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Facts
The assessee's appeal for AY 2013-14 arises against the CIT(A)'s order upholding an addition of Rs. 50 lakhs on account of unexplained cash credits. The assessment was done under section 153C r.w.s. 143(3) of the Income-tax Act, 1961, following a search action under section 132 on 09.10.2013.
Held
The Tribunal held that the Section 153C satisfaction was not recorded for the assessment year 2013-14, but for assessment year 2012-13. The satisfaction recorded in 2015-16 rendered the assessment year 2013-14 as 'unabated', meaning additions should only be based on seized material. The court cited relevant Supreme Court and Delhi High Court judgments.
Key Issues
The primary issue was the validity of the assessment under Section 153C for the assessment year 2013-14, given the timing of the satisfaction and notice.
Sections Cited
153C, 143(3), 132, 68, 127
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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA
ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2013-14, arises against the Commissioner of Income Tax (Appeals)-IV [in short, the “CIT(A)”], Kanpur’s order dated 31.10.2018 passed in case no. CIT(A)-IV/10003/DCIT-CC-Noida/2016-17, involving proceedings under section 153C/143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Delay of 70 days in filing the asseessee’s instant appeal is condoned in larger interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).
We notice at the outset that there arises the first and foremost issue of validity of the impugned section 153C assessment itself in light of the relevant facts narrated hereunder. There is no dispute between the parties that the learned lower authorities had carried out section 132 search action at the assessee’s premises on 09.10.2013 in M/s. Shubhkamna Buildtech Pvt. Ltd. And that the learned Assessing Officer; after section 127 “centralization” order dated 23.10.2015; recorded his section 153C satisfaction, followed by his corresponding notice issued on 07.12.2015. There is further no dispute that all this culminated in section 143(3) r.w.s. 153C assessment in the assessee’s case making section 68 unexplained cash credits addition of Rs.50 lakhs which stand upheld in the lower appellate discussion.
It is in this factual backdrop that we revert back to the foregoing legal issue of validity of the impugned assessment. Learned CIT(DR) could hardly dispute the Assessing Officer’s
2 | P a g e section 153C satisfaction nowhere recorded that such unexplained cash credits ought to be assessed for the impugned assessment year 2013-14 as what all he has done was to deal with the corresponding figures in assessment year 2012-13 only. We further note that going by the date of recording of section 153C satisfaction or issuance of the notice therein to the assessee; as the case may be, all falling in the year 2015-16, render the impugned assessment year 2013-14 as an “unabated” one wherein any such addition ought to have been made only on the basis of the corresponding seized material going by PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC), CIT-7 Vs. RRJ Securities Ltd. (2016) 380 ITR 612 (Del), PCIT Vs. Ojjus Medicare (P) Ltd., (2024) 465 ITR 101 (Del) and CIT Vs. Jasjit Singh (2024) 465 ITR 101 (SC).
Faced with this situation, we reject the Revenue’s vehement contentions supporting the impugned section 153C assessment which stands quashed in foregoing terms. All other remaining issues between the parties on merits stand rendered academic.
This assessee’s appeal is allowed.