TaxTMI 
TaxTMI 
2025 (9) TMI 784
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....s for the said year. Therefore, the entire assessment proceedings initiated under this section are bad in law and liable to be quashed. 2. Addition Without Issuance of Notice Under Section 143(2) The Learned Assessing Officer completed the appeal order by making an addition of Rs. 134,33,42,009/- without issuing any notice under Section 143(2) of the Income Tax Act. This procedural lapse renders the assessment order invalid and unsustainable in law. 3. Non-Existent DIN Renders Assessment Order Void The Hon'ble Commissioner of Income Tax (Appeals) failed to appreciate that the Document Identification Number (DIN) mentioned in the assessment order by the Learned Assessing Officer is non-existent. As per CBDT Circular No. 19 of 2019 dated 14/08/2019, any order issued without a valid DIN is invalid and void ab initio. Hence, the impugned assessment order is legally unsustainable and deserves to be set aside. The impugned order does not reflect on the Income Tax portal even to this day and hence, the order should also be considered as invalid and void ab initio. 4. Questionable Integrity of Electronic Evidence Used for Additions The Hon&#....
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....uest the Honourable Income Tax Appellate Tribunal to consider this appeal and provide appropriate relief by: a. Setting aside the order passed by the Learned Commissioner (Appeals) and allowing the Appeal filed by your Appellant, b. Deleting the additions made by the Learned Assessing Officer, c. Directing the Income Tax Authorities to abate any penalty proceedings initiated, b. Any other relief deemed fit and just by the Honourable Commissioner (Appeals) in the interest of equity and justice. The Appellant craves leave to submit such further facts/documents/evidence at or before the hearing of this appeal as may be necessary to dispose of this appeal according to law." 3. The assessee in the present appeal has challenged the validity of assessment framed by the Revenue and also agitated the additions made by the lower authorities on merit of the case. 4. The facts in brief are that the assessee is an individual. A search proceeding under section 132 of the Act carried in the case of the assessee's husband Shri Durgappa Lakkana as on 19th February 2020. 5. During the search it emerged that the assessee and her husband has entere....
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....ost of construction at Rs. 3000 per sq. ft. and accordingly computed the cost of construction for super built-up area of 519404 sq. ft. at Rs. 155,82,12,000/- (519404 sq. ft. x Rs. 3000) and after adjustment of index cost of land for Rs. 1.68 crore worked out the long-term capital gain of Rs. 154,14,12,000/- in which assessee share (72.2%) stood at Rs. 111,28,99,464/- only. Thus, the AO proposes to add the same to the total income through show cause notice dated 18th September 2021 and 20th September 2021. But the assessee failed response the show causes notice. Hence, the AO added the long-term capital of Rs. Rs. 111,28,99,464/- to the total income of the assessee on account of transfer of land through JDA. 9. Likewise, the AO also computed the capital gain regarding another JDA entered by the assessee with M/s Sunil Mantri Reality Ltd as on 20-03-2009 for development of residential flats in the name and style of "Mantri Premiro Projects". In the impugned JDA, the assessee in the developed project received super built-up area of 1,28,014 Sq. Ft. The AO applying the average cost of construction at Rs. 3000 per sq. ft. and worked out construction cost at Rs. 38,40,42,000/- and af....
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....e, invoking the provisions of section 153C of the Act was not justified. Moreover, the assessee had already declared the income from the concerned real estate projects- SJR Pallazza City and Mantri Primero-in her tax returns, and paid taxes accordingly. Hence, the ld. AR contended, it was illogical and unlawful for the Department to allege that these documents were incriminating in nature. 16.1 The ld. AR further contended that issuing a notice under section 153C of the Act after the return had been filed and the income declared was not only bad in law but also violated natural justice. The learned AR emphasized that incriminating material must directly indicate undisclosed income, financial irregularities, or tax evasion. In this case, there was no such material. 17. The learned AR also pointed out that the assessee was never provided with a copy of the satisfaction note of the AO of the search person or the seized material, which are essential for a fair assessment. As per settled legal principles, including rulings in CIT vs. Calcutta Knitwears (2014) 6 SCC 444, Pepsi Foods Pvt Ltd vs. ACIT 367 ITR 112, and Ganpati Fincap Services Pvt Ltd vs. CIT 395 ITR 692, the satisfact....
