DAMANDEEP KAUR,MOHALI vs. ASSISTANT COMMISSIONER OF INCOME TAX (CENTRAL CIRCLE-2), CHANDIGARH, CHANDIGARH

ITA 899/CHANDI/2025Status: DisposedITAT Chandigarh15 December 2025AY 2016-1721 pages
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What did the Tribunal hold?

The Tribunal admitted the additional ground raised by the assessee concerning the non-issuance of a draft assessment order under Section 144C(1). The Tribunal held that this issue goes to the root of the jurisdiction and is a pure question of law, following the Supreme Court's decision in NTPC Ltd. v. CIT. The Tribunal noted that the assessee was a non-resident and an 'eligible assessee' as per Section 144C(15)(b). Citing various High Court decisions, including Zuari Cement Ltd. v. Asst. CIT (Andhra Pradesh High Court, affirmed by Supreme Court), Vijay Television P. Ltd. v. DRP (Madras High Court), ESPN Star Sports Mauritius S.N.C. ET Compagnie v. Union of India (Delhi High Court), and Ahmed Buhari Vs. ACIT (Madras High Court), the Tribunal concluded that the failure to issue a draft assessment order under Section 144C(1) is a jurisdictional illegality, not a curable procedural defect, rendering the final assessment order void ab initio. Consequently, the assessments framed under Section 153A for AYs 2016-17, 2018-19, 2019-20, and 2020-21 were quashed as being without jurisdiction. The Tribunal stated that once the assessment orders are found to be without jurisdiction, the additions on merits become purely academic and need not be examined. All appeals of the assessee were allowed.

What were the facts?

The assessee, Damandeep Kaur, filed four appeals against the orders of the CIT(A)-3, Gurgaon, for Assessment Years (AYs) 2016-17, 2018-19, 2019-20, and 2020-21. These assessments were framed under Section 153A of the Income-tax Act, 1961, following a search and seizure action on October 3, 2019. The assessee was identified as an individual and trustee. The assessments involved additions for household expenses, salary differences, foreign bank account credits, and overseas property investment. The CIT(A) had partly confirmed these additions. The assessee raised a primary legal ground challenging the jurisdiction of the Assessing Officer due to the non-issuance of a draft assessment order under Section 144C, as she was a non-resident and an 'eligible assessee'.

What were the issues?

1. Whether the Assessing Officer erred in assuming jurisdiction under Section 153A of the Income-tax Act, 1961, and whether the CIT(A) erred in sustaining such an assessment order, particularly in the absence of incriminating material and in violation of the principles laid down in Principal Commissioner of Income-tax, Central-3 vs Abhisar Buildwell (P.) Ltd. (Assessee's contention). The Revenue did not record specific arguments on this point. 2. Whether the Assessing Officer erred by not issuing a draft assessment order under Section 144C(1) of the Act, despite the assessee being a non-resident and an 'eligible assessee', thereby rendering the final assessment order void ab initio (Assessee's contention). The Revenue objected to the admission of this additional ground but did not present substantive arguments against it on merits. 3. Whether the CIT(A) erred in sustaining the addition of Rs. 3,00,000/- on account of 'Unexplained Household Expenses' (Assessee's contention). The Revenue did not record specific arguments on this point. 4. Whether the CIT(A) erred in sustaining the addition of Rs. 15,33,250/- on account of the alleged difference between salary receipts and declared income (Assessee's contention). The Revenue did not record specific arguments on this point. 5. Whether the CIT(A) erred in sustaining the addition of Rs. 26,77,331/- on account of credits in the appellant's foreign bank account (Assessee's contention). The Revenue did not record specific arguments on this point.

Which sections of the Income-tax Act were involved?

Section 153A,Section 144C,Section 10(3),Section 245D(4),Section 132(1),Section 153D,Section 292B

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आयकर अपीलीय अधिकरण, चण्डीगढ़ न्यायपीठ “ए”, चण्डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE श्री ललित कुमार, न्यायिक सदस्य एवं श्री कृणवन्त सहाय, लेखा सदस्य BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं. / ITA No. 899 Tο 902/Chd/ 2025 निर्धारण वर्ष / Assessment Year : 2016-17, 2018-19, 2019-20 & 2020-21

| Damandeep Kaur | बनाम | The ACIT | | House No. 2368., Phase X, Mohali | | Central Circle-2, Chandigarh | | Punjab-160055 | | | | स्थायी लेखा सं./PAN NO: ALCPK6320J | | | | अपीलार्थी/ Appellant | प्रत्यर्थी / Respondent |

| निर्धारिती की ओर से/Assessee by : | Shri Rohit Kapoor, Advocate & | | Shri Virsain Aggarwal, ITP | | राजस्व की ओर से / Revenue by : | Shri Manav Bansal, CIT, DR |

| सुनवाई की तारीख/ Date of Hearing : | 04/11/2025 & 15/12/2025 | | उद्घोषणा की तारीख/Date of Pronouncement : 15/12/2025 |

आदेश/Order

PER LALIET KUMAR, J.M:

These four appeals by the assessee are directed against the respective appellate orders passed by the Ld. CIT(A)-3, Gurgaon pertaining to A.Ys.2016- 17, 2018-19, 2019-20 and 2020-21 arising from assessments framed u/s 153A of the Income-tax Act. Since t

The order continues below.

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