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TMI Blog2025 (2) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of mere conjectures, suspicion and surmises, without having any corroborative/independent evidences. 3. That the Ld. CIT(A) has erred in law and in facts to confirm action of the AO on the basis of loose piece of paper which was seized during the search and seizure operations on third party. 4. That the assessee prays permission to add, delete or amend one or more grounds of appeal." 2. The Ld. Counsel for the assessee submits that assessee has filed additional legal ground of appeal with a prayer to admit the additional ground which is in respect of the validity of assessment made u/s 143(3) of the Act. Ld. Counsel for the assessee further submits that since the assessee in her additional ground challenges the very validity of assessment made u/s 143(3) as void ab initio the legal ground be admitted and adjudicated upon. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Ltd. Vs. CIT (229 ITR 383 and Jute Corporation of India Ltd. vs. CIT 187 ITR 688 (SC). 3. Heard rival contentions. The assessee has raised the following common additional ground in both the appeals: "The impugned order of assessment u/s 143(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3rd co-owner of the property (Arti Dhall), exactly similar and identical additional ground has been dealt by the Coordinate Bench of Delhi Tribunal in the case of Arti Dhall vs. DCIT passed in ITA No. 1239/Del/2024 (AY 2021-22) vide order dated 28.01.2025 and decided in favour of the assessee by quashing the assessment, wherein, the Coordinate Bench has passed the following order:- "3. Heard rival contentions. The assessee has raised the following additional ground: "The impugned order of assessment u/s 143(3) of I.T. Act is not valid in law as the same has been passed in complete defiance of the provisions of sec. 153C of the Act as the assessment order has been passed taking adverse view of the material found in the course of search on the third person and the assessment year under consideration was not the year of search in view of the proviso to sec. 153C(1) of the IT Act and the assessment was not an abated assessment." By way of the above additional ground the assessee is challenging the very validity of the assessment made u/s 143(3) of the Act. The assessee's contention is that since the assessment was made pursuant to search and based on materials found in the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 153C. It is submitted that based on these facts, the assessment year 2023-24 relevant to FY 2022-23 is the year of search and in view of the provisions of section 153C of the Act having regard to first proviso thereof, the AO was required to complete assessment for six assessments year prior to the year of search i.e. AY 2023-24 u/s 153C for AY 2017-18 to AY 2022- 23. 7. It is further submitted that on the above analogy, the assessment for AY 2021-22 would fall in the block period in view of the first proviso to section 153C of the Act. If that be the case, which is the correct position of law, such assessment was required to be completed u/s 153C of the Act after complying with the requirements of the said section. The AO was needed to record necessary satisfaction u/s 153C of the Act and thereafter, to issue a notice u/s 153C calling the assessee to file return of income after considering the impact of the material found in the case of the person searched. It is submitted that in the present case although the AO has recorded separate satisfaction u/s 153C of the Act but the AO failed to issue a notice u/s 153C of the Act without which assessment u/s 153C could not be complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in the following decisions: * CIT v. T. Rangroopchand Chordia [2016] 241 Taxman 221 (Madras HC); * Dr. K.M. Mehaboob v. DCIT [2012] 26 taxmann.com 54 (Kerala HC); * Ashok ji Chandu ji Thakur v. PCIT [2021] 130 taxmann.com 130 (Guj. HC) * Shri Om Prakash Jalkhotia v. ACIT ITA Nos.968, 969, 970 & 971 /Del./2021 * Mikado Realtors P. Ltd. ITA no. 50/DEL/2021; * Sanjay Thakur v. The DCIT (Central Circle) In ITA No.3559/DEL/2015 ; * DCIT v Vinod Kumar in ITA no. 2550/DEL/2015; 11. On the other hand, Ld. DR strongly supported the orders of the authorities below. 12. Heard rival submissions, perused the orders of the authorities below and the decisions relied on. In this case undoubtedly the addition made in the assessment order passed u/s 143(3) of the Act for the AY 2021-22 was based on the search and seizure operations conducted on Hans Group of cases on 06.01.2021, wherein the mobile phone of Shir Vaibhav Jain was seized and based on the watts app chats on 01.12.2020 in the mobile phone of Shri Vaibhav Jain, the addition came to be made while completing the assessment u/s 143(3) of the Act. The contention of the assessee in this appeal was that when once the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequently, it was incumbent upon AO to assess the alleged undisclosed und income pertaining to AY 2021-22 in the hands of the assessee under section 153C of the Act and such assessment of income emanating from search is outside the scope of section 143(3) of the Act. 14. We find substantial force in the plea raised on behalf of the assessee. While search in the instant case was carried on 06.01.2021 i.e. previous year relevant to Assessment Year 2021- 22, the documents were handed over in the previous year relevant to Assessment Year 2022-23. Based on such matrix, the assessment upto Assessment Year 2021-22 stood covered within ambit of section 153C of the Act. This being so, domain for assessment qua undisclosed income for Assessment Year 2021- 22 falls within sweep of section 153C of the Act. The AO has committed substantive error in proper appreciation of jurisdictional provisions of section 153C of the Act by excluding Assessment Year 2021-22 from the ambit of section 153C of the Act erroneously based on actual date of search rather than based on date of receipts s of incriminating documents. In order to frame assessment based on the searched document, the notice ought to h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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