SRI. NITHIN BAGAMANE,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3) , BANGALORE

We will take up the appeal in ITA No. 366/Bang/2024 for A.Y. 2012- 13 as the lead case and the result arrived in the said appeal will apply mutatis mutandis to the appeals in ITA Nos. 367 to 372/Bang/2024 for A.Ys. 2013-14 to 2018-19. Since the grounds raised by the assessee in all the appeals are identical, grounds of appeal raised for the A.Y. 2012-13 in ITA No. 366/Bang/2024 is reproduced herein below for reference. “1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

The learned Commissioner of Income tax [Appeals] erred in upholding the validity of the assessment order that is barred by limitation in as much as the Department is unable to establish that the said order was passed before the expiry of the limitation as it has been served only on 01/01/2020 under the facts and in the circumstances of the appellant’s case.

Without prejudice to the above, the learned CIT[A] ought to have appreciated that the search action conducted in the premises of the appellant based on the strength of the warrant issued in the name of M/s. Coffee Day Group and consequent seizure of documents therein was illegal and therefore, the proceedings initiated u/s. 153C of the Act based on such illegal search action was also illegal and therefore, the order passed ought to have been cancelled.

Without prejudice to the above, the learned CIT[A] ought to have held that the order of assessment passed u/s. 153C of the Act is bad in law and void-ab-initio as conditions precedent to invoke the provisions of sec. 153C of the Act viz., the discovery of any assets / documents in course of search conducted in the case of any person that belongs to the appellant and is relevant for computing the income of the appellant for the year under appeal is totally absent.

Without prejudice to the above, the learned CIT[A] is not justified in upholding the addition made u/s. 69C of the Act of Rs. 23,25,000/- in respect of the payment made to one Mrs. Sheela Sawhney that was erroneously offered by the appellant in his statement u/s. 132[4] of the Act, under the facts and in the circumstances of the appellant's case. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly

The brief facts of the case are that the assessee is an Individual and also Director of the companies viz., M/s. Kesar Marble and Granites Ltd and M/s Bagamane Ventures Pvt Ltd. The assessee’s company M/s. Bagamane Ventures Pvt. Ltd. had taken on lease a premises on the 7th floor in the corporate office building of the Coffee Day Global Ltd. at 23/2, Vittal Mallya Road, Bangalore, by way of a sub-lease agreement dated 31/08/2016. From that date onwards, the said company is operating its business from the said 7th floor. In that circumstances, the Principal Director of Income Tax, Investigation Wing, Bangalore had issued a warrant of authorisation in Form No. 45 to search the premises of Shri V.G. Siddhartha, M/s. Coffee Day Enterprises Ltd., M/s. Coffee Day Global Ltd. Based on the said warrant, the search was conducted in the premises of M/s. Coffee Day Group on 21/09/2017. At that time, the officers of the department also searched the premises of M/s. Kesar Marble and Granites Ltd. which is a different identity from M/s. Coffee Day Group and they seized incriminating materials pertaining to the assessee as well as the company. Thereafter, notice u/s. 153C was issued to both the assessee as well as the company. The assessee filed their return of income pursuant to the notice issued u/s. 153C. Based on the seized materials, the AO made the additions and completed the assessment u/s. 153C of the Act. The said assessment orders were challenged by the assessee before the Ld.CIT(A) and the assessee raised legal grounds as well as grounds on merits. The Ld.CIT(A) had dismissed the legal grounds raised by the assessee and allowed some portion of the income added u/s. 69C of the Act. As against the said orders of the Ld.CIT(A), the assessee is in appeal before this Tribunal.

The Ld.AR at the time of hearing vehemently argued that the search conducted at the business premises of the assessee’s company, for which no warrant has been issued, is illegal and therefore based on the said illegal search, the assessments made on the assessee is also an illegal one. The Page 4 of 22 ITA Nos. 366 to 372/Bang/2024

The Ld.AR relied on the statements recorded u/s. 132(4) on 14/11/2017 and 26/03/2018 in which the authorities had categorically admitted that the office at the 7th floor of the Coffee Day Square was searched u/s. 132 of the Act and therefore the authorities had no warrant to search the premises of the assessee’s place of business situated at the 7th floor of the Coffee Day Square Building. The Ld.AR also draw our attention to the sub-lease agreement dated 31/08/2016 and submitted that the sub- lease agreement was executed between the Coffee Day Global Ltd. and Bagamane Ventures Pvt. Ltd. and therefore the authorities has no right to enter the business premises of the Bagamane Ventures Pvt. Ltd. without any valid warrant issued by any of the authorities. The Ld.AR also submitted that the assessee is the Managing Director of M/s. Kesar Marble and Granites Ltd. and also Managing Director of the sub-lessee M/s. Bagamane Ventures Pvt. Ltd. and therefore he submitted that there is no warrant of authorisation issued u/s. 132 of the IT Act against the business premises of Bagamane Ventures Pvt. Ltd. or against the assessee which is situated at the 7th floor of the Coffee Day Square. The Ld.AR also submitted that the notice issued u/s. 153C is not a valid one on the ground that the assessee’s premises was searched and documents seized and therefore the notice would have been issued u/s. 153A of the Act. In the rejoinder, the Ld.AR also questioned the validity of the statement recorded u/s. 131 of the Act by the DDIT, after the search has been completed. The Ld.AR mainly urged these legal grounds and submitted that if the said legal ground is decided, the issue on merits could be decided thereafter, based on the outcome of the legal grounds raised by the assessee.

The Ld.AR initially filed a memo enclosing the typed copy of the panchanama dated 24/09/2017. Subsequently, the Ld.AR also filed another memo on 20.05.2025 enclosing the certificate of incorporation issued in the name of Bagamane Ventures Pvt. Ltd. by the