AJAY SINGH,KOTA vs. DCIT, CENTRAL CIRCLE, KOTA, KOTA

ITA 495/JPR/2026Status: DisposedITAT Jaipur13 October 2026AY 2016-1711 pages
AI SummaryAllowed

What were the facts?

The assessee, Ajay Singh, filed an appeal against the order of the CIT(A), Udaipur, dated 17.12.2025, which upheld the validity of a notice issued under Section 153C of the Income Tax Act, 1961, and the consequent assessment order. The assessment year in question is AY 2016-17. The dispute involves an addition of Rs. 20,00,000/- on account of alleged cash payment for the purchase of a flat in the 'Royal Palm' project. The assessee's primary contention is that the notice under Section 153C and the subsequent assessment are barred by limitation. The search that led to this assessment was conducted on the premises of 'Friends SPS Group Kota' on 01.08.2019. The notice under Section 153C was issued to the assessee on 13.10.2023.

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 153C of the Income Tax Act, 1961, for the impugned assessment year (AY 2016-17) was issued without the authority of law and was barred by limitation. The reasoning was based on the interpretation of Section 153C read with its first proviso and the judgment of the Hon'ble Apex Court in CIT vs Jasjit Singh. The Tribunal noted that the notice under Section 153C was issued to the assessee on 13.10.2023, which, as per the proviso to Section 153C, is to be treated as the date of initiation of the search for the purpose of reckoning the six-year period for assessment. Since the search on the 'Friends SPS Group Kota' was conducted on 01.08.2019, and the notice was issued on 13.10.2023, the period of six assessment years prior to the year of search initiation (which would be AY 2024-25, considering the notice date) would extend up to AY 2018-19. Therefore, the assessment for AY 2016-17 was beyond the permissible scope. The AO's report did not controvert these facts or the legal position. Consequently, the jurisdiction assumed by the AO to frame the assessment under Section 153C for AY 2016-17 was held to be invalid, and the assessment order was quashed as void ab initio. Ground No. 1 was allowed. As the assessment order was quashed, other grounds were rendered academic and not dealt with.

What were the issues?

1. Whether the notice issued under Section 153C of the Income Tax Act, 1961, and the consequent assessment order are valid and not barred by limitation? (Question of law and fact, turning on Section 153C and Section 153A of the Act). Assessee's contentions: The assessment order passed under Section 153C read with Section 153A is barred by limitation. Assessments under Section 153A can be conducted for six assessment years prior to the search year, expanded to ten years only under specific circumstances not met here. For Section 153C, the date of receiving seized documents by the assessee's AO is treated as the date of search initiation. In this case, the notice under Section 153C was issued on 13.10.2023, which should be considered the date of search initiation. Therefore, only assessments up to AY 2017-18 could be reopened, making the assessment for AY 2016-17 beyond the permissible period. This ground is raised for the first time before the Tribunal. The assessee relies on the Hon'ble Apex Court's decision in CIT vs Jasjit Singh (2025) 476 ITR 157. Revenue's contentions: The judgment records no specific arguments from the revenue on this ground, other than the AO's report which did not comment on the assessee's arguments but referred to Section 153B.

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A,Section 69,Section 132,Section 153B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “A” BENCH, JAIPUR

Hearing: 06.10.2026Pronounced: 13.10.2026

Per Annapurna Gupta, AM:- The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax, Appeal CIT(A), Udaipur 02 (hereinafter referred to as “Ld. CIT(A)”), dated

P a g e | 2 Ajay Singh 17.12.2025 under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

2.

The grounds raised by the assessee read as under:-

1.

The Ld. CIT(A) has erred on facts and in law in upholding the validity of notice issued u/s 153C of IT Act, 1961 and the consequent order passed by the AO. Further the notice issued u/s 153C is barred by limitation.

2.

The Ld. CIT(A) has erred on facts and in law in c

The order continues below.

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