AVNISH AGRAWAL,NOIDA V. DCIT, CC-1, NOIDA

ITA 1174/DEL/2021

AI Insights

The case involves Avnish Aggarwal, the appellant, contesting an assessment order passed under sections 153C and 143(3) of the Income Tax Act, 1961, by the Deputy Commissioner of Income Tax, Central Circle-1, Noida, the respondent. The assessment was based on documents seized during a search operation on the ABA group of companies, which allegedly included incriminating evidence against Aggarwal. The primary legal contention raised by Aggarwal was the invalidity of the notice issued under section 153C, claiming that the jurisdictional conditions for issuing the notice were not met, and the satisfaction note was insufficient and vague. The Tribunal admitted the additional grounds of appeal concerning the validity of the notice and the compliance with section 153D of the Act, leading to a detailed examination of the procedural adherence by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23838 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: RAJIV KHANDELWAL; JAIND KUMAR
• Keywords: Assessment record
• Section: 143(3); 142(1); 143(2); 201; 153C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: C : NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.1174/Del/2021 Assessment Year: 2016-17 Avnish Aggarwal, H.No.51, Sector-15A, Noida, Uttar Pradesh – 201 301. PAN: AFNPA0922R Vs DCIT, CC-1, Noida. (Appellant) (Respondent) Assessee by : Shri Rajiv Khandelwal, Ca & Shri Jaind Kumar, Advocate Revenue by : Shri Dayainder Singh Sidhu, CIT-DR Date of Hearing : 04.03.2025 Date of Pronouncement : 12.03.2025 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the assessee against the order dated 15.07.2021 of the Commissioner of Income-tax (Appeals), Kanpur-4 (hereinafter referred to as the ld. First Appellate Authority or ‘the Ld. FAA’ for short) in Appeal No.CIT(A)-IV/KNP/10827/2018-19 arising out of the appeal before it against the order dated 31.12.2018 passed u/s 153C/143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the DCIT, Central Circle-1, Noida (hereinafter referred to as the Ld. AO). ITA No.1174/Del/2021 2 2. On hearing both the sides, it came up that the assessee has filed additional grounds which are reproduced below:- “The following ground of appeal is independent of, and without prejudice to, the original grounds of appeal – 1. The appellants contend that the notice issued under section 153C is ab initio void inasmuch as the jurisdictional conditions for the issue of the said notice have not been complied with and consequently, the assessment framed is bad in law and needs to be quashed. The appellant contends that the satisfaction note recorded is insufficient and vague. 2. The Assessing Officer and the appropriate authority under section 153D erred in not properly complying with the provisions of section 153D of the Act. The appellant contend that on the facts and in the circumstances of the case and in law, the Assessing Officer and the appropriate authority under section 153D ought to have appropriately complied with the provisions of section 153D of the Act and having not so complied, the impugned assessment order is bad in law and needs to be quashed. The appellant craves leave to add, alter or modify the aforesaid ground of appeal.” 3. As the additional ground raised go to the root of assumption of jurisdiction by the AO and can be decided on the basis of facts available on record, being legal ground, the same stands admitted. 4. Now with regard to these grounds on the last date of hearing, i.e., 14th January, 2025, the Bench had made the following observations:- “The ld. Counsel for assessee seeks to submit that 'Satisfaction Note' copy available him is neither dated nor signed and therefore such 'Satisfaction Note' is non-est in Law. Ld. DR produced the assessment record, wherein the satisfaction note was not found. Further, the copy of seized material provided to the AO for initiation of action u/s 153C was also not available in the records. The ITA No.1174/Del/2021 3 Assessing Officer was earlier required to provide written comments vide order sheet entry dated 12/09/2024. However, the AO has ignored the directions and, has not complied which is viewed seriously. The AO is accordingly cautioned and directed to provide factual report in writing by the next date of hearing. The Copy of approval obtained u/s 153D should also be furnished. The matter is thus de-heard and shall be listed for hearing in regular course on 04/03/2025.” 5. The ld. DR has filed a report today as received from the ld.AO wherein the AO has specifically admitted that there is no copy of satisfaction note recorded u/s 153C of the Act available with the office of the AO and the case records already submitted may be referred for the same. 6. At the same time, the copy of approval u/s 153D in the cases of ABA group of cases granted on 30.12.2018 has been filed which shows on 29.12.2018 the ld. AO had sought approval and on 30.12.2018 approval was granted and we consider it appropriate to reproduce the details of the assessee and the assessment years involved for which the approval was granted:- S. No. Name of the Assessee PAN A.Y. Section 1 Sh. Aditya Agarwal AFLPA7178M 2017-18 153C/143(3) 2 Sh. Avnish Agarwal AFNPA0922R 2016-17,2017-18 153C/143(3) 3 M/s Concord infrastructure Pvt. Ltd. AACCC9080B 2011-12, 2017- 18 153C/143(3) 4 Sh. Manoj Kumar ADLPT8134A 2016-17, 2017-18 153C/143(3) 5 Sh. Manoj Ramsisaria ADEPR8794H 2017-18 153 C/143(3) 6 Smt. Namrata Totlani AADPT9968K 2016-17, 2017-18 153C/143(3) 7 M/s New J K Plastics AAAFN277M 2015-16, 2017- 18 153C/143(3) 8 Sh. Sunil Totlani AAGPK1064Q 2017-18 153C/143(3) 9 M/s Supersonic Techno Build Pvt. Ltd. AAKCS3190E 2012-13, 2016- 17, 2017-18 153C/143(3) 10 Sh. Suresh Agarwal ADCPA2792A 2016-17, 2017- 18 153C/143(3) ITA No.1174/Del/2021 4 7. On the basis of the aforesaid facts, as we consider the material on record, it comes up from the assessment order that the same has been passed u/s 153C r.w.s. 143(3) of the Act. The assessment order mentions that search was conducted on 09.11.2016 in ABA group of companies and at various residential and business premises of the Directors and group companies were covered under the search. Allegedly, incriminating documents were found from the corporate office of M/s County Infrastructure Pvt. Ltd., M/s ABA Builders Pvt. Ltd. and M/s IV County Pvt. Ltd. on the basis of which Amit Modi, Director had admitted undisclosed income in the hands of the Directors and companies including Rs.1.5 crores in the hands of the assessee. As these papers/documents were found pertaining to the assessee and the cases were centralized and the AO records in assessment orders as follows:- “3. Considering the above facts, it was believed that it is a fit case for initiation of proceedings u/s 153C of IT Act for proper deep investigation and to plug the leaked revenue. A proper satisfaction was recorded in the case of M/s ABA Builders Pvt Ltd & others for initiation of proceedings u/s 153C of the Act in the case of Assessee for the AY 2017-18 and a separate satisfaction was also recorded in the case of Assessee Avanish Aggarwal for the AY 2016-17. 4. Consequently, for the purpose of assessment, a notice u/s 153C of the Act was issued dated 22/11/2018 & duly served upon the assessee. In response to the notice, the assessee submitted a copy of e-filed return of income on 29/11/2018 declaring total income of Rs.58,95,610/- Subsequently, notice u/s 143(2) of the Act was issued on 30/11/2018 and duly served upon the assessee. A notice u/s 142(1) of the Act along with detailed questionnaire was issued dated 07/12/2018 and the assessee was asked to furnish the details/information ask called for.” ITA No.1174/Del/2021 5 8. Thus, the admitted case of the ld.AO is that the assessee being other than the person searched, the assessment was initiated on the basis of assumption of jurisdiction after recording the satisfaction u/s 153C of the Act. However, in spite of opportunity, it is not established that if any such satisfaction was actually recorded so as to validate the assumption of jurisdiction u/s 153C of the Act and that being the state of affairs, we are inclined to allow additional ground No.1. As the assumption of jurisdiction itself is vitiated, the other grounds including the additional ground No.2 questioning approval u/s 153D of the Act becomes academic. As a consequence of above, the appeal of the assessee is allowed and the impugned assessment is quashed. Order pronounced in the open court on 12.03.2025. Sd/- Sd/- (AMITABH SHUKLA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:12th March, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "