INDER CHAND BAJAJ,DELHI V. DCIT, CENTRAL CIRCLE-32, DELHI

ITA 815/DEL/2023

AI Insights

This case involves an appeal by Sh. Inder Chand Bajaj against the order of the Commissioner of Income Tax (Appeals) which confirmed an addition of Rs. 5,00,000 to the assessee's income for the Assessment Year 2015-16. The addition was initially made by the Assessing Officer under section 68 of the Income Tax Act, 1961, following a search and seizure operation at the premises of the Bajaj Group. The Tribunal, referencing previous judgments and the absence of incriminating material, decided in favor of the assessee, highlighting procedural lapses and the lack of jurisdiction in making such additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31058 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Other Referred Cases: Smt. Pushpa Bajaj vs. DCIT, New Delhi, Inder Chand Bajaj vs. DCIT, CIT vs. Kabul Chawla, PCIT vs. Abhisar Buildwell P. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: VED JAIN
• Keywords: Set aside; Reassessment proceedings; Income from undisclosed sources; Search and seizure
• Section: 143(3); 142(1); 143(2); 143(1); 132; 153A; 68; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘C’: NEW DELHI) BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No:- 815/Del/2023 (Assessment Year- 2015-16) Sh. Inder Chand Bajaj, AE-17, 2nd Floor, Tagore Garden, West Delhi-110027. Vs. DCIT, Central Circle-32, Delhi. PAN No: ABFPB2238R APPELLANT RESPONDENT Assessee by : Shri Ved Jain, Adv. and Shri Aman Garg, CA Revenue by : Shri Dayainder Singh Sidhu, CIT(DR) Date of Hearing : 30.12.2024 Date of Pronouncement : 28.03.2025 ORDER PER SUDHIR PAREEK, JM This appeal by the Assessee preferred against the order of Ld. Commissioner of Income Tax (Appeals)- 30, New Delhi-110055, [hereinafter referred to as the Ld. CIT(A)] vide order dated ITA No.- 815/Del/2023 Inder Chand Bajaj 2 06.02.2023 pertaining to Assessment Year 2015-16. The Assessee has raised the following ground of appeal: “1. 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT (A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT (A) has erred in making enhancement of Rs. 5,00,000/- on account of amount received from M/s N Sarda & Associates Consultant Pvt Ltd holding the same as unexplained invoking the provision of section 68 of the Act. 3. On the facts and circumstances of the case, the enhancement made by the CIT(A) by excerising powers under section 251(1) of the Act is invalid and without jurisdiction. 4. On the facts and circumstances of the case, the CIT(A) has erred in making the enhancement ignoring the settled position of law that jurisdiction of the CIT(A) for making the enhancement under section 251(1) of the Act can only be assumed with regard to matter which has been considered by the Assessing Officer and determined in the course of the assessment proceedings. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in enhancing the income of the assessee without following due procedures as prescribed under the law. 6. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assesse that the addition has been made by misinterpreting the statements recorded during the course of search. 7. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the learned AO under section 153A r.w.s 143(3) is illegal and bad in law as the same has been passed without having valid jurisdiction. 8. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the AO under section 153A r.w.s. 143(3) is bad and liable to be quashed as the same has been framed consequent to the search which was initiated under the wrong pretext. 9. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that ITA No.- 815/Del/2023 Inder Chand Bajaj 3 the order passed by the learned AO under section 153A r.w.s 143(3) is bad and liable to be quashed as the same has been framed consequent to a search which itself was unlawful and invalid in the eyes of law. 10. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the learned AO has erred, in reissuing the notice under section 153A dated 05.09.2019 despite the fact that reassessment proceedings initiated by initial notice issued under section 153A dated. 03.07.2018 was already pending and not concluded by the AO. (ii) That the learned AO has erred in ignoring the settled position of law that the AO cannot issue the fresh notice unless and until the assessment proceedings earlier initiated by the AO was completed. 11. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the assessment order passed by the AO is illegal and liable to be quashed as the same has been passed violating the provisions of section 124 of the Income Tax Act. 12. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the proceedings initiated under section 153A against the appellant and the assessment framed under section 153A r.w.s. 143(3) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed. 13. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the learned AO has erred, in passing the order despite the fact that the notice issued under section 143(2) is barred by limitation as the same has been issued beyond the statutory time limit prescribed under the Act. 14. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that notice issued 142(1) ofthe Act is bad in law as the same was issued prior to the issue of notice under section 143(2) of the Act. (ii) That the learned CIT(A) has erred, both on facts and in law, in confirming the action of the learned AO in drawing adverse inference against the appellant on the basis of above notice issued under section 142(1) of the Act which itself is invalid. 15. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the ITA No.- 815/Del/2023 Inder Chand Bajaj 4 assessee that the learned AO has erred in making the addition in order passed u/s 153A r.w.s 143(3) of the Act, without any incriminating material having been found during the course of search. 16.(1) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the proceedings initiated under section 153A against the appellant and the consequent reassessment framed under section 153A r.w.s 143(3) are in violation of mandatory provisions of Section 153D of the Act and as such the same is bad in eyes of law. (ii) That the CIT(A) has erred in ignoring the contention of the assessee that the purported approval u/s 153D of the Act is illegal, bad in law and also without any application of mind. 17. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the assessment order passed by the AO is invalid and bad in law as the same was passed in violation of the circular No. 19/2019 issued by CBDT which mandates that no order shall be passed without there being valid Document Identification Number (DIN) 18. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the learned AO by indulging in conjecture and surmises only on the basis of presumption and assumption. 19. On the facts and circumstances of the case, the learned CIT (A) has erred in facts and in law in confirming interest charged u/s 234A, 234B and 234C of the Act. 20. That the appellant craves leave to add, amend or alter any of the grounds of appeal.” 2. Brief facts of the case are that the original return in this case was filed on 28.03.2016 declaring income of Rs.3,24,930/- which was processed u/s 143(1) of the Income Tax Act, 1961. ITA No.- 815/Del/2023 Inder Chand Bajaj 5 3. A search and seizure operation was carried out at the various premises of Bajaj Group and its associates including the assessee and the directors and others. Consequent to search action in this case, notice u/s 153A of the Income Tax Act, 1961 (hereinafter called the “Act”) was manually issued on 03.07.2018 requiring the assessee to file the return of his income within15 days of service of the notice. Thereafter, another notice is u/s 153A of the Act, was issued through ITBA portal on 05.09.2019 requiring the assessee to file the return of his income within 15 days of service of the notice. In response to notice u/s 153A of the Act the assessee vide letter dated 18.07.2018 submitted that the return filed by the assessee on 28.03.2016 may be treated as the return filed in response to notice u/s153A of the Act. 4. Finally, the assessment order passed on 18.12.2019 and Ld. AO made addition of Rs. 75,00,000/- u/s 68 of the Act as income from undisclosed sources. Aggrieved by the same, the assessee / appellant filed appeal specifically raised the ground no. 14, that the addition made u/s 153A r.w.s. 143(3) of the Act, without any incriminating material found during the entire course of search. ITA No.- 815/Del/2023 Inder Chand Bajaj 6 5. In the appeal filed before the Ld. CIT(A), partly allowed the appeal by confirming the addition amounting to Rs. 5 lakhs. 6. On being dissatisfied with the confirmed addition hereinbefore, the assessee before us as appellant. 7. Heard rival submissions and perused the material available on record. 8. The Ld. AR submitted that search was carried on Mr. Vikram Bajaj, Mr. Pradmod Bajaj, Mr. Radhey Shyam Bajaj and Mr. Krishna Kumar Bajaj on 20.04.2017 and during the course of search a key of IDBI bank locker was found, which was in the name of the assessee and his wife Mrs. Pushpa Devi Bajaj. In pursuance thereof, a search action on very same day on 20.04.2017 was carried out on above locker no. 474, IDBI Bank Ltd., Rajouri Garden, New Delhi. But as Punchnama, which is well placed at page no. 6-7 of the Paper Book, no incriminating document / material was found. The Ld. AR submitted that Coordinate Bench in assessee’s own case for Assessment Year 2014-15, in the case of wife of assessee, Smt. Pushpa Bajaj vs. DCIT, New Delhi, deleted the addition made by the Ld. AO, holding that addition made in the ITA No.