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Facts
The assessee's appeals concerned assessment years 2016-17, 2017-18, and 2018-19. The assessments and penalties were based on Section 153C proceedings following a search in M/s Pythhos Group on 13.06.2018. The disallowances related to long-term capital loss and income from other sources.
Held
The Tribunal held that the impugned disallowances and penalties were not sustainable as they were not based on specific seized material. The assessment dated 29.03.2023 was found to be unsustainable in law.
Key Issues
Whether the reassessments and penalties under Section 153C and Section 270A were sustainable without being based on specific seized material found during the search.
Sections Cited
153C, 143(3), 270A, 271(1)(c)
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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman
Asstt. Year : 2018-19 : Asstt. Year : 2016-17 : Asstt. Year : 2017-18 ITA No. 37/Del/2025 : Asstt. Year : 2018-19 Sh. Anil Kapilashrami, Vs DCIT, 1002, Tower-4, Vipul Belmonte, Golf Central Circle-16, Course Road, Sector-56, Gurgaon, New Delhi-110055 Haryana-122011 (APPELLANT) (RESPONDENT) PAN No. AFBPK2728K Assessee by : Ms. Simmi Bagga, Adv. & Ms. Palak Kumari, Adv. Revenue by : Sh. Ajay Kumar Arora, Sr. DR Date of Hearing: 10.10.2025 Date of Pronouncement: 10.10.2025 ORDER Per Bench:
The instant batch of five appeals pertains to the single assessees herein namely, Sh. Anil Kapilashrami. All other relevant details thereof stand tabulated as under:
S l. N o. ITA N o s. A.Y . Ap pe llant Re spon den t Orde r pa s se d ag a in s t Pro cee d ing s u / s 1- 2 309 3 & 201 6 -17 An il DCI T C IT (A ) -2 6, Ne w D e lh i 153C r . w. s. 309 4 /D e l/2 02 4 & Ka p ila shra mi In D I N & or der Nos . 143 (3) 201 8 -19 ITB A /AP L /M /250 / 20 24 - 25 /1 064 46 951 5 (1 ) & 106 44 692 20 (1 ) D ate d : 30 .0 4. 202 4 3- 5 35, 3 6 & 201 6 -17 , An il DCI T C IT (A ) -2 6, Ne w D e lh i 271 (1) (c ) - 37 /De l/202 5 201 7 -18 Ka p ila shra mi In D I N & or der Nos . (A .Y. 20 16 -1 7 ) & ITB A /AP L /M /250 / 20 24 - 270A - 201 8 -19 25 /1 070 15 285 5 (1 ) , (A .Y. 2 01 7- 18 & 107 01 798 27 (1 ) & 201 8 -19 ) 107 01 795 43 (1 ) D ate d : 06 .1 1. 202 4
We come to the assessee’s “lead” appeal for the first and foremost assessment involved herein A.Y. 2016-17. It emerges during the course of hearing with the able assistance coming from both the parties that the learned Assessing Officer had framed his section 153C r.w.s. 143(3) assessment dated 29.03.2023 in the assessee’s case disallowing his long term capital loss amounting to Rs.40,20,794/- which stands upheld in the lower appellate discussion.
We further deem it appropriate to clarify here that the learned departmental authorities had carried out the search in question in M/s Pythhos Group on 13.06.2018 followed by issuance of section 153C notice to the assessee on 30.07.2021.
The above being the clinching factual position, learned CIT-DR could hardly dispute that the impugned assessment year 2016-17; when counted as on the date of 153C satisfaction becoming the date of search in case of such a third person as on 30.07.2021, becomes an “unabated” assessment year wherein any disallowance or addition; as the case may be, & 3094/Del/2024 36 & 37/Del/2025 Anil Kapilashrami ought to be made on the basis of the corresponding specific seized material only. We further wish to emphasize here that the impugned long term capital loss disallowance is not based on any such specific seized material as per the assessment findings in the assessment order. Faced with this situation, we quote PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) to conclude that the impugned disallowance; or for that, the assessment herein dated 29.03.2023 itself is not sustainable in law in very terms. Quashed accordingly. This assessee’s first and foremost “lead” appeal ITA Nos. 3093/Del/2024 is accepted in very terms.
Same order to follow in the assessee’s penalty appeal being consequential in nature. Allowed accordingly.
The assessee’s third appeal in assessment year 2017-18 is directed against both the learned lower authorities’ action levying section 270A penalty of Rs.1,32,150/- @ 200% of the mis-reported income amounting to Rs.66,075/- pertaining to the income from other sources of Rs.6,95,750/-. It is made clear that the foregoing head of income had also not been deducted during the course of search & 3094/Del/2024 36 & 37/Del/2025 Anil Kapilashrami on the basis of seized material forming a conditioned precedent in an unabated assessment herein as well. We thus quote PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC) to conclude that the impugned penalty is not sustainable in law. Deleted accordingly. The assessee instant third appeal ITA No. 36/Del/2025 is accepted.
The assessee’s twin appeal in assessment year 2018-19 involve section 143(3) r.w.s. 153C quantum and section 270A penalty proceedings; respectively. A perusal of the assessment order herein also indicates that the quantum disallowance was of long term capital loss only amounting to Rs.4,66,951/- again not based on any specific seized material.
We thus refer to the foregoing landmark decision herein as well to quash the impugned assessment dated 29.03.2023 itself in very terms. So is the outcome of the assessee’s consequential penalty appeal since the same has got no legs to stand any more in foregoing terms. These assessee’s twin appeals succeed in above terms.