TaxTMI 
TaxTMI 
2026 (3) TMI 1225
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....9-20) 3. The assessee has raised following grounds of appeal in ITA No.3643/Del/2025:- No incriminating material qua the appellant found 1. That on the facts and in the circumstances of the case, and in law, the learned CIT(A) erred in upholding the assumption of jurisdiction by the learned Assessing Officer under Section 153C of the Income-tax Act, 1961, for the assessment year under consideration, without the existence of any incriminating material qua the appellant, found during the course of search conducted on Alankit Group. That, ledgers produced during the reassessment proceedings u/s 153C cannot per se be regarded as incriminating material available with the Assessing Officer; That the assessment order passed under section 153C of the Income Tax Act, 1961 is bad in law, void ab initio, and without jurisdiction, and therefore deserves to be quashed. Initiation of Proceedings barred by limitation - 'Cash Credit' is not asset 2. That on the facts and in the circumstances of the case, and in law, the learned CIT(A) erred in upholding the assumption of jurisdiction by the learned Assessing Officer under Section 153C of the Income-ta....
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....ction at the premises of third person, which does not qualify to be admitted as evidence without bringing any independent corroborative evidence on record and that too without providing certificate u/s 65B of the Indian Evidence Act, 1872. Hence, addition made of Rs. 16,65,00,000/- merely on the basis of alleged un-substantiated soft data/ excel sheets, is bad in law and is liable to be quashed. Addition u/s 68 of the Income Tax Act, 1961 not attracted 7. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in sustaining the addition of Rs. 16,65,00,000/ - u/s 68 of the Act on account of unexplained source of receipt of unsecured loan by arbitrarily rejecting the explanation and documentary evidences put forth by the appellant to discharge its onus u/s 68 of the Act without pointing out any defector shortcoming by conducting any independent enquiry. That, the provisions of section 68 of the Income Tax Act, 1961 are not applicable on facts of the case. Peak Theory 8. Without prejudice to other grounds of appeal and that on facts and in the circumstances of the case and in law and, the benefit of peak theory is av....
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....eration, without the existence of any incriminating material qua the appellant, found during the course of search conducted on Alankit Group. That, ledgers produced during the reassessment proceedings u/s 153C cannot per se be regarded as incriminating material available with the Assessing Officer; That the assessment order passed under section 153C of the Income Tax Act, 1961 is bad in law, void ab initio, and without jurisdiction, and therefore deserves to be quashed. Non-supply of satisfaction note prepared by AO of searched person 2. That in the facts and circumstances of the case, the Ld. CIT(A) erred in law in sustaining the action of Ld AO in completing the assessment proceedings u/s 153C of the Act for the assessment year under consideration without bringing on record the copy of the satisfaction note recorded by the Ld AO having jurisdiction over the searched person. That, the assessment order passed u/s 153C without satisfying the mandatory jurisdiction condition is not valid in law; Mechanical recording of facts in satisfaction note 3. That in the facts and circumstances of the case and in law, Ld CIT(A) erred in sustaining the assumpt....
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....law and, the benefit of peak theory is available by arranging all credits and debits appearing in different accounts in chronological order and that addition of Rs 3,68,95,000/-u/s 68 of the Income Tax Act, 1961 during the impugned AY is unwarranted and double taxation of same funds; Addition u/s 69C of the Income Tax Act, 1961 not attracted 8. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) in sustaining addition of Rs. 11,06,850/- u/s 69C of the Act being notional commission estimated @ 3 percent on receipt of unsecured loan of Rs. 3,68,95,000/- without adducing any corroborative evidence on record which could prove the payment of alleged commission by the appellant company. Hence, addition made of Rs. 11,06,850/- u/s 69C of the Act on the basis of doubt, suspicion, conjecture and surmises is bad in law and is liable to be deleted. Violation of principle of natural justice 9. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in sustaining addition of Rs. 3,68,95,000/-u/s 69A of the Act on account of unexplained source of receipt of unsecured loan and interest on the basis o....
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....ed in sustaining the assumption of jurisdiction based on the satisfaction note recorded by Ld DCIT, Circle - 13(1) Delhi in mechanical and ritualistic manner; That, the satisfaction note does not reflect any application of mind towards evidence available on record; Invalid Order u/s 127(2) of the Income Tax Act, 1961 4. That in the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the assumption of jurisdiction by the Ld. DCIT, Central Circle-28, Delhi, based on a transfer order under Section 127(2) of the Income Tax Act, 1961, without recording any reasons. That the order passed under Section 127(2) of the Income Tax Act, 1961 by the PCIT-4, Delhi, based merely on a letter from TO (Hqrs)-1 0/o CCIT(Central) - 2 and without the agreement or concurrence of an officer of equal rank, is invalid in law, and consequently, all assessment proceedings made thereafter by Ld DCIT, CC -28 are also invalid. Non-compliance with Section 65B of Indian Evidence Act 1872/section 63 of BSA 2023 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred on fact and in law in sustaining the addition of Rs. 3,80,00....
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.... and interest on the basis of unsubstantiated statement of third persons without providing complete copy of their statement and also without providing opportunity of cross-examination of said deponents even though specifically requested by the appellant. That, addition made without disclosing the information and material in the possession of Ld AO is per se violative of the principles of fairness. Hence, addition made of Rs. 3,80,00,000/- u/s 69A of the Act in violation of principle of natural justice, is bad in law and is liable to be deleted. 10. That on facts and circumstances of the case and in law, Ld CIT (A) erred in sustaining the action of the Ld AO without appreciating that no show cause notice was issued during the course of the assessment proceedings in terms of CBDT Instruction No 20/2015 (Para 4) dated 29.12.2015. 6. In all the above three appeals, the appellant has raised legal grounds as well as challenged the merits of the addition. As all the three appeals are on common issues qua legality of assessment and merits of additions, we will take the legality of assessment in assessee's appeal in ITA No.3643/Del/2025 first. The decision taken shall apply muta....
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....he order of the ld. CIT(A) that the same concerns raised by the assessee have not been adequately handled. The decision of the ld. CIT(A) is primarily based upon lukewarm response to appellate proceedings. The facts of the case have not been properly analyzed by the First Appellate Authority. As regards, non-availability of incriminating document, we have found sufficient force in the arguments raised by the appellant. Perusal of the assessment order alludes that the ld. Assessing Officer has primarily made the addition on the basis of search and seizure operation carried out in the residential premises of one Shri Sunil Kumar Gupta an alleged close confidant of the Alankit Group and its Directors as well as information available in the seized HP laptop of Shri Gupta. Heavy reliance has also been placed upon the sworn statement of Shri Gupta under section 132(4) dated 18.10.2019. There is nothing substantial in the reasons recorded or the order under section 153C which allude towards any incriminating material found qua the assessee. The judicial precedents on the subject pronounced by Hon'ble Apex Court and Hon'ble Delhi High Court are categorically clear in laying down that no ad....
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....e assumed without issuance of notice u/s 153C of the Income Tax Act, 1961. Barred by Limitation - not the case of abated year 2. That on facts and in the circumstances of the case and in law, the assessment proceedings initiated by issuance of notice u/s 143(2) of the Income Tax Act, 1961 dated 29.06.2021 is barred by limitation as on 30.09.2022; that, the provisions relating to abatement under section 153C rws 153A of the Income Tax Act, 1961 are not applicable on the facts and circumstances of the case, as no valid jurisdictional trigger exists to invoke such abatement. Non-supply of satisfaction note prepared by AO of searched person 3. That in the facts and circumstances of the case, the Ld. CIT(A) erred in law in sustaining the action of Ld AO in completing the assessment proceedings u/s 153C of the Act for the assessment year under consideration without bringing on record the copy of the satisfaction note recorded by the Ld AO having jurisdiction over the searched person. That, the assessment order passed u/s 153C without satisfying the mandatory jurisdiction condition is not valid in law; Mechanical recording of facts in satisfact....
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....tion u/s 69C of the Income Tax Act, 1961 not attracted 8. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) in sustaining addition of Rs. 6,102/- u/s 69C of the Act being notional commission estimated @ 3 percent on repayment of unsecured loan and interest of Rs. 2,03,402/- without adducing any corroborative evidence on record which could prove the payment of alleged commission by the appellant company. Hence, addition made of Rs. 6,102/- u/s 69C of the Act on the basis of doubt, suspicion, conjecture and surmises is bad in law and is liable to be deleted. Violation of principle of natural justice 9. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in sustaining addition of Rs. 2,03,402/- u/s 69A of the Act on account of unexplained source of repayment of unsecured loan and interest on the basis of un-substantiated statement of third persons without providing complete copy of their statement and also without providing opportunity of cross-examination of said deponents even though specifically requested by the appellant. Thai, addition made without disclosing the information and materia....
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....e ITBA portal-without any real-time alert via SMS or email-as valid issuance or service of notice within the prescribed limitation period. 4.1. That the learned CIT(A) further erred in recording an incorrect factual finding that the appellant had not raised this issue before the Assessing Officer, while ignoring the documented objections and corresponding acknowledgment filed by the appellant, as placed in the Paper Book. Invalid Order u/s 127(2) of the Income Tax Act, 1961 5. That in the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the assumption of jurisdiction by the Ld. DCIT, Central Circle-28, Delhi, based on a transfer order under Section 127(2) of the Income Tax Act, 1961, without recording any reasons. That the order passed under Section 127(2) of the Income Tax Act, 1961 by the PCIT-4, Delhi, based merely on a letter from ITO (Hqrs)-1 0/o CCIT(Central) - 2 and without the agreement or concurrence of an officer of equal rank, is invalid in law, and consequently, all assessment proceedings made thereafter by Ld DCIT, CC-28 are also invalid. Ground of Appeal not adjudicated by CIT (A) 6. That, o....
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....erest on the basis of un-substantiated statement of third persons without providing complete copy of their statement and also without providing opportunity of cross-examination of said deponents even though specifically requested by the appellant. Hence, addition made of Rs. 11,13,114/-u/s 37(1) of the Act in violation of principle of natural justice, is bad in law and is liable to be deleted. 11. That on facts and circumstances of the case and in law, Ld CIT(A) erred in sustaining the action of the Ld AO without appreciating that no show cause notice was issued during the course of the assessment proceedings in terms of CBDT Instruction No 20/2015 (Para 4) dated 29.12.2015. 14. We have heard rival submissions in the light of material available on records. The short point raised by the Ld council for the assessee through its above-mentioned additional ground of appeal dated 25/02/26 is that AYs 2020- 21 & 2021-22 fall within the block of six assessment years contemplated under section 153C read with section 153A. Once proceedings under section 153C were triggered on 14.02.2022, the assessment for AYs 2020-21& 2021-22 could only have been framed in accordance with sectio....
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....the present assessee would be the date i.e. 16/06/2009 when documents belonging to the assessee (found during the course of search) were handed over and jurisdiction for framing the assessment was transferred to the AO having jurisdiction for the assessment on the assessee. Taking into account the date 16/06/2009 as date of search in the case of the assessee, the contention of the Id. AR remained that the search year in the case of assessee would be A.Y. 2010-11 and six previous assessment years would be 2009-10 to 2003-04. In other words, the regular assessment u/s 143(3) of the Act in the present case should have been framed for the assessment year 2010-11 and the assessment for the assessment year under consideration should have been framed u/s 153C read with 143(3) of the I.T. Act. In support the above cited decisions were relied upon by the Id. AR 1. The contention of the ld. CIT(DR on the contrary remained that the reference of proviso 1 of section 153C is only in relation to the second proviso to sub-section 1 of section 153A which speaks about the abatement of the pending proceedings of six assessment years and not regarding the assessment of the preceding six asse....
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....o examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search u/s 132 or the requisition u/s 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the AO having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date." 18. In view of the above finding, the assessment framed u/s 143(3) of the Act for the A.Y. 2009-10 in the present case is not valid. Respectfully following the above cited decisions on an identical issue, the additional ground no. 4 in the present case is decided in favour of the assessee....
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....al position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books, of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A." 16. Per contra the Ld DR placed reliance upon the order of lower authorities. 17. We have noted that the facts of present case are identical to those discussed in judicial precedents supra. There is no dispu....