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Facts
The appeals were filed by the Assessees against orders of the Commissioner of Income-tax (Appeals) which upheld orders of the Assessing Officer passed under section 143(3)/153C of the Income-tax Act. The Revenue sought an adjournment stating that additions were made on a protective basis, while substantive additions were made in the hands of a third party, Robert Wadhera, whose appeals were pending.
Held
The Tribunal noted that the Assessee's counsel argued that the assessment years were unabated and there was no incriminating material found. They relied on High Court decisions. The Tribunal held that sustaining protective additions without final conclusions on substantive additions lacks legal sanctity. It also observed that for AY 2020-21, assessment should have been under section 153C.
Key Issues
Whether protective additions can be sustained in the absence of substantive additions or incriminating material, and the applicability of section 153C for AY 2020-21.
Sections Cited
143(3), 153C
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Income Tax Appellate Tribunal, “B” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
ITA No. & Ld. FAA who Appeal No. & Date of order AO who passed the AY passed the appellate of the Ld. FAA assessment order
P a g e | 3 16 Appeals JoginderPayla order &Date of order 2741/D/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2013-14 ITBA/APL/S/250/2024- Delhi, dated 25/1073208869(1) Dated 30.03.2023 12.02.2025 2742/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2014-15 ITBA/APL/S/250/2024- Delhi, dated 25/1073209135(1) 30.03.2023 12.02.2025 2743/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2015-16 ITBA/APL/S/250/2024- Delhi, dated 25/1073209552(1) 30.03.2023 12.02.2025 2744/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2016-17 ITBA/APL/S/250/2024- Delhi, dated 25/1073209869(1) 30.03.2023 12.02.2025 2745/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2017-18 ITBA/APL/S/250/2024- Delhi, dated 25/1073210072(1) 30.03.2023 12.02.2025 2746/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2018-19 ITBA/APL/S/250/2024- Delhi, dated 30.03.2023 25/1073210367(1) 12.02.2025 2819/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2019-20 ITBA/APL/S/250/2024- Delhi, dated 25/1073210585(1) 30.03.2023 12.02.2025 2820/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2020-21 ITBA/APL/S/250/2024- Delhi, dated 25/1073210750(1) 30.03.2023 12.02.2025 3157/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2014-15 ITBA/APL/S/250/2024- Delhi, dated 25/1074711052(1) 30.03.2023 19.03.2025 3158/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2015-16 ITBA/APL/S/250/2024- Delhi, dated 25/1074712378(1) 30.03.2023 19.03.2025 3159/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2016-17 ITBA/APL/S/250/2024- Delhi, dated 25/1074711875(1) 30.03.2023 19.03.2025
P a g e | 4 16 Appeals JoginderPayla 3160/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2017-18 ITBA/APL/S/250/2024- Delhi, dated 25/1074713073(1) 30.03.2023 19.03.2025 3161/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2018-19 ITBA/APL/S/250/2024- Delhi, dated 25/1074714873(1) 30.03.2023 19.03.2025 3162/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2020-21 ITBA/APL/S/250/2024- Delhi, dated 25/1074713963(1) 30.03.2023 19.03.2025 4685/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2012-13 ITBA/APL/S/250/2025- Delhi, dated 26/1076592531(1) 30.03.2023 30.05.2025 4686/Del/25 CIT(A)-31, Delhi DIN & Order No : DCIT, CC-27, New 2013-14 ITBA/APL/S/250/2025- Delhi, dated 26/1076592156(1) 30.03.2023 30.05.2025 4687/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2014-15 ITBA/APL/S/250/2025- Delhi, dated 26/1076592215(1) 30.03.2023 30.05.2025 4688/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2015-16 ITBA/APL/S/250/2025- Delhi, dated 26/1076592299(1) 30.03.2023 30.05.2025 4689/Del/25 CIT(A)-31, Delhi DIN & Order No : ACIT, CC-27, New 2016-17 ITBA/APL/S/250/2025- Delhi, dated 26/1076592396(1) 30.03.2023 30.05.2025
At the time of hearing ld. DR has sought adjournment on the basis that additions in the hands of these assessees have been made on protective basis while additions on substantive basis have been made in the hands of Robert Wadhera and in fact, the appeals of the Robert Wadhera are still pending
P a g e | 5 16 Appeals JoginderPayla before the Ld. First Appellate Authority, therefore, till the disposal of that appeal the present appeals be kept pending.
Ld. Counsels appearing for the assessee, however, submitted that in any case the years involved are unabated years and neither in the satisfaction note recorded to take cognizance u/s 153C of the Act or in the impugned orders there is any reference of any incriminating material found and relied. Reliance was heavily placed on the decision of Hon’ble Delhi High Court in the case of Saksham Commodities Ltd. Vs. ITO (2024) 464 ITR 1 (Delhi). It was also pointed out that in regard to AY: 2020-21 in fact the assessment should have been u/s 153C as a search year has to be determined on the basis of date of recording of satisfaction note. Therefore, assessment concluded u/s 143(3) for AY: 2020-21 are not sustainable in the light of decision of Hon’ble Delhi High Court in CIT Vs. RRJ Securities Ltd. (2016) 380 ITR 612 (Delhi).
We are of the considered view that where ld. First Appellate Authority was yet to make final conclusion with regard to substantive additions sustaining protective additions lacks legal sanctity as protective additions
P a g e | 6 16 Appeals JoginderPayla independently have no legal substratum to sustain and same has caused prejudice to the cause of justice for both the assessee and Revenue.
Therefore, the factual legal aspect as raised before us with regard to absence of incriminating materials being referred in the satisfaction note or the assessment orders and that in regard to AY: 2020-21 assessment should have been u/s 153C of the Act require indulgence of the Ld. First Appellate Authority independently too.
Thus, we allow the appeals for statistical purposes and restore the issues involved in appeals to ld. CIT(A) to give assessee fresh opportunity of hearing on aforesaid question of facts and law and to give conclusive findings on the same, only consequent to determination of issues in hand of assesse, where substantive additions have been made.
The appeals are allowed for statistical purposes.
Order pronounced in the open court on 23.01.2026