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TMI Blog2025 (5) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... order of Hon'ble Rajasthan High Court's order dated 19.03.2024 in D.B. Civil Writ Petition No. 18363/2019 and several other linked petitions wherein wrongly held that once there is incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted, Section 153C is to be resorted to without giving any finding that issuance of notice under section 148 was incorrect. Thus, the CIT (A) is not justified in quashing notice issued u/s 148 of the Act. (iii) Whether the Learned CIT(A) erred in overturning the issuance of a notice under Section 148 of the Income Tax Act, 1961, despite the precedent set by the Hon. Supreme Court of India in Deputy Commissioner of Income Tax (Central) Circle 1(2) V/s. M/s. M.R. Shah Logistics Private Limited (2022) 14 SCC 101. In light of the Supreme Court's ruling in the aforementioned case, the Learned CIT (A) should have upheld the issuance of the notice under Section 148, unless there were compelling reasons to deviate from the established legal precedent. (iv) The appellant craves leave to add, amend or withdraw any of the ground of appeal during the course of appellate proceeding." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02,595/- considering the undisclosed cash loans of Rs. 2,08,00,000/- and interest earned of Rs. 31,02,595/- on these loans. 4. Aggrieved from the order of AO, the Revenue preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:- "4.2 Conclusion: I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- 4.2.1 A search & seizure action u/s 132 of the Income Tax Act, 1961 was carried out in the case of Ramesh Manihar Group on 07.01.2016. The information revealed that the group was indulged in cash loan finance on large scale. During the course of search, voluminous data comprising of excel sheets in 18 pen-drives seized from the main office of the Ramesh Manihar Group at 303, Ratna Sagar, MSB Kaa Rasta, Johari Bazar, Jaipur, which consisted details of cash loans financed by the Ramesh Manihar Group. The information further revealed that the persons of the Ramesh Manihar Group, bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of incriminating documents seized during the course of search proceedings in the case of Ramesh Manihar Group, Jaipur. In the above order Hon'ble High Court, Rajasthan has quashed the notices issued under Section 148 and the resultant assessment orders. 4.2.6 The findings of Hon'ble High Court, Rajasthan in the above order dated 19.03.2024 in D.B. Civil Writ Petition No.18363/2019 and several other linked petitions are as under: "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 carmed 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f relevant preceding years for assessing 'total income in case of incriminating material found during search or requisition. 30. The argument that by enactment of Section 153A to 153C 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 153C 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r proceedings and also in cases where no incriminating material is seized during the search or requisition. 4.2.8 As per decision of Hon'ble High Court, Rajasthan in the above writ petition, it is clear that the notice issued u/s 148 of the I.T.Act, 1961 and the assessment order in the cases which were reopened on the basis of incriminating documents seized during the course of search in the case of Ramesh Manihar Group are quashed. 4.2.9 Considering the facts of the present case, it is noticed that the case of the appellant was also reopened u/s 148 of the I.T.Act, 1961 by the Id. AO on the basis of information of advancing of unaccounted cash loans by the appellant through the broker Sh. Ramesh Chand Maheshwari and on the basis of seized material during the course of search proceedings in the Ramesh Manihar Group. 4.2.10 In the light of the above decision, as the facts of the present case are similar, hence the above judgement of Hon'ble High Court is squarely applicable in the present case of the appellant. 4.2.11 Accordingly, the order passed by the AO u/s 147 r.w.s. 143(3) of the I.T.Act, 1961 has become ineffective as on date as the Hon'ble High Court Raja ..... X X X X Extracts X X X X X X X X Extracts X X X X
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