TaxTMI 
TaxTMI 
2026 (5) TMI 314
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....see is heading Galaxy Group (Sawasdee Group), which was established in 2008. The assessee had started Diamond business in Bangkok during year 1990, and is associated with diamond trading activities, operating from Bangkok, Belgium and Mumbai as non-resident. Post coming back to India, assessee started filing his ITR as R&NOR from AY 2016-17 and from AY 2018-19 and started filing his ITR as resident. The group has considerable presence in real estate sector in Delhi/NCR. A. search was conducted u/s 132 of the Act on the Galaxy Group on 17.11.2021. Accordingly, the assessee was also covered under the search and seizure operation under section 132 of the Act. 2.1. The case of assessee was centralized to the office of AO in pursuance of order passed u/s 127 of the Act dated 06.02.2022 by the PCIT-10, Delhi. The case of the assessee was selected for compulsory scrutiny in pursuance of CBDT notification no F.No.225/81/2022/ITA-II dated 03.06.2022 as per para no 2.2 for compulsory selection of returns for complete scrutiny in FY. 2022-23. Notices u/s 143(2) of the Act dated 29.06.2022 was issued. General questionnaire vide notice u/s 142(1) of the Act dated 22.07.2022 was issued. Asses....
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.... without prejudice, the learned CIT(A) has failed to appreciate that the approval obtained by the Assessing Officer from the Additional CIT for passing the assessment order under Section 143(3) is non est and mechanical, contrary to the statutory mandate, and does not confer validity on the impugned assessment. 5. That in view of the facts and circumstances of the case and in law, the learned CIT(A) has erred in not appreciating that the assessment order dated 11.02.2023 is time-barred, since the limitation period under Section 153(1) for AY 2021-22 expired on 31.12.2022. The assessment framed beyond the statutory limitation is void ab initio. 6. That in view of the facts and circumstances of the case and in law, the assessment order dated 11.02.2023 passed under section 143(3) of the Act is illegal, bad in law and liable to be quashed as the same has been passed in contradiction to CBDT Circular No. 10/2019 dated 14.08.2019. 7. That in view of the facts and circumstances of the case and in law, no incriminating material was found during the search conducted on the assessee, and the impugned additions have been made solely on the basis of alleged third-pa....
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.... the Assessing Officer to make the disallowance, is not confronted to the Appellant and as such the disallowance made are illegal and bad in law. 16. That in view of the facts and circumstances of the case, the CIT(A) has erred on the facts and in law in upholding by charging interest under section 234A/234B/234C/234/234D of the Act. The interest has been also wrongly worked out. 5. In ITA No.6959/Del/2025, the Department of Revenue raised following grounds of appeal: a. Whether the Ld. CIT(A) has justified in allowing the appeal of the assessee only on technical ground and not considering the merit of the assessment order. b. The Ld. CIT (A) did not appreciated the fact that the whatsapp chat revealing the transaction of Rs.50,00,000/- was never denied by the assessee it is an admitted fact that assessee is a party to these whatsapp chats, which is evidenced as incriminating in nature, and without bringing forth any clue, detail and/or substantiating proof of such transaction, narrative only cannot be considered as proof or substantiation thereof. Hence, decision on this ground is not acceptable and further appeal is recommended on the issue in the ca....
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....of Income Tax (Appeals)-3 [in short, the "CIT(A)"], Noida's order dated 30.07.2025 passed in case no. CIT(Appeals), Noida-3/10126/2021-22, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). Heard both the parties. Case files perused. 2. We notice at the outset that there arises the first and foremost issue of validity of the impugned section 143(3) assessment itself framed by the learned DCIT, Central Circle-II, Noida as per the assessee's pleadings in its appeal ITA No.5458/Del/2025. A combined perusal of both these case files indicates that the assessee/appellant is engaged in the business of manufacturing and sale of flexible packaging material etc. It has filed its return for the impugned assessment year 2022-23 on 29.10.2022, declaring loss of Rs.64,53,88,702/-. And the same was taken for scrutiny. The learned departmental authorities thereafter carried out section 132 search action as well as section 133A survey in its case on 21.02.2023. There is further no dispute that the learned Assessing Officer then proceeded to frame the impugned assessment on 30th March, 2024 in its case inter alia making va....
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....ree assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated." 13.1 Therefore, the only permissible statutory course was to issue notice u/s 148 and obtain prior approval u/s 148B before passing assessment order. 13.2 As the Assessing Officer completed the assessment under section 143(3) of the Act without issuing the notice under section 148 of the Act. Therefore, the question before us is whether the assessment proceedings initiated under section 143(3) of the Act can be validly continued and completed after a search under section 132 has been conducted in the case of the same assessee, without following the procedure prescribed under section 148 (Explanation 2) of the Act. 13.3 In our considered opinion, the answer lies in the scheme of the Act itself. Section 143 provides the general framework for regular assessment, whereas sections 147-148 (post-2021 regime) deal with reassessment based on information suggesting escapement of income, including that unearthed during a search. 13.4 A plain reading of section 143(2) shows that such notice can be issued only when a return of incom....
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....sing Officer or to produce any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be issued after the expiry of three months from the end of the financial year in which the return is furnished. 13.6 This position finds substantial support from the ratio of various decisions of Hon'ble High Court and Hon'ble Supreme Court. The Courts unanimously held that once a search has been conducted and proceedings are triggered under section 153A, the Assessing Officer cannot continue parallel proceedings under section 143(3) or section 147 for the same assessment year, because the entire assessment for that year stands merged in the search assessment. The Courts emphasized that the existence of a special procedure for assessment consequent to a search is a complete code in itself; therefore, ordinary assessments abate and cannot coexist with the search-based assessment. 13.7 Drawing this analogy to the current regime, it is evident that when a search takes place and information is unearthed suggesting escapement of income, the Assessing Officer must act under section 148 (which now performs ....