ASHA GUPTA,NEW DELHI V. DCIT CENTRAL CIRCLE 30, NEW DELHI

ITA 2069/DEL/2024

AI Insights

The case involves Asha Gutpa, the appellant, who contested the assessment order for the assessment year 2021-22, which was passed under section 143(3) of the Income Tax Act, 1961. The assessment was based on incriminating documents found during a search operation in another person's premises, which were later linked to the appellant. The primary legal contention was regarding the procedural validity of the assessment under section 143(3) instead of section 153C, which pertains to the assessment of income based on documents seized during a search operation. The Tribunal's decision hinged on the interpretation of the relevant sections of the Income Tax Act and the timing of the satisfaction note recorded by the Assessing Officer.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833887 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Appeal Filed On: 30-04-2024
• Other Referred Cases: CIT vs Jasjit Singh [2023] (10) TMI 572 (SC), Esha Kedia v. ACIT, Central Circle - 3, New Delhi 2025 (3) TMI 1214 - ITAT Delhi, Sanjeev Gupta v. DCIT, Central Circle - Meerut 2025 (3) TMI 40-ITAT Delhi, Prashant Kansal v. DCIT, Central Circle - Noida 2025 (5) TMI 107- ITAT Delhi, Raja Varshney v. DCIT, Central Circle - 31 New Delhi, Akansha Gupta v. ACIT, Central Circle 04, Delhi
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA KUMAR
• Assessee Lawyers: PRANAV YADAV
• Keywords: Opportunity of being heard; Principle of natural justice; Search and seizure; Accommodation entries
• Section: 143(3)

Judgement Text

"ITA No.2069/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “A” BENCH: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2069/Del/2024 [Assessment Year : 2021-22] Asha Gutpa 87A/1, 1st Floor, Jamrudpur Greater Kailash, Part-I Delhi-110048 PAN-AEPPG7643N vs DCIT, Central Circle-30 Delhi APPELLANT RESPONDENT Appellant by Shri Pranav Yadav, Adv Respondent by Shri Krishna Kumar Ramawat, Sr.DR Date of Hearing 04.12.2025 Date of Pronouncement 06.02.2026 ORDER PER MANISH AGARWAL, AM : The present appeal is filed by assessee against the order dated 22.02.2024 by Ld. Commissioner of Income Tax (A)-30, New Delhi [“Ld.CIT(A)”] in Appeal No. 10154/2020-21 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 21.12.2022 passed u/s 143(3) of the Act pertaining to Assessment Year 2021-22. 2. Brief facts of the case are that assessee has filed her return of income on 14.03.2022, declaring total income of INR 4,13,910/-. A Printed from counselvise.com ITA No.2069/Del/2024 Page | 2 search and seizure operation was carried out in the case of “Sanjay Jain and Mehtas” on 26.10.2020 wherein during the course of search, various incriminating material / documents were found and seized. Thereafter, AO of the person searched has supplied the material after recording his satisfaction that certain documents pertained to the assessee. Thereafter, the AO of the assessee has recorded his satisfaction on 24.05.2022 and initiated the proceedings u/s 153C of the Act for Assessment Years 2015-16 to 2021-22. Notice u/s 143(2) of the Act was issued on 24.05.2022 for the year under appeal and consequently, the order was passed u/s 143(3) of the Act by making addition of INR 76,65,659/- u/s 69A of the Act by holding the same as unexplained money of the assessee company, being the amount of loan to BCC Cement Pvt. Ltd. as accommodation entries and total income was assessed at INR 80,79,569/-. 3. Against the said order, the assessee preferred appeal before Ld.CIT(A) who dismissed the appeal in terms of the impugned order dated 22.02.2024. 4. Aggrieved by the order of Ld.CIT(A), the assessee preferred appeal before the Tribunal by taking following grounds of appeal:- 1. “On the facts and circumstances of the case and in law, the assessment proceedings initiated without complying with the provisions of section 153C of the Act is bad-in-law and without jurisdiction and therefore, the assessment order passed by the assessing officer is liable to be quashed and CIT(A) erred in not holding so. Printed from counselvise.com ITA No.2069/Del/2024 Page | 3 2. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in- law, without jurisdiction and barred by limitation and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the notice issued u/s 143(2) issued in this case is bad-in-law and without jurisdiction and CIT(A) erred in not holding so. 4. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is non-est as it does not have valid DIN. 5. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 76,65,660/- on account of alleged unexplained money u/s 69A r.w.s 115BBE of the Act, and, therefore, the addition made by the AO is liable to be deleted. 6. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is contrary to the provisions of section 153D of the Income Tax Act, 1961. 7. On the facts and circumstances of the case and in law, the CIT (A) erred in passing the order without providing proper opportunity of being heard. 8. On the facts and circumstances of the case and in law, the CIT(A) erred in passing ex-parte order. 9. On the facts and circumstances of the case and in law, the CIT (A) erred in not adjudicating the grounds of appeal on merit. 10. On the facts and circumstances of the case and in law, the order passed by CIT (A) is against the principles of natural justice.” 5. In support of the Ground of appeal Nos.1 to 3, Ld.AR for the assessee submits that in the present case, satisfaction note was recorded by the AO of the assessee on 24.05.2022 and thus the search year should be AY 203-24 and accordingly, the assessment for the year under appeal should have been completed u/s 153C, where six Assessment Years starts from AY 2017-18 to AY 2022-23 Printed from counselvise.com ITA No.2069/Del/2024 Page | 4 and assessment for AY 2023-24 has to be completed u/s 143(3) of the Act. 6. In support of his claim, the Ld.AR for the assessee placed reliance on the judgment of Hon’ble Jurisdictional High Court in the case of Jasjit Singh which stood confirmed by Hon’ble Supreme Court in the case of CIT vs Jasjit Singh [2023] (10) TMI 572 (SC) and further placed reliance on the judgments of Co-ordinate Bench of ITAT, Delhi Tribunal in following cases:- 1. Esha Kedia v. ACIT, Central Circle - 3, New Delhi 2025 (3) TMI 1214 - ITAT Delhi 2. Sanjeev Gupta v. DCIT, Central Circle - Meerut 2025 (3) TMI 40-ITAT Delhi 3. Prashant Kansal v. DCIT, Central Circle - Noida 2025 (5) TMI 107- ITAT Delhi 4. Raja Varshney v. DCIT, Central Circle - 31 New Delhi 5. Akansha Gupta v. ACIT, Central Circle 04, Delhi 7. On the other hand, Ld. Sr.DR for the Revenue vehemently supported the orders of the lower authorities and submits that limitation of serving the notice u/s 143(2) of the Act was since not expired on the date of receiving books of accounts or documents or assets seized or re-acquisitioned by the AO having jurisdiction over the assessee. Therefore, in terms of the provisions of section 153C(2) of the Act, the AO has rightly issued the notice u/s 143(2) and subsequently, passed the order u/s 143(3) of the Act which deserves to be upheld. Printed from counselvise.com ITA No.2069/Del/2024 Page | 5 8. Heard the contentions of both the parties and perused the material available on record. In the present case, admittedly, the satisfaction was recorded by the AO of the assessee on 24.05.2022 which is falling in the Financial Year 2022-23 relevant to AY 2023- 24. As per First proviso to section 153C(1), the date of search should be construed from the date when satisfaction is recorded by the AO of the assessee upon receiving the books of accounts or other documents or assets seized or re-questioned from the AO of the person searched. This view is supported by the judgement of Hon’ble Apex Court in the case of Jasjit Singh (supra) and followed by the Tribunal in the cases relied upon by the assessee as stated herein above. 9. In the present case, as per the date of satisfaction recorded by the AO, the year under which search is conducted will be AY 2023- 24 and 06 Assessment Years immediately preceding AY relevant for the previous year in which search was conducted for initiating proceedings u/s 153C of the Act will be AY 2017-18 to AY 2022-23. Therefore, by respectfully following the judgement of Hon’ble Supreme Court in the case of Jasjit Singh (supra) and of Delhi Tribunal, we hold that the assessment for AY 2021-22 should have been completed by issuance of notice u/s 153C of the Act and not by issuing notice u/s 143(2) of the Act. 10. With respect to the arguments of Ld.AR that time limit for issue of notice u/s 143(2) has not been expired when the satisfaction was Printed from counselvise.com ITA No.2069/Del/2024 Page | 6 recorded is of no help as the assessee has already filed the return of income, therefore, the assessment should have been completed u/s 153C of the Act for the Assessment Year 2021-22. 11. In view of the above facts, we hold that assessment order passed u/s 143(3) dated 21.12.2022 by issuing notice u/s 143(2) without initiating proceedings u/s 153C is bad in law and thus, quashed. Grounds of appeal Nos. 1 to 3 are accordingly, allowed. 12. Other Ground of appeal Nos.4 to 10 raised by the assessee on merits became academic hence, not adjudicated. 13. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 06.02.2026. Sd/- Sd/- (MAHAVIR SINGH) VICE PRESIDENT Date- 06.02.2026 *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT 6. Guard File ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "