TaxTMI 
TaxTMI 
2026 (3) TMI 807
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....asonable cause thus, the delay in filing the appeal by 08 days is condoned. 3. Ld.AR for the assessee filed an application for admission of additional grounds of appeal and contended containing that these additional grounds of appeal are purely legal in nature and required no investigation, thus the same be admitted. The additional grounds of appeal are as under:- Ground No. 12 "Because on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the validity of the proceedings under Section 153C, falling to appreciate that the Assessing Officer recorded a consolidated Satisfaction Note for multiple Assessment Years (AY 2011-n. to 16) instead of recording satisfaction for each Assessment Year separately. Ground No. 13 Because on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in failing to appreciate that the proceedings under Section 153C are void ab initio and bad in law as the Satisfaction Note forming the basis of jurisdiction is undated and unsigned. Ground No. 14 Because on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in failing to apprecia....
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....ng "a bearing on the determination of the total income of such other person" and having formed the opinion that proceedings under Section 153C are liable to be initiated. It would be pertinent to bear in mind that Kabul Chawla was a decision rendered in the context of Section 153A.It was in the aforesaid backdrop that the Court significantly observed that once a search takes place under Section 132 of the Act, notice under Section 153A(1) would mandatorily issue. The abatement of assessment and reassessment pending on that date would, in the case of a Section 153A assessment, be a preordained consequence. However, and in light of what has been observed hereinabove, it is apparent that Section 153Cconstructs a subtle and yet significant distinction insofar as the question of commencement of proceedings or assumption of jurisdiction is concerned. 49. That takes us to the principal question and which pertains to the nature of the incriminating material that may be obtained and the years forming part of the block which would merit being thrown open. Regard must be had to the fact that while Section 153C enables and empowers the jurisdictional AO to commence assessment or reass....
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....A, would clearly govern the question that stands posited even in the context of Section 153C. It would be relevant to recall that the Division Bench in Kabul Chawla had observed that in the absence of any incriminating material, a completed assessment may be reiterated and the abated assessment or reassessment be concluded. The importance of incriminating material was further underlined in Kabul Chawla with the Court observing that completed assessments could be interfered with, only if some incriminating material were unearthed. This aspect came to be reiterated in RRJ Securities when the Court held that it would be impermissible to either reopen or reassess a completed assessment which may not be impacted by the material gathered in the course of the search and which may have no plausible nexus. The aforesaid position also comes to the fore when one reads para 17 of ARN Infrastructure and which annulled an action aimed at reopening assessments for years to which the incriminating document which was found did not relate. 53. Sinhgad Technical Education Society also constitutes a binding precedent in respect of the aforesaid proposition as would be evident from the Supreme....
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....t respect would surely abate. However, that by itself would not be sufficient to either reopen or issue notices in respect of AYs' prior to or those falling after those two AYs' and which may otherwise fall within the maximum block period of ten years merely because the statute empowers the AO to do so. Unless the material gathered and recovered is found to have relevancy to the AY which is sought to be subjected to action under Section 153C, it would be legally impermissible for the respondents to invoke those provisions. Consequently, the AO would be bound to ascertain and identify the year to which the material recovered relates. The years which could be then subjected to action under Section 153C would have to necessarily be those in respect of which the assessment is likely to be influenced or impacted by the material discovered. Section 153C neither mandates nor envisages a mechanical or an enblanc exercise of power, or to put it differently, one which is uninformed by a consideration of the factors indicated above. 56. We also bear in mind the pertinent observations made in RRJ Securities when the Court held that merely because an article or thing may have b....
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....proceedings which are ongoing on the date when the AO proceeds to draw its satisfaction and in respect of which no incriminating material has been discovered, there would exist no justification to initiate proceedings under Section 153C. 59. It would be pertinent to recall that Section 153C essentially seeks to merge ongoing assessments with a search assessment which may be triggered by the discovery of material obtained in a search and which was the statutory procedure which prevailed in terms of the provisions contained in Chapter XIV B. However, and in cases where on facts it is found that the material gathered is unlikely to have any impact on the computation of total income for a particular year, there would exist no justification to invoke the powers conferred by Section 153C. 60. Before concluding, we also deem it imperative to briefly notice certain aspects which emerge from a reading of the Satisfaction Notes themselves. As is manifest from a reading of the Satisfaction Note drawn by the jurisdictional AO of the assessee in W.P. (C) 1459/2024, after noticing the material which was recovered during the search and related to FYs' 2009-10, 2010-11 and 20....
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....e 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 year". 64. In our considered view, abatement of the six AYs' or the "relevant assessment year" under Section 153Cwould follow the formation of opinion and satisfaction being reached that the material received is likely to impact the computation of income for a particular AY or AYs' that may form part of the block of ten AYs'. Abatement would be triggered by the formation of that opinion rather than the other way around. This, in light of the discernibly distinguishable statutory regime underlying Sections 153A and 153C as explained above. While in the case of the former, a notice would inevitably be issued the moment a search is undertaken or documents requisitioned, whereas in the case of the latter, the proceedings would be liable to be commence....
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....ne 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 to have a bearing on or impact the total income of years or years which may form part of the block of six or ten AYs' and thereafter proceed to place the assessee on notice under Section 153C. The power to undertake such an assessment would stand confined to those years to which the material may relate or is likely to influence. Absent any material that may either cast a doubt on the estimation of total income for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C. It would only beconsequent to such satisfaction being reached that a notice would be liable to be issued and thus resulting in the abatement of pending proceedings and reopening of concluded assessments. H. OPERATIVE DIRECTIONS ....
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.... the ease of M/s. DEEPAK BULDERS & ENGINEERS INDIA PVT. LTD. A search n/s 132 of Income Tax Act was conducted on an Entry operator Sanjay Jain along with his facilitators and some of his beneficiaries who were found to be generating cash against bogus billing of cement and other such items on 28.10.2020. Proposal for centralization of the group cases was made vide letter No. PDIT(Inv.)-1/Delhi/Centralization/SJAM/2030-31/854 dated 08.03.2021. The Group is centralized with the DCIT Central Circle-30, New Delhi under the charge of Pr. UIT (Central)-3, New Delhi by the order of Chief Commissioner of Income Tax (Central), circulated vide file no. F. No. COIT(C)/Del/CD-305/2020-21/1181 dated 18.03.2021. 1. The entire web of transaction mounted through a maze of bank accounts Initiated by the receipt of willing beneficiaries and the trail right up-to the withdrawal of the cash for the beneficiary is seen. Digital records, whatsapp chats were liberally used by the racketeers for inward communication and quick access. Sharing of a unique ID of pictures bank note serial numbers were utilized by the entry operators and the band of cash handlers and the recipients of the ent....
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....jay Jain used to withdraw cash through variona benami firma of his associates. However, since the applicability of TDS of 0.1% u/s 1947, the charges for arranging such cash increased from 30 paisa to 100 paisa. The difference between billing amount and the bank credit entries is on account of such RTGS to cash entries. 5. During the course of search dated 26.10.2030 on the entry operator, Mr. Sanjay Jain, 2 sets of books of tally were found and seized from the office premise of Sh. Sanjay Jain i.a. 87, First Floor, Dharamvir Mann Marg, Sabri Market, Hari Nagar Ashram, New Delhi, which were annexurized as Annexure-A31. The set of tally data which contains the receipt and expenditure in cash. This data is compiled as List of beneficiary and named as R-1. List of beneficiaries who have received benefits out of Rs 1590,94,68,436 in total, as bogus purchases from Sanjay Jain is appended to this report as Annexure-R1, for necessary action/ intimation. The said list is derived in the following format: - S. No. PAN Name of entity 2019-20 Total 1. AAGCD3470Q M/s. DEEPAK BUILDERS & ENGINEERS INDIA PRIVATE LIMITED 9,79,66,801 9....