DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI V. HALDIRAM SNACKS PRIVATE LIMITED, GURGAON

ITA 6328/DEL/2025

AI Insights

The case involves Haldiram Snacks Pvt. Ltd., which appealed against the assessment order passed under section 143(3) of the Income Tax Act, 1961, for the assessment year 2020-21. The primary contention was that the assessment should have been made under section 153C, considering the satisfaction note was drawn on 16.02.2022, and the assessment year in question falls within the six preceding assessment years contemplated under section 153C. The Department also filed an appeal against certain deletions made by the CIT(A). The Tribunal's decision focused on the correct application of sections 143(3) and 153C, leading to the quashing of the assessment order.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839238 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Appeal Filed On: 07-10-2025
• Other Referred Cases: CIT vs Jasjit Singh, Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd, Arti Dhall vs. DCIT, Reena Mittal v. Dcit, Akansha Gupta v. ACIT, Dheeraj Chaudhary v. Assistant Commissioner of Income-tax, Kehar Singh v. DCIT, Tavleen Resorts & SPA Pvt. Ltd. Versus DCIT, Dileep K. Gupta v. DCIT, Mysore Finlease Pvt Ltd & Ors.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Capital asset; Reassessment proceedings; Business expenditure; Depreciation; Cost of acquisition; Document seized; Documents seized; Search and seizure; Valuation report; Earning of tax free income; Loose papers; Assessment record; Share purchase agreement; Rule 8D
• Section: 143(3); 132; 153A; 14A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘C’: NEW DELHI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.4959/Del/2025 Assessment Year 2020-21 Haldiram Snacks Pvt. Ltd. B-1/F-12, Main Mathura Road, South East Delhi, Tuglakabad, Badarpur, Delhi PAN No.AAACH0061R Vs. DCIT New Delhi Appellant Respondent ITA No.6328/Del/2025 Assessment Year 2020-21 DCIT New Delhi Vs. Haldiram Snacks Pvt. Ltd. B-1/F-12, Main Mathura Road, South East Delhi, Tuglakabad, Badarpur, Delhi PAN No.AAACH0061R Appellant Respondent Appellant Sh. Ajay Wadhwa, Advocate Ms. Ragini Handa, Advocate Sh.Vaibhav Gupta, CIT DR Sh. Deepanshu Kaushik, Advocate Respondent Sh. Dayainder Singh Sidhu, CIT DR Printed from counselvise.com Page | 2 ORDER PER C.N. PRASAD, JM, These appeals are filed by the assessee and revenue respectively against the order of the Ld.Commissioner of Income Tax (Appeals)-29/NFAC, New Delhi dated 20.06.2025 for A.Y. 2020-21. 2. The assessee and the revenue had raised the following grounds of appeal respectively:- ITA 4959/DEL/2025 - Assessee’s Appeal “1. That on the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) [“CIT(A)”] has erred in confirming the assessment order dated 28.09.2022 passed under section 143(3) of Income- tax Act, 1961 (“the Act”) by the learned Assessing Officer ( the “AO”), which is bad in law, contrary to facts, and liable to be quashed. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the validity of the assessment framed under section 143(3) of the Act without appreciating that the Ld. AO ought to have invoked section 153C of the Act, as the satisfaction note was admittedly drawn on 16.02.2022 and the impugned assessment year falls within the six preceding assessment years contemplated under section 153C of the Act. The assessment order passed under section 143(3) of the Act is, therefore, bad in law, without jurisdiction and void ab initio. 3. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the validity assessment order without appreciating no satisfaction was recorded by the Jurisdictional AO for the impugned assessment year as mandatorily required under Section 153C of the Act. Date of Hearing 20.01.2026 Date of Pronouncement 18.02.2026 Printed from counselvise.com Page | 3 3.1. Without prejudice to the above the Ld. CIT(A) failed to appreciate that Ld. JAO of the assessee failed to record any satisfaction that books of account or documents or assets alleged to be seized from the premised of the searched person “have bearing on the determination of the total income of such other person i.e. Assessee”. 4. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the Ld. AO failed to provide the copy of prior approval u/s 153D of the Act of Additional Commissioner of Income Tax, Central Range 07, New Delhi dated 23.09.2022 as referred at page 73 of the Assessment order dated 28.09.2022. 4.1. Without prejudice to the aforesaid, the approval dated 23.09.2022 of the Additional Commissioner of Income Tax, Central Range-07, New Delhi is mechanical, without any application of mind, without perusing the records of the case and has been passed in a haste therefore the assessment order passed by the Ld. AO is jurisdictionally flawed, and deserve to be quashed. 5. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the disallowance of Rs. 2,28,505/- made under section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 without appreciating that no expenditure was incurred by the Appellant to earn exempt income. 5.1. Without prejudice to the above, the Ld. CIT(A) has erred in making disallowance of Rs. 2,28,505/- to the income of the appellant under section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 without recording an objective satisfaction and despite the fact that the appellant has not incurred any interest expenditure and all investments are made from own funds. 5.2. That the Ld. CIT(A) has erred in upholding the disallowance under section 14A of the Act read with Rule 8D without appreciating that no disallowance cannot be made on mere presumptions without establishing a nexus between the expenditure disallowed and the earning of such exempt income. 6. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has further erred in confirming the disallowance of Rs. 4,48,37,267/- under Section 40(a)(ii) despite the fact that no incriminating evidence relating to this issue was found during the course Printed from counselvise.com Page | 4 of search, and there was no satisfaction recorded in relation to the proposed addition. The said addition was neither recorded in the satisfaction note nor supported by any material, which, needless to add, was non-existent. 7. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has further erred in confirming the disallowance of Rs. 4,48,37,267/- under section 40(a)(ii) of the Act on account of education cess, ignoring the settled judicial precedents which hold that education cess is not in the nature of “tax” disallowable under section 40(a)(ii) of the Act. 8. That on the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that AO has erred in making addition of Rs. 26,73,973/- to the income of the appellant under section 112A of the Act on account of long term capital gain without any justification or explanation. 9. That on the facts and in the circumstances of the case and in law, each of the above grounds is without prejudice to one another. 10. That the Appellant craves leave to add, amend, alter, vary or withdraw any ground(s) of appeal at any time before or during the course of hearing. ITA 6328/DEL/2025 – Department’s Appeal “1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 16,02,60,000/- made under section 69B of the Act, ignoring the cogent seized evidence including ledgers, cash entries, and corroborative statements indicating unaccounted cash payments towards acquisition of shares linked to Noida land. 2. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 23,07,26,952/- The Ld. CIT(A) has erred in holding the capital gain as Long –Term Capital Gain under Sec 50, despite the asset being a depreciable asset on which depreciation had been claimed in earlier years, attracting the deeming fiction of section 50. 3. That the order of the CIT(A) is erroneous and is not tenable on facts and in law. 4. That the grounds of appeal are without prejudice to each other. Printed from counselvise.com Page | 5 5. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.” 3. The assessee has taken two legal grounds of appeal which are jurisdictional in nature and were also taken before the Ld. CIT(A). 4. Ground No. 2 of grounds of appeal is with respect to challenging the assessment order dated 28.09.2022 passed u/s.143(3) of the Act being without jurisdiction and void ab initio since according to the assessee the same should have been passed u/s. 153C of the Act. 5. Ground No.4 of grounds of appeal of the assessee is with respect to challenging the approval obtained by the AO u/s.153D of the Act before passing the assessment order as having been granted without any application of mind and without perusing the records of the case. 6. We, therefore, first take up the jurisdictional ground No.2 raised by the assessee challenging the assessment wrongly framed u/s.143(3) of the Act which is bad in law and void ab inito. The relevant ground No.2 is reproduced as under :- Printed from counselvise.com Page | 6 “2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the validity of the assessment framed under section 143(3) of the Act without appreciating that the Ld. AO ought to have invoked section 153C of the Act, as the satisfaction note was admittedly drawn on 16.02.2022 and the impugned assessment year falls within the six preceding assessment years contemplated under section 153C of the Act. The assessment order passed under section 143(3) of the Act is, therefore, bad in law, without jurisdiction and void ab initio.” 7. During the course of assessment proceedings the assesse filed these synopsis on the legal and other ground which is reproduced as under :- “SUBJECT: SYNOPSIS IN THE CASE OF M/S HALDIRAM SNACKS PVT. LTD. (PAN: AAACH0061R) FOR AY 2020-21– ITA NO. 4959/DEL/2025 & 6328/DEL/2025. A. GROUND NUMBER 1: ASSESSMENT ORDER OUGHT TO HAVE BEEN PASSED UNDER SECTION 153C OF THE ACT AS SATISFACTION WAS DRAWN ON 16.02.2022 AND THE IMPUGNED AY FALLS WITHIN 6 AYS FROM DATE OF HANDING OVER. 1. It is submitted that by virtue of the first proviso to Section 153C(1) of the Act, the trigger point for computing the period of 6 or 10 assessment years is the date on which the assessing officer of the Assessee receives seized material from the assessing officer of the searched person. Therefore, the 6 or 10 year period in the case of the other person has to be computed from the date of handing over of material by the Assessing Officer of the searched person. 2. The satisfaction note recorded by the AO of the searched person for AYS 2014-15 to 2020-21 is dated 16.02.2022 (refer page 302-304 of the PBK). No notice under section 153C of the Act was issued for the impugned AY. In the case of the Assessee, the date of handing over of seized material by the Assessing Officer of the searched person is the date of satisfaction note recorded by the AO of the searched person, since no satisfaction is recorded by JAO i.e. 16.02.2022 and therefore the period of six assessment years for the purpose of making assessment under section Printed from counselvise.com Page | 7 153C read with section 153A of the Act has to be counted from the date of the handing over of material i.e., 16.02.2022 i.e. FY 2021-22 or AY 2022-23. AY 2020-21 is covered within the block period of 6 AYs as mentioned in Section 153C(1) of the Income Tax Act, 1961 and therefore assessment should have been made under section 153C of the Act. 3. Reliance is placed upon the following: a. Hon’ble Supreme Court in the case of CIT vs Jasjit Singh [2023 SCC Online SC 1265] - Review Petition dismissed b. Hon’ble Delhi High Court in the case of Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd [2024 SCC OnLine Del 2439] c. Hon’ble ITAT Delhi in the case of Arti Dhall vs. DCIT [ITA No. 1239/Del/2024] d. Hon’ble ITAT Delhi in the case of Reena Mittal v. Dcit, Central Circle-31 [ITA NO. 1238/Del/2024] e. Hon’ble ITAT Delhi in the case of Akansha Gupta v. ACIT, Central Circle-04, Delhi (ITA No. 3074/DEL/2023) B. GROUND NUMBER 3: THE INITIATING OF PROCEEDINGS UNDER SECTION 153C OF THE ACT ARE ITSELF INVALID IN THE ABSENCE OF A VALID SATISFACTION NOTE RECORDED BY THE JURISDICTIONAL AO THAT THE SEIZED MATERIAL HAD A BEARING ON THE DETERMINATION OF DETERMINATION OF TOTAL INCOME OF THE ASSESSEE FOR THE IMPUGNED AY. HENCE THE CONSEQUENTIAL ASSESSMENT ORDER IS VOID. SUCH AN INVALID ORDER CANNOT BE REVISED: 1. Section 153C of the Act states that for initiating valid proceedings u/s 153C of the Act, recording of clear and positive satisfaction by the JAO is a sine qua non. The JAO after receiving the books/documents/assets has to apply his mind as to whether the assets, books and documents received have a bearing on the determination of the total income of that other person for the six assessment years preceding the year of search and if he is so satisfied, he has to issue notice and assess or reassess the income of the other person for the six assessment years preceding the year of search in accordance with the provisions of section 153A of the Act. Section 153C of the Act is reproduced below: Printed from counselvise.com Page | 8 “Assessment of income of any other person 153C. [(1)] [Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,— (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, 74belongs to; or (b)any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A] :]…” 2. Thus, recording of satisfaction is a mandatory requirement before the issuance of notice under section 153C of the Act in order to assume jurisdiction to make assessments for the assessment years prescribed in this section. The satisfaction note constitutes the edifice/ basis to make the assessment u/s 153C of the Act and section 153C mandates certain necessary and statutory requirements which have to be incorporated in the satisfaction note for it to be declared valid. 3. No satisfaction of the Jurisdictional AO was recorded for initiating proceedings under Section 153C of the Act. The same is evident from the finding of CIT(A) in his order at Page 122 of CIT(A) order dated 20.06.2025. 4. It is also a settled law that the recording of satisfaction note is not mere a formality. The satisfaction Printed from counselvise.com Page | 9 must reflect an application of mind by the JAO of the other person that he has examined the seized material that belongs to/pertains to/relates to the other person and also state the reasons on the basis of which he reached to a conclusion that the seized material belonging to/pertaining to/relating to the other person, has a bearing on the determination of the total income of such other person. This proposition is confirmed in the following case laws: a.Hon’ble Supreme Court in the case of CIT-III, Pune v. Singhad Technical Educational Society [397 ITR 344] SC - para 18 b.Hon’ble Delhi High Court in the case of Saksham Commodities Limited vs. ITO Ward 22(1) [2024] 464 ITR 1 (Delhi) - para 65-68 c.ITO v. Saksham Commodities Limited[2025] 170 taxmann.com 87 (SC) SLP Dismissed d.Hon’ble Delhi High Court in the case of Neeraj Bharadwaj Versus Assistant Commissioner Of Income Tax, Circle Int Tax 1 (1) (2) & Anr. 2025 (7) TMI 1240 - para 15, 19 C. GROUND NUMBER 4.1: APPROVAL U/S 153D IS MECHANICAL, WITHOUT APPLICATION OF MIND AND WITHOUT PERUSING THE CASE RECORDS HENCE VITIATING THE REASSESSMENT PROCEEDINGS. 1. In the assessment order dated 28.09.2022 passed by the Ld. AO, at the last page i.e. page 73 it is mentioned, that that the order was passed after obtaining a purported approval from the Addl. Commissioner of Income Tax, Central Range-7, New Delhi dated 23.09.2022. 2. The approval order u/s 153D of the Act and the request letter to approve the draft order are provided via order dated 14.11.2025 in response to the RTI application attached at pages 300-301 of PBK. 3. On a perusal of the approvals orders and the request letters the following are the defects pointed out: a. The proposal seeking approval under section 153D and the grant of such an approval on the very same day itself demonstrates complete non-application of mind, as it is humanly impossible for the approving authority to independently examine the draft assessment order, seized documents (physical and electronic), appraisal report and proposed additions on same day. Printed from counselvise.com Page | 10 b. It is further submitted that even the language employed in the Assessing Officer’s note seeking approval under section 153D fundamentally violates the statutory scheme. The note records that “the assessment order for A.Y. 2020-21 has been drafted and submitted (in duplicate) for approval” and encloses “assessment order & records”, and not a “draft assessment order”. Section 153D contemplates approval of a draft assessment order capable of modification upon application of mind by the approving authority, and not an assessment order already crystallised in substance. The expression “assessment order has been drafted” denotes a completed decision presented for ratification, thereby rendering the approval post-decisional and mechanical. The language of the internal correspondence itself evidences that conclusions had already been finalised by the Ld. AO, reducing the approving authority to a rubber stamp. Such deviation from the statutory mandate is not a semantic irregularity but a jurisdictional defect, rendering the approval invalid and the consequent assessment void ab initio. c. The AO’s proposal does not specify: the date of search, the person searched, the incriminating material relatable to the assessee, the nature of seized documents or the nexus between material and additions. d. The approving authority does not state: which seized document was examined, which addition is based on which material, what discussion took place, or what aspect of the draft order was independently verified. e. The phrase “perused by you and brought to the notice of the undersigned” itself shows that: the Additional CIT did not peruse the seized material independently, and merely relied on whatever the AO allegedly “brought to notice”. f. In Para 3, the approving authority states: “office note indicating addition in relevant assessment year should be indicated in all assessment years.” The approval sought before him was confined only to A.Y. 2020-21. Issuance of such a generalized and omnibus direction, without even appreciating the specific assessment year for which approval was sought, clearly reflects non-application of mind. g. Further, Ld. Adl. CIT records has “you have certified about perusal and verification of data seized in electronic format through working copies having certified hash values Printed from counselvise.com Page | 11 as that of original hard drives/CDs/pen drives/mobile data and other electronic data” and has further “certified that all information available in AIR/CIB/from other Law Enforcement Agencies has been properly scrutinized before finalizing the draft assessment order.” It is respectfully submitted that the above recording is factually incorrect and without any foundation on record, as no such certification finds place in the proposal letter addressed by the Assessing Officer seeking approval under section 153D. h. In para 3 of the approval, the Ld. Adl. CIT that the “certified that all information available in AIR/CIB/ from other Law Enforcement Agencies has been properly scrutinized before finalizing the draft assessment order.” This recording is factually incorrect and contrary to the record, as the Assessing Officer’s proposal itself categorically shows that the present assessment emanates solely from a search conducted on the Oriental Group. There is no reference whatsoever in the AO’s letter to any information received from AIR, CIB or any other law- enforcement agency. The approval thus proceeds on assumed and non-existent facts, clearly evidencing a mechanical grant of approval without independent application of mind, vitiating the approval under section 153D. i. The Ld. Adl. CIT failed to point out that there is no mention of Rs. 26,73,973/- in the whole assessment order but has been added to the returned income for computing the assessed income. 4. The above mentioned facts clearly establish that such approval was granted in a perfunctory manner, without applying his mind, without reviewing the draft assessment orders and relevant assessment records. This is so because when the Ld. AO did not meet the jurisdictional condition then how did the Ld. Additional CIT grant approval without checking that the impugned AY ought to have been assessed u/s 153C not u/s 143(3). 5. Section 153D of the Act being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the Section is not turned into an empty formality. There has to be some indication that approving authority has examined draft orders and finds that it meets the requirement of law. The approving Printed from counselvise.com Page | 12 authority is expected to indicate his thought process while granting approval. Reliance is placed upon the following: a. Hon’ble Delhi High Court in the case of PCIT (Central)-2 v. Anuj Bansal, [2024] 165 taxmann.com 2 - para 9.1,11,12 b. PCIT v. Anuj Bansal [2024] 165 taxmann.com 3 (SC) – SLP Dismissed c. Hon’ble ITAT Delhi in the case of Dheeraj Chaudhary v. Assistant Commissioner of Income-tax, [2025] 178 taxmann.com 360 (Delhi - Trib.) - para 22 d. Hon’ble ITAT Delhi in the case of Kehar Singh v. DCIT ITAs No.2835 to 2841/Del/2024 - para 9 to 11 e. Hon’ble ITAT Delhi in the case of Tavleen Resorts & SPA Pvt. Ltd. Versus DCIT Central Circle-2 Gurgaon (ITA Nos. 3361 to 3366/Del/2024) - para 16.4 f. Hon’ble ITAT Delhi in the case of Dileep K. Gupta v. DCIT ITA Nos. 148 to 153/Del/2025 - para 7 g. Hon’ble ITAT Delhi in the case of Mysore Finlease Pvt Ltd & Ors. (8821-8826/del/2019) - para 9, 10 & 15 6. In view of the above, the approval granted under section 153D deserves to be held as mechanical, invalid and non-est, and the assessment order passed pursuant thereto be quashed in limine, without going into merits. D. DEPARTMENT’S GROUND NUMBER 1: REGARDING ADDITION OF RS. 16,02,60,000/- UNDER SECTION 69B OF THE ACT BEING ALLEGED CASH PAYMENT MADE BY THE ASSESSEE TO M/S SWETA ESTATES PVT. LIMITED FOR PURCHASE OF NOIDA LAND HELD BY M/S OSE INFRASTRUCTURE LTD. I. ADDITION BASED ON LOOSE SHEETS; BLANK, UNSIGNED, INCORRECT, DRAFT, SELF CREATED MOU; UNCONNECTED DOCUMENTS WHICH EVEN FAIL TO MENTION NAME OF ASSESSEE WHICH ARE DUMB DOCUMENTS FOUND FROM PREMISES OF SEARCHED PERSON AND DO NOT EVEN PERTAIN TO THE ASSESSEE; NO MENTION OF THE ASSESSEE IN STATEMENTS RELIED UPON. 1. The following were the reasons adopted by the Ld. AO: i.The transactions in the seized documents being the MOU dated 07.05.2018, Cash flow MIS dated 12.11.2019 and Annexure A-2 (Page No. 125), A-3(page no. 25) and A49 Printed from counselvise.com Page | 13 (page no. 66) pertain to and relate to the Assessee-refer para 5.2 at page 3 and para 5.13 at page 23 of the order. ii.As per the MIS sheet cash flow as on 12.11.2019 seized from the residence of Neeraj Dhawan, there is an entry of 160,260 in respect of Noida deal and as per statement of Neeraj Dhawan recorded under section 132(4) of the Act, the amount mentioned in the sheet is in thousands. Thus, as per Neeraj Dhawan’s statement the amount is Rs. 16,02,60,000/- was received in cash from the Assessee in respect of Noida land deal. –refer para 5.7 at page 7-8 of the order. iii.The Assessee had purchased land situated at Noida of OSE and paid cash of Rs. 16,02,60,000/- on 04.06.2019 which is clear from the page No. 125 of annexure A-2 , page No. 25 annexure A-3 and page No. 66 of annexure A49 found and seized from the residence of Sh.Lalit Taluja. This fact also find force that the share purchase agreement was signed on 04.06.2019 refer para 5.11 at page 21of the order. iv.From the ‘Share Purchase Agreement’ it is clear that all the parties including sellers and purchasers had signed the document on same date as on 04.06.2019 after payment and receipt of cash of Rs. 16,02,60,000/- refer para 5.12 at page 22; para 5.19 at page 35 of the order. v.From the documents seized it is clear that the Assessee has purchased Noida land as the whole shares of OSE Infrastructure Ltd were purchased by the Assessee. The promoters and employees of M/s Sweta Estates Pvt Ltd had principally agreed on the basis of documents found and seized at the time of search at the residences of employees of M/s Sweta Estates Pvt Ltd that the transactions mentioned in these documents are correct- para 5.19 at page 35 of the order. vi.On the basis of Affidavits filed by the promoters of M/s Sweta Estates Pvt Ltd and application filed before the Hon’ble Settlement Commission, it is clear that M/s Sweta Estates Pvt Ltd has accepted that it had received the amount of Rs. 16,02,60,000/- in cash on 04.06.2019 from the Assessee- para 5.19 at page 35 of the order. vii.In Statement recorded u/s 132(4) of the Act, Lalit Taluja stated that all the transactions entered in Annexure A-2, A- 3 and annexure A-49 are all cash transactions. From page No. 66 of annexure A-49 seized at the residence of Sh. Lalit Taluja it is clear that amount of Rs. 16,02,60,000/- was received on account of Noida deal This amount is further Printed from counselvise.com Page | 14 entered in annexure A-2 and A-3 found and seized from the residence of Sh. Lalit Taluja as well as MIS sheet found from the residence of Sh. Neeraj Dhawan-- para 5.20 at page 35 of the order. 2. It is humbly submitted that the documents relied upon are loose sheets; blank, unsigned, incorrect, draft, self-created MOU; unconnected documents which even fail to mention name of assessee which are dumb documents found from premises of searched person and do not even pertain to the Assessee. i.Annexure A-2 (Page 125)- refer page 37 of PBK and page 9 of assessment order: Found from search of Sweta Estates Pvt. Ltd.- document only states “Noida land-OSE Infra” ii.Annexure A-3 (page no. 25) - refer page 38 of PBK and page 10 of assessment order: Found from search of Sweta Estates Pvt. Ltd.- document only states “Noida land-B/F.” iii.Annexure A-49 (page no. 66) - refer page 39 of PBK and page 11 of assessment order: Found from search of Sweta Estates Pvt. Ltd.- document only states “Received a sum of Rs. 16,02,60,000/- on a/c Noida deal.” It is not signed or approved (“Approved by”- blank “Signed by” – blank). Inconsistency in the document – in the next line it is stated Received 16,02,600. iv.Further, in respect of Annexure A-49 (page no. 66) the expenditure also mentioned - document to be considered in entirety -if receipts are taken into account then expenditure to be considered also refer CIT v. Indeo Airways (P.) Ltd. [2012] 349 ITR 85 (Delhi). v.Proposed Cash Flow as on 12.11.2019 - refer page 40 of PBK and page 11 of assessment order: Proposed cash Flow - the word proposed is stated at three different places of the document. Found from search of Sweta Estates Pvt. Ltd.- document only states “Noida land.” vi.MOU dated 07.05.2018 Annexure A-8 (page no. 1-10) – refer page 26-36 of PBK: Unsigned, blank, Rough and unverified MOU found is a dumb document which does not have any relevance to the transaction between the Assessee company and M/s. OSE infrastructure Ltd. vii.Further, at point 10 of MOU page 30 it is stated that the Assessee simultaneous to the execution of this MOU has paid an advance of Rs. 21 crores to OSE Infrastructure Printed from counselvise.com Page | 15 Limited. –THIS HAS NOT BEEN PAID HENCE ON THIS COUNT ALSO THE MOU IS A ROUGH DOCUMENT NOT ACTED UPON. No mention of the amount that has been alleged to have been paid by Assessee to any party. viii.In all these documents there is no mention of name of Assessee anywhere; not found from search of Assessee. ix.No mention of the amount of Rs. 16,02,60,000/- in cash. x.No mention of the amount that has been alleged to have been paid by Assessee to any party. xi.This is a loose sheet not containing any information as to who it belongs to. The Assessee is not the author of this sheet. The document in not in the Assessee’s hand writing. Therefore, it is presumed as per section 132(4A) that the handwriting in the absence of examination is of the person searched. xii.Found from residence of Lalit Taluja in search of Sweta Estates Pvt. Ltd. – whether any statement of Lalit Taluja taken in respect of this document. xiii.The document lack specificity, clear evidence, and a proper foundation for making additions to the assessed income. xiv.The document in itself has got no intrinsic value. xv.The department cannot draw inference on the basis of suspicion, conjectures and surmises. 3. A SHARE PURCHASE AGREEMENT DATED 04.06.2019 BETWEEN HALDIRAM SNACKS PVT. LTD. AND OSE INFRASTRUCTURE LIMITED AND SELLERS BEING SHAREHOLDERS OF OSE INFRASTRUCTURE LIMITED. i.This was executed between the Assessee and Ose Infrastructure Limited. ii.The Assessee has stated that it is unaware of any such MOU and nor is it aware of any sum of Rs. 200 crores paid by it as alleged by the revenue. The Assessee has purchased the shares of the company M/s. OSE Infrastructure Ltd. for a total consideration of Rs. 105 crores as per the Share Purchase Agreement dated 04.06.2019 enclosed at page 145-182 also found from search of Sweta Estates Pvt. Limited. Printed from counselvise.com Page | 16 iii.Under the said agreement, the Assessee Company has purchased 1,00,000 equity shares of M/s. OSE Infrastructure Ltd. at a price of Rs. 10,500/- per share i.e. for a total consideration of Rs. 105 crores page 153 & 163 of PBK. The details of the payments made to the shareholders of M/s. OSE Infrastructure Ltd. are attached along with the bank statements of the assessee company highlighting the payments made in favour of the shareholders of M/s. OSE Infrastructure Ltd. attached at page 138-142 of PBK. iv.The Assessee had also given loans of Rs. 79.52 crores to M/s. OSE Infrastructure Ltd. during the FYs 2018-19 and 2019-20, The details of the same along with the copies of bank statement highlighting such payments made are attached at page 138-142 of PBK. v.Copy of ledger account of M/s. OSE infrastructure Ltd, in the books of the assessee company is attached at page 143- 144. vi.Statement of Neeraj Dhawan affirming this wherehe confirmed that shares of OSE Infrastructure Limited were transferred for a price evaluated by merchant bankers–refer page 7 of assessment order –response to Q6. He also confirmed the MOU dated 6.6.2018 for Rs. 185 crores and that after paying off liabilities of Rs. 80 crores, 100% equity has been bought for balance of Rs. 105 crores –refer page 7 of assessment order –response to Q9. 4. STATEMENT OF NEERAJ DHAWAN AND LALIT TALUJA RECORDED U/S 132(4) OF THE ACT i.In the statement recorded u/s 132(4) of the Act, in response to question no. 39 (see page 41-42), there is reference to Noida Land on page no. 25 of the statement reproduced as “……NOIDA Land this is claim receivable that has to come back to us the total is approx. 16 crore for which court case is under process, presumably it looks like this but I will confirm in due course of time” Mr. Neeraj Dhawan mentions that Noida Land is a disputed claim receivable that has to come back to them for which court case is under process. If \"Noida Land\" relates to a court case or process as mentioned by Mr. Neerai Dhawan then how can it be alleged that the same has been received from the Assessee Printed from counselvise.com Page | 17 ii.The Assessee vide letter dated 19.09.2022 asked the Ld. AO to highlight or point out where Mr. Neeraj Dhawan has said \"this amount mentioned in the sheet is Rs. 16,02,60,000/-was paid by M/s Haldiram Snacks Pvt Ltd in respect of Noida deal\" as claimed by the Ld. AO (refer 113-114 of PBK). iii.Therefore, there is nothing even to remotely suggest that Neeraj Dhawan or Lalit Taluja ever stated anything relating to the allegation of cash payment made by the Assessee as per the alleged seized annexures. iv.The Assessee has already demonstrated that Neeraj Dhawan stated that the Noida payment represents some disputed loan for which court case in progress and is not in any way linked to the Assessee. v.No mention of Assessee in statement of Lalit Taluja provided or reproduced in the assessment order 5. PRESUMPTION U/S 134(4A)/292C IS AVAILABLE ONLY IN THE CASE OF THE PERSON FROM WHOSE POSSESSION AND CONTROL THE DOCUMENTS ARE FOUND. i.Your Honours will appreciate that whenever a document is found on the person who is searched, under section 132(4A), the presumption is that the document belongs to that person and whatever is contained therein also relates to that person. The searched person in this case is Sweta Estates Private Limited & other concerns and family members of Oriental Group in light of the document found from its possession and not the Assessee. ii.The Assessee is not the author of this sheet. The document in not in the Assessee’s hand writing. iii.Whenever a document is found from a third party, there needs to be a corroborative evidence and onus is on the department to establish that the documents belongs to the other person. In such a case, where the document is found from a person who is searched and the document is purportedly belonging to a third person, it is mandatory for the department to first establish that the document does not belong to the person who has been searched and thereafter, further establish that the document belongs to the third party. Printed from counselvise.com Page | 18 6. How can vague terms like \"Noida Deal\" or \"Noida Land\" be arbitrarily linked to the Assessee company? The whole premise of the allegation is that in the loose sheet seized by the investigation team from Lalit Taluja or Neeraj Dhawan it is mentioned \"Noida Land\" and \"Noida Deal\" with the amount of Rs. 160260/- in a couple of places and in one place Rs. 16,02,60,000/- respectively. How this has been alleged that the Assessee company has paid this amount to someone. Thereafter, it is very clear that claim made by the ld. AO is wrong and the satisfaction recorded is also defective and therefore no addition is maintainable since there is nothing to suggest that any payment in cash or otherwise over and above the stated consideration as per the agreement was given by the Assessee company to anybody. II. NO NAME OF THE ASSESSEE IN THE AFFIDAVIT AND THE SETTLEMENT APPLICATION. 1. The Ld. AO has stated that the promoters and employees of M/s Sweta Estates Pvt Ltd had principally agreed on the basis of documents found and seized at the time of search at the residences of employees of M/s Sweta Estates Pvt Ltd that the transactions mentioned in these documents are correct. On the basis of Affidavits filed by the promoters of M/s Sweta Estates Pvt Ltd and application filed before the Hon’ble Settlement Commission, it is clear that M/s Sweta Estates Pvt Ltd has accepted that it had received the amount of Rs. 16,02,60,000/- in cash on 04.06.2019 from the Assessee- para 5.19 at page 35 of the order. 2. How does the affidavit reproduced at page 13-16 of the assessment order have anything to do with the Assessee? 3. The affidavit is in respect of documents found in search of M/s Sweta Estates Pvt Ltd; it does not mention any specific document or transaction or entry; it only is a confirmation from the promoter of the searched person that the documents found in the search of M/s Sweta Estates Pvt Ltd from its employees relate to business receipts and business expenditure of M/s Sweta Estates Pvt Ltd and not to the employees. Where is the name of the Assessee in the affidavit? Where is the mention of this annexure on which reliance is placed or this specific entry? Printed from counselvise.com Page | 19 4. Hence, there is no link of the affidavits with the additions made and the Ld. AO has only proceeded on misconceptions, conjectures and surmises. III. SHARE PURCHASE AGREEMENT DATED 04.06.2019 FOUND FROM SEARCH OF M/S SWETA ESTATES PVT LTD AND MOU DATED 06.06.2018 IGNORED AND NOT TAKEN INTO ACCOUNT. 1. The agreement dated 04.06.2019 finds place in the audited Balance Sheet 2. Confirmed by Neeraj Dhawan in his statement. Statement of Neeraj Dhawan wherein he confirmed that shares of OSE Infrastructure Limited were transferred for a price evaluated by merchant bankers–refer page 7 of assessment order –response to Q6. He also confirmed the MOU dated 6.6.2018 for Rs. 185 crores and that after paying off liabilities of Rs. 80 crores, 100% equity has been bought for balance of Rs. 105 crores –refer page 7 of assessment order –response to Q9. 3. Share Purchase agreement dated 04.06.2019 found from office of M/S SWETA ESTATES PVT LTD also confirms the same at page 145-182 of PBK. 4. Valuation Report filed on 23.09.2022 - page 256- 262 of PBK. 5. Bank statement filed on 19.09.2022 - page 138-142. 6. Ledger of OSE Infrastructure Limited - page 143- 144. 7. Details of loans cleared showing payment to shareholders of OSE Infrastructure Limited as per agreement dated 4.06.2019 and MOU dated 6.6.18. 8. None of this evidence has been refuted by the Ld. AO. IV. INCORRECT OBSERVATION BY THE LD. AO THAT THE ASSESSEE DID NOT SEEK CROSS EXAMINATION OF STATEMENTS OF NEERAJ DHAWAN AND LALIT TALUJA; REQUEST FOR CROSS EXAMINATION IGNORED. 1. The Ld. AO has stated as follows: i.That it is clear that the Assessee is not interested to cross examine Sh. Neeraj Dhawan and Sh. Lalit Taluja from whom residences the incriminating documents mentioned supra found and seized- refer para 5.18 at page 30 of assessment order. Printed from counselvise.com Page | 20 ii.The assesse did not even express any of its desire to get the cross examination done at this particular issue which clearly depicts that it was well settled with its act- refer para 5.20 at page 36 of assessment order. iii.The assessee did not think the necessity of cross examine the documents found and seized at the residences of Sh. Lalit Taluja and Sh. Neeraj Dhawan- refer para 5.20 at page 36 of assessment order. 2. The Assessee vide its reply dated 19.09.2022 submitted as follows: refer 110-116 of PBK i.That there was no reason for cross examination of Mr. Neeraj Dhawan and Mr. Lalit Taluja as they have not mentioned the Assessee company either directly or indirectly anywhere in their statements and therefore there is nothing to confront them with. ii.There is nothing to even remotely suggest that Mr. Neeraj Dhawan or Mr. Lalit Taluja ever stated anything relating to the allegation of cash payment made by the Assessee company as per the alleged seized documents etc. It is already demonstrated that Mr. Neeraj Dhawan stated that the Noida Land/payment represents some receivable on account of a dispute. iii.The statements given by Mr. Neeraj Dhawan and Lalit Taluja, do not impugn the assessee company in any manner. Their statements are only about the documents/diaries seized at their premises and do not name the Assessee company anywhere. iv.Nowhere in these statements, has Mr Neeraj Dhawan stated that any sum of money was received from Assessee either in cash or otherwise. 3. The Assessee however requested the Ld. AO to go ahead with the cross examination. This request was ignored by the Ld. AO. 4. The Assessee also asked the Ld. AO that if he has any other document/statement, wherein Mr. Neeraj Dhawan has stated that any sum of money was received from the Assessee company, and also requested for copy of such statement. Printed from counselvise.com Page | 21 E. DEPARTMENT’S GROUND NUMBER 2: REGARDING ADDITION RELATING TO THE COMPUTATION OF SHORT- TERM CAPITAL GAIN OF RS. 23,07,26,952/-: 1. The Assessee, during the year under consideration, sold property at Commercial Shop No. 108 and 109, Ground Floor, Plot No. 2, Block 1, Sector 25A, Noida at Spice Mall for a consideration of Rs. 25,50,00,000/-. It worked out the long-term capital gain on the sale of the property at Rs. 134,783,310/-. 2. According to the Assessee, the property was a depreciable asset until the financial year 2011-12 and formed part of the block of assets on which depreciation was claimed. Pursuant to the hiving off of its business by way of demerger in the retail segment, this property was removed from the block of assets at a value of Rs. 5,07,48,914/-, being the written-down value, and was treated as an investment in the books of accounts thereafter. The Assessee indexed the cost of Rs. 5,07,48,914/- to arrive at the indexed cost of acquisition and reduced the same from the sale price of Rs. 25,50,00,000, thus working out the capital gain at Rs. 134,783,310/-. 3. According to the Ld. AO, this treatment was not permissible. Once an asset enters a block of assets, it cannot be extracted from it, regardless of whether it is used for business purposes or not. It continues to enjoy depreciation until the block is fully depreciated. Hence, according to the Ld. AO, the sale of the asset for Rs. 25,50,00,000/- entailed a short-term capital gain as per the provisions of Section 50 of the Act. He reduced the written- down value of the asset to Rs. 24,273,048/- and arrived at a short-term capital gain of Rs. 230,726,952/-. 4. The Ld. AO thus treated the shop as a separate asset, reduced the depreciation on it from 01.4.2012 and deducted the written-down value from the sale price. 5. This action of the Ld. AO is grossly illegal and, in fact, contradicts his own line of reasoning and interpretation of the law. 6. Our reasons for this are as follows: i.If the Ld. AO was to treat the asset as part of the block of assets, he should have added the written-down value of the asset on 01.04.2012 to the block of assets, provided Printed from counselvise.com Page | 22 depreciation on the block till date, and thereafter reduced the selling price of the asset from the net block of assets. The Assessee would have then been entitled to reduced depreciation on the diminished block, consequent to the sale of the asset. ii.The Ld. AO has, in fact, created his own rule by keeping the asset outside the block and treating its sale as a short-term capital gain by applying Section 50 of the Act. Hence, the computation by the Ld. AO is grossly incorrect and needs to be discarded. 7. Without prejudice and as a matter of foresight, it is submitted that the Assessee's computation of long-term capital gain is correct down to the last paisa. The deeming provision whereby the gain on the sale of a block of assets is treated as short-term capital gain is only for the purpose of determining the rate of tax on the gain. If there is a gain, the tax rate would be as applicable to an asset on which short-term capital gain has arisen. However, this deeming provision does not extend to exemptions sought to be claimed under Section 54, or where a long-term capital loss is sought to be set off against the gain arising from the sale of a block of assets. 8. Admittedly, the shop was acquired in FY 2006-07 and is a long-term asset in terms of the period for which it has been held. Therefore, for the purpose of the allowability of capital loss, the long-term capital loss, which is the accumulated loss as per the return of income, shall be allowed to be set off against the deemed short-term capital gain. In effect, this gain arises from the sale of a long-term capital asset, and the deeming provision of Section 50 would not apply in such a situation. 9. Reliance is placed upon the following wherein it has been held that if there is a short-term capital gain under Section 50 of the Act, it should be allowed to be set off against any long-term capital loss of the Assessee, as long as the asset sold has been held for more than 36 months: a. Commissioner of Income-tax-19, Mumbai v. Manali Investment [2013] 39 taxmann.com 4 (Bombay) – para 3 & 4 b. PCIT v. Peerless General Finance & Investment Co. Ltd. [2023] 146 taxmann.com 285 (Calcutta) – para 6 & 7 c. Income Tax Officer, Ward 2(2)(2) v. Smart Sensors & Transducers Ltd. [2019] 176 ITD 104 (Mumbai) – para 9 & 10 Printed from counselvise.com Page | 23 d. Rajshree Roadlines P. Ltd, Mumbai vs ITO ITA No. 1627/Mum/2012 – para 6 & 7 e. CIT v. Parrys (Eastern) (P.) Ltd. [2016] 384 ITR 264 (Bombay) – para 6 f. Komac Investments & Finance P. Ltd. v. ITO ITA No.1508/Mum/2010 – para 12 F. GROUND NO. 8: REGARDING ADDITION RELATING TO THE COMPUTATION OF LONG-TERM CAPITAL GAIN OF RS. 26,73,973/-: No such addition made in the assessment order however, this amount is also added to the returned income for computing the assessed income. Hence, the same should be deleted. In view of the aforesaid, it is humbly prayed that the additions made by the Ld. AO should be deleted.” 8. On the other hand the Ld. DR strongly placed reliance on the orders of the Ld. CIT(A) / AO in framing the assessment u/s.143(3) of the Act for the assessment year 2020-21. 9. Heard rival contentions and perused the submissions filed by the assessee and the case laws relied on. 10. As far as the ground relating to assessment having been wrongly framed u/s.143(3) of the Act is concerned, it is contended by the assessee that consequent to search the assessment of other person i.e., assesse, in relation to whom the evidence of undisclosed income is found in the premises of the search person, the assessment have to be made in accordance with section 153C of the Act for a period of six Printed from counselvise.com Page | 24 years preceding the assessment year in which the AO of the said other person receives seized material from the AO of the searched person. Hence, the period of six years preceding the searched year for the purpose of assessment u/s.153C of the Act have to be computed from the date of handing over of the material by the AO of the searched person to the AO of other person. 11. According to the assessee, the satisfaction note recorded by the AO of the searched person for the A.Y’s 2014-15 to 2020-21 is dated 16.02.2022 and is placed at pages 302 to 304 of the paper book. Hence, as per the assessee if 16.02.2022 is to be taken as the triggering point for computing the six assessment years for which assessments u/s.153C of the Act have to be made, then for the impugned assessment year i.e. A.Y.2020-21, the assessment ought to have been made u/s.153C of the Act since six assessment year as per section 153C of the Act would be assessment years 2016-17 to 2021-22. 12. The assessee placed reliance on the numerous decisions including the decision of the Hon’ble Supreme Court in the case of CIT Vs. Jasjit Singh (458 ITR 437) on the above legal proposition. Printed from counselvise.com Page | 25 13. We have perused the assessment order and other documents and records filed before us by the assessee relating to the above issue. A search and seizure action was carried out in the case of Sh. Amarjeet Bakshi and others and including on various companies referred to in para-5.1 of the Assessment Order, on 27.11.2019. The satisfaction note recorded by the AO of the searched person is dated 16.02.2022. In the case of the Assessee being “other person”, the AO has treated the date of search u/s.132 to be the trigger point for determining the period of six preceding years for assessment to be framed u/s.153C of the Act and assessment year 2020-21 to be the search year and therefore, in respect of assessment year 2020-21, the assessment has been framed u/s.143(3) of the Act. 14. However, according to the assesse the date of handing over of the seized documents being 16.02.2022 this date should have been taken to be the trigger point for computing the period of six assessment years as per first proviso to section153C of the Act. Since, the assessment year 2020- 21 which is under challenge falls within the six assessment years preceding the year in which the documents seized were handed over by the AO of the searched person to the AO of the such other person i.e., assesse, the assessment for the A.Y.2020-21 ought to have been made u/s.153C of the Act. Printed from counselvise.com Page | 26 15. We find that this matter is no longer res-in-tegra in the light of the decision of the Hon’ble Supreme Court in the case of CIT Vs. Jasjit Singh (supra) wherein the Hon’ble Supreme Court held that the legislative intent underlying the insertion of the first proviso to section 153C was not confirmed merely to the escaped abetment of assessment, but also extended to determining the relevant date from which the six years period was to be computed in case of person other than searched person. The relevant portion of the judgment reproduced as under :- “9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. 