RADIX TIE-UP PVT. LTD.,KOLKATA vs. I.T.O., WARD - 11(1), KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as the “Ld. CIT(A)”] dated 04.11.2025 for the AY 2013-14.

“1. That in the facts and circumstances of the case, the re-assessment proceedings for the instant year having been initiated solely on the basis of information emanating from the search conducted by DDIT (Inv), Unit-1, Ranchi in the case of Balaji Cellphone Pvt Ltd on 07.02.2019 and the said information being alleged to, pertain to and contain information relating to the appellant company, the Assessing Officer was required to proceed against

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 the appellant company, if at all, under section 153C of the Act and not re- opened the case under section 147/148 of the Act. 2. That in the facts and circumstances of the case, the reasons recorded and the letter of the DDIT(Inv.), Unit-2(1), Kolkata dated 05.03.2019 disclose that the entire material forming the basis of the re-assessment emanated from proceedings taken against persons other than the appellant company. If the material so relied upon was found or seized in the course of a search under section 132 or a requisition under section 132A of the Act carried out in the case of such other person, the Assessing Officer was obliged in law to proceed against the appellant company, if at all, under section 153C of the Act, which by its non-obstante clause excludes recourse to sections 147, 148, 149, 151 and 153. Thus, the notice under section 148 of the Act and the consequent assessment are, in that event, without jurisdiction and void-ab- initio.” 2.1. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised the above additional ground of appeal challenging the jurisdiction of the AO to make addition. In our opinion the issued raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts is required from any quarter whatsoever. In our considered view ,the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688 , ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore, we are inclined to admit the same for adjudication.

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ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 3. The ld. AR vehemently submitted that the case of the assessee was invalidly reopened under Section 147 by issuing a notice under Section 148 on 30.03.2021, after the AO received information from the DDIT Investigation Unit-2(1), Kolkata, vide letter dated 05.03.2019, stating that the assessee is a beneficiary of accommodation entries amounting to ₹39.00 Lakhs from M/s. Greenberry Holdings Pvt. Ltd., etc. It was submitted that during the course of a search and seizure action on Balaji Cellphone Pvt. Ltd. dated 07.02.2019, the said fact came to light. The learned AO therefore submitted that since the reopening of assessment was made on the basis of material found and recovered during the third- party search, proceedings under Section 147 / 148 have been wrongly and invalidly initiated, and the same should have been initiated under Section 153C of the Act. The ld. AR noted to have submitted that as there is an exclusive and specific section provided in the Act which starts with a 'non-obstante' clause to deal with such type of assessment. The learned AO has prayed that the reopening of assessment as well as the subsequent assessment framed are bad in law and may be quashed. In defense of his argument, the ld. AR relied on series of decisions namely i) in DCIT vs. Nawal Kumar Kanodia (ITA No. 1952/Kol/2025, A.Y. 2019-20) ii) Sri Dinakara Suvarna vs. DCIT, [2022] 143 taxmann.com 362 (Karnataka) (special leave petition dismissed, [2023] 151 taxmann.com 489) iii) Shyam Sunder Khandelwal vs. ACIT, [2024] 161 taxmann.com 255 (Rajasthan) iv) Sejal Jewellary vs. Union of India, [2025] 171 taxmann.com 846 (Bombay) Page 3 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 and ACIT vs. Pramod Jain, [2025] 163 taxmann.com 762 (SC). The ld. AR has submitted that same view has since been taken by this Hon'ble Tribunal in Maan Steel & Power Limited vs. DCIT, Central Circle-1(2), Kolkata, ITA Nos. 1167, 2354, 1096 & 2609/Kol/2025, order dated 26.06.2026.

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 assessment framed by the learned AO under Section 147/144B/144 of the Act dated 31.03.2022 are invalid and cannot be sustained. The case of the assessee is squarely covered by the following decisions:

• The co-ordinate Bench in case of DCIT Vs. Nawal Kumar Kanodia(supra), has held as under:-

“5. After hearing the rival contention and perusing the material available on record, we find that incriminating material on the basis of which proceeding u/s 147/148 of the Act were initiated apparently on the basis of said incriminating material found and seized during the course of search on Kasera and Sanwaria Group on 30.11.2018. Therefore proceeding have been initiated to assess the escaped income u/s 153C of the Act which is the special provisons provided under the Act as it overrides the other provisions of the Act. Therefore, the Ld. CIT(A) has rightly annulled the assessment framed by the AO. The case of the assessee is squarely covered by the decision as discussed by the Ld. CIT(A) in the appellate order. Beside the case is squarely covered by decision in the case of Shyam Sunder Khandelwal Vs. ACIT (supra) which was duly approved by the Hon’ble Apex Court in the case of ACIT Vs. Promod Jain (2025) 163 taxman.com 762 (SC). Thus we do not find any infirmity in the appellate order which a very reasoned and speaking order. We are inclined to uphold the order of CIT(A) and dismissed the appeal of the revenue. The appeal of the revenue is dismissed6. Upon hearing the submission of the counsel of the respective parties and on perusal of the impugned order, we find that Assessing Officers in the assessment order has stated that information”. • Further, in case of DCIT Vs. Ajay Jalan(supra), the coordinate bench has held as under:-

“6. Upon hearing the submission of the counsel of the respective parties and on perusal of the impugned order, we find that Assessing Officers in the assessment order has stated that informationin the case of assessee was received on insight portals stating that as per ceased materials found in search at the premises of KaseraGroup,the assessee Shri Ajay Jalan has given cash loan amount to Rs. 3,50,00,000/- through the finance broker Kasera and has earned interest income on the said loan.The Assessee in his submission has clearly stated that other than search U/s 132(1) on 30.11.2018 at the premises of Kasera, search U/s 132(1) was also conducted at the premises of assessee Shri Ajay Jalan and its other group concern on 07.12.2020. Consequent to the search on the assessee, the case of the assessee for the Page 5 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 assessment year 2019-20,was assessed u/s 153(A)/143(3) on 28.03.2022. It is pertinent to mention here that search in the case of finance brokers Kasera was conducted on 30.11.2018 much prior to the assessment order passed U/s 153(A)/143(3) dated 28.03.2022 and the AO was in possession of the alleged incriminating material relating to cash loan and the same was not considered for making addition in the case of the Assessee. So, the further reopening of the assessment in some information by issuing notices u/s 148 on 06.04.2023 as nothing but change in the opinion of the AO. It is further important to mention here that addition made of cash loan of Rs. 6,65,00,000 and Rs. 5,95,00,000 u/s 69A based on the same information in the assessment year 2016-17 and 2017-18 had been deleted by the CIT(A). It is important to mention here that in case of search at the premises of a person if certain incriminating documents relating or belonging to an assessee is found and ceased the Section to open the case of the assessee is Section 153C of the Act. It is further important to mention here that during the assessment proceeding by filing an affidavit assessee has submitted that he does not know any person by the name of any person Sri. Prabhat Kumar Kasera. 7. On perusal of the impugned order and finding of the CIT(A), we find that CIT(A) has discussed the legality of the issuance of the notices u/s 147, discussed the case of the assessee on merit and thereafter allow the appeal of the assessee on legal ground as well as on merit also.We do not find any infirmity in the impugned order.” • In case of DCIT Vs. Suresh Kumar Banthia (supra), the coordinate bench held as under:-

“3.4. After hearing the rival contentions and perusing the materials available on record, we find that a search action u/s 132 of the Act was conducted on finance brokers Kasera and Sanweria on 30.11.2018. We note that during the course of said search, certain documents/ papers were impounded and seized. The statements ofthe finance brokers were also recorded u/s 132(4) of the Act with regard to the modus operandi of arranging loans. We note from the said statements that though the brokers admitted to have engaged in the business of arranging cash loans but the none of the brokers in the statements named the assessee as loan provider or loan receiver nor the documents seized during the course of search contained the name of the assessee. We note that the assessee was surveyed u/s 133A of the Act on 19.02.2020, along with group concerns Citizen Umbrella Mfg Co. Ltd. and during the course of search, the some documents marked as SKB/1 and 2 of the assessee and CUML/1 and 2 of Citizen Umbrella Mfg. Co. Ltd. were impounded. The statement u/s 133A of the Act was recorded on 20.02.2020, wherein the assessee admitted to have given some initial loan of ₹1.60 crores during the financial year 2016-17, which was only rotated periodically. However, the assessee made disclosure by ₹50 crores during Page 6 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 the course of survey in the statement recorded on 20.02.2020. We note that the said surrender/ disclosure was withdrawn on 24.02.2020, within three days by filing an affidavit before ADIT and therefore, statements were retracted. The case ofthe assessee was reopened on 26.03.2021, after recording the reasons to believe which stated that during the course of search operation on finance brokers Sanwaria and Kasera group on 31.11.2018, certain incriminating material/ documents were seized pertaining to the assessee group in which the assessee Suresh Kumar Bathia alias Jain is main person of Citizen Group and abbreviated as SK Jan/ Citizen. The ld. AO further noted that thereafter a survey was carried out on the assessee. The ld. AO also noted that there was a low profitability vis a vis the high turnover and high cash loan transactions and thus, the ld. AO noted that theassessee Shri Suresh Kumar Banthia was involved in unaccounted cash transactions. The ld. AO bifurcated the year wise loan transactions and for the year under consideration the ld. AO computed the loan transactions at 36.65 crores by relying on the statement of Shri Pravin Kumar Kasera and concluded that the same was accepted by the assessee in the statement recorded on 20.02.2020 that he used to lend cash through Praveen Kasera. 3.5. We have perused the rival contention material before us as well as the appellate order and find that the source of incriminating material/ documents on the basis of which the assessment was reopened was the documents seized during the course of search and the finance brokers Kasera and Sanwaria on 30.11.2018. Therefore, the proceedings u/s 153C of the Act should have been initiated as there exists separate code for assessing such incomes which starts with non-abstante clause overriding the other provisions of the Act. Therefore, the ld. CIT (A) has correctly passed the order that the proceedings u/s 147 of the Act as well as the consequent assessment proceedings were invalid and void ab initio. The same have been initiated under the wrong provisions of the Act. We note that the ld. CIT (A) while passing the order relied on several decisions asextracted above. Therefore, we do not find any occasion to interfere with the said appellate order which is very reasoned and speaking order. Consequently, we uphold the order of ld. CIT (A) on this issue by dismissing the ground no.1 of Revenue’s appeal.” • In case of Shyam Sunder Khandelwal Vs. ACIT(supra), the Hon'ble’ High Court has held that in case of third-party search, the assessment has to be framed u/s 153C of the Act. The SLP filed by the Revenue against the said decision is dismissed by the Hon'ble Apex Court. The operative part of the decision of the Hon’ble High Court read as under:- Page 7 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 “30. The argument that by enactment of section 153A to 153D has not eclipsed section 148 does not enhance the case of respondent to initiate the proceedings under section 148. On fulfillment of two conditions for invoking section 153C the proceeding in accordance with section 153A are to be initiated. The operating field of and section 153A to 153D and section 148 are different. Applicability of section 153C in cases where the seized material related to or belonged to person other than on whom search is conducted or requisition made does not render section 148 otiose. Section 148 shall continue to apply to the regular proceedings and also in cases where no incriminating material is seized during the search or requisition. 31. The other aspect of the matter is that under section 153A and 153C, 'the total income' is to be assessed. The total income includes returned income (if any), undisclosed income unearthed during the search or requisitioning and information possessed from the other sources. For Illustration:- An assessee had returned income of Rs.100, undisclosed income of Rs.200 is unearthed during search and there is information from annual information statement of non-disclosure of income of Rs.150/-. The AO under section 153A and 153C shall pass order dealing with income of Rs.100+Rs.200+Rs.150, the total income being Rs.450/-. In cases where there is no unearthing of undisclosed income of Rs.200/-, the department can resort to proceeding under section 147/148. 32. The argument that section 153C can be invoked in case there is incriminating material for all the relevant preceding years and otherwise section 148 is to be resorted to, is misplaced. On satisfaction of the twin condition for proceedings under section 153C, the AO has to proceed in accordance with section 153A. Notice is to be issued for filing of the returns for relevant preceding years and thereupon proceed to assessee or reassessee the 'total income'. It is not obligatory on the AO to make assessment for all the years, the earlier orders passed may be accepted. But once there is incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted, section 153C is to be resorted to. 33. Before concluding, it would be fair to deal with the case law cited by both the parties. 34. Reliance of respondents on decision of M/s. M.R. Shah Logistics Pvt. Limited (supra) is of no avail. The issue of interplay of provisions of section 147/148 vis-a-vis section 153C in the case of seized material relating or belonging to the person other than on whom the search was conducted or requisition made was not the issue before the Supreme Court. 35. The Supreme Court in the case of Abhisar Buildwell (P.) Ltd. (supra) while dealing with the provisions of section 153A held that in case of absence of Page 8 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 incriminating material seized during the search, the department is not remediless for reassessing the unabated assessment on the basis of material received from the other sources and can proceed under section 148. The decision does not support the contentions raised that section 148 is rendered redundant if section 153C is to be resorted to in the facts of the present case. 36. The Single Bench of this Court in the case of Vijay Kumar Mehta (supra) held that if the Department has chosen not to proceed under section 153C, no right is created to the petitioner for getting the notice under section 148 quashed. Moreover, learned Single Judge was not having the benefit of the decision of the Supreme Court in the case of Abhisar Buildwell (P.) Ltd. (supra). The appeal against the order was dismissed having rendered infructuous in view of the subsequent developments that the assessment order was passed. 37. The decision of the Madras High Court in the case of Saloni Prakash Kumar (supra) is of no help to the respondents. The High Court held that section 153C does not preclude issuance of notice under section 148. The field of applicability of two sections was not the issue before the Court. 38. The petitioner relied upon the decision of the Karnataka High Court in the case of Sri Dinakara Suvarna (supra). It would be relevant to quote Para-10: 10. Admittedly no proceedings were initiated under section 153C of the Act. Thus, there is patent non-application of mind. It is relevant to note that the author of the diary Smt. Soumya Shetty had passed away prior to the date of search. It was argued on behalf of the Revenue that Shri. Ashok Kumar Chowta had offered tax on lump-sum income. 39. Further reliance was placed upon the decision of the Bombay High Court in the case of M/s. Aditi Constructions (supra). The para-9 is quoted:- "9. We find that the jurisdictional conditions for invoking section 147- 148 are not satisfied as there is no failure to disclose material facts fully and truly. It is not in dispute that by the letter dated 11th September 2015 (Exhibit H) the Petitioner have submitted all the particulars along with supporting documents to the Respondent No.1. Hence the reasons to believe and a presumption based on the statement of Shri Bhanwarlal Jain (a third party) in the course of a search, that the loans of the entities were bogus or accommodation entries was clearly dispelled. Moreover, the specific provisions of S. 153C would prevail over the general provisions of section 147 in the case of search on 3rd party." 40. In view of above discussion the notices issued under section 148 and the impugned orders are quashed. However, the respondents shall be at liberty to proceed against the petitioners in accordance with law.” Page 9 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 • The case of the assessee is also squarely covered by the decision of Hon'ble Karnataka High Court in the case Sri Dinakara Suvarna Vs. DCIT (supra) wherein the Hon'ble Court has held that where the AO on the basis of search conducted at the premises of third party reopened the assessment of the assessee and if no proceedings were initiated u/s 153C of the Income-tax Act, 1961 (the Act) then same is not sustainable. The SLP filed by the Revenue against the above decision has been dismissed by the Hon'ble Supreme Court in the following case.In case of DCIT Vs. Sri Dinakara Suvarna (supra) , the operative part read as under:-

“2. This Court is of the opinion that the order impugned does not call for interference. The Special Leave Petition is, accordingly, dismissed.” • In case of Tirupati Construction Company vs. Income-tax Officer [2024] 165 taxmann.com 176 (Rajasthan)/[2024] 465 ITR 611 (Rajasthan)[21-03-2024], the Hon'ble’ Court held as under:-

“14. In view of above, it is clear that the entire basis for reopening the assessment is nothing but the material and information collected during search conducted in the premises of another assessee. Collection of details relating to search would not mean collection of new incriminating material and information, independent of the incriminating material and information collected during search proceedings. 15. Learned counsel for the petitioner is correct in submitting that in fact, search was carried out in the year 2016 and the respondents had the authority to reopen the assessment by invoking the powers under section 153C of the Act of 1961 and draw reassessment proceedings under section 153A of the Act of 1961. That was not done within the period of limitation prescribed under section 153B of the Act of 1961. The respondent-authority was fully aware of the fact that proceedings under section 153C of the Act of 1961 would be barred by limitation, therefore, recourse was taken to the provisions contained in Section 148 and Section 148A of the Act of 1961 which has no application in the present cases. Page 10 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 16. Learned counsel for the revenue does not dispute the legal position that where the basis for reassessment is incriminating material and information collected during search, the only legally permissible course of action is the one provided under section 153C of the Act of 1961 and not under section 148 of the Act of 1961. Admittedly, present are not the cases where search was carried out after 1-4-2021, i.e., after coming into force the Finance Act, 2021. Present are the cases of search of prior period. 17. In view of above considerations, impugned orders passed on 27-7-2022 in both the cases cannot be sustained in law and the same are, accordingly, quashed and set aside.” • In case of Sejal Jewellery Vs. Union of India (supra), the operative part read as under:-

“22. Applying the principles of law as discussed hereinabove, we are of the clear opinion that the foundation of the present case was certainly a search action which was undertaken by the Revenue against one Shilpi Jewellers Pvt. Ltd. and in such search and seizure action, materials were seized and such materials were further explored and enquired. Such enquiry revealed significant information in regard to M/s. Green Valley Gems Pvt. Ltd., which according to the Revenue had provided accommodation entries to the petitioner, in which it was also revealed that Green Valley Gems Pvt. Ltd. was a shell company. We do not find that the record would indicate something which is not on the basis of such new materials gathered under the search and seizure action under Section 132. If this be the case, then certainly the provisions of Section 153C read with Section 153A would be applicable, as held by the Supreme Court in Abhisar Buildwell (P) Ltd. (supra) when the Court interpreted the effect and purport of Section 153C and 153A, as also held by the Rajasthan High Court in Shyam Sunder Khandelwal (supra). 23. Insofar as Mr. Suresh Kumar's contention supporting the proceedings under Section 147 and 148 of I.T. Act are concerned, for the aforesaid reasons, such contention would in fact go contrary to the intention of the legislature as depicted by the provisions of Section 153A and 153C of the I.T. Act. There would not be any difficulty in accepting the proposition as canvassed by Mr. Suresh Kumar, referring to the decision of the Supreme Court in Phool Chand Bajrang Lal (supra), however, the facts in the present case are distinct. There cannot be any doubt on the position in law when the Revenue intends to proceed purely on materials relevant for an action under Section 148 read with Section 147. We have already observed that the provisions of Sections 147, 148 vis-a-vis Section 153A and Section 153 are quite compartmentalized. To avoid any overlapping of these provisions, the legislature in its wisdom has thought it appropriate to provide for an independent effect, to be given under Section 153A read with Section 153C by incorporating the "non-obstante" clause, in these provisions, which carves Page 11 of 13

ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14 out an exception to any normal/regular action being resorted under Section 147. 24. In this view of the matter, we are of the clear opinion that the impugned notice under Section 147 of the I.T. Act and all actions consequent thereto are required to be held to be without jurisdiction and bad in law. The petition is accordingly allowed in terms of prayer clauses (a) and (b). 25. Learned counsel for the parties are ad idem that the aforesaid observations would cover the other companion matters, which also stand allowed in terms of our aforesaid reasoning and the operative order passed in Writ Petition No. 3057 of 2019. The said petitions hence stand allowed in terms of prayer clauses (a) and (b) of each of these petitions. 26. Rule is made absolute in the aforesaid terms. No costs.” 6. Therefore, considering the facts of the case and respectfully following the above decisions, we are inclined to quash the proceedings initiated under section 147/148 of the Act as well as the assessment framed as nullity and invalid in the eyes of law. The additional ground raised by the assessee is allowed.

Order pronounced on 30.10.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 30.10.2026 Sudip Sarkar, Sr.PS

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ITA No. 1014/KOL/2026 Radix Tie-Up Pvt. Ltd; A.Y. 2013-14

Copy of the Order forwarded to: Digitally signed Sudip 1. The Appellant by Sudip Sarkar 2. The Respondent Date: Sarkar 2026.10.30 3. CIT 09:36:15 DR, ITAT, 4. +05'30' 5. Guard file. BY ORDER, True Copy//

Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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