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Facts
The Revenue appealed an order by the CIT(A) that deleted additions made by the Assessing Officer under Sections 68 and 69A of the Income Tax Act for AY 2018-19. The additions were based on proceedings initiated under Section 153C following a search.
Held
The Tribunal held that the Section 153C proceedings and the subsequent additions could not have been invoked in the assessee's case. This was because the seized material relevant to the additions did not relate to the assessee but to her HUF.
Key Issues
Whether the Section 153C proceedings and additions were valid when the seized material did not pertain to the assessee but her HUF.
Sections Cited
153C, 143(3), 68, 69A
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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
Assessment Year: 2018-19 Vs. Mrs. DCIT, Sulochana Mahadev New Delhi Bobade, G 10, PMC Colony, Ghorpade Peth, Maharashtra PAN: AGCPB7457L (Appellant) (Respondent) Assessee by Sh. Gaurav Jain, Adv. Sh. Tarun Chanana, Adv. Department by Ms. Rajinder Kaur, CIT(DR) Date of hearing 20.11.2025 Date of pronouncement 20.11.2025 ORDER
PER SATBEER SINGH GODARA, JM
This Revenue’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)-24, New Delhi’s order dated 28.01.2025 in case no. CIT(A), Delhi-24/10320/2017- 18 involving proceedings under section 153C r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
The Revenue proposes the following substantive grounds in the instant appeal: “1. That the learned CIT(A) has erred in law and on facts by deleting the addition of 280,00,000/- made by the Assessing Officer under Section 68 of the Income Tax Act, 1961. without properly appreciating the facts and evidence on record and ignoring the fact that the assessee could not satisfactorily establish the unexplained cash credits taken up by the assessee. 2. That the CIT(A) failed to appreciate that the documents found during the course of search proceedings were crucial in establishing the existence of undisclosed income in the hands of the Assessee.
That the CIT(A) erred in holding that the satisfaction note does not have any reference of the said search while the same clearly establishes a nexus between the seized material and the undisclosed income of the assessee for the current AY.
4. That the CIT(A) erred in law and on facts by deleting the addition of? 50.00,000/- made by the AO under Section 69A, ignoring the fact that the assessee could not satisfactorily establish the unexplained money in the hands of the assessee.
5. That the appellant craves leave to add, alter, amend, or withdraw any or all ground(s) of the appeal raised above at the time of hearing” 3. It next transpires during the course of hearing that the learned CIT(A) has reversed the Assessing Officer’s action making the above twin additions under section 68 and 69A of the Act, involving varying sums; for the reason that the relevant incriminating material sought to be relied upon by the department does not indicate any such unexplained cash credits or investments in the assessee’s name.
Both the parties reiterate their respective stands against and in support of the learned CIT(A)’s impugned lower appellate discussion. We notice from a perusal of the case records that the learned departmental authorities had carried out the search in question dated 13th March, 2019 wherein the Assessing Officer of searched person recorded his satisfaction that the corresponding loose slips found and seized in course thereof related to the assessee. He accordingly forwarded the said records to the Assessing Officer who initiated section 153C proceedings after satisfying himself that the same had a bearing on determination of the assessee’s total income. It is in this factual backdrop that our attention is invited to page 2 of the assessment order dated 23rd February, 2022 that the relevant seized material did not relate to the assessee Mrs. Sulochana Mahadev Bobade but to her eponymous “HUF” only. The Revenue is indeed very fair in not being able to rebut this clinching factual position.
Faced with this situation, we are of the considered view that the impugned section 153C proceedings as well as the twin additions herein could not have been invoked in the assessee’s case. Learned CIT(A)’s impugned lower appellate discussion under 3 | P a g e challenge at the Revenue’s behest stands upheld therefore. Ordered accordingly.