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Facts
The assessee's appeal for AY 2018-19 arose from an order related to proceedings under Section 153C read with Section 144 of the Income Tax Act. The Assessing Officer recorded a Section 153C satisfaction following a search on a group of cases. The AO found information in seized documents that belonged to the assessee and was relevant for determining total income.
Held
The Tribunal held that based on a recent co-ordinate bench decision and the legislative amendment to Section 153C vide Finance Act, 2015, a satisfaction recorded under Section 153C cannot treat books of account or documents as belonging to a third person after the amendment. Therefore, the assessment was quashed.
Key Issues
Whether seized documents found during a search on a third party can be considered to belong to the assessee for the purpose of Section 153C proceedings post the amendment by the Finance Act, 2015.
Sections Cited
153C, 144, 69C, 115BBE, 153C(1)(a)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Asstt. Year: 2018-19 Allen Petrochemicals Pvt. Ltd. Vs DCIT, Plot No. 8835, Accronda Industrial Central Circle, Estate, Delhi Road, Partapur, Meerut, Meerut, U.P.-250103 U.P.-250001 (APPELLANT) (RESPONDENT) PAN No. AACCA4573H Assessee by : None Revenue by : Sh. Gouranga Chandra Das, Sr. DR Date of Hearing: 09.12.2025 Date of Pronouncement: 09.12.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2018-19, arises against the CIT(A)-3, Noida’s DIN & order No. ITBA/APL/M/250/2025-26/1076842849(1) dated 09.06.2025, in proceedings u/s 153C r.w.s. 144 of the Income Tax Act, 1961.
Case called twice. None appears at the assessee’s behest. The assessee/appellant had also not put in appearance in the previous hearing as well. We thus proceeded ex-parte against the assessee.
Mr. Das vehemently argues that both the lower authorities have rightly made section 69C r.w.s. 115BBE of the Act, Allen Petrochemicals Pvt. Ltd. unexplained expenditure addition representing assessee’s cash payments to the searched party, in the assessment order dated 26.03.2024 as upheld in the lower appellate discussion.
We have given our thoughtful consideration to the assessee’s and the Revenue’s respective stands all along. Suffice to say, the learned departmental authorities had carried out a search in M/s Blomstrende Buildwell Pvt. Ltd. group of cases on 15.01.2021. This followed the centralization of the assessee’s case(s) as well. And that the learned Assessing Officer then recorded section 153C satisfaction followed by his notice dated 02.01.2024 which finally culminated in the impugned assessment framed forming subject matter of adjudication before us.
We further notice that the learned Assessing Officer had himself made it clear at page 2 in para 3 of the assessment order that the seized diary and various loose sheets found/seized during the course of search in M/s Sunny Chemical Pvt. Ltd. and the information contained therein “belongs to” M/s Allen Petrochemicals Pvt. Ltd. and has bearing upon the determination of it’s total income. That being the case, we invited the Revenue’s attention to section 153C(1)(a)(b) wherein the legislature has incorporated the clinching statutory Allen Petrochemicals Pvt. Ltd. expression of “belongs to” for any money, bullion, jewellery......than such seized documents and loose sheets etc. covered under the latter clause. This tribunal’s recent learned co-ordinate bench in Prashant Premchand Bafana Vs. ACIT IT(SS)A No. 119 & 120/Pun/2022 decided on 08.04.2025 has already settled the issue in the assessee’s favour and against the department that satisfaction recorded u/s 153C could not treat such books of account or documents as “belongs to” a third person after the legislative amendment therein vide Finance Act, 2015 w.e.f. 01.06.2015. We adopt the very analogy herein-as-well mutatis mutandis to quash the learned Assessing Officer’s assessment dated 26.03.2024 in very terms.
All other remaining pleadings between the parties stand rendered academic.