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Facts
The assessee's appeal was filed 326 days beyond the limitation period due to an accountant's oversight in checking the Income Tax Portal. The assessee, an NRI, subsequently filed the appeal and raised an additional ground challenging the validity of proceedings under Section 153C of the Income Tax Act.
Held
The Tribunal condoned the delay in filing the appeal, citing bonafide and reasonable cause. It further held that the proceedings initiated under Section 153C were invalid as the notice was issued beyond the time limit prescribed by the Act, following Supreme Court and High Court precedents.
Key Issues
Condonation of delay in filing appeal and validity of proceedings initiated under Section 153C of the Income Tax Act, 1961, concerning the date of initiation of search and time-bar.
Sections Cited
153C, 153C(3), 132, 132A, 143(1), 143(2), 142(1), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM
This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals) Kolkata-27, (hereinafter referred to as the “Ld. CIT (A)”] dated 31.08.2024 for the AY 2019- 20.
At the outset, we note that the appeal of the assessee is barred by limitation by 326 days. At the time of hearing the counsel of the assessee submitted that the assessee is a Non-Resident Indian (NRI) and assessed to tax in India under PAN AAWPH1706L. The 2.1. The Ld. D.R on the other hand strongly opposed the maintainability of the appeal as the delay was not explained with reasons.
2.2. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reason, hence, we condone the delay and adjudicate the appeal after respectfully following the decisions. The Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. 1167 1.T.R. 471 (SC), has held that the Courts should have a pragmatic and liberal approach while considering the petition for condonation of delay. Their Lordships have also held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice should be preferred. Similarly, the Hon'ble ITAT Delhi in the case of Royal Airways Ltd. vs. ADIT reported in [2006] 98 ITD 259 (ITAT Del]) has condoned the delay of 9 to 11 years in filing appeals by holding that it is a settled legal position that any delay caused on account of legal advice received or while perusing an abortive remedy should be treated as sufficient cause for such delay.
At the time of hearing the ld. Counsel for the assessee pressed additional ground, which is extracted below:-
“that the proceedings u/s 153C of the Act initiated vide notice dated 13.12.2022 is not valid in terms of section 153C(3) of the Income-tax Act, 1961 (the Act).” 3.1. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of
The facts in brief are that the assessee filed the return of income on 29.08.2019, declaring total income of ₹25,22,240/-, which was processed u/s 143(1) the Act on 29.10.2019. The Director of Income Tax (Investigation) Delhi conducted a search action u/s 132 of the Act on 06.02.2019, in the case of Shri Avtar Singh Kochar during which certain incriminating materials were found and seized. These materials were in the form of digital evidences, conversations and WhatsApp Chats, etc. between Shri Avtar Singh Kochar and Shri Jaideep Halwasiya, the assessee having bearing on the determination of total income of the assessee (the other person) for the purpose of invoking the Provisions of Section 153C of the Act which were received by email on 26.09.2022, from the AO of the searched person i.e. DCIT CC-25, New Delhi. A satisfaction note dated 4.1. The Ld. Authorized Representative vehemently submitted before us that the notice issued by the Ld. AO is hopelessly barred by limitation in terms of first proviso to Section 153C of the Act. The Ld. Authorised Representative argued that according to the said proviso to Section 153C of the Act , the date of initiation of search in case of other person u/s 153C of the Act is the date on which the Ld. AO of such other person receives the books of account or documents seized during the course of search. The Ld. Authorised Representative submitted by referring to the satisfaction note dated 21.10.2021 that the soft copy of the WhatsApp Chats which was seized documents in this case for the purpose of invoking Section 153C of the Act in the case of the assessee was received by the Ld. AO vide email dated 26.09.2022 via email. Therefore, the proceedings u/s 153C of the Act initiated vide notice dated 13.12.2022, is not valid in terms of section 153C(3) of the Act. The Ld. Authorised Representative in defense of his argument relied on 4.2. The Ld. DR on the other hand relied on the orders of the authorities below.
After hearing the rival contentions and perusing the materials available on record, we find that in this case the proceedings were initiated u/s 153C of the Act vide notice dated 13.12.2022, after a search was conducted on Shri Avtar Singh Kochar on 06.02.2019. During the course of search certain incriminating materials were found and seized which were in the form of conversation and WhatsApp Chats between Shri Avtar Singh Kocar and the assessee. We note that the satisfaction note of the Ld. AO of the searched person dated 21.10.2021, was received by the Ld. AO of the assessee on 31.01.2022. We find that the satisfaction note mentioned the seized documents in the form of soft copy of WhatsApp Chats. The said seized materials were received by email on 26.09.2022 by the AO of assessee. The observations ande notings of the AO of the assessee in para 2.2 page 2 are extracted below for the sake of ready reference:-
“44. Certainly, there cannot be two different dates for initiation of search for the other person. Hence, for all practical purpose, the initiation of search would be the same date and it is apparent upon reading the provisions of Section 153C of the Act. In the provision of Section 153C(1) of the Act, the date of initiation of search is mentioned as the date of handing over of materials and as per the first proviso, the same date would apply for the purpose of abatement also. When such being the case, no other date will come into picture for the purpose of determination of initiation of search for other
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 20.01.2026.
Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 20.01.2026 Sudip Sarkar, Sr.PS