Sunil Kumar Ahuja vs. Assistant Commissioner of Income Tax

ITA No

IN THE The Pr. Comm M/s M3M In (Formerly kn CORAM: H

Present: SANJEEV P

Income Tax A be referred a 13. 2. 21.07.2016 a Cases includ Income Tax assessee – M Solution), C return of inco After giving o. 97 of 2023 E HIGH COURT OF PUNJAB AT CHANDIGARH ITA Reser Date of Pron missioner of Income Tax (Centr Versus dia Holdings nown as M/s Krishna Flexi Solut HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN Mr. Yogesh Putney, Senior Stan for the appellant.

Ms. Radhika Suri, Senior Advoc Mr. Abhinav Narang, Advocate Ms. Parnika Singla, Advocate, f

PRAKASH SHARMA, J. The present appeal is directed Appellate Tribunal, Delhi Bench as ‘the ITAT’) dated 23.09.2022 It is stated that a search and seiz at the residential as well as offi ding the assessee. A notice un Act, 1961 (for short, ‘the Act’) M/s M3M India Holdings (Forme -13, Sushant Lok, Phase-1, Gu ome, the assessee has declared it g opportunity to the assessee -1- B AND HARYANA H A No. 97 of 2023 (O&M) rved on : 25.09.2024 nouncement : 22.10.2024 al), Gurugram … Appellant tion) …Respondent

NJEEV PRAKASH SHARMA NJAY VASHISTH nding Counsel, cate assisted by and for the respondent. against the order passed by the h ‘E’, New Delhi, (hereinafter to 2 for the assessment year 2012- zure operation was conducted on ice premises of M3M Group of nder Section 153A(1)(a) of the was issued and served upon the erly known as M/s Krishna Flexi urugram on 28.03.2018. In the ts income of ` 3,53,03,79,100/-. e, the assessment order was

e o - n f e e i e . s VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No

passed unde ` 5,77,68,34 appeal befor who vide his assessee file dated 23.09.2 3. incorrect in assessee, wh the assessee. Section 153A search. The i that proceedi found during 4. has relied on Meeta Gutgu challenge bef 5. that additions additions had Private Limi which had m purchase of l ultimate bene o. 97 of 2023 er Section 153A (1)(b) of the 4,292/-. Aggrieved against the re the Commissioner of Incom s order dated 31.03.2022 dismis d the appeal before the ITAT, 2022. Now the Revenue is in ap Learned counsel for the Revenu holding that no search was co hereas warrants of authorization It was incorrect in holding that A of the Act as there was no incr interpretation made under Sectio ings can be initiated only with r g search at the premises of the ass Learned counsel for the Revenu n CIT vs Kabul Chawla 380 I utia 395 ITR 526, although th fore the Supreme Court at that re It was further submitted that the s could not have been made in th d already been made in the ha ited ignoring the aspect that it w made the entire payment throu land measuring 430 acres at Ma eficiary of such transactions. -2- e Act on the total income of e same, the assessee preferred me Tax (Appeals)-3, Gurugram, ssed the appeal. Thereafter, the which was allowed vide order ppeal before this Court. ue submitted that the ITAT was nducted in the premises of the n were executed in the name of no additions can be made under riminating material found during on 153A of the Act by the ITAT regard to incriminating material sessee is incorrect. ue fairly submitted that the ITAT TR 573 (Delhi) and Pr.CIT vs he same were subject matter of elevant time. e ITAT was incorrect in holding he hands of the assessee, as such ands of M/s Peakwood Reality was M/s M3M India Holdings, ugh paper/ shell companies for anger, Gurugram and it was the f d , e r s e f r g T l T s f g h y , r e VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No

ITA No

material was of Rs. 62.89 9. wrongfully n where the se were issued mentioned th incriminating perversity in 10. for the partie 11. factual aspec satisfy oursel authorization 12. consequentia after search w authorization of Income Ta Kumar Bans M/s M3M In C-13, Sushan day is for Ba Bansal, Smt. Tower-1, DL o. 97 of 2023 found from the premises of the crores in the hands of the assess Learned counsel for the Revenu noted that no incriminating mate earch was conducted. He also to search 106A, Tower-1, DLF he name of the respondent, t g material available for init the order passed by the ITAT. We have carefully considered es and perused the referred law. Although, prima facie, this Cou cts would not be examined in lves, we asked the Department to n issued under Section 132 of the The original file containing al warrant of authorization and was also perused. It is noticed t n issued under Section 132 of th ax (Inv.), Chandigarh. One is for sal, Pankaj Bansal, Smt. Anita ndia Holdings Private Limited d nt Lok, Phase-1, Gurgaon and th ansant Bansal, Roop Kumar Ban . Abha Bansal and M/s M3M In LF Aralias, DLF Golflinks, Gu -4- assessee to justify the additions ee. ue submitted that the ITAT has erial was found at the premises submitted that warrants, which Aralias, Golf Link, Gurugram, therefore, there was sufficient tiating proceedings. There is the submissions of the counsel urt is of the firm view that the appeal but with the purpose to o place before us the warrants of e Act. satisfaction note for issue of d the satisfaction note prepared that there were two warrants of he Act by the Principal Director r partners Bansant Bansal, Roop Bansal, Smt. Abha Bansal and dated 16.07.2016 at the address he other one issued on the same nsal, Pankaj Bansal, Smt. Anita ndia Holdings (Firm) at 106-A, rugram. Thus, the name of the s s s h , t s l e o f f d f r p d s e a , e VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No

firm assessee Tower-1, D registered off 13. but contains registered of However, th ourselves in mentioning M 13, Sushant search operat if the name o fact remains and the name that there wa therefore, fou 14. incriminating however, is Satisfaction been made th Act is the so also noticed t to the assesse of different conducted a o. 97 of 2023 e is mentioned in the warrants LF Aralias, DLF Golflinks, ffice of the assessee. The other warrant which does n s name of M/s M3M India H ffice of the assessee i.e. C-13, S he name of the partners of the n agreement with learned co M/s M3M India Holdings Priva Lok, Phase-1, Gurgaon would n tion was conducted at the premis of other private limited company that the registered address of th es of their partners were mentio as no search conducted at the pre und to be erroneous and perverse Further contention of the appel g material being found in the without any basis. We hav Report and found that only inc he basis for initiating proceedin o called laptop of one Bina Sha that recovery of the said Laptop ee. The search operation in whic firm and it was not during t gainst the respondent-firm or -5- s at (Global 3rd Floor) 106-A, Gurugram, which is not the not contain name of the assessee Holdings Private Limited and Sushant Lok, Phase-1, Gurgaon. e firm are mentioned. We find ounsel for the Revenue that ate Limited for the addressee C- not be a reason to hold that no ses of the assessee because even is mentioned in the warrant, the he respondent firm was searched oned. The findings of the ITAT emises of the respondent-firm is, e. llant with regard to assertion of e premises of the respondent, e carefully gone through the criminating material which has ngs under Section 153-A of the ah recovered from Mumbai. We is not from the office belonging ch the laptop was recovered was the course of search operation its partners that incriminating , e e d . d t - o n e d T , f , e s e e g s n g VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No

material was of the Act o which may h Section 153- since no suc respondent-a Section 153-A 15. under:- o. 97 of 2023 recovered. If there was any indi or suppression of income or an have been recovered from the p -A of the Act can be said to b ch material was collected or fo assessee, we are unable to sustain A of the Act. Delhi High Court in Kabul Ch “Summary of the legal po On a conspectus of sectio the provisos 37 thereto, and in the aforementioned decisions, is as under: (i) Once a search takes Act, notice under section 153A issued to the person searched six assessment years immediat relevant to the assessment ye place. (ii) Assessments and rea of the search shall abate. The t years will have to be computed fresh exercise. (iii) The Assessing O assessment powers in respect relevant assessment year in wh Assessing Officer has the pow "total income" of the aforem assessment orders for each of there will be only one assessm -6- ication of violation of provisions ny other incriminating material, premises, the proceedings under e justified and legal. However, ound from the premises of the n the proceedings initiated under awla’s case (supra) has held as osition on 153A(1) of the Act, read with the light of the law explained in the legal position that emerges place under section 132 of the A(1) will have to be mandatorily requiring him to file returns for tely preceding the previous year ear in which the search takes assessments pending on the date total income for such assessment d by the Assessing Officers as a Officer will exercise normal of the six years previous to the hich the search takes place. The wer to assess and reassess the entioned six years in separate f the six years. In other words, ment order in respect of each of s , r , e r s h n s e y r r s e t a l e e e e

f VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No

(iv) Although section 15 should be strictly made on the course of the search, or o information available with the related to the evidence foun assessment "can be arbitrary or nexus with the seized mate has to be made under this se seized material."

(v) In the absence of a completed assessment can b assessment or reassessment ca in section 153A is relatable to pending on the date of search) completed assessment proceedi

(vi) In so far as the pend the jurisdiction to make the assessment under section 153 assessment shall be made sepa on the basis of the findings material existing or brought o Officer.

(vii) Completed assessm the Assessing Officer while section 153A only on the basis unearthed during the course documents or undisclosed inc the course of search which we disclosed or made known assessment.” In the case of Principal Co s Abhisar Bhildwell Private Lim -7- which both the disclosed and the brought to tax". 53A does not say that additions e basis of evidence found in the other post-search material or Assessing Officer which can be nd, it does not mean that the or made without any relevance erial. Obviously, an assessment ection only on the basis of the any incriminating material, the be reiterated and the abated an be made. The word "assess" o abated proceedings (i.e., those ) and the word "reassess" to the ings. ding assessments are concerned, e original assessment and the 3A merges into one. Only one arately for each assessment year of the search and any other on the record of the Assessing ments can be interfered with by making the assessment under s of some incriminating material e of search or requisition of come or property discovered in ere not produced or not already in the course of original ommissioner of Income Tax, mited (2023) 454 ITR 212, the e s e r e e e t e e d " e e

e e r r g y r l f n y l , e VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No

Supreme Cou and held as u We further fi on the basis assessee and could have b Meadows Pr 630, after con we have held Meadows Pr o. 97 of 2023 urt upheld the law laid down in under:- “For the reasons stated here agreement with the view taken case of Kabul Chawla (supra) the case of Saumya Constructio no addition can be made in resp absence of any incriminating ma ind that the proceedings, if at all of material collected while co d found to be relevant for the p been adopted was only under Sec rivate Limited vs Union of Ind nsidering the provisions of Secti d that both operate in different rivate Limited (supra) are extract “Thus, we find that a pa prescribed, as above. Follow law as laid down in Nazir Ah Bahadur Singh and Singhara that the respondents were obl procedure for reassessment o manner as prescribed under S other manner. However, we f invoked and initiated proceed Act, although neither there Section 132 of the Act as aga said that the search was con view has been taken by Gujar Vaswani and Subhash Khat -8- n Kabul Chawla’s case (supra) einbelow, we are in complete by the Delhi High Court in the and the Gujarat High Court in on (supra), taking the view that pect of completed assessment in aterial.” which could have been initiated onducting search of some other purpose, then the course which ction 153-C of the Act. In Misty dia and others 2024 (465) ITR ion 153-A and 153-C of the Act, fields. Relevant paras of Misty ted below:- articular procedure has been wing the salutary principles of hmad and followed in Rao Shiv a Singh's cases (supra). we find liged to compulsorily follow the of the petitioner company in the Section 153C(1) alone and in no find that the respondents have dings under Section 153A of the is any search initiated under ainst the petitioner nor it can be nducted at its premises. Similar rat High Court in Hitesh Ashok ttar's cases (supra). Thus, the ) e e n t n d r h y R , y n f v d e e o e e r e r k e VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No

In somewhat Principal Co Park Private decided on 0 17. law to be ex o. 97 of 2023 proceedings initiated under vitiated. xxx xx Thus, when there was no sear and 132A of the Act as aga panchnama reflects the name registered office of M3M In respondents in passing s 07.02.2024 on the basis of no 05.01.2018 is held to be unju Once the search and seizure order dated 28.02.2014 was p of the Act for the AY 2006-07 conducting search and seiz sustainable in law. In view conclusions, we are satisfie initiated under Section 153A issued on 05.01.2018 are liab t similar situation, Delhi High C ommissioner of Income Tax, C e Limited (formerly known as A 8.12.2023, held as under:- “Also admittedly, in the pr action against the responde material was found and the m of Shri B.P. Singh now sou appellant/ revenue was reco action. Therefore, the propose in the memo of appeal cann question of law.” In view of the above, we do not xamined by this Court. All the -9- Section 153A are found to be xx xxx rch conducted under Section 132 ainst the petitioner and only a of the petitioner prepared at the ndia Limited, the action of the econd assessment order on otice under Section 153A dated ustified and without jurisdiction. was conducted and assessment passed by invoking Section 153A 7 to 2012-13, fresh order without zure operation would not be of the aforesaid findings and ed that the entire proceedings A of the Act including notice le to be quashed.” Court in ITA No. 680 of 2023 – Central -1 vs Oxyzen Business Achvis Softech Private Limited, resent case, during the search ent/ assessee no incriminating material in the form of statement ught to be relied upon by the orded subsequent to the search ed question of law numbered 2.2 not be admitted as substantial t find any substantial question of pleas raised are purely factual e 2 a e e n d

t A t e d s e – s , h g t e h 2 l f l VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment

ITA No.

which have b we dismiss th 18. returned und 19. 20.

22.10.2024 vs Whether spea Whether repo . 97 of 2023 been examined by the ITAT as he appeal summarily. The original file produced by t er proper receipt. All pending applications shall st No costs.

(SANJ

aking/reasoned

ortable

-10- noticed by us and accordingly, the department in the Court be tand disposed of. JEEV PRAKASH SHARMA)

JUDGE (SANJAY VASHISTH)

JUDGE Yes/No Yes/No

, e VARINDER SINGH 2024.10.24 10:17 I attest to the accuracy and authencity of this order/judgment