- 815/Del/2023 Inder Chand Bajaj 7 absence of incriminating material found during search, which was carried out in the premises of Mr. Vikram Bajaj, Mr. Pradmod Bajaj, Mr. Radhey Shyam Bajaj and Mr. Krishna Kumar Bajaj, during the course of search key of IDBI Bank locker was found which was in the name of Shri Inder Chand Bajaj, the assessee and his wife Smt. Pushpa Bajaj. 9. It is also submitted that the addition in this case has been made in the hands of the assessee in the absence of any incriminating material found during the course of search. It is quite relevant and necessary to mention here that Co-ordinate Bench, in the assessee’s own case, Inder Chand Bajaj vs. DCIT, in ITA No. 2871/Del/2022, wherein, deleted the addition in question while observing that no incriminating material was found during the course of search. In above-cited case, related to the search and seizure operation conducted at the various premises of the Bajaj Group and its associates on 20.04.2017, the relevant para no. 6 is reproduced as under: “ 6. We have heard the parties perused the material available on record. In the present case, it is found from the record that the addition of Rs. 16,00,000/- u/s 68 of the Act and addition of Rs. 1,00,000/- were made on account of undisclosed sources on ITA No.- 815/Del/2023 Inder Chand Bajaj 8 verifying the bank statement produced by the Assessee during the assessment proceedings. In the entire assessment order, there is not even a single whisper on any incriminating material found during the search to substantiate the addition. The Co-ordinate Bench of the Tribunal in Assessee's wife's case in ITA No. 628/Del/2022 (Α.Υ 2013-14), by relying on the Judgment of Kabul Chawla in 380 ITR 573 and Meeta Gutgutia Pro M/s Ferns N Petals in ITA No. 306 to 308/2017 dated 25/05/2017 deleted the addition. Further, the Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax, Circle 3 Vs. Abhisar Build well P. Ltd. 2034 (4) TMI 1056-(Supreme Court) dated 24/04 2023, decided the issue in favour of the Assessee holding that the Assessing Officer cannot make additions to assessee's income in respect of completed/unabated assessment if no incriminating material has been found during the course of search u/s 132 or requisition u/s 132A of the Act. Following the ratio laid down by the Hon'ble Supreme Court in the case of Abhisar Build Well (supra), we delete the addition of Rs. 17,00,000/- made by the A.O. which was confirmed by the Ld. CIT(A). Accordingly, the Appeal of the Assessee is allowed.” 10. The Ld. AR further submitted that the assessee for the year under consideration, filed return of income on 28.03.2016 and time limit prescribed to issue notice u/s 143(2) already been expired on 30.09.2015. At the time of framing the assessment u/s 153A of the Act, there was no pending assessment in the case of the assessee. 11. Ld. AR also relied upon the judgment passed by the Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla, in which Hon’ble High Court held that completed assessment can be ITA No.- 815/Del/2023 Inder Chand Bajaj 9 interfered by the Ld. AO while making the assessment u/s 153(A) of the Act, only on the basis of some incriminating material unearthed during the course of search and about ratio of the Hon’ble Delhi High Court already been confirmed by the Hon’ble Apex Court in the case of PCIT vs. Abhisar Buildwell P. Ltd. 2023 (4) TMI 1056. 12. The Ld. DR relied upon the order of the authority below. 13. By respectfully following the above binding judicial precedents and emerging fact situation, we find material substance in the submissions advanced on behalf of the assessee / appellant and having thoughtful consideration that addition in question deserves to the deleted by the reasons as mentioned hereinbefore and find the parity the ground no. 15 deserves to be allowed and addition made by the Ld. AO which was sustained by the Ld. CIT(A) is deserves to be deleted and orders of both lower authorities set aside. As we discussed above, other grounds are not required to adjudicate. ITA No.- 815/Del/2023 Inder Chand Bajaj 10 14. Consequently, the appeal of the assessee is hereby allowed as indicated above. Order pronounced in the Open Court on 28.03.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28/03/2025 Pooja, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "