AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 539
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ld. AO. a.) That both the Ld. AO and the Ld. CITA) have failed to appreciate the contention of the assessee that the proceedings have wrongly been initiated u/s 148 and, if at all, the proceedings were liable to be initiated, the same could have been initiated only by issuance of notice u/s 153C and, thus, the assessment as framed by the AO u/s 148/143(3) deserves to be quashed. b) That the Ld. CIT(A) has ignored the binding judgement of the Hon'ble Apex Court in the case of 'Vikram Sujit Kumar Bhatia' reported in, 453 ITR page 417 and that binding judgement have been ignored in a summary manner. c) That the re-opening of the assessment whether u/s 148 or 153C goes to the root of assumption of jurisdiction and since the very basis of the initiation of proceedings have wrongly been initiated u/s 148, the proceedings as initiated by issuance of notice u/s 148 deserves to be quashed. d) That the same contention were raised before the Ld. Assessing Officer as per objections to the reasons recorded for proceedings u/s 148, as made by the appellate but the same have been dismissed without assigning any reasons. 2.a) Notwithstandin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a.) That the finding of the CIT(A) in para 6.4, that cross examination could not be allowed due to paucity of time, since the assessment was getting barred by time. This is apparently incorrect observations as the assessee had made a request for cross-examination vide letter dated 26.11.2018 vide para 2.1 of the letter and repeated request was made by letter dated 26.12.2018. b.) That the finding of the CIT(A) that Sh. Sushil Kumar Accountant of Sh. Sanjay Bansal was known to the assessee is totally misconceived, as appellate had no link or connection with the said Sh. Sushil Kumar as Sh. Sushil Kumar had never worked with the appellate. c.) That the finding of the CIT(A) in para 6.7 about the filing of the affidavit by Sh. Sanjay Bansal and accountant Sh. Sushil Kumar's retraction is concerned, this observation is totally incorrect as Sh. Sanjay Bansal has never stated that the amount have been paid to the appellate and regarding the other person namely Sh. Sushil Kumar, the appellate had/have no connection with him as he is totally stranger, rather Sanjay Bansal have denied to made any such alleged payment, which is even recorded at Para No. 9.2 of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded for re-opening of the assessment whose copies available on page No. 15 of the Paper Book. We deem it appropriate to take note of these reasons which read as under : 1. As per the information received on transfer from ITO Ward-2, Kurukshetra which was received by him through JCIT, Range, Kurukshetra from Dy Commissioner of Income tax, Centre Circle, Dehradun vide file No. DCIT/CC/DDN/MISC/2015-16/5 dated 15.04.2015, a search under Section 132 of the I.T. Act 1961 had taken place on Dev Bhomi Institute of Technology Group on 26.4.2012 and its Chairman Sh. Sanjay Bansal R/o 32/4 EC Road, Dehradun and premises of Shri Krishna Educational Trust, Rattan Dera, Kurukshetra was also covered. During the course of search certain evidences were gathered and subsequently post search enquiries of investigation wing, certain facts emerged which indicated that Sh. Sanjay Bansal and his family members have taken over the management and control of M/S Shri Krishna Educational Trust, Rattan Dera, Kurukshetra by virtue of amended trust deed dated 14.10.2010 from outgoing trustees including the assessee Sh Subash Gupta of SKET. Documents seized from the premises of Shri Krishna Educational....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h as: Entry standings in the Balance Sheet as white amount: 1) Abhinav Gupta 17250/- 2) Arun Gupta 226056/- 3) Rama Gupta 675322/- 4) Subash Gupta 508110/- 5) Som Parkash 440259/- 6) Varun Gupta 418081/- 2285078 It is extremely pertinent to note that the above entries are clearly reflected in the balance sheet of Shree Krishna Education Trust which therefore, makes a safest assumption that the seized document is true/real/authentic as if, transactions in white are matching with balance sheet then the other notings also have to be correct and true in all true respect. 4. In addition to the above, it is also pertinent to note that during the course of scrutiny proceedings U/s 153A in the case of Sh. Sanjay Bansal, statement of Sh. Sushil Kumar, Accountant of Sh. Sanjay Bansal was recorded who categorically admitted in his statement that this particular document which was seized during search was a real/authentic document and that the same was in his handwriting written on the directions of Sh. Sanjay Bansal. 5. Further, the retired trustees who received payment on sale of the trust (SKIET) were also ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 153C of the Income Tax Act after its amendment by Finance Act, 2015. 