10. This Court is of the opinion that the revenue’s argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials – of the search party, under Section 132 – would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually “relate back” as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned under Section 153- C after a period of four years, the third party assessee’s prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153-C supports the interpretation which this Court adopts.” Printed from counselvise.com Page | 27 16. The revenue had sought review of this judgment which has also been rejected by the Hon’ble Supreme Court in the case of CIT Vs. Jasjit Singh (476 ITR 157) and the relevant portion of the said decision is as under :- “2. This review petition has been filed by the petitioner seeking review of the Order dated 26th September, 2023 passed in the captioned Civil Appeal whereby the said Appeal was dismissed. 3. We have carefully gone through the said Order and the record. In our opinion, no case for review is made out. Consequently, the review petition is dismissed on the ground of delay as also on merits.” 17. The Hon’ble Delhi High Court in the case of PCIT vs. Ojjus Medicare Pvt. Ltd. And others (465 ITR 101) also dealt with the issue concerning the determination the triggering point in computing the block period of six preceding assessment years and the identification of the “relevant years” as inserted by the Finance Act 2017 in the case of a person other than the searched person. While interpreting the scope and import of the first proviso to section 153C of the Act, the Hon’ble High Court concluded as under :- “D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “relevant assessment year” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non- searched Printed from counselvise.com Page | 28 person. The shift of the relevant date in the case of a non- searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs’ would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A.” 18. The other judgments of the Hon’ble High Court of Delhi on this issue are as follows :- a) Pr. Commissioner of Income Tax (Central), Gurugram Versus Deepak Kumar Aggarwal, 2025:DHC:11355 – DB b) Ramaa Advisors Private Limited Versus Assistant Commissioner Of Income Tax Central Circle 20, 2025:DHC:9420 – DB c) Evergreen Infrasolutions Pvt. Ltd. Versus Assistant Commissioner Of Income Tax Central Circle 7 1 Delhi & Anr., 2025 (6) TMI 574 - DELHI HIGH COURT d) Sunil Kumar Dhaiya Versus Assistant Commissioner Of Income Tax Central Circle 29, Delhi, 2025:DHC:4480 – DB 19. We observe that there are numerous decisions of this Tribunal on this issue as well. The assessee has placed reliance on the decision of Akansha Gupta Vs. ACIT in ITA No.3074/Del/2023 dated 10.07.2024, wherein this issue Printed from counselvise.com Page | 29 was examined in its entirety. We observe that the coordinate Bench held that where the assessment ought to have been framed u/s.153C of the Act, but was instead made u/s.143(3), and considering the date of handing over of the seized material is the relevant triggering point in the case of a person other than the searched person, the entire assessment is liable to be quashed, the relevant portion of this decision is reproduced as under :- “9. Therefore, in view of the above decision, the date of recording of the satisfaction will be the deemed date for the possession of the seized documents, which is 30.06.2022 in the present case and the date of search and six years period would be reckoned from this date i.e. 30.06.2022. Therefore, there is merit in the submission of the assessee that the assessment year relevant for previous year in which search was conducted in the case of the assessee will be AY 2023-24 and the six assessment years immediately preceding the assessment year relevant for the previous year in which search was conducted for initiating proceeding u/s 153C of the Act will be AY 2018-19 to 2022-23. Therefore, respectfully following the decision of the cited case, it is held that in the present case, the assessment for AY 2021-22 should have been carried out by issuing notice u/s 153C of the Act and not u/s 143(2) of the Act as done by the AO in this case. No other contrary facts or decision was brought on record by the Ld. DR Therefore, it is held that the assessment order dated 29.12.2022 passed u/s 143(3) of the Act by the issuance of notice u/s 143(2) of the Act dated 30.06.2022 is bad in law and hence the notice u/s 143(2) of the Act, dated 30.06.2022 and the consequent assessment order dated 29.12.2022 passed u/s 143(3) of the Act are hereby quashed. The additional grounds filed by the assessee are allowed.” 20. The other decisions of the Delhi Bench of the Tribunal relied on by the assessee are as under :- a) Hon’ble ITAT Delhi in the case of Arti Dhall vs. DCIT [ITA No. 1239/Del/2024] b) Hon’ble ITAT Delhi in the case of Reena Mittal v. DCIT, Central Circle-31 [ITA NO. 1238/Del/2024] Printed from counselvise.com Page | 30 21. In view of the above discussion, we hold that since the triggering point for initiating proceedings for computing the period of six assessment years as per the first proviso to section 153C and by virtue of the decision of the Hon’ble Supreme Courts in the case of CIT Vs. Jasjit Singh (supra) and the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Ojjus Medicare Pvt. Ltd. (supra) is 16.02.2022, the block period of six assessment years preceding to that date would be assessment years 2016-17 to 2021-22 and, therefore, the impugned assessment is incorrectly framed u/s.143(3) of the Act instead of u/s. 153C of the Act and consequently we quash the said impugned order. 22. The assesse has also raised jurisdictional issue relating to prior approval u/s.153D of the Act as mechanical without application of mind and bad in law and consequently the assessment framed is bad in law. However, since we have already decided the first legal ground in favour of the assessee and quashed the assessment framed u/s.143(3) of the Act the other grounds taken by the assessee legal as well as on merits need not be adjudicated at this stage as it would be of only academic in nature and, therefore, they are left open. 23. In the result, the appeal of the assessee is partly allowed as indicated above and appeal of revenue is dismissed as infructuous. Printed from counselvise.com Page | 31 Order pronounced in the open court on 18.02.2026. SD/- SD/- [BRAJESH KUMAR SINGH] [C.N. PRASAD] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18.02.2026 NEHA , Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "