MALA RAM,SURAT vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, NEW DELHI

This assessee’s appeal for Assessment Year 2019-20, arises against the CIT(A)-27, New Delhi’s case No. CIT(A), Delhi-27/10825/2018-19 dated 28.02.2023, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties at length. Case file perused.

It emerges at the outset that there arises the first and foremost issue of validity of the impugned assessment framed u/s 143(3) of the Act dated 16.06.2021 itself. This is for the precise reason that the learned departmental authorities had Mala Ram carried out a search action dated 06.12.2018 in case of M/s Faquir Chand Lockers and Vaults Pvt. Ltd. group of cases wherein they are stated to have come across the assessee’s locker No. 175 and seized cash of Rs.85,00,000/-. The moot question which arises in this factual backdrop is that once the cash has been seized during the course of search herein which belonged to the assessee, the case was covered under the specific provision attracting section 153C(1)(a) than the procedure of normal assessment u/s 143(3) of the Act. We further quote section 153C(1) first proviso that the date of search in such a case is the date of recording the relevant satisfaction thereunder in light of PCIT vs. Ojjus Medicare Pvt. Ltd. (2024) (4) TMI 268 (Del).

We accordingly conclude that given the fact that it was an instance of search and seizure u/s 132 of the Act, learned lower authorities have erred in law and on facts in framing assessment in the assessee’s case u/s 143(3) of the Act. The same stand quashed in very terms.

This assessee’s appeal is allowed. Order Pronounced in the Open Court on 28/01/2025.