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....g papers for projects such as the SJR Palazza City, Premero Project, and Aditya Tussar Project. The seized documents revealed significant income from these real estate transactions that was either not disclosed or incorrectly declared, especially in respect of capital gains. 23. The DR submitted that the seized documents had a direct nexus with the total income of the assessee and therefore qualify as incriminating material. Relying on the decision of the Hon'ble Delhi High Court in CIT v. SSP Aviation Ltd. [2012] 346 ITR 177, it was argued that there is no requirement for the documents to conclusively prove undisclosed income. It is enough if the documents belong to or pertain to the assessee, which in this case is clearly established. Therefore, the Assessing Officer rightly recorded satisfaction and validly issued the notice under section 153C of the Act for bringing the escaped income to tax. The assessee's denial of the existence of incriminating material is, therefore, without basis and liable to be rejected. 24. On the issue of non-issuance of notice under section 143(2) of the Act, the learned DR argued that the assessee failed to e-verify her return filed under s....
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....see. The assessee had already disclosed income from the concerned real estate projects in her regular returns. The Revenue's reliance on JDAs and supporting documents recovered from the assessee's husband does not amount to new or undisclosed evidence that can justify issuance of notice under section 153C of the Act. 29. Secondly, the satisfaction note relied upon by the Revenue is not recorded by the AO in the capacity of AO of the person other than search person. Furthermore, separate satisfaction notes for each assessment year, as mandated by law, were not recorded. The Hon'ble Karnataka High Court in the case of Shri Sunil Kumar Sharma v. DCIT [(2024) 159 taxmann.com 179 (Kar.)] has categorically held that a consolidated satisfaction note covering multiple years is invalid and vitiates the entire proceedings. This view has also been affirmed by the Hon'ble Supreme Court. In the present case, no such year-wise satisfaction has been recorded, and therefore, the assessment proceedings are void ab initio. 30. Thirdly, on the issue of non-uploading of the assessment order on the ITBA portal, the ld. AR reiterates that this is not a mere procedural lapse but a fatal defect. The....
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.... of the Act and proceeded to make additions primarily on account of capital gains from joint development agreements (JDAs), treatment of sale proceeds from flats as business income, and inclusion of refundable deposits as income from other sources. 34.2 At the outset, we find force in the contention of the assessee that the jurisdiction assumed under section 153C of the Act is invalid in the absence of incriminating material pertaining to the assessee. It is settled law, as held by the Hon'ble Supreme Court in Abhisar Buildwell Pvt. Ltd. (2023) 149 taxmann.com 399, that for invoking section 153C of the Act, the Revenue must possess incriminating materials belonging to or relating to the assessee which is unearthed during the search. In the present case, the documents relied upon by the AO, such as JDAs and occupancy certificates, were already disclosed in a sworn statement given by the assessee's husband under section 131 of the Act on 13.05.2019, i.e., much before the date of search. There is no indication that any fresh material was found during the search that had not already been disclosed. Therefore, in our considered opinion the issuance of notice under section 153C lacks ....
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....nd procedural fairness, particularly when the assessee has raised specific grounds challenging the jurisdiction under section 153C of the Act. 34.7 We also find merit in the submission that the impugned assessment order was never uploaded on the ITBA portal, and no valid Document Identification Number (DIN) was traceable. As per CBDT Circular No. 19/2019 dated 14.08.2019, every order or communication issued by the Department must bear a valid, system-generated DIN. Any manual issuance is permitted only under exceptional circumstances, and such manual orders must be regularized by uploading them on the system within 15 working days. However, we are also conscious to the fact that the issue of DIN is pending before the Hon'ble Supreme Court in the case of CIT Vs. Brandics Mauritius Holdings Ltd. reported in 158 taxmann.com 247. Hence, we refrain ourselves from giving any final verdict regarding the validity of the assessment in absence of valid DIN. As such, the issue remains open. 34.8 In light of the above legal and factual analysis, we are of the considered opinion that the assessment order passed under section 153C of the Act is invalid for multiple reasons: absence of incr....
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....ar HC)], it was held that once possession is transferred under a development agreement, capital gains accrue in the year of such transfer. 34.13 Accordingly, the AR contended that the assessee has complied with the provisions of law as applicable to her case and offered the capital gains in the correct assessment years. Therefore, no adverse inference should be drawn, and the addition made may kindly be deleted. 34.14 Considering the facts in totality, we find that the assessee had entered into two Joint Development Agreements (JDAs) one with M/s SJR Prime Corporation Pvt. Ltd. on 17.12.2012 for the "SJR Plaza City Project" and another with M/s Sunil Mantri Realty Ltd. on 20.03.2009 for the "Mantri Premero Project". Both agreements were entered into prior to 01.04.2018, the effective date of the introduction of section 45(5A) of the Act. Thus, the deeming provision under section 45(5A), which provides for capital gain taxation in the year of receiving completion certificate, does not apply to the assessee's case. 34.15 The assessee's claim is that she has offered the capital gains to tax in the relevant assessment years in accordance with the prevailing law. The assessee f....