ACIT CENT CIRCLE, JAMSHEDPUR V. SHRI SUDHANSHU TRIPATHI, JAMSHEDPUR

ITSSA 33/RAN/2016

AI Insights

The case involves two appeals by the revenue against the orders of the CIT(A)-3, Patna, concerning the assessment years 2012-13 for Sri Raj Kumar Agarwal and Sri Sudhanshu Tripathy. Both cases were interconnected and addressed together. The primary legal issues revolved around the validity of the notices issued under Sections 143(2) and 153C of the Income Tax Act, 1961, and the subsequent assessment orders. The tribunal examined the procedural adherence in issuing these notices and the substantive satisfaction required under the law to invoke these sections. The tribunal dismissed both appeals, emphasizing the importance of procedural correctness and the substantive requirements of the law in tax assessments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780096 (ITAT-RANCHI)
• Duration Of Justice: 9 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 02-06-2016
• Other Referred Cases: CIT vs. Shettys Pharmaceuticals & Biologicals Ltd., CIT vs. Manju Finance Corporation, PCIT vs. Munisuvrat Corporation, Hi Klass Moving Picture Pvt. Ltd. vs. ACIT, Peter Vaz vs. CIT, B. R. Bamasi vs. CIT, National Thermal Power Co. Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3); 142(1); 153A

Judgement Text

"P a g e 1 | 12 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER IT(SS)A No. 10/Ran/2016 (Assessment Year: 2012-13) A.C.I.T., Central Cicle, Jamshedpur. Vs. Sri Raj Kumar Agarwal, 4, Shanti Kunj, C.H. Area, Jamshedpur-831001. PAN No. ABBPA 6867 F Revenue/ Appellant Respondent/ Assessee IT(SS)A No. 33/Ran/2016 (Assessment Year: 2012-13) A.C.I.T., Central Cicle, Jamshedpur. Vs. Sri Sudhanshu Tripathy, H. No. 49/50, 1st Floor, Punjabi Line, Ramdas Bhatta, Bistupur, Jamshedpur. PAN No. ANVPT 6516 G Revenue/ Appellant Respondent/ Assessee Department represented by Adjournment Application Filed Assessee represented by Shri Anand KumarTibrewal, FCA with Shri Amit Agarwal, Advocate. Date of hearing 06/10/2025 Date of pronouncement 06/10/2025 O R D E R PER: BENCH 1. IT(SS)A No. 10/Ran/2016 is an appeal filed by the revenue in the case of Sri Raj Kumar Agarwal against the order of the ld. CIT(A)-3, Patna in appeal No. 250/JSR/2013-14 dated 22/02/2016 for the A.Y. 2012-13. IT(SS)A No. 30/Ran/2016 is an appeal filed by the revenue in the case of Sri Sudhanshu Tripathy against the order of the ld. CIT(A)-3, Patna in appeal No. 64/CIT(A)-3/PAT/2014-15 dated 29/03/2016 for the A.Y. 2012-13. As the Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 2 | 12 facts in the impugned appeals are interconnected, therefore, both the appeals are being disposed off by this common order. 2. The ld. CIT-DR has sought adjournment mentioning as follows: \"As per order of Pr. Chief Commissioner of Income-Tax (B&J), Patna dated 26/09/2025, I have been directed to perform duty as CIT(DR) from 06.10.2025 to 10.10,2025 on rotational basis. In the following cases appeal orders have been passed by this office. In some cases, appeals of the same assessee's are pending with the undersigned for other assessment years. Hence, these cases cannot be argued by the undersigned. A short adjournment of 10 days may please be granted so that another CIT(DR) may attend to these cases.\" 3. The number of cases posted during the week is nearly 250, out of the same, on daily basis, nearly in 72 to 75% of the cases, adjournments are being sought. As the Bench was constituted and the same was also intimated much in advance and the adjournment has been sought in the last minute, therefore, the adjournment applications are being rejected. 4. It may also be worthwhile to mention here that another reason given by the ld. CIT-DR for adjournment is that in some of the appeals, orders have been passed by the office of the impugned CIT-DR personally. Here, it is to be mentioned that in respect of the orders of the ld. CIT(A), which have been challenged by the revenue, it can be said that it would be difficult for the ld. CIT-Departmental Representative to defend such orders, in so far as he would be arguing against his own orders. But in such cases, where the orders have been passed against the assessee and the assessee is in appeal, we find no reason as to why the ld. CIT-DR would not be able to defend his Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 3 | 12 own orders. In any case orders have been issued against the assessee. When this was put to the ld. CIT-DR, it was a submission that should the Tribunal pass an order reversing the order of ld. CIT(A), he could be questioned under administrative provisions. This does not stand to be a reason, in so far as the appeal provisions have been provided by the statute. It is human to err. If there is no order passed by the Assessing Officer, then obviously post of CIT(A) is required and if there is no order of ld. CIT(A), there is no requirement of the Tribunal so on and so forth. Various stages of appeals are provided so that necessary proceedings are available for both the assessee and the revenue to defend their stands. Decisions taken by the appellate authority as a judicial or quasi judicial forums, are not subject to administrative reviews. Appeal provisions are provided by the statute. It would also be worthwhile to mention here that repeatedly the courts have been holding that the ld. CIT(A) are quasi judicial authorities and no administrative pressure can be put on them to decide any issues in any specific manner. We are of the view that such apprehension of the ld. CIT- DR is unfounded. Consequently, the submission of the ld. CIT-Departmental Representative was that he is recusing from the arguments. His plea is accepted. The matters are disposed off on merits on the basis of records and documents available before the Tribunal. 5. Shri Anand Kumar Tibrewal, ld. A.R. represented on behalf of the assessee. It was submitted by the ld. AR that the assessee has raised an application of Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 4 | 12 Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 which reads as follows: \"1. The Income Tax Appeal bearing ITSSA No. 14/RAN/2016 has been filed by the Revenue against the order passed by Ld. CIT(A)-3, Patna on 22nd February 2016 whereby the Appeal of the Petitioner for the Assessment Year 2012-13 was partly allowed. The said aforesaid Appeal is fixed for hearing before Hon'ble \"Ranchi Bench\", Ranchi on 17th November, 2022. 2. The assessment order for the Assessment Year 2012-13, in this case, was passed by Ld. Assistant Commissioner of Income Tax, Central Circle, Jamshedpur (the Assessing Officer) under section 143(3) r.w.s. 153B/153C of the Income Tax Act, 1961. The Assessing Officer assumed jurisdiction under section 153C of the Income Tax Act, 1961 and made additions aggregating to Rs.3,65,00,000/- to the amount of income declared by the Respondent Assessee in the return of income filed in response to the Notice under section 142(1) of the Act. 3. The Respondent Assessee herein had filed an appeal against the aforesaid assessment order whereby he challenged the legality of the assumption of jurisdiction under section 153C of the Act in pursuance to the satisfaction recorded by the Assessing Officer as well as on merits of the addition of Rs. 3,65,00,000/-. 4 The Ld. CIT(A), Patna, while allowing relief on merits of the addition made in this case dismissed the legal ground of assumption of jurisdiction under section 153C of the Act. The Petitioner/Respondent in the instant case did not file any appeal and/or cross objection against the order passed by Ld. CIT(A). 5. In course of the appellate proceedings before Ld. CIT(A), the Assessee pleaded that the basic mandatory condition for invoking the jurisdiction under section 153C of the Act viz. recording of satisfaction under section 153C of the Act was not fulfilled and therefore the impugned assessment order passed by Ld. Assessing Officer was to be quashed. Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 5 | 12 6. The Petitioner/Respondent assessee most humbly and respectfully submits that in the following cases the assessment orders passed by the Assessing Officer were quashed in absence of subjective satisfaction recorded under section 153C of the Act. (i) CIT vs. Shettys Pharmaceuticals & Biologicals Ltd. [2015] 57 taxmann.com 282 (Andhra Pradesh) (ii) CIT vs. Manju Finance Corporation [2015] 56 taxmann.com 164 (Delhi) (iii) PCIT vs. Munisuvrat Corporation [2020] 115 Taxmann.com 264 (Gujarat) (iv) Hi Klass Moving Picture Pvt. Ltd. vs. ACIT ITA No. 926 to 931/Mum/2013. 7. The Petitioner/Respondent Assessee did not file any appeal and against the order passed by Ld. CIT(A). The Petitioner/Respondent Assessee did not file any cross-objection against the appeal filed by Revenue in this case. 8. The Petitioner/Respondent most humbly and respectfully prays that the Petitioner/Respondent may kindly be permitted to raise the following legal ground in accordance with Rule 27 of the Income Tax Appellate Tribunal Rules, 1963. \"That the learned Commissioner of Income Tax (Appeals) erred, on facts and in law in dismissing the legal ground taken before him regarding the validity of the assessment proceedings initiated by the Ld. Assessing Officer in this case, when basic ingredients required for assuming jurisdiction under section 153C of the Act are missing.\" 9. The Petitioner/Respondent submits that the aforesaid legal ground which goes to the root of the matter may kindly be admitted and be adjudicated by your Honours. The Petitioner/Respondent Assessee refers to the following Judgements in support of its prayer for admission of the aforesaid Legal Ground. (i) Peter Vaz vs. CIT [2021] 128 taxmann.com 180 (Bombay) (ii) B. R. Bamasi vs. CIT [1972] 83 ITR 223 (Bom) (iii) National Thermal Poer Co. Ltd. vs. CIT [1998] 229 ITR 383 (SC) AND for this act of kindness your Petitioner/Respondent shall ever pray.\" Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 6 | 12 The main issues raised in the petition under Rule 27 is that (i) no notice under Section 153C of the Income Tax Act, 1961 (in short, the Act) has been issued on the assessee and (ii) the satisfaction note issued by the Assessing Officer for the purpose of proceedings under Section 153C was not valid and it was only on the basis of mere suspicion and surmises. It was a further submission that the notice under Section 143(2) of the Act has been issued beyond time. These arguments relates to the appeal of the assessee in the case of Sri Raj Kumar Agarwal in IT(SS)A No. 10/Ran/2016. In regard to appeal of Sri Sudhanshu Tripathy in IT(SS)A No. 33/Ran/2016, it was a submission that the assessment itself being a protective assessment clearly showed that the satisfaction recorded in the issuance of notice under Section 153C was on mere suspicion and surmises and therefore, unsustainable. It was mentioned that in regard to non-issuance of notice under Section 153C of the Act, the ld. AR drew our attention to assessment order para 2.13. It was a submission that in the said paragraph, there is no reference to the issuance of notice under Section 153C of the Act. Here it was mentioned that there is no affidavit by the assessee under Rule 11 of the ITAT, Rules in respect of non-issuance of notice under Section 153C. Consequently, in absence of specific affidavit and compliance of Rule 11 of the ITAT Rules, this contention stands rejected. 6. Now coming to the issue of notice under Section 143(2) of the Act, the ld. AR has drawn our attention to the page 1 of the paper book which is the copy of return filed which reads as follows: Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 7 | 12 The ld. AR further drew our attention to the notice issued under Section 143(2) of the Act which are found at page No. 52 of the paper book, which reads as follows: Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 8 | 12 The ld. AR further drew our attention to the page No. 3 of the paper book which was the copy of the letter dated 21/10/2013 being a letter referred to a notice under Section 143(2) is as follows: Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 9 | 12 It was a submission that the return has been filed for the impugned assessment year on 27/09/2012, notice under Section 142(1) had been issued on 01/10/2013, the assessee had responded vide the letter dated 21/10/2013 that the assessee has already filed the return of income on 27/09/2012. The assessee has not mentioned that the earlier return is to be considered in response to the notice under Section 143(2) intimated that the return was filed within due time notice given under Section 143(2) to be issued on 01/11/2013 and as per the provisions of Section 143(2) as stood then notice under Section 143(2) had to be issued within six months from end of the financial year in which the return is furnished and consequently Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 10 | 12 time limit for the notice under Section 143(1) expired on 30th September, 2013 and as the notice has been issued on 01/11/2013, the notice under Section 143(2) of the Act is liable to be quashed. 7. We have considered the submissions. A perusal of the facts in the present case clearly shows that admittedly in the letter dated 21/10/2013, the assessee has not filed a return in response to the notice under Section 142(1) which has responded to the return has been originally filed and copy of the acknowledgment of the ITR had been provided. Return was filed on 27/09/2012 and there was adequate time for the issuance of notice under Section 143(2) of the Act but then after expiry of the notice under Section 143(2), notice under Section 142(1) was issued on 01/10/2013. As admittedly, notice under Section 143(2) is beyond the specified time limit, we are of the view that the impugned notice dated 1/11/2013 is bad in law and consequently liable to be quashed and we quash the same. This applies in regard to the appeal in the case of Shri Raj Kumar Agarwal in IT(SS)A No. 10/Ran/2016. As we have quashed the notice under Section 143(2) of the Act, the impugned assessment order also would stand quashed. Consequently, the order of the ld. CIT(A) would also stand set aside as the assessment order has been quashed on technicality. In the result, appeal of the revenue stands dismissed. 8. In the case of Sri Sudhanshu Tripathy, a perusal of the satisfaction note in the case of Sri Raj Kumar Agarwal shows that the Assessing Officer had taken a stand that the money belonged to the assessee Sri Raj Kumar Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 11 | 12 Agarwal and the substantial addition has been made in the hands of Sri Raj Kumar Agarwal. Once a substantial view has been taken and in one hand then an identical satisfaction for another assessee on the same issue obviously cannot be taken. The communication of the impugned order in the case of Sri Sudhanshu Tripathy is a protective addition clearly shows that the satisfaction recorded by the Assessing Officer for the purpose of issuance of notice under Section 153C in the case of Sri Sudhanshu Tripathy is not a clear satisfaction and is only a surmise. On this ground, the notice issued under Section 153A in the case of Sri Sudhanshu Tripathy becomes invalid, consequently, the same stands quashed. Consequent upon the quashing of notice under Section 153A in the case of Sri Sudhanshu Tripathy, the impugned assessment order in the case of Sri Sudhanshu Tripathy is also quashed. 9. Here we may mention that the ld. AR has specifically asked that what has happened to the CBI matter as being discussed by the Assessing Officer in the assessment order in the case of Sri Raj Kumar Agarwal, the ld. AR drew our attention to the decision of the Hon'ble Jharkhand High Court at Ranchi in WP(Cr.) No. 279 of 2023 dated 21/08/2024 wherein the Hon'ble High Court has categorically held as under: \"20. Having heard learned counsel for the parties and from perusal of records and the facts and law, as discussed above, this Court finds that:- (1). The recovery of Rs.2.15 crores is not material so far as present criminal proceeding is concerned. (2). So far as transaction of Rs.1.5 crores between the petitioner and Smt. Sita Soren is concerned, the material collected by the CBI has Printed from counselvise.com IT(SS)A 10 & 33/Ran/2016 ACIT Vs. Raj Kr. Agarwal & 1 Anr. P a g e 12 | 12 been considered by the Income Tax Authority after giving due opportunity to the C.B.I and thereafter, finding has been recorded that evidence produced is not sufficient for reopening of the assessment of recipient Smt. Sita Soren as well as of the petitioner. The issue before the Hon'ble Jurisdictional High Court for the purpose of quashing of the proceedings is in regard to ₹ 1.5 crores transactions between the assessee and Smt. Sita Soren. The issue of transaction of ₹ 2.15 crores has been held by the Hon'ble High Court is not material to the criminal proceedings. This being so, the findings of the Assessing Officer that there are CBI matter in regard to the issue no more survives. 10. In the result, both these appeals of the revenue are dismissed. Order announced in open court on 06/10/2025. Sd/- Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi, Dated: 06/10/2025 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Ranchi Printed from counselvise.com "