7. The ld. Counsel for the assessee while taking us through Section 153C submitted that if clause (b) of subclause (1) is being perused, then it contemplates that where the AO is satisfied that any books of account or document, seized or requisitioned, pertains or pertains to or any information contained therein relates to a person other than the person referred to in Section 153A, then the AO of the searched person would record his satisfaction that action under Section 153C is required to be taken against any other person qua him books of account/documents/information unearthed during the course of search. In other words, if any information could be inferred from a seized document, then also notice under Section 153C is required to be issued. The ld. Counsel for the assessee further relied upon the judgement of Hon'ble Supreme Court in the case of Vikram Sujit Kumar Bhatia reported in 453 ITR 417. Before the Finance Act 2015, Section 153C contemplates that where AO is satisfied that any money, bullion, jewellery or other valuable articles or things or books of account or documents seized or requisi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153-A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eveal that it starts with a non obstante clause "not withstanding anything contained in Section" meaning thereby this Section has an over-riding effect over other Sections namely; 139, 147, 148, 149 etc. This Section contemplates that where AO of the searched person is satisfied that ; a) Any money, bullion, jewellery, other valuable article or thing seized or requisitioned belong to or b) Any books of account, document seized or requisitioned pertains or pertains to or any information contained therein relates to a person other than the person referred in Section 153A, then AO of the searched person would record his satisfaction and transmit those materials to the AO of such other person qua whom these materials have been found during the course of search. Prior to Finance Act, 2015, this Section was not in the present shape. It has been divided in two categories post 2015. The first limb of Section deals with items discovered in physical form i.e. money, bullion, jewellery and the second limb of Section provides if any books of account, documents seized or requisitioned pertains or pertains to or any information contained therein pertains to a person other th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e date of the amendment. The impugned common judgment and order passed by the High Court, therefore, deserves to be quashed and set aside and is accordingly quashed and set aside. However, as before the High Court respective assessment orders were challenged mainly on the aforesaid issue, which is now answered in favour of the Revenue as above, we reserve the liberty in favour of the respective assessees to challenge the assessment orders before CIT (A) on any other grounds which may be available and it is observed that if said appeals are preferred within four weeks from today, the same be considered in accordance with law and on their own merits, on any other grounds. Present appeals are accordingly allowed in terms of the above. However, in the facts and circumstances of the case, there shall be no order as to costs." 11.2 Thus, according to this decision of the Hon'ble Supreme Court, this post amended Section of 153C will be applicable in this assessment year also. The assessment order is dated 31.12.2018 i.e. after the amendment carried out in Section 153C by Finance Act, 2015. 12. We have taken cognizance of the alleged seized material (extracted supra) as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... recorded by the AO for reopening (page No. 7,8 and 9 of this order). On the strength of this paper, AO harboured the belief that Shri Sanjay Bansal has paid a sum of Rs.13 Cr to the assessee and hence, this amount deserves to be assessed in the hands of the assessee. He, accordingly, made the addition. The brief discussion made by the AO read as under : "7.2 Further, it is an admitted fact that the assessee had been a trustee in Shree Krishna Education Trust at Kurukshetra (here-in-after mentioned as SKET) together with other group of trustees; that during the year 201011 the management of said trust was handed over to another team of trustees headed by aforesaid Shri Sanjay Bansal as its chairman; that subsequently, a search & seizure action under section 132 was carried at the residence of said Sanjay Bansal and his business premises in which the premises of SKET were also covered; that during search several incriminating documents were found and seized; that such documents also contained the documents written by one Shri Sushil Kumar accountant of Shri Sanjay Bansal; that Shri Sanjay Bansal as well as Shri Sushil Kumar accountant admitted to have written these document....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s 147-148. 8. After examining the case as above together with the information available on record and the replies filed on behalf of the assessee, I hold the afore said amount of Rs. 13.00 crores as to be the assessee's undisclosed income, which, in addition to normal tax liability thereon, also renders the assessee liable for penalty under section 271(l)(c). 9. Further, as the assessee is found to have accepted said amount of Rs. 13.00 crores otherwise than bank cheque, bank draft or other banking channel, therefore, I am satisfied that the assessee has also violated the provisions of section 269SS rendering him liable for penalty under section 27ID." 15. Appeal to the CIT(A) did not bring any relief to the assessee. 15.1 While impugning the order of the Revenue Authorities below, ld. Counsel for the assessee has submitted that this document was not found from the possession of the assessee. It was not in his handwriting. It was a document allegedly recovered from the premises of a third person. It cannot be an incriminating document qua the assessee because assessee has no control over a third person what he writes in his diary, loose paper, books etc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... CIT(A) is categoric on this aspect. 16. We have duly considered the rival contentions and gone through the record carefully. We have taken note of the finding of the AO. We would appreciate the finding of the CIT(A) in the later part of this order. First let us evaluate quality of evidence possessed by the AO qua the assessee for making addition to his income. The only evidence possessed by the AO is one loose sheet of a paper whose contents are being noted by us while dealing first fold of proposition at page 7 and 8 of this order. This page is neither in the handwriting of the assessee nor was found from his premises. It is a document found at the premises of a third person. The assessee had no control over any other person, what they write in their accounts at their office/residence. He cannot be charged to any liability on the basis of writing made by a third person. This aspect was considered by the Hon'ble Supreme Court in the case of CBI Vs V.C.Shukla and others (1998) 3 SCC page 410 wherein CBI sought to prosecute certain politicians on the basis of one Diary written by one 'Jain' which was known as 'Jain Hawala Diary'. All the charges were quashed by the Hon'bl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on the statement of Accountant of Shri Sanjay Bansal against whom a FIR has been lodged by his employer. If we exclude that statement from the evidence on the basis of the judgement of Hon'ble Supreme Court in the case of Andaman Timber Industries V CCE as well as judgement of Hon'ble jurisdictional High Court in the case of PCIT Vs DSG Papers (P) Ltd. reported in 161 taxmann.com 586 (2024), then nothing will remain with the AO to draw such a conclusion. Therefore, this addition is not sustainable. We allow this ground of appeal and delete the addition. 17. In the next fold of grievance, assessee has pleaded that alleged re-assessment is not sustainable because no notice was issued to the assessee under Section 143(2) of the Income Tax Act. 18. The brief facts of the case are that a notice under Section 148 of the Income Tax Act was served upon the assessee on 31.03.2018. The assessee has raised objection against re-opening of the assessment. Simultaneously he submitted that return filed originally under Section 139(1) is to be treated as filed in response to the notice received under Section 148. The assessee again reminded the AO that his original return be treated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nds, assessee has raised peripheral arguments in support of the above three central points. Therefore, it is not necessary to adjudicate rest of the issues separately. In view of the above three fold of contentions, we have taken care of peripheral arguments and sub-grounds. 21. In the result, appeal of the assessee is allowed. ITA 768/CHD/2024 : A.Y. 2011-12 22. As far as ITA No. 768/CHD/2024 is concerned, the assessee is in appeal against the order of ld. CIT(A) dated 28.06.2024 passed for assessment year 2011-12. The ld. AO has imposed a penalty under Section 271D of the Income Tax Act on account of acceptance of loan in cash in violation of Section 269SS of the Income Tax Act. This penalty has been confirmed by the CIT(A). 23. With the assistance of ld. Representative, we have gone through the record carefully. If Section 269SS of the Income Tax Act is being perused, then it would reveal that it prohibits any person to take or accept from any other person any deposit or loan or any specified sum other than by Account Payee Cheque/Bank Draft or Electronic Clearing System, then such person will be liable to pay penalty of equal amount. According to the AO, assessee ha....