TaxTMI 
TaxTMI 
2026 (7) TMI 1394
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...., information was received by the Department that the assessee had allegedly entered into transactions aggregating to Rs. 7,72,10,945/- with M/s. Stance Synergies Pvt. Ltd., which, according to the Department, represented non-genuine transactions. Based upon such information, proceedings under section 148A of the Act were initiated. Thereafter, an order under section 148A(d) dated 28.03.2023 was passed and notice under section 148 was issued on the same date. The assessee did not file any return of income in response to the said notice. During the reassessment proceedings, notices under section 142(1) were issued and complied with by the assessee. 3. During the reassessment proceedings, the assessee submitted that it had received aggregate amounts from M/s. Stance Synergies Pvt. Ltd. during the relevant previous year. According to the assessee, the amount of Rs. 7,20,02,121/- represented revenue from services rendered to the said concern and had already been disclosed as sales in its books of account and offered to tax. It was contended that once such receipts had already formed part of the turnover disclosed by the assessee, the same could not again be brought to tax as unexpla....
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....cy services and maintained regular books of account which were duly audited under section 44AB of the Act. It was contended that the entire premise adopted by the Assessing Officer was factually incorrect. According to the assessee, there were no purchases from M/s. Stance Synergies Pvt. Ltd. and, on the contrary, the assessee had rendered services to the said concern and received consideration therefor through banking channels. 8. The assessee further submitted before the learned CIT(A) that revenue from operations amounting to Rs. 8,08,56,121/- had been duly disclosed in the audited financial statements and that out of the same, revenue of Rs. 7,20,02,121/- pertained to services rendered to M/s. Stance Synergies Pvt. Ltd. It was contended that the receipts had been recorded in the regular books of account and that all supporting documents, including bank statements and ledger accounts, had been furnished before the Assessing Officer. The assessee also explained that income had inadvertently been reflected under the head "Income from Other Sources" in the return of income, though, in substance, the receipts constituted business income. 9. The assessee further contended that ....
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....ut fulfilling the jurisdictional conditions u/s 147 of the Act for the Ld. AO to validly assume jurisdiction. 3. That the Ld. CIT(A) has erred in law and on facts in upholding the action of the Ld. Assessing Officer in assuming jurisdiction under section 148 of the Act, without appreciating that the assessment ought to have been framed under section 153C, as the material relied upon emanates from a search conducted in the case of third party which was conducted prior to 01.04.2021 i.e. on 03.02.2021. Accordingly, the assessment framed u/s 148 is without jurisdiction and liable to be quashed. 4. That the Ld. CIT(A) has erred in law and on facts in not appreciating the fact that the Ld. AO has not followed the binding Judgment of Hon'ble Apex Court in the case of Vikram Sujit Kumar Bhatia reported in 453 ITR 417 in which it has been held that if any information could be inferred from the seized document, then notice u/s 153C is required to be issued. 5. That the Ld. CIT(A) has erred in law and on facts in upholding the Ld. AO's action of reopening the assessment u/s 147 of the Act by merely relying on the information received from DCIT, Central Circ....
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....ormation" the allegation was categorically recorded as "Bogus Purchases" involving an amount of Rs. 7,72,10,945/-. He further drew our attention to paragraph 5 of the Annexure wherein the assessee was called upon to explain why notice under section 148 of the Act should not be issued on the basis of the aforesaid allegation. It was, therefore, submitted that the very foundation of the reassessment proceedings rested upon the allegation of bogus purchases. 14. The learned AR further invited our attention to the last page of the Annexure to the notice issued under section 148A(b) of the Act, wherein, after referring to the analysis of the bank statement of M/s. Stance Synergies Pvt. Ltd., it has been stated that "the assessee is one of the beneficiary who has received Rs. 7,72,10,945/-". He submitted that the notice itself is self-contradictory. Elaborating his submission, he contended that while paragraph 2 of the Annexure categorically records the nature of information as "Bogus Purchases", the concluding portion proceeds on an altogether different premise by merely stating that the assessee is one of the beneficiaries who had received Rs. 7,72,10,945/- from M/s. Stance Synergie....
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....r emanates from a search conducted prior to 01.04.2021, the assessment of a person other than the searched person could be initiated only in accordance with the provisions of section 153C of the Act, subject to satisfaction of the statutory conditions prescribed therein. He submitted that the Assessing Officer could not have invoked the provisions of section 148 merely on the basis of such search material. According to him, the very assumption of jurisdiction under section 148, instead of section 153C, was contrary to the statutory scheme and, therefore, the impugned reassessment proceedings deserve to be quashed on this ground alone. 18. In support of the aforesaid submissions, the learned AR placed reliance upon the judgment of the Hon'ble Bombay High Court in Sejal Jewellary v. Union of India[2025] 171 taxmann.com 846 (Bom.) and the recent decision of the Co-ordinate Bench in Nanne Gulzar & Company v. ACIT, ITA Nos. 3956 & 3957/Mum/2025, order dated 15.06.2026. 19. Per contra, the learned Departmental Representative ("DR") strongly supported the orders of the lower authorities. He submitted that the Assessing Officer had validly assumed jurisdiction under section 148 o....
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....shiwara, Jogeshwari (West), Mumbai, and Neo Vikram Co-operative Housing Society, Level-3, New Link Road, Above Audi Show Room, Andheri (West), Mumbai. 22. The learned AR submitted that, except for the aforesaid recital, the Annexure does not disclose any material whatsoever gathered during the alleged survey proceedings so far as the assessee is concerned. According to him, the survey team merely records that no concern by the name of M/s. Stance Synergies Pvt. Ltd. was found functioning from the stated addresses. It neither records any finding that the assessee had entered into bogus purchase transactions with the said concern nor refers to any material discovered during the survey indicating that the receipts in the hands of the assessee represented unexplained cash credits. He, therefore, submitted that the Revenue cannot derive any support from the mere reference to survey proceedings under section 133Ato justify the assumption of jurisdiction under section 148 of the Act. 23. The learned AR further contended that the reference to the survey proceedings is only incidental and the entire information relied upon by the Assessing Officer admittedly emanates from the investig....
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....onal Assessing Officer emanated from the search proceedings and enclosed the "Relevant part of Appraisal Report of Sameer Modi and Shivani Modi Group of cases". The said communication merely requested the jurisdictional Assessing Officer to verify the transactions of the entities mentioned therein and to take remedial action in accordance with law. Thus, the very source of information relied upon by the Assessing Officer is the search conducted in the case of a third party and the material gathered pursuant thereto. 28. It is also significant that the Annexure itself contains an inherent contradiction. While paragraph 2 records that the information uploaded on the Insight Portal pertains to "Bogus Purchases" from M/s. Stance Synergies Pvt. Ltd., the concluding paragraph of the very same Annexure states that on the analysis of the bank statement of M/s. Stance Synergies Pvt. Ltd., the assessee is one of the beneficiaries who has received Rs. 7,72,10,945/-. Thus, the foundation of the notice itself oscillates between an allegation of bogus purchases and an allegation that the assessee was a recipient of funds. Such contradictory allegations further demonstrate that the Assessing O....
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....153C operate in completely different fields and are "quite compartmentalized". It was further held that section 147 does not contemplate a situation which is specifically covered by sections 153A and 153C and, therefore, both provisions are intended to operate in distinct situations. 32. The Hon'ble High Court thereafter analysed the effect of the non obstante clause contained in sections 153A and 153C. In paragraph 20, while considering the decision of the Hon'ble Supreme Court in Pr. CIT v. Abhisar Buildwell (P.) Ltd., the Court held that where incriminating material is found during the course of a search, the Revenue is necessarily required to take recourse to the provisions of section 153A and only where no incriminating material is found does the power of reassessment under sections 147/148 remain available. Proceeding further, in paragraph 22, the Hon'ble High Court held that once the foundation of the proceedings is the search action and the material seized therein which was subsequently explored and investigated, the provisions of section 153C read with section 153A necessarily become applicable. In paragraph 23, the Hon'ble Court explained that the Legis....