TaxTMI 
TaxTMI 
2026 (3) TMI 481
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....the facts that substitution of date of handing over of seized material in place of date of initiation of search as mentioned in the First Proviso under Section 153C was only a limited purpose to determine the years of abatement of assessment proceedings as provided in Second Proviso to Section 153A and not at all with reference tro powers of AO to make assessment under section 153C, which was separately provided under Section 153C(1) itself b using the phrase for the relevant assessment year or years referred to in Sub Section (1) of Section 153A. 3. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred by not considering the fact that even after amendment brought under section 153C(1) w.e.f. 1.4.2017 by inserting the expression 'six assessment years immediately preceding the assessment year relevant to the previous year in which search conducted'. The First proviso has still not been amended. This forties the view that First proviso to Section 153C never dealt with the period of reckoning of six assessment years for the purposes of making assessment under section 153C(1). 4. Whether on facts and circumstances of the case and in law, ....
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..../s. 153C of the Act have been initiated with the approval of the Ld. PCIT, Kanpur. Subsequently, notice u/s. 153C of the Act was issued to the assessee company on 2.3.2024 for the year under consideration. In response to notice u/s. 153C of the Act, the assessee filed its ITR on 8.3.2024 manually declaring income of Rs. NIL. Consequently, notice u/s. 143(2) of the Act was issued to the assessee company on 8.3.2024. AO noted that assessee obtained the accommodation entry of Rs. 1,58,00,000 and during the statement recorded on oath, Sh. Sunil Kumar Gupta accepted that commission was charged @3% for providing accommodation entry and the same was received in cash. AO noted that the assessee paid commission of Rs. 4,74,000/- for taking the above accommodation entry was treated as unexplained expenditure u/s 69C of the Act and added to the income of the assessee. AO further noted that during the assessment proceeding the assessee was requested to furnish source of repayment of Rs. 50,00,000/- alongwith supporting documents, however the assessee failed to explain the source of above. Accordingly, the assessment was completed at Rs. 2,12,74,000/- u/s. 153C/143(3) of the Act by making the a....
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....f initiation of assessment under section 153A or Section 153C could be made due to initiation of search. Further, the act of abatement and the act of assessment are two different functions, having different connotations and purpose and hence the two cannot be equated / interchanged by any stretch of interpretation. The power to make assessment after initiation of search is separately provided in Section 153A(1) itself and not in Second Proviso to Section 153A. Therefore, First Proviso of Section 153C was entirely in different context and it clearly referred to section. She further submitted that Ld. CIT(A) has erred in deleting the addition of Rs. 1,58,00,000 without appreciating the facts that the assessee has taken accommodation entry of Rs. 1,58,00,000 in the form of unsecured loan and said loan was deposited in the bank account of the assessee, which is covered under the definition of assets in view of the provisions of Explanation 2 to section 153A(1) of the Act. It was further submitted that the aped amount i.e. Rs. 1,58,00,000 is for the year under consideration which is much above Rs. 50 lacs in aggregate in the relevant assessment years. Thus, the case of the assessee for ....
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....tisfaction note by the AO of Alankit in the name of the assessee i.e. Friends Charitable Society. It is settled law that in the absence of satisfaction note by the AO of search party, no proceedings u/s. 153C can be made on the assessee. We note that the Hon'ble Karnataka High Court in the case of PCIT vs. G. Laxmi Aruna affirmed the decision of the Tribunal and held that recording of satisfaction note by the AO of searched person is pre-requisite and the same must be prepared by the AO before the transmits records to other AO who has jurisdiction over such other person u/s. 153C and since in the case of the assessee before the Hon'ble Karnataka High Court, satisfaction note was not recorded by the AO of searched person it was held that the Tribunal had rightly quashed assessment on account of lack of jurisdiction. The SLP filed by the Revenue against this decision in the case of PCIT vs G. Laxmi Aruna by the Revenue was dismissed by the Hon'ble Supreme Court in the case of PCIT v G Laxmi Aruna. The Delhi Tribunal in the case of Ratna Sagar (P) Ltd. vs. DCIT in ITA No. 169 & 170/Del/2025 AYrs. 2018-19 & 2019-20 vide order dated 21.11.2025 on identical facts, by following the afores....