SMT. SUFHILA CHANDRA,DEHRADUN vs. ACIT, CC-, DEHRADUN

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ITA 151/DDN/2024Status: DisposedITAT Dehradun13 June 2025AY 2019-20Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI M. BALAGANESH (Accountant Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that section 147/148 proceedings initiated on the basis of seized incriminating material should have been under section 153C, not the general reopening mechanism. Following precedents favouring the assessee, the impugned reopening was quashed.

What were the facts?

The assessment proceedings for AY 2019-20 were initiated under section 147/144 based on seized material from a search in another person's case. The department added cash payments/receipts based on entries in the seized material.

What were the issues?

The primary issue was the validity of reassessment proceedings initiated under section 147/148 when the basis was seized material from another assessee's search, and whether section 153C was the appropriate provision.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 153C

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DEHRADUN “SMC” BENCH, DEHRADUN

Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH

Hearing: 21.03.2025Pronounced: 13.06.2025
1.

This assessee’s appeal for assessment year 2019-20, arises against the Commissioner of Income Tax (Appeals)-3 [in short, the “CIT(A)”], Noida’s order dated 10.07.2024 passed in case no. CIT(Appeal) Noida-3/10030/2018-19, involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

It transpires during the course of hearing that there arises the first and foremost legal issue of validity of the impugned section 148/147 proceedings itself since initiated on the basis of a seized material found in the course of search carried out in case of one Sh. Krishan Sharma & Smt. Sheetal Sharma on 02.02.2022. This clinching fact duly emerges from a perusal of the CIT(A)’s lower appellate discussion at page 7 onwards that the department has proceeded to add the assessee’s cash payments/receipts; as the case may be, going by the corresponding entries found to have made in the seized material. It is in this factual backdrop that the department has strongly contested the assessee’s above legal ground that section 148/147 mechanism set into motion herein is indeed sustainable in law than that under section 153C of the Act going by PCIT Vs. Naveen Gupta (2024) 168 taxmann.com 574 (Del) settling the issue against the assessee. We, however, note that various other judicial precedents i.e. Shyam Sunder Khandelwal Vs. ACIT (2024) 161 taxmann.com 255 (Raj.); PCIT Vs. VSL Mining

2 | P a g e Company Pvt. Ltd. (2024) 167 taxmann.com 373 (Ker) and Amit Kumar alias Amit Saraf Vs. Union of India (2024) 462 ITA 205 (Del) have adjudicated the very issue in assessee’s favour. And also that their lordships concluded that section 148/147 proceedings initiated on the basis of such seized incriminating material leads to initiation of the specific provision under section 153C than the general reopening mechanism under section 148/147 of the Act. Hon’ble jurisdictional high court of Uttarakhand has admittedly not decided the instant issue in either party’s favour. That being the case, we hereby quash Commissioner of Income-Tax Vs. Vegetable Products Ltd. [1971] 80 ITR 14 (Kol.) that the view favouring the assessee in such an instance ought to be adopted and quash the impugned reopening herein forming subject matter of record. Ordered accordingly. All other pleadings on merits stand rendered academic.

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