SHRI ISHITAQ AHMAD DAR, SRINAGAR V. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, SRINAGAR

ITA 275/ASR/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6987 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-04-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 24-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Presumptive income; Business income; Search and seizure; Condonation of delay
• Section: 68; 132; 44AD; 143(3); 153A; 133(6); 69A; 153; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. Nos. 275 & 276/Asr/2023 Assessment Years: 2014-15 & 2018-19 Ishtiaq Ahmad Dar, Post Office Lane By Pass, Srinagar 190014 [PAN: BLWPD 3874P] (Appellant) Vs. Asstt.CIT, Central Circle, Srinagar (Respondent) Appellant by Respondent by : : Sh. Rohit Kapoor, C. A. & Sh. V. S. Aggarwal, ITP Smt. Balvinder Kaur, CIT-DR Date of Hearing Date of Pronouncement : : 24.04.2024 29.05.2024 ORDER Per Dr. M. L. Meena, AM: Both the appeals have been filed by the assessee against the separate order of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana even dated 10.05.2022 which are arising out of the Assessment Orders passed by the ACIT/DCIT, CC, Srinagar u/s 153A r.w.s. 143(3) of 2 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT the Income Tax Act dated 15.04.2021 in respect of the Assessment Years: 2014-15 & 2018-19. 2. The assessee has raised the following grounds of appeal in ITA No.275/Asr/2023: “1. On the facts and circumstances of the case, the Ld. CIT(A) vide order u/s 250(6) dated 10.05.2022 has erred in confirming the addition to the tune of Rs. 454706/- made u/s 69A by the learned AO on account of difference in amount credited in bank and the sale proceeds shown in the bank in the income tax return. 2. That the Ld. CIT(A) has erred in confirming the addition of Rs. 454706/- without appreciating that the assessee was a small business man running a restaurant business under the name of M/s Candle Light Restaurant and had filed the return of income under section 44AD on presumptive taxation basis. That the provision of section 69A could not be applied where no books of accounts were maintained. 3. That without prejudice to the aforesaid, the Ld. CIT(A) has erred in not appreciating that all the credits in bank are in respect of sales and as such, the addition has to be restricted to profit element @ 8% as per the provisions of section 44AD. 4. That the CIT(A) has erred in confirming the addition made by the AO ignoring the fact that the assessment framed u/s 153A is bad in law since the same is without mentioning DIN which is a mandatory requirement as per circular no________. 5. That the Ld. CIT(A) has erred in confirming the addition of Rs. 454706/- by not appreciating that the debits in the same bank account represent the amount expended for business purposes and as such, addition made u/s 69A is untenable. 6. That the Ld. CIT(A) has erred in confirming the addition of Rs. 454706/- without bringing on record any incriminating material found during the course of search. 3 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT 7. That the Ld. CIT(A) has erred inconfirming the addition of Rs. 454706/- on surmises and conjectures and without bringing on record any material to prove that the appellant was in receipt of any income other than business income from restaurant business. 8. That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.” 3. Grounds of appeal in ITA No. 276/Asr/2023 “1. On the facts and circumstances of the case, the Ld. CIT(A) vide order u/s 250(6) dated 10.05.2022 has erred in confirming the addition to the tune of Rs. 648720/- as against returned income of Rs. 287730/-. 2. That order passed by Ld. AO u/s 153A dated 08.04.2021 and further order passed by Ld. CIT(A) u/s 250(6) dated 10.05.2022 confirming the addition made by the AO are bad in law in as much as while passing the impugned orders the material relied upon/taken from are found from the premises of M/s Golden Tulip Hospitality during search which could have been only imported in assessee's case as per procedure prescribed u/s 153C which is not at all followed in instant case. 3. That order passed by Ld. AO u/s 153A dated 08.04.2021 and further order passed by Ld. CIT(A) u/s 250(6) dated 10.05.2022 are bad in law as the same has been confirmed by applying the provisions of 69A, taking into consideration the CA certificate. The AO and the CIT(A) have erred in not appreciating the facts that the provisions of section 69A can only be invoked when the assessee is found to be the owner of any money, bullion, jewellery or any other valuable article. 4. That the Ld. CIT(A) has erred in confirming the addition of Rs. 648720/-u/s 69A by the learned AO on account of difference in returned income anc income as per certificate issued by M/s Naveen Aggarwal & Associates on 14.04.2018 without considering the fact that the document relied upon by the AO was found from the premises of M/s Golden Tulip Hospitality which were subject to search u/s 132 and as such the assessment proceedings had to be initiated vide notice u/s 153C. 4 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT 5. That the Ld. CIT(A) has erred in confirming the addition of Rs. 648720/- without appreciating that the provision of section 69A could not be applied where no books of accounts were maintained. That the CIT(A) has failed to appreciate that the assessee has filed the return of income for the year under consideration by applying the provisions of section 44AD. 6. That the Ld. CIT(A) has erred in confirming the addition of Rs. 648720/- merely on the basis of suspicion, surmises and conjecture and without bringing on record any material to prove that the appellant was in receipt of any income other than business income. 7. That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off.” 4. The ld. counsel for the assessee has explained the reason for the delay of 443 days in filing the appeals with the support of an affidavit filed with an application dated20.09.2023 explaining therein the bonafide reasons that the appellant Sh. Nasir Ahmad Dar had undergone various medical tests and later advised to undergo Endovascular surgery and finally admitted to AIIMS Hospital, Ansari Nagar, New Delhi. As a result, the appellant could not approach the AR to file the appeal. Thus, the cause of delay in filing the appeal was primarily due to the exceptional circumstances. Accordingly, he requested for the condonation of the said delay in filing the appeal on account of exceptional circumstances. In support he relied on the judgment of Coordinate Bench in the case of M.K. Hotels & Resorts Ltd. v. Asstt. CIT, Circle-1, Amritsar, the Hon’ble Apex Court in the case of the Senior Bhosale Estate (HUF) v. ACIT [2019] 112 5 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT taxmann.com 134 (SC) in ITA No. 57/Asr/2021 for AY: 2010- 11andShakuntala Devi Jain vs Kuntal Kumari AndOrs. AIR 1969 SC 575, 1969 SCR 1006 I.T.A. No.57/Asr/2021 Assessment Year: 2010-11.The relevant part of the judgment on condonation of delay by coordinate Bench (supra) reads as under: “a) IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH. AMRITSAR M.K. Hotels & Resorts Ltd. Distt.Shopping Complex. Ranjit Avenue. Amritsar V/s Assistant Commissioner of Income Tax, Circle-1. Amritsar 6.1 We find that the assessee has a sufficient cause for non-submission of the appeal within due time. The merit was also not considered in appeal stage as it is I.T.A. No.57/Asr/2021 Assessment Year: 2010-11 decided in limine. Therefore, we remit back the issue to the Id. CIT(A) and direct to pass the order on merits, denovo. Needless to say, the assessee should get a reasonable opportunity of hearing in set-aside proceeding. 7. In the result, the appeal of the assessee bearing ITA No. 57/Asr/2021 is allowed for statistical purposes. b) Hon'ble Supreme Court in the case of Senior Bhosale Estate (HUF) v. ACIT [20191 112 taxmann.com 134 (SC):I.T.A. No.57/Asr/2021 Assessment Year: 2010-11 "Held that where revenue did not expressly refute stand taken by assessee that they had no knowledge about passing of order of Tribunal, dated 29-12-2003, until June, 2008, assessee's delay of 1754 days in filing appeal before Bombay High Court against Tribunal order was to be condoned. The brief facts of the case were that assessee sought condonation of delay of 1754 days in filing appeals against order, dated 29-12-2003, passed by Tribunal. The assessee pleaded that it had no knowledge about passing of Tribunal's order, until it was confronted with auction notices in June, 2008, issued by competent authority, immediately upon which, assessee filed appeal with High Court. The High Court 6 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT dismissed assessee's appeals holding that these were not fit cases in which inordinate delay of 1754 days in appeals deserved to be condoned. However, it was found that respondent revenue did not express refute stand taken by assessee that they had no knowledge about passing of order, dated 29-12-2003, until June, 2008. The Supreme Court held that unless that fact was to be refuted by the Revenue, question of disbelieving stand taken by assessee on affidavit, could not arise and for which reason, High Court should have shown sympathy to assessee by condoning delay in filing concerned appeal(s)." c) Hon'ble Supreme Court in the case of Shakuntala Devi Jain vs Kuntal Kumari AndOrs. AIR 1969 SC 575, 1969SCR 1006 I.T.A. No.57/Asr/2021 Assessment Year: 2010-11 "We are inclined to accept the statement that she was under the bona fide impression that the certified copy was not ready, and that is why it was not supplied to her by the copying department. It is not a case where it is possible to impute to the appellant want of bona fides or such inaction or negligence as would deprive her of the protection of Section 5 of the Limitation Act. We are therefore inclined to allow her application under Section 5 and to condone the delay in re-filing the appeal with a certified copy of the order." 5. Per contra, the ld. DR has objected to the request of the ld. AR but he failed to rebut the contention raised on medical grounds. 6. We have heard both the sides, perused the condonation application with affidavit and medical documents of the AIIMS Hospital. We find that the appellant had bonafide reasons which would construed sufficient cause u/s 5 of Limitation Act. We, therefore, inclined to allow the appellant application u/s 5 and condoned the delay in filing the appeal and as such we admit both the appeal for adjudication on merits. 7 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT 7. First, we take up ITA 275/Asr/2023 for adjudication. 8. In ground no. 6 and 7 the appellant challenged the decision of the Ld. CIT(A) in confirming the addition of Rs. 454706/- without bringing on record any incriminating material found during the course of search and that confirming the addition of Rs. 454706/- on surmises and conjectures and without bringing on record any material to prove that the appellant was in receipt of any income other than business income from the restaