sub-section (2) of section 143 section 143 has expired, or (c) assessment or reassessment, if any, has been made, assessment or reassessment, if any, has been made, assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or before the date of receiving the books of account or documents or before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having assets seized or requisitioned by the Assessing Officer having assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue jurisdiction over such other person, such Assessing Officer shall issue jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of the notice and assess or reassess total income of such the notice and assess or reassess total income of such such assessment year in the manner provided in such assessment year in the manner provided in section 153A section 153A.] 80 [(3) Nothing contained in this section shall apply in relation to a [(3) Nothing contained in this section shall apply in relation to a [(3) Nothing contained in this section shall apply in relation to a search initiated under search initiated under section 132 or books of account, other or books of account, other documents or any assets requisitioned under documents or any assets requisitioned under section 132A section 132A on or after the 1st day of April, 2021.] the 1st day of April, 2021.]” 4.1 A plain and harmonious reading of the provision leaves no A plain and harmonious reading of the provision leaves no A plain and harmonious reading of the provision leaves no room for doubt. Where the seized material “belongs to” or “pertains for doubt. Where the seized material “belongs to” or “pertains for doubt. Where the seized material “belongs to” or “pertains to” a person other than the person searched, the Assessing Officer to” a person other than the person searched, the Assessing Officer to” a person other than the person searched, the Assessing Officer of the searched person is statutorily mandated to hand over such of the searched person is statutorily mandated to hand over such of the searched person is statutorily mandated to hand over such material to the Assessing Officer having jurisdiction over the “other material to the Assessing Officer having jurisdiction over t material to the Assessing Officer having jurisdiction over t person”, who shall thereafter proceed strictly in accordance with person”, who shall thereafter proceed strictly in accordance with person”, who shall thereafter proceed strictly in accordance with section 153A as if search section 153A as if search-based proceedings were initiated in that based proceedings were initiated in that person’s case. The legislative scheme thus draws an explicit The legislative scheme thus draws an explicit The legislative scheme thus draws an explicit

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distinction between material seized from the person searched distinction between material seized from the person distinction between material seized from the person (falling under section 153A) and material seized from a third person (falling under section 153A) and material seized from a third person (falling under section 153A) and material seized from a third person but relating to another assessee (falling under section 153C). Once but relating to another assessee (falling under section 153C). Once but relating to another assessee (falling under section 153C). Once Parliament has prescribed the specific route through which Parliament has prescribed the specific route through which Parliament has prescribed the specific route through which additions based on third additions based on third-party seized material are to be made, any to be made, any assessment framed by bypassing this route is contrary to law and assessment framed by bypassing this route is contrary to law and assessment framed by bypassing this route is contrary to law and void ab initio.

4.2 In the present case, it is an admitted position on record that In the present case, it is an admitted position on record that In the present case, it is an admitted position on record that the alleged hundi papers were not seized from the premises of the the alleged hundi papers were not seized from the premises of the the alleged hundi papers were not seized from the premises of the assessee. These papers wer assessee. These papers were found at the premises of third parties e found at the premises of third parties belonging to the Dodhia Group. The Assessing Officer was, belonging to the Dodhia Group. The Assessing Officer was, belonging to the Dodhia Group. The Assessing Officer was, therefore, obliged to record satisfaction under section 153C and therefore, obliged to record satisfaction under section 153C and therefore, obliged to record satisfaction under section 153C and proceed in accordance with that provision. The assumption of proceed in accordance with that provision. The assumption of proceed in accordance with that provision. The assumption of jurisdiction under section 153A jurisdiction under section 153A, without resort to section 153C, is , without resort to section 153C, is patently without authority of law. Consequently, the assessments patently without authority of law. Consequently, the assessments patently without authority of law. Consequently, the assessments framed for AYs 2014- -15, 2015-16 and 2016-17 under section 153A 17 under section 153A stand vitiated for want of jurisdiction. stand vitiated for want of jurisdiction. We accordingly hold that the We accordingly hold that the impugned assessments impugned assessments are unsustainable and are hereby quashed. are unsustainable and are hereby quashed.

4.3 In view of our decision on the legal issue, the other grounds In view of our decision on the legal issue, the other grounds In view of our decision on the legal issue, the other grounds— whether relating to the alteration of the statutory provision by the whether relating to the alteration of the statutory provision by the whether relating to the alteration of the statutory provision by the learned CIT(A) or the merits of the additions learned CIT(A) or the merits of the additions—are rendered purely are rendered purely academic and do not call for adjudication. do not call for adjudication.

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Order pronounced in the open Court on ounced in the open Court on 25/11/2025. /11/2025.

Sd/- Sd/ Sd/- (NARENDER KUMAR CHOUDHRY NARENDER KUMAR CHOUDHRY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 25/11/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai