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Income Tax Appellate Tribunal, DELHI BENCH, ‘A’: NEW DELHI
Before: SHRI C.N. PRASAD & SHRI M. BALAGANESH
ORDER
PER C.N. PRASAD, JM,
This appeal is filed by the assessee against the order of the CIT(A), Delhi-25 dated 05.12.2024 for A.Y. 2014-15.
The assessee in its appeal has raised following grounds of appeal :-
1. On the facts and circumstances of the case and in law, the order passed by the learned Commissioner of Income Tax (Appeals) [Ld. CIT(A) is bad both in the eyes of law and on facts and thus, liable to be quashed.
2. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law passing the order without giving assessee an opportunity of being heard, in violation of the principle of natural justice.
3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred both on facts and in law in confirming the additions in the order passed u/s. 153C of the Act, without any incriminating material having been found during the course of search.
4. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the proceedings initiated under Section 153C and the assessment framed under Section 153C which is bad and liable to be quashed in the absence of a proper satisfaction being recorded by the AO of the searched person that the incriminating material belonging assessee was found during the course of the search. (ii) That the Ld. CIT(A) has erred both on facts & in law in confirming the above addition despite the fact that the documents on the basis of which addition has been made do not belongs to, pertains to or relates to the assessee.
5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred both on the facts and in law in confirming the assessment order u/s 153C of the Act which was passed by the AO without disposing off the objections so raised by the assessee during the course of the assessment proceedings.
6. On the facts and circumstances of the case and in law, Ld. CIT(A) has erred both on facts and in law in confirming the assessment u/s 153C of the Act made by the AO without issuing and serving mandatory notice u/s 143(2) of the Act within the time limit prescribed under the Act thereby making the assessment order invalid and liable to be quashed.
7. (i) On the facts and circumstances of the case and in law, the approval obtained by the Ld. AO under Section 153D of the Act is not in accordance with the provisions of Section 153D of the Act and is thus, bad in law, illegal and invalid. (ii) That the said approval has been granted in a mechanical manner and as such the assessment order so passed is illegal and void-ab-initio
8. On the facts and circumstances of the case, the Ed. CIT(A) has erred in confirming the assessment of income at Rs.35,69,750/- as against the returned income of Rs. 4,79,750/-. 9. (i) On the facts and circumstances of the case, the Ld. CIT(A) 8 has erred in confirming the addition of Rs. 25,00,000/- u/s 69A of the Act on account of payment made to M/s Diwakar Commercial Private Limited. (ii) That the aforesaid addition has been made by the AO arbitrarily rejecting the explanation and evidences brought on record by the appellant.
10. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred in confirming the addition of Rs. 5,00,000/- u/s 69A of the Act on account of payment made to Alok K Agarwal. (ii) That the aforesaid addition has been made by the AO despite the fact that no payment is made to Alok K Agarwal during the year under consideration. 11. (i) On the facts and circumstances 9 of the case and in law, the Ld. CIT(A) has erred both on facts and in law in confirming an addition of Rs. 90,000/- under section 69C of the Act as unexplained expenditure on account of commission at the rate of 3% paid on the above transactions from the alleged undisclosed sources. (ii) That the aforesaid addition has been made by the AO arbitrarily rejecting the explanation and evidences brought on record by the appellant.
(i) On the facts and circumstances of the case and in law, Ld. CIT(A) has erred both on facts and in law in confirming the assessment made by the AO by placing reliance on statement of third party recorded during the course of search and as such the assessment so made is bad in law and against facts of the case. (ii) That the admission made during the course of search cannot be deemed as conclusive evidence in order to make the addition without any corroborating evidence in this regard. (iii) That the Ld. AO has erred both on facts and in law in drawing adverse inference against the assessee on the basis of statement recorded without giving assessee an opportunity to cross examine the same.
That the appellant respectfully craves for leave to add, amend, alter, omit or substitute any of the grounds of appeal at 11 any time before or at the time of hearing of the appeal. The above grounds of appeal are mutually exclusive and without prejudice to each other.
3. The assessee also filed application for admission of the following additional ground under Rule 11 of the ITAT Rules :-
“14. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming the issuance of notice u/s153C of the Act as same is not covered within the ambit of ‘relevant assessment year’ as defined in Explanation 1 to 4th Proviso to Section 153A(1) of the Act and is thus without jurisdiction, barred by limitation, bad in law, illegal and invalid. (ii) That the Ld. CIT(A) has erred both on facts and in law in confirming the issuance of notice u/s.153C of the Act as the same is time barred by applying the first proviso to section 153C of the Act and is thus without jurisdiction, barred by limitation, bad in law, illegal and invalid.
The learned Counsel for the assessee submitted that in the additional grounds of appeal
the assessee challenged the very validity of notice issued u/s.153C as barred by limitation and, therefore, purely legal issue which do not require any investigation of facts.
5. The learned Counsel placing reliance on the decision of Hon’ble Supreme court in the case of National Thermal Power Company Limited Vs. CIT reported in 229 ITR 383 pleads for admission of additional ground.
6. On hearing both the sides and perusing the above additional grounds we observed that the additional grounds raised by the assessee are purely legal ground and, therefore, the same are admitted in view of the decision of Hon’ble Supreme Court in the case of National Thermal Power Company Vs. CIT (supra).
7. Since, the assessee has raised the very validity of notice issued u/s. 153C and the legality of assessment first we take up these grounds for adjudication.
The learned Counsel for the assessee submitted that search and seizure action was carried out in Alankit Group on 18.10.2019 and a satisfaction note was drawn by the AO of the searched person on 24.06.2022. Consequent to the search in Alankit Group certain documents were received by the AO of the Assessee company from the AO of the searched person on 24.06.2022 and subsequently a notice u/s. 153C was issued to the assessee by the AO on 26.07.2022.
The learned Counsel submitted that following the judgment of Hon’ble High Court of the Delhi in the case of PCIT Vs. Ojjus Medicare Private Limited, the date of commencement for computation of 6 years block period u/s. 153C shall be reckoned from the date of receipt of the books of the accounts documents or assets seized by the jurisdictional AO of the non searched person i.e. the assessee. Therefore, it is sated that in the case of the Assessee the search date will have to be considered as on 24.06.2022 for the purpose of computing the 6 years block period u/s. 153C of the Act i.e. from A.Y.2022-23 to A.Y.2017-18. Thus, the learned Counsel submitted that since assessment year 2014-15 falls beyond the block period of 6 years, the notice issued u/s. 153C for the assessment year under consideration i.e. 2014-15 is invalid and liable to quashed.
Heard rival submissions and perused the material available on record. In this case search and seizure operations were conducted in Alankit Group on 18.10.2019 and a satisfaction note was drawn by the AO in the case of Alankit Group on 24.06.2022. On the same date certain documents belonging / pertaining to the assessee were transferred to the jurisdictional AO of the assessee by the AO of the searched person on 24.06.2022. Pursuant to these documents notice u/s. 153C was issued on 26.07.2022 and accordingly the assessments were completed for 6 assessment years including A.Y. 2017-18.
We observed that the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Ojjus Medicare Private Limited & others (465 ITR 101) held that the period of “relevant assessment year” is to be calculated to the date of receipt of the books of accounts, documents, assets seized by the jurisdictional AO of the non searched person. Applying the ratio of this decision to the case on hand since the documents were received by the jurisdictional AO of the assessee from the AO of the searched person on 24.06.2022, the block period of 6 years for the purpose of completion of assessments u/s.153C would be from A.Y. 2022-23 and five assessment years backwards i.e. till 2017-18.Thus, the 6th assessment year would be 2017-18 and the assessment year under consideration is A.Y.2014-15 is out of the block period of assessment years 2020-22 to 2017-18. In the circumstances, the assessment framed for A.Y. 2014-15 u/s.153C is bad in law and same is hereby quashed. The additional grounds raised by the assessee are allowed.
13. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28.11.2025