DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-3, JAIPUR vs. SHWETA CHORDIA, JAIPUR

Ground (iii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in correctly interpreting the application of the case of Hon'ble Supreme Court in the case of Pr.CIT(Central-3) Vs. Abhisar Buildwell Pvt. Ltd. (Civil Appeal No. 6580/2021) dated 24.04.2023 in this case. Since the warrant executed in the case of the assessee, provisions of section 153A shall primarily apply in this case. Also the assessing officer can't initiate the proceedings u/s. 153C of the Income Tax Act simultaneously with the ongoing proceedings u/s. 153A as interpreted by the Ld. CIT (A). Hence, the additions made by the AO in this case u/s. 153A of the Income tax Act are in accordance with the law.

Ground (iv) The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.

Ground (i) Whether on the facts and in circumstances of the case, the CIT (A) is justified in deleting the additions of Rs. 4,02,74,500/- irrespective of the fact that the addition was based on the incriminating material found and seized in the pen drive during search u/s. 132 of the I.T. Act, 1961. 6. Ground (ii) Whether on the facts and in circumstances of the case, the CIT (A) is justified in passing a perverse and arbitrary order whereby the addition of Rs. 4,02,74,500/- deleted.

Ground (iii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is justified in correctly interpreting the application of the case of Hon'ble Supreme Court in the case of Pr.CIT(Central-3) Vs Abhisar Buildwell Pvt. Ltd. (Civil Appeal No. 6580/2021) dated 24.04.2023 in this case. Since the warrant executed in the case of the assessee, provisions of section 153A shall primarily apply in this case.

This common order is to dispose of the above captioned two appeals filed by the department challenging the two separate orders passed by the Ld. CIT (A).

One impugned order dt. 20.01.2025 relates to A.Y. 2015-16 and the other impugned order dt. 20.01.2025 relate to A.Y. 2016-17. 4. Feeling dissatisfied with the two impugned orders, two separate appeals were filed by the revenue challenging the appeal order as mentioned (supra). Vide these two impugned orders, the Ld. CIT(A) has set aside both the assessment orders while relying on the decision of Hon’ble Supreme Court in case of PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 149 Taxman.com 399/ 293 Taxman 141/ 454 ITR 212 and similar decision of Hon’ble Supreme Court in case of DCIT Vs. UK Paints (2023) 454 ITR 441 where it is held that in case during the search incriminating material is found, in case of completed/ unabated assessment, the only remedy available to the revenue would be to initiate the reassessment proceedings u/s. 147/ 148 of the Act subject to fulfilment of conditions mentioned therein and not u/s. 153A of the Act and in relying on the decision of Hon’ble Rajasthan High ITA Nos. 439 & 440/JP/2025 6. The Ld. D/R for the appellant has submitted that notices u/s. 153A were correctly issued by the AO in the given facts & circumstances of the case as a search was conducted on the assessee on 19.01.2021 and therefore no notice u/s. 153C of the Act was required to be issued to the assessee. Therefore, Ld. D/R urged that appeals deserves to be allowed.

On the other hand, the Ld. A/R of the assessee has stood by the findings recorded by the Ld. CIT (A) in allowing the appeals filed by the assessee by stating that in the search conducted on the assessee on 19.01.2021 no incriminating document was found and no addition with reference to the document found in search of the assessee was made by the AO. As per section 153A of the Act addition could be made only with reference to the document found in the search of assessee. In case a document is found in the search of a third person, section 153C of the Act provides that the AO of the searched person shall handover those documents to the AO of the assessee to whom such documents pertain to and thereafter such AO after recording the satisfaction can issue notice u/s. 153C of the Act and complete the assessment. In this case, AO has made the addition with reference to the document found in search of Shri Ramesh Manihar. Hence such addition could be made only by issuance of notice u/s. 153C of the Act and not by issuance of notice u/s. 153A of the Act. The department in its ground of appeal has incorrectly stated that AO cannot initiate proceedings u/s. 153C of the Act simultaneously with the ongoing proceedings u/s. 153A of the Act ignoring that ITA Nos. 439 & 440/JP/2025 DCIT vs. Shweta Chordia there is no law which prohibits initiating proceedings u/s. 153C of the Act when proceedings u/s. 153A has already been initiated. Hence there is no perversity in the order of the Ld. CIT (A) and therefore the same be upheld by dismissing the ground of the department.

In the impugned orders, Ld. CIT(A) extracted the findings recorded by Hon’ble Supreme Court in case of Abhisar Buildwell Pvt. Ltd. wherein at Para 11 of the order it was held as under:-

However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under ss. 147/148 of the Act, subject to fulfilment of the conditions mentioned in ss. 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under s. 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under ss. 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy.

Undisputedly in the assessment order passed by AO u/s. 153A, addition has been made on the basis of the pen drive found in search of Ramesh Manihar Group. Having regard to the decision of Hon’ble Supreme Court in case of Abhisar

As a result, we find no merit in these appeals filed by the department, we uphold the two impugned orders passed by the Ld. CIT (A) and thus appeals filed by the department are dismissed.

In the result, both the appeals of the revenue are dismissed. The Order is pronounced in the open court on the 14th day of October 2025. (Dr. S. SEETHALAKSHMI) ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 14/10/2025

अपीलाथ /The Appellant , 2. ितवादी/ The Respondent. 3. आयकर आयु CIT 4. िवभागीय ितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड फाइल/Guard file.