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Facts
The assessee's appeals (ITA Nos. 3403 & 3404/Del/2025) for AY 2020-21 and 2021-22 arose from CIT(A) orders. These orders were based on proceedings initiated under Section 153C read with Section 143(3) of the Income-tax Act, following a search action under Section 132. The lower authorities held the assessee as an entry provider for specific entries, leading to additions.
Held
The Tribunal held that the assessment under Section 153C was invalid if the satisfaction for forwarding the seized material was recorded after the search date and prior to the assessment year. This rendered the Section 143(3) assessment, framed on a later date, as non-est.
Key Issues
Validity of assessment under Section 153C when satisfaction for forwarding seized material was recorded after the search date. Whether assessment framed under Section 143(3) instead of Section 153C is valid.
Sections Cited
153C, 143(3), 132
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
ORDER PER SATBEER SINGH GODARA, JM These assessee’s twin appeals & 3404/Del/2025 for assessment years 2020-21 and 2021-22, arises against the Commissioner of Income Tax (Appeals)-30 [in short, the “CIT(A)”], New Delhi’s orders, both dated 12.12.2024, having DINs and orders no. ITBA/APL/M/250/2024-25/1071165111(1) and ITBA/APL/M/250/2024-25/1071166041(1), involving proceedings under sections 153C r.w.s. 143(3) and 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively. Heard both the parties. Case files perused.
Coming to the assessee’s former appeal we notice during the course of hearing that he is aggrieved against both the learned lower authorities action holding it as an entry provider; @ 50 paise qua the corresponding entries of Rs.5,12,87,784/-, resulting in addition of Rs.1,28,220/- in assessment order dated 9th March, 2023 and upheld in the lower appellate discussion.
That being the case, learned counsel representing assessee could hardly dispute that the departmental authorities had carried out section 132 search action in M/s. Sanjay Jain & Mehta group on 26.10.2020 wherein he was found to be a part of a well- orchestrated accommodation entry network. This followed the searched party as well as the assessee’s Assessing Officer’s respective section 153C satisfaction(s) finally culminating in the impugned assessment framed on 09.03.2023 in his case assessing the foregoing entry commission. We thus find no reason to interfere
2 | P a g e with the learned authorities impugned action. The assessee fails in his instant former appeal in very terms.
The outcome of the assessee’s latter appeal 143(3) assessment in question framed on 22.12.2022 appears to be against the department. This is for the precise reason that the learned Assessing Officer in the above searched party’s case had recorded his satisfaction that the corresponding incriminating material required to be forwarded to the jurisdictional Assessing Officer on 11.05.2022 which followed the latter’s satisfaction in the very financial year. That being the case and going by section 153C(1) 1st proviso read in light of 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), we notice that once the foregoing date of recording satisfaction is treated as a date of search in such an instance, the learned Assessing Officer could only have framed section 153C assessment herein than a regular one under section 143(3) of the Act.
Faced with this situation, we reject the Revenue’s vehement contention supporting the impugned assessment, to hold it as a 3 | P a g e non-est one in the eyes of law. The assessee succeeds in its latter appeal . All other remaining pleadings between the parties stand rendered academic.