DCIT, NEW DELHI V. SH. KUNJAN ARORA, NEW DELHI

ITA 2772/DEL/2014

AI Insights

The case revolves around a search and seizure operation conducted on the Mahesh Mehta group, during which documents related to the assessee, Kunjan Arora, were found. These documents led to the issuance of a notice under section 153C of the Income Tax Act, resulting in substantial additions to the assessee's income. The primary legal contention was the validity of the jurisdiction assumed under section 153C, which the assessee challenged on the grounds that the documents were unsigned and thus did not meet the statutory requirement of belonging to the assessee. The Tribunal's decision focused on this jurisdictional issue, leading to the quashing of the notice and the subsequent order.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841402 (ITAT-DELHI)
• Duration Of Justice: 11 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONIKA SINGH
• Assessee Lawyers: SALIL KAPOOR
• Keywords: Documents seized; Search and seizure

Judgement Text

"Page 1 of 7 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 2772/Del/2014 (Assessment Year: 2009-10) DCIT, Central Circle-03, New Delhi Vs. Kunjan Arora, 2A/53, Geeta Colony, Delhi (Appellant) (Respondent) PAN: ADKPA3182A CO 77/Del/2024 (In ITA No. 2772/Del/2014) (Assessment Year: 2009-10) Kunjan Arora, 2A/53, Geeta Colony, Delhi Vs. DCIT, Central Circle-03, New Delhi (Appellant) (Respondent) PAN: ADKPA3182A Assessee by : Shri Salil Kapoor, Adv Shri Rajan Malik, Adv Shri Utkarsa Gupta, Adv Revenue by: Ms. Monika Singh, CIT DR Date of Hearing 09/02/2026 Date of pronouncement 09/02/2026 O R D E R PER NAVEEN CHANDRA, A. M.: 1. This appeal by the assessee is preferred against the order of the Addl. Ld. Commissioner of Income Tax (Appeals) dated 21.02.2014 pertaining to A.Y. 2009-10. Printed from counselvise.com ITA No. 2772/Del/2014 CO 77/Del/2024 Kunjan Arora Page 2 of 7 2. A search and seizure action was carried out in Mahesh Mehta group of cases on 30.06.2009 where certain documents pertaining to the assessee were found and seized. On the basis of these documents, a satisfaction note was recorded for initiating action u/s 153C of the Act. Notice u/s 153C was issued on 14.06.2011 on the basis of documents seized and addition of Rs. 18.40 crores was made in the hands of the assessee on account of payment made out of books for acquisition of company. Another addition of Rs. 1.50 crores was made on account of expenditure incidental to the purchase of property. 3. Aggrieved the assessee preferred an appeal before the ld CIT(A), who deleted the said addition. The assessee had also challenged before the ld CIT(A) the jurisdiction of the AO with regard to proceedings u/s 153C of the Act which was rejected by the ld CIT(A). 4. Aggrieved revenue is before us against the deletion of the addition made while the assessee is before us in Cross Objection on account of rejection of its ground with regard to assumption of jurisdiction u/s 153C of the Act. We take up the issue of assumption of jurisdiction u/s 153C first. 5. The ld AR of the assessee argued that the documents relied upon by the AO which were found during the search on the basis of which satisfaction note u/s 153C was recorded, was unsigned. As the Printed from counselvise.com ITA No. 2772/Del/2014 CO 77/Del/2024 Kunjan Arora Page 3 of 7 document was unsigned therefore, the law at that time requiring the document should belong to the assessee, is not satisfied. It is stated by the ld counsel that the amendment with regard to inclusion of the term pertaining to was brought into the statue w.e.f. 01.06.2016. Therefore, in the impugned AY 2009-10, the condition of document belonging to the assessee is not satisfied. Therefore, assumption of jurisdiction by the AO cannot be considered as validly assumed. 6. Per contra the ld DR relied on the orders of the AO and the ld CIT(A). 7. We have heard the rival submissions and perused the material available on record. A perusal of the satisfaction note shows that the satisfaction note is based on sale agreement which is found and seized during the course of search in the case of Mahesh Mehta on 30.06.2009. The said agreement, attached at pages 89 to 91 of the paper book, is an agreement between Shri Mahesh Mehta, Mrs. Kusum Mehta and Ms. Kunjan Arora with regard to sale of property for Rs. 25 crore. We find that this sale agreement is dated 22nd February 2008 but has no signature of either purchaser or the seller. The said agreement is unsigned by Kunjan Arora, the assessee. Printed from counselvise.com ITA No. 2772/Del/2014 CO 77/Del/2024 Kunjan Arora Page 4 of 7 8. For a greater understanding, the satisfaction note for issue of notice u/s 153C of the Act is reproduced as under:- Printed from counselvise.com ITA No. 2772/Del/2014 CO 77/Del/2024 Kunjan Arora Page 5 of 7 9. The documents purported to be belonging to the assessee does not have any signature of the assessee, therefore, condition laid down in section 153C, of books of account or document, belonging to the assessee is not satisfied. We, therefore, are of the considered view that the notice u/s 153C suffers from legal lacuna and therefore, the assumption of jurisdiction u/s 153C has not been validly assumed and is devoid of any legal sustenance. Accordingly, notice u/s 153C is liable to be quashed and the resultant order framed u/s 153C is also liable to be quashed. We order accordingly. The Cross Objection of the assessee is allowed. 10. Since, the appeal has been decided on legal ground, the ground of merit of the revenue become academic and are dismissed as being academic. 11. In result, the appeal of revenue ITA No. 2772/Del/2014 is dismissed while CO of the assessee CO 77/Del/2024 in ITA No. 2772/Del/2014 is allowed. Order pronounced in the open court on 09/02/2026. -Sd/- -Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 23/02/2026 A K Keot Printed from counselvise.com ITA No. 2772/Del/2014 CO 77/Del/2024 Kunjan Arora Page 6 of 7 Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "