TaxTMI 
TaxTMI 
2026 (7) TMI 1020
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....yd/2025 for AY 2019-20, and the order therein passed shall apply mutatis mutandis for disposing of the other appeal. The assessee has assailed the impugned order on the following grounds of appeal: "1. The order of the Learned Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case. 2. For that the assessment completed u/s. 153C of the Act is bad in law, void ab initio and liable to be quashed. 3. For that the assessment completed u/s. 153C of the Act is invalid and liable to be quashed since the seized material was received by the jurisdictional Assessing Officer on 25.08.2023 being after 01.04.2021, which by virtue of the proviso to section 153C(1) r.w.s 153C(3) of the Act is deemed to be the date of search for the "other person", thereby barring invocation of section 153C and rendering the notice and resultant proceedings statutorily barred. 4. Without prejudice to the above grounds, the assessment framed u/s. 153C of the Act is bad in law and liable to be quashed, as the mandatory approval u/s. 153D of the Act was granted by the approving authority in a mechanical manner and without proper application of m....
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.... sold by the assessee and her husband through registered sale deeds dated 22.06.2019 in favour of M/s Spectra India Eco Projects Pvt. Ltd. and not in favour of Shri Kalluri Manohar Reddy. 5. The AO holding a conviction that the assessee and her husband had failed to satisfactorily explain the nature and source of the aforesaid amount of Rs. 50 lacs, treated the same as their unexplained money under section 69A of the Act and made an addition of Rs. 25 lacs each in their respective hands. 6. Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success. 7. The assessee aggrieved with the CIT(A) order has carried the matter in appeal before us. 8. We have heard the Ld. Authorised Representatives of both parties, perused the orders of the authorities below and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home her contentions. 9. Mrs Hemalatha K, CA, the Ld. Authorised Representative (for short, "AR") for the assessee, at the threshold of hearing of the appeal assailed the validity of the jurisdiction assumed by the AO for framing the assessment ....
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....ssumption of jurisdiction. 10. Coming to the merits of the case, the Ld. AR assailed the addition made by the AO de hors any irrefutable material which would establish receipt of an amount of Rs. 25 lacs by the assessee based on the impugned agreement to sell found in the course of the search proceedings from the premises of the Spectra group entity. Alternatively, it was submitted that there was no justification for the AO to have made the impugned addition under Section 69A of the Act. 11. Per Contra, the Ld. Senior Departmental Representative (for short, "Sr. DR") vehemently objected to the Ld. AR's contentions. It was submitted that the AO had rightly assumed jurisdiction and, after recording his satisfaction as required per the mandate of Section 153C of the Act, rightly framed the assessment. The Ld. Sr. DR submitted that as the assessee's counsel has failed to factually substantiate her claim regarding the invalid assumption of jurisdiction by the AO of the assessee, the judicial pronouncements pressed into service by her will not carry the case of the assessee any further. Apropos the reference by the AO of the searched person in his satisfaction note of the cash rece....
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....heir respective unexplained money under Section 69A of the Act, failed to come forth with any reply and reiterated that it was because of the failure of the assessee to furnish the requisite details in the course of the assessment proceedings. Also, the Ld. Sr. DR on being queried that now, when the amount received by the respective persons was the suppressed sale consideration of the subject property sold by them vide registered sale deeds dated 22.06.2019 to M/s Spectra India Eco Projects Pvt. Ltd., then how the same was assessed in the hands of the assessee during the year under consideration i.e., AY 2019-20, failed to come forth with any plausible reply. However, it was submitted by her that, if the amount is held to be the assessee's income assessable in another year, a finding or direction to that effect be given while disposing of the appeal. 13. Admittedly, it is a matter of fact borne from record that Annexure A/SIEPL/OFF/24, Pages 56 to 62, comprising the "Agreement of Sale" and receipt evidencing payment of Rs. 50 lacs, was found and seized from the premises of the "Spectra Group" during the search proceedings conducted on 23.03.2021. Apart from that, we find tha....
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....nible from the record. 15. We thus, in terms of our aforesaid observations, are persuaded to hold that the amount of Rs. 50 lacs received by the assessee and her husband from Shri Kalluri Manohar Reddy (supra) represented part of the sale consideration on behalf of the eventual purchaser, viz. M/s Spectra India Eco Projects Pvt. Ltd., which acquired the property through registered sale deeds dated 22.06.2019. 16. Having held so, we are unable to comprehend the basis on which the AO has treated the aforesaid amount of Rs. 25 lacs each in the hands of the assessee and her husband as an unexplained money under section 69A of the Act. Section 69A can be invoked only where the assessee is found to be the owner of money and either offers no explanation regarding the nature and source thereof, or the explanation offered is found to be unsatisfactory. In the present case, the AO himself has categorically recorded in the assessment order that the amount of Rs. 50 lacs represented the advance received by the assessee and her husband pursuant to the agreement to sell the subject property. Thus, the AO himself has acknowledged both the nature and the source of the receipt. In our view, o....
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....of the Act provides that the provisions of Section 153C shall not apply in relation to searches initiated under Section 132 or requisitions made under Section 132A on or after 01.04.2021. However, in the present case, the search in the Spectra Group case was admittedly initiated on 23.03.2021, i.e., prior to 01.04.2021. In our view, the reference contained in the "1^st Proviso" to section 153C(1) of the Act, whereby the date of receipt of seized material by the AO of the other person is deemed to be the date of search, is only for the limited purpose of determining the assessment years that would in case of such "other person" abate under the "2^nd Proviso" to section 153A. We are of firm conviction that such deeming fiction cannot be extended for determining whether section 153C itself is applicable or excluded by virtue of section 153C(3). Rather, on a conjoint reading of sections 153C, 153A and the amended reassessment provisions introduced by the Finance Act, 2021, it can safely be concluded that the relevant date for determining applicability of section 153C(3) is the date of initiation of search and not the date of receipt of seized material by the AO of the other person. Sin....