TaxTMI 
TaxTMI 
2026 (5) TMI 1209
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....rtnership firm engaged in the business of construction as developer, builders and promoters of projects. The assessee has not filed its return of income for assessment years 2007- 08 to 2012-13. Information was obtained from the DIT (Inv)-II, Mumbai through CIT-I, Pune vide letter dated 31.03.2014 that the assessee is a beneficiary of accommodation entries of bogus unsecured loan and advances by Bhawarlal Jain Group. As per information the assessee during the financial year 2006-07 relevant to assessment year 2007-08 has received an amount of Rs. 15,00,000/- from Kothari and Company through RTGS. He also observed that the assessee has received various amounts in the subsequent assessment years, the details of which are as under: S. No. A.Y. Amount involved 1 2007-08 15,00,000/- 2 2008-09 85,00,000/- 3 2009-10 1,74,32,000/- 4 2010-11 53,58,916/- 5 2011-12 1,93,64,000/- 6 2012-13 4,02,96,000/- 4. The Assessing Officer, therefore, issued notice u/s. 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') on 31.03.2014 which was served on the assessee on 31.03.2014. Subsequently notices u/s. 142(1) of the ....
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.... of HDFC Bank and balance confirmation as on 31/03/2012 of Kothari and Company. The assessee had also filed reconciliation statement claiming that it had received booking advance from Kothan and Company in FY 2009-10 and not in FY 2006-07 as alleged. It was submitted by the assessee that it had received Rs. 25,00,000/- in 2005-06 from little diamond and the said figure was shown in balance sheet as on 31/03/2007, as no amount was received in FY 2006-07. 7. The Assessing Officer referred to the information received regarding bogus accommodation entries from DIT(Inv)-II, Mumbai through CIT 1 Pune who had identified 70 benami concerns in the name of the employees and relatives of Shri. Bhavarlal Jain and his family. He, therefore, made necessary verification of unsecured loans which was claimed by the assessee as received from M/s. Kothari and Company on account of "Booking Deposit of Rs. 15,00,000/-. The Assessing Officer while going through the information from DIT(Inv)-II noticed that there was difference in names of the parties, year of receipt and amount. He noted that the parties who were intimated by the said investigation wing were not shown by the assessee or the parties w....
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.... sheet of the assessee firm. The Assessing Officer asked the assessee to reconcile the figures with supporting evidences, such as, Balance Sheets, returns of income, bank statements of concerned parties and copies of Booking Agreements etc. The assessee filed 3 copies of Booking Agreements on 31/03/2015 on sample basis. The Assessing Officer after further examination found that the agreement between M/s Minakshi Builders i.e. the assessee firm and M/s. Kothari & Company was executed on 30/03/2009 and as per the said agreement the date of payment of Rs. 15,00,000/- was shown as 29/12/2008, which agreement was executed on 30/03/2009, In respect of another Booking Agreement executed on 25/07/2007 between the assessee firm Minakshi Builders and M/s. Impex Gems, dates of payments were shown as 12/06/2007 of Rs. 30,00,000/-, 03/07/2007 of Rs. 23,00,000/- and 06/07/2007 of Rs. 17,00,000/- totaling to Rs. 70,00,000/-, In the third Agreement, the AO noticed that the same was executed on 25/07/2010 by the assessee and M/s. Impex Gems, M/s. Laxmi Trading CO. and M/s. Maximus Gems wherein the payments were shown as on 14/07/2010 of Rs. 89,32,000/-, on 16/07/2010 of Rs. 89,32,000/- and on 20/07....
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....smissed the appeal filed by the assessee. 11. So far as the validity of reopening of the assessment is concerned, he held that the Assessing Officer has rightly reopened the case of the assessee for assessment years 2007-08 to 2012-13 u/s. 147 of the Act and has correctly issued notice u/s. 148 of the Act and there is no such invalidity in the order of the Assessing Officer. So far as the addition on merit is concerned, he also upheld the same. 12. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following revised / additional grounds: 1. Ground No.01 On the facts and circumstances of the case and in law, the Ld. A.O. erred in initiating the assessment u/s. 147 of the Act and passing the assessment order u/s. 147 r.w.s. 144 of the Act, and disregarding the fact that jurisdiction of the impugned assessment was within the purview of section 153C of the Act, which begins with non-obstante clause and over-rides section 147 of the Act, since the information relating to or pertaining to the appellant, was found and seized during the course of search on Bhanwarlal Jain Group 2. Ground No.02 ....
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....ely legal in nature and all the material facts are already available on record and no new facts are required to be investigated, therefore, in view of the decision of Hon'ble Supreme Court in the case of the National Thermal Power Co. Ltd. v. CIT (supra) and in the case of Jute Corporation of India Ltd vs Commissioner Of Income Tax And Anr (supra), the additional ground raised by the assessee is admitted for adjudication. 16. The Ld. Counsel for the assessee submitted that in the instant case the assessment was completed u/s. 144 r.w.s. 147 of the Act on 31.03.2015. He submitted that the notice u/s. 148 of the Act was issued on 31.03.2014 on the basis of reasons recorded which is based entirely on the basis of information arising from a search conducted u/s. 132 of the Act in the case of Shri Bhawarlal Jain group. Referring to the reasons for reopening by the Assessing Officer, copy of which is placed at pages 57 and 58 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to the same which is as under: 17. Referring to page 5 of the assessment order he submitted that the Assessing Officer in the assessment order has stated that the information w....
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....9 of his order where he has observed as under: "8.1 I find that....I have seen that the AO had got the information from the Investigation Wing regarding the accommodation entries provided by Bhanwarlal Jain Group of cases in which the assessee was one of the beneficiaries....." 20. He submitted that a perusal of the above would clearly and categorically shows that in the present case the material / information available to the Assessing Officer for making the assessment of the assessee is based on the incriminating material found and seized during the course of search action on Bhawarlal Jain group u/s. 132 of the Act. Therefore, the provisions of section 153C of the Act are attracted and not the provisions of section 147 of the Act. The Ld. Counsel for the assessee drew the attention of the Bench to the provisions of section 153C of the Act as amended by the Finance Act, 2015 and emphasized the addition of the words "any information contained therein". He submitted that the provisions of section 153C being a special provision begins with a non-obstante clause and specifically overrides sections 147 / 148 and provides for the exclusive mechanism for assessment where sei....
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.... iv) DCIT-Circle-1, Nashik vs. M/s. Shree Sai Properties, ITA No.987/Pun/2025 v) Aristocrat Residences LLP vs. ITO-34(1), ITA No.1118/Kol/2024 vi) DCIT, Circle 42(1)(1), Mumbai vs. Ghanshyam Rasiklal Shah ITA No.4707/Mum/2024 24. He accordingly submitted that in view of the above facts and binding judicial precedents, the impugned notice issued u/s. 148 of the Act and correspondingly for the other years in present appeal may be held to be invalid, without jurisdiction and bad in law. 25. Without prejudice to the above, the Ld. Counsel for the assessee in another plank of his argument, submitted that the re-assessment proceedings were initiated on the basis of borrowed satisfaction and not on the basis of independent enquiry conducted by the Assessing Officer. He submitted that neither in the reasons recorded for reopening nor in the assessment order there is any mention of any independent enquiry conducted by the Assessing Officer to corroborate the information received. The reasons so recorded reflects that the Assessing Officer did not independently apply his mind to the information received from the Investigation Wing and arrived at a belief whether o....
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....me as unexplained cash. He drew the attention of the Bench to the provisions of section 69A of the Act according to which the addition u/s. 69A can be made if and only if the conditions mentioned in that section are satisfied. He submitted that in the present case the assessee has maintained proper books and the alleged transactions are fully recorded in the books of account regularly maintained. Further, the said transactions are supported by documentary evidences including confirmations, ledger accounts and bank statements. The loans have been received through proper banking channel and there is no allegation of cash being found or discovered with the assessee. Therefore, the basic conditions for invoking the provisions of section 69A are not satisfied. 29. Referring to the following decisions, he submitted that the addition can only be made when the assessee is found to be in possession of money, bullion, jewellery etc not recorded in his books of account: i) DCIT vs. M/s. Karthik Construction Co vide ITA No.2292/MUM/2016 ii) DCIT Judgments Hospital [2022] 142 taxmann.com 122 (Chennai - Trib.) iii) DCIT Vs. Roop Fashion [2022] 145 taxmann.com 216 (C....
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.... 26.56,416 Total (B) - 15.00,000 85,00,000 1,74,32,000 53.58,916 1,93,64,000 4,02,96,000 9,24,50,916 32. Referring to the following chart, he submitted that the Ld. CIT(A) has upheld / enhanced the additions which are as under: Sr. No Name of Party Op. Bal as on 01.04.2007 AY 2007-08 AY 2008-09 AY 2009-10 AY 2010-11 AY 2011-12 AY 2012-13 Total Part wise 1 Rose Impex - 25,00,000 - - - - 25,00,000 2 Maximus Gems - - - - 89,32,000 - 89,32,000 3 Little Diam - - 15,00,000 - = 10,00,000 25,00,000 4 Laxmi Trading Co - - - 89 32,000 - 89,32,000 5 Impex Gems - 70,00,000 - - 89.32,000 1,59,32,000 6 Kothari & Co - 15,00,000 - - 27,02.500 - 42,02,500 7 Sankhala Exports Pvt Lad - - - 89,32,000 - - 89,32,000 8 Pankaj Exports - - - - 26,56.416 - 26,56,416 9 Madhur Flour Mills Private Limited ....
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....O as well as the Ld. CIT(A) failed to consider the same and upheld the addition which is not in accordance with law. He submitted that the loans cannot be treated as accommodation entries merely based on the general information or third party statements allegedly relating to Shri Bhanwarlal Groups without providing the assessee an effective opportunity to cross-examine such parties, without establishing any direct nexus between the assessee and the alleged entry providing activities and without bringing on record any independent corroborative evidence to substantiate the allegation. He submitted that once the assessee has discharged the initial onus by establishing the identity, creditworthiness and genuineness of the loan transactions, the Assessing Officer should not have made addition without rebutting those evidences placed on record. The Ld. CIT(A) is not justified in confirming the addition made by the Assessing Officer. He accordingly submitted that the addition on merit also deserves to be deleted. 38. The Ld. DR on the other hand while relying on the orders of the Assessing Officer and the Ld. CIT(A) on merit of the addition, filed the following written submissions rega....
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....the assessee or contain information pertaining to the said assessee, are found and the same are handed over to the AO of the assessee, he would subject to satisfaction of the other jurisdictional conditions stipulated under Section 153C of the Act, having the jurisdiction to make a reassessment/assessment of the income of the assessee under Section 153C of the Act. However, the same cannot mean that he is bound to exercise the said jurisdiction. In the event, the AO does not assume the jurisdiction to proceed with making an assessment/ reassessment under Section 153C of the Act, for want of the necessary ingredients thereto, it is to submit that the recourse to Section 147/148 is not ousted." 2.5 It is to submit that the non-obstante clause under Section 153C of the Act does not override the provisions of Section 147 of the Act. 3. In the case at hand, it is the claim of the Revenue that upon examination of documents seized from the search action conducted on group cases of Bhanwarlal Jain on 03.10.2013 by DIT(Inv)-2, Mumbai, it was found that the assessee was beneficiary of the bogus unsecured loans and advances accommodation entries by Bhanwarlal Jain group Duri....
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....It is to humbly submit that, the non obstante clause, kicks-in only on the AO assuming the jurisdiction under Section 153C of the Act, to make an assessment / reassessment. The non obstante provisions cannot come into play, if the AO does not take recourse to provision of Section 153C of the Act. 3.4 A non obstante clause is generally appended to section with a view to give the connecting part of the section, in case of conflict, an overriding effect over the provision in the same or other Act mentioned in the non obstante clause It is equivalent to saying that inspite of the provisions or Act mentioned in the non obstante clause, the provision following it will have its full operation or the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment or the provision in which the non obstante clause occurs. The non obstante clauses are not always to be regarded as repealing clauses nor as clauses which expressly or completely supersede any other provision of the law, but merely as clauses which remove all obstructions which might arise out of the provisions of any other law in the way of the operation of the princip....
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....block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under section 153A, however, the Assessing Officer has been given the power to assess or reassess the "total income" of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. The argument as regards the non obstante clause contained in section 153A and its effect, that it would exclude the very applicability of sections 147 and 148 respectively, is without any merit. The non obstante clause in section 153A should be understood as merely dispensing with the procedural aspect of section 147. Consequent to the notice under section 153A, the earlier return that may be filed for the purpose of assessment which is pending would be treated as non est in law Further, section 153A(1) itself provides that on filing of the return consequent to the notice, the provision of the Act will apply to the return of Income....
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....n as on date. 3.6 It is to humbly submit that, by its very nature, Section 153C of the Act is an enabling provision, which enables the Assessing Officer to assume jurisdiction to assess / reassess the income of the Assessee, in cases where the jurisdictional conditions as set out in Section 153C are satisfied. The non obstante provision as contained in Section 153C(1) of the Act must necessarily be construed in the aforesaid context. The non obstante provision, in such circumstances, cannot be construed to mean that recourse to a provision, which by nature is an enabling provision, is necessary and by implication, the other provisions in respect of which, the main enactment is accorded primacy are inoperative and nugatory. 3.7 In conclusion, it is to submit that the non obstante clause in Section 153C cannot be read to completely exclude the provisions of Sections 143 or 147, in cases where the assessee's income is sought to be assessed on the basis of information found during search proceedings. 3.8 However, it is to clarify that it will not be open for the AO to take recourse to Section 147, where the AO has taken steps under Section 153C o....
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.... proposition that if a search and seizure operation has taken place or there is information available from a search and seizure, then the only resort available to the AO is to invoke the provisions of section 153A/153C and not section 147/148. In this connection, it is to mention that firstly the decision is pertaining to a writ petition filed by the assessees therein, which came to be collectively disposed of by the Hon'ble Bombay High Court and accordingly there is no ratio decidendi that follows from the said decision. In the decisions of the Hon'ble Delhi High Court, the Hon'ble Court was asked to decide the question regarding the precluding of sections 153A/153C on one hand to sections 147/148 on the other ie the interplay between sections 153A/153C and sections 147/148 There were 13 Writ Petitions that were clubbed and decided by the Hon'ble Bombay High Court taking writ petition No. 3057 of 2019 i.e. Sejal Jewellery vs Union of India & Ors as the lead writ petition. The facts of the case very clearly indicate that the petitioner was searched (para-4 on page 4 of the said decision) along with its associate concerns as well as the key individuals of th....
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....ting the various explanations given by the assessee during the course of assessment proceedings, made addition of Rs. 15 lakhs for the impugned assessment year which has been upheld by the Ld. CIT(A). It is the submission of the Ld. Counsel for the assessee that the reopening of the assessment u/s. 147 of the Act is invalid since it falls within the purview of section 153C of the Act. It is his submission that the basis of reasons recorded for reopening is entirely on the basis of information arising from a search conducted u/s. 132 of the Act in the case of Bhanwarlal Jain group. Further in the order of the Assessing Officer he has stated that the information was found during the course of search proceedings in the case of Bhanwarlal Jain and received from the office of the DIT(Inv), Mumbai. It is also his submission that the Ld. CIT(A) has called for a remand report from the Assessing Officer and the Assessing Officer in his remand report has also categorically mentioned that the information has stemmed from seized material during the search in the case of Shri Bhanwarlal Jain. It is his submission that when the material / information available to the Assessing Officer for making....
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.... shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have be en received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of sec....
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....aw. The petition is accordingly allowed in terms of prayer clauses (a) and (b)." 43. We find the Hon'ble Rajasthan High Court in the case of Shyam Sunder Khandelwal vs. ACIT vide Civil Writ Petition No.18363/2019, order dated 19.03.2024, copy of which is placed in the paper book from para 23 onwards has observed as under: "CONCLUSION:- 23. The reasons supplied in case in hand for initiation of proceedings under Section 147/148 are based on the incriminating material and documents including Pen Drives seized during the search carried out of the Manihar Group and the statements recorded during proceedings. From the information received the AO noticed that the loan advanced and interest earned thereon were unaccounted. In other words the basis for initiation of Section 148 proceedings is the material seized relating to or belonging to the petitioner, during the search conducted of Manihar Group. 24. In the case where search or requisition is made, the AO under Section 153A mandatorily is required to issue notices to the assessee for filing of income tax return for the relevant preceding years. The AO assumes jurisdiction to assess/reassess 'total inco....
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....ing 'total income' in case of incriminating material found during search or requisition. 30. The argument that by enactment of Section 153A to 153D has not eclipsed Section 148 does not enhance the case of respondent to initiate the proceedings under Section 148. On fulfillment of two conditions for invoking Section 153C the proceeding in accordance with Section 153A are to be initiated. The operating field of and Section 153A to 153D and Section 148 are different. Applicability of Section 153C in cases where the seized material related to or belonged to person other than on whom search is conducted or requisition made does not render Section 148 otiose. Section 148 shall continue to apply to the regular proceedings and also in cases where no incriminating material is seized during the search or requisition. 31. The other aspect of the matter is that under Section 153A and 153C, 'the total income' is to be assessed. The total income includes returned income (if any), undisclosed income unearthed during the search or requisitioning and information possessed from the other sources. For Illustration:- An assessee had returned income of Rs. 10....
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....ted to the petitioner for getting the notice under Section [2024:RJ-JP:14106- DB] (49 of 50) [CW-18363/2019] 148 quashed. Moreover, learned Single Judge was not having the benefit of the decision of the Supreme Court in the case of Abhisar Buildwell P. Ltd. (supra). The appeal against the order was dismissed having rendered infructuous in view of the subsequent developments that the assessment order was passed. 37. The decision of the Madras High Court in the case of Saloni Prakash Kumar (supra) is of no help to the respondents. The High Court held that Section 153C does not preclude issuance of notice under Section 148. The field of applicability of two sections was not the issue before the Court. 38. The petitioner relied upon the decision of the Karnataka High Court in the case of Sri Dinakara Suvarna (supra). It would be relevant to quote Para-10:- 10. Admittedly no proceedings were initiated under Section 153C of the Act. Thus, there is patent non-application of mind. It is relevant to note that the author of the diary Smt. Soumya Shetty had passed away prior to the date of search. It was argued on behalf of the Revenue that Shri. Ashok Kumar Chowta ....
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....information received, it is observed that as per Annexure A-1, Item No. 1, Page No. 35 of the seized documents, contains handwritten noting of various amounts in which against the name of Mr. Atul Vijay Madan amount of Rs. 55 lacs noted as 'Loan" and Rs. 22 Lacs as 'settlement. Noting contains various amounts alongwith the names of the parties from whom the amounts were taken by Mr. Ramzan Kokani. This transaction appears to be loan given by Mr. Atul Vijay Madan. Also as per Annexure A-1, Item No. 2 Page No. 186 of the seized document there are noting of land transaction such as date place, property description, amount & share of the seller. The loan transaction of Rs. 45 lacs with Mr. Atul Vijay Madan is in respect of land transaction of G. No. 332/1 of Talwade dated 25/10/2012 mentioned on the seized document. The Sathe Khat agreement dated 28/09/2011 and purchase deed dated 25/10/2012 of the land at Gat No. 332/1 of Tallwade was also found and seized as per Annexure-A, Item No. 2. On verification of the sathe Khat agreement and purchase deed there is difference of Rs. 33 lacs which was paid in cash by Mr. Ramzan Kokani to the sellers of the land. In view of the ....
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....her that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 34 [and for the relevant assessment year or years as referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b....
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....of the legislature as depicted by the provisions of Section 153A and 153C of the I.T. Act. There would not be any difficulty in accepting the proposition as canvassed by Mr. Suresh Kumar, referring to the decision of the Supreme Court in Phool Chand Bajrang Lal (supra), however, the facts in the present case are distinct. There cannot be any doubt on the position in law when the Revenue intends to proceed purely on materials relevant for an action under Section 148 read with Section 147. We have already observed that the provisions of Sections 147, 148 vis-a-vis Section 153A and Section 153 are quite compartmentalized. To avoid any overlapping of these provisions, the legislature in its wisdom has thought it appropriate to provide for an independent effect, to be given under Section 153A read with Section 153C by incorporating the "non-obstante" clause, in these provisions, which carves out an exception to any normal/regular action being resorted under Section 147. 24. In this view of the matter, we are of the clear opinion that the impugned notice under Section 147 of the I.T. Act and all actions consequent thereto are required to be held to be without jurisdiction and ba....
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....deration of Rs. 8,26,37,030/- which have been registered under the sale deed entered on 05.07.2013. Now the observation of the AO in the assessment order indicates that the incriminating material found during the course of search in the case of Kokani Group and subsequently at page 16 and 17 on the basis of information about the assessee in the form of name of the land "367 Makhmalabad". Except this incriminating material, there is no other document referred by the ld. AO for carrying out the reassessment proceedings nor any other information is mentioned. It is also noted in the assessment order that assessee has not been subjected to any survey action and only the assessee's sister concern firm namely PH Infrastructure was subjected to survey action and the partner in this firm is also the partner of the assessee firm. So admittedly the reassessment proceedings in question have been initiated solely on the basis of incriminating material found and seized during the course of search in the case of Kokani Group. Now the assessee has contended before ld.CIT(A) referring to various judgments that if the AO had reason to believe that in the seized material found during the course of s....
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.... view of the facts and circumstances as stated above, the impugned assessment should have been framed u/s. 153C of the Act, hence the assessment u/s. 147/148 of the Act framed by the Ld. AO is hereby quashed. The ground of appeal no. 3 is allowed." 13. We further note that similar type of issue also came for adjudication before the Hon'ble Jurisdictional High Court in the case of Sejal Jewellery Vs. Union of India (2025) 171 taxmann.com 846 (Bombay) wherein the Hon'ble Court has also taken into consideration the judgment of Hon'ble High Court of Rajasthan in the case of Shyam Sunder Khandelwal Vs. ACIT 161 taxmann.com 255 (Rajasthan) and Hon'ble Court has discussed about non obstante clause appearing in provisions of section 153A and 153C of the Act along with scope of section 147 in para 16 of the order which reads as under : "16. On a plain reading of Section 153A, it is clear that it begins with a 'non-obstante' clause, when it provides that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of accou....
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....h Court of Rajasthan in the case of Shyam Sunder Khandelwal (supra) wherein the Hon'ble Court has laid down the ratio that where the basis of the initiation of proceedings u/s. 148 in case of the assessee was material seized relating to or belonging to assessee during search conducted on M Group, notice issued u/s. 148 and impugned orders rejecting objections prior to issuance of notice were to be quashed and set aside. Hon'ble Jurisdictional High Court in the case of Sejal Jewellery (supra) has considered the ratio laid down by the Hon'ble Rajasthan High Court in the case of Shyam Sunder Khandelwal (supra) and has shown its complete agreement with the view taken by the Division Bench of Hon'ble Rajasthan High Court. For the sake of convenience, para 21 to 24 of the judgment in the case of Sejal Jewellery (supra) is reproduced below : "21. The Rajasthan High Court in Shyam Sunder Khandelwal (supra) also had taken a similar view when the issue which had arisen before the Court was in regard to the notice issued under Section 148 of the 1. T. Act, the basis of issuance of such notice was the material seized during search. The contention of the assessee was to the effect that....
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....e proposition that the special provision shall prevail over the general provision. To say it differently the provisions of Section 153A to 153D have prevalence over the regular provisions for assessment or reassessment under Section 143 & 147/148. 27. Section 153A and 153C starts with non-obstante clause. The procedure for assessment/reassessment in Section 153A, 153C in cases of search or requisition has an overriding effect to the regular provisions for assessment or reassessment under Sections 139, 147, 148, 149, 151 & 153. 28. The language of explanation 2 to new Section 148 is akin to Section 153A and Section 153C Corollary being that after seizing of operational period of Section 153A to 153D. the cases being dealt thereunder were circumscribed in the scope of newly substituted Section 148." We are in complete agreement with the view taken by the Division Bench of Rajasthan High Court in the aforesaid decision. 22. Applying the principles of law as discussed hereinabove, we are of the clear opinion that the foundation of the present case was certainly a search action which was undertaken by the Revenue against one Shilpi Jewellers Pvt. Ltd.....
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.... In light of the above judgment of Hon'ble Jurisdictional High Court as well as that of Hon'ble Rajasthan High Court, we find that the judgment referred and relied on by ld. DR in the case of PCIT Vs. Naveen Kumar Gupta 168 taxmann.com 574 (Delhi) will not be applicable as we sitting at Pune Benches of ITAT are bound by the judgment of Hon'ble Jurisdictional High Court. We find that from the judgment of Hon'ble Jurisdictional High Court in the case of Sejal Jewellery (supra) has also been followed by the Coordinate Benches in the decisions given below: (i) (iv) Atul Vijay Madan-vs-DCIT, ITA No. 1529/Pun/2024, Hon. Members, "A" Bench, ITAT Pune dt. 07/05/2025 (ii) (P) Vidarbha Mining Private Limited-vs-DCIT, ITA No. 1265/Mum/2024, Hon. Members, "F" Bench, ITAT Mumbai dt. 30.07.2025 (iii) (Parshwa Investment-vs-DCIT, ITA No. 1429/Mum/2025, Hon. Members, "C" Bench, ITAT Mumbai dt. 30/06/2025 16. Further, similar view has also been taken in the case of following decisions: (i) Pr. CIT vs. VSL Mining Company (P.) Ltd., 167 taxmann.com 373 (Kar.) [2024] (ii) Tirupati Construction Company vs. ITO, 165 taxmann.com 176 (Raj.) [2024]....
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....ation so received. We, therefore, find merit in the argument of the Ld. Counsel for the assessee that the Assessing Officer in the instant case has not independently applied his mind to the information received from the Investigation Wing to arrive at a belief whether or not any income has escaped the assessment and the reopening of the assessment is on borrowed satisfaction. It is the settled proposition of law that it is a pre-condition of section 147 that the Assessing Officer should form his own satisfaction based on credible enquiry and on the credentials of the facts of the case. He shall not act on the basis of borrowed satisfaction. In the instant case, as mentioned earlier, the re-assessment proceedings have been initiated entirely on the basis of information obtained from the DIT (Inv), Mumbai and therefore, such reopening is on borrowed satisfaction without independent application of mind by the Assessing Officer. 48. We find the Hon'ble Bombay High Court in the case of Pr.CIT vs. Shodiman Investments Pvt. Ltd. reported in (2020) 422 ITR 337 (Bom) at para 14 of the order has observed as under: "14. Further, the reasons clearly shows that the assessing officer....
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....t proceedings that follow. This is the bare minimum mandatory requirement of the first part of Section 147 (1) of the Act. 25. At this stage it requires to be noted that since the original assessment was processed under Section 143 (1) of the Act, and not Section 143 (3) of the Act, the proviso to Section 147 will not apply. In other words, even though the reopening in the present case was after the expiry of four years from the end of the relevant AY, it was not necessary for the AO to show that there was any failure to disclose fully or truly all material facts necessary for the assessment. 26. The first part of Section 147 (1) of the Act requires the AO to have "reasons to believe" that any income chargeable to tax has escaped assessment. It is thus formation of reason to believe that is subject matter of examination. The AO being a quasi judicial authority is expected to arrive at a subjective satisfaction independently on an objective criteria. While the report of the Investigation Wing might constitute the material on the basis of which he forms the reasons to believe the process of arriving at such satisfaction cannot be a mere repetition of the report of i....
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....ly is in the affirmative please state : (c) Whether any voluntary return hos already been filed; and (d)if so, the date of liing the said return: Yes No NA 9 10 If the answer to item 8 is in the negative please state : (c) The income originally assessed [d]Whether it is a case of" under assessment, assessment af too low o rate, assessment which has been made the subject of excessive raset or/allowing of excessiva loss or depreciation : Nit NA Whether the provisions of Sec. 150(1) are applicable, il tho reply is in the affirmative, the relevant fochs may be stated against item No.11 and il may also be brought out that the provisions of Sec.150(2) would not stand in the way-of initiating proceedings U/s 147 NO The provisions of sec.150[2] would nol stand in the way of iniliating proceedings U/s.147 Assessment year in respect of which it is proposes to issue nolice U/s.148 9 10 NO The provisions of sec.150[2] would nol stand in the way of iniliating proceedings U/s.147 TRUE-COPY cathmk 08/09/22 Tax Offic S. V. Thombare trewine Tax Officer tward-1, Ahmednagar Document 2 11 "Reasons for the belief that income has escaped assessment. As per separ....