TaxTMI 
TaxTMI 
2026 (10) TMI 526
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....l Circle o=in terms of the order passed u/s 127 of the Act on 27.06.2024 and the statutory notice u/s 143(2) was issued on 28.06.2024 and duly served upon the assessee. During the course of assessment proceedings, various notice/s 142(1) were issued to the assessee from time to time. In response to notices, the reply was filed which was duly examined properly and found that the assessee has not provided adequate documentary evidences and explanation to substantiate its claim. Further, show cause notice was issued on 27.03.2025 to furnish the details about the payment of INR 7,84,426/- in cash may not be added to the income of the assessee as per the provisions of the Act. As per the seized material, various transactions were found noted carried out in cash by the assessee and the source of such funds could not be verified in absence of any supporting documents such as bank statement and other documents. Therefore, the AO made the addition of INR 7,84,426/- u/s 69C of the Act and assessed the total income of the assessee at INR 32,40,236/- vide assessment order dated 30.03.2025 passed u/s 143(3) of the Act for the year under appeal. 3. Against the said order, assessee filed an ap....
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....fore, the AO has rightly initiated the assessment proceedings by issue of notice u/s143(2) of the Act and the consequent order passed is in accordance with law. 8. Heard both the parties and perused the material available on record. In the present case, a search and seizure operation us/s 132 of the Act was carried out on 15.02.2024 and prior to that notice u/s 143(2) of the Act for taking the case of the assessee for scrutiny assessment was issued on 28.06.2024. Claim of the assessee was that when search is conducted on or after 01.04.2021, assessment must be framed u/s 147/148 of the Act and not under Section 143(3) of the Income Tax Act. Before going further, it is necessary to refer Explantion-2 to section 148 of the Act, which reads as under: "Explanation 2- for the purpose of this section : (i) A search is initiated under section 132 or books of accounts, other documents or any assets are requisitioned on or after 1st day of April 2021 in the case of the assessee or (ii) a survey is conducted under section 133A, other than under sub-section (2A) [***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or ....
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.... 426 which was followed by Lord Roche in Nazir Ahmed v King Emperor who stated as under :- "where a power is given to do certain thing in certain way, the thing must be done in that way or not at all." 32. This rule has since been approved by this court in Rao Shiv Bahadur Singh & Anr Vs State of Vindhya Pradesh and again in Deep chand Vs state of Rajasthan 1962, (1) SCR =AIR 1961 SC 1527. These cases were considered by a three Judge Bench of this court in state of Uttar Pradesh vs Singhara Singh & Others and the rule laid down in nazir Ahmed's case (Supra) was again upheld. This rule has since been applied to the exercise of jurisdiction by courts and also been recognized as statutory principal of administrative Law." 10. Therefore, the AO should have acted strictly in terms of the amended provisions of section 148 of the Act for the searches carried out on or after 01.04.2021. The Co-ordinate bench of Delhi Tribunal in the case of Montage Enterprises P. Ltd. vs DCIT/ACIT, Central Circle-II, Noida reported in [2025] (12) TMI 1815 (Del. Trib.) held as under: "Heard both the parties. Case files perused. 2. We notice at the outset that there ari....
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.... 12.1 He contended that section 148B applies only to "re- assessment" and not to "regular assessments." The AO's approval from Addl. CIT, being in line with the CBDT Instruction No. 7/2022 dated 15.07.2022, fulfils the supervisory requirement. The DR also submitted that Homelife Buildcon is distinguishable, as the AO therein relied on third-party search data, whereas the present case is based on assessee's own seized material. 13. We have carefully considered the rival submissions and perused the record. It is undisputed that search u/s 132 was conducted on 24.11.2022, relevant to A.Y. 2023-24. Thus, A.Y. 2022- 23 is one of the three preceding years under Explanation 2(iv) to section 148. The Explanation reads that if a search is initiated, "the Assessing Officer shall be deemed to have information suggesting escapement of income for the three 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 compl....
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....n other words the time required for issuing the notice under 143(2) had already expired, and the revenue can not be allowed to issue issue 143(2) on 21.6.2023 after the search was carried out and notice had been issued on 21.6.2023 and assessment was framed under 143(3) of the Act. The relevant portion of section 143(3) reads as under:- 143(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing 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 ....