TaxTMI 
TaxTMI 
2024 (11) TMI 1304
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....e heard the rival submissions and perused the materials available on record. The assessee is a Hindu Undivided Family (HUF) having following members and coparceners :- Shri Sumit Gupta - Karta Smt Garima Gupta - Wife Kumari Anumitya Agarwal - Minor Daughter Master Nachiketa Agarwal - Minor Son 4. The return of income for the Asst Year 2013-14 was filed by the assessee HUF on 20.7.2013 declaring total income of Rs 9,84,680/-. No regular assessment was framed on the said return. A search and seizure operation was conducted u/s 132 of the Act in Dev Priya Group on 1.3.2016 and assessee's case was also centralized vide order of ld PCIT u/s 127(2) of the Act dated 29.3.2017. The assessee was never subjected to search u/s 132 of the Act. The documents related to the assessee that it had received accommodation entries by giving colour of Long Term Capital Gain (LTCG) were found during search of Dev Priya Group. Accordingly, notice stood issued u/s 153C of the Act to the assessee on 11.10.2017 after recording the following satisfaction note:- "Satisfaction note for issue of notice under section 153C of the Act. Α.Υ.2013-14 ....
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....y the assessee that exempt LTCG shown by the assessee is only out of conversion of his unaccounted income. If this is not done, then the element of satisfaction of the ld AO to initiate proceedings u/s 153C of the Act preceded by formation of his opinion vanishes in thin air. d) It is pertinent to note that the entire satisfaction note does not even state that whether the findings of investigation , if any, or the seized documents, if any, on the aspect of exempt LTCG has any bearing on determination of total income of the assessee before us. 6. We find that few of the deficiencies pointed out hereinabove were subject matter of adjudication by the Hon'ble Jurisdictional High Court in the case of Mukesh Chandra Agarwal vs DCIT in WP(C ) 6162, 6164 & 6271 / 2023 dated 4.9.2024. For the sake of convenience, the entire order is reproduced below:- "1. The writ petitioner impugns the initiation of proceedings referable to Section 153C of the Income Tax Act, 1961¹ and insofar as they pertain to Assessment Years 2014-2015, 2017-2018 and 2018-2019. 2. From the Satisfaction Note dated 24 December 2021 which has been drawn by the Jurisdictional Assessing Off....
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....020-21. Accordingly, notice u/s 153C is issued as per provisions of the IT Act, 1961. 3. As it manifest from the aforesaid, the satisfaction rested on transactions which were dated 21 April 2014, 26 August 2015 and 30 May 2019. None of those transactions pertained to the AYs in question. 4. We in this regard bear in mind the following pertinent principles which we had come to enunciate in Saksham Commodities Limited v. Income Tax Officer, Ward 22(i), Delhi & Anr. The relevant paragraphs of the said decision are reproduced below:- "63. On an overall consideration of the structure of Sections 153A and 153C, we thus find that a reopening or abatement would be triggered only upon the discovery of material which is likely to "have a bearing on the determination of the total income" and would have to be examined bearing in mind the AYs' which are likely to be impacted. It would thus be incorrect to either interpret or construe Section 153C as envisaging incriminating material pertaining to a particular AY having a cascading effect and which would warrant a mechanical and inevitable assessment or reassessment for the entire block of the "relevant assessment ....
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....y the jurisdictional AO of the non-searched entity. 66. Therefore, and in our opinion, abatement of the six AYs' or the "relevant assessment year" would follow the formation of that opinion and satisfaction in that respect being reached. 67. On an overall consideration of the aforesaid, we come to the firm conclusion that the "incriminating material" which is spoken of would have to be identified with respect to the AY to which it relates or may be likely to impact before the initiation of proceedings under Section 153C of the Act. A material, document or asset recovered in the course of a search or on the basis of a requisition made would justify abatement of only those pending assessments or reopening of such concluded assessments to which alone it relates or is likely to have a bearing on the estimation of income. The mere existence of a power to assess or reassess the six AYs' immediately preceding the AY corresponding to the year of search or the "relevant assessment year" would not justify a sweeping or indiscriminate invocation of Section 153C. 68. The jurisdictional AO would have to firstly be satisfied that the material received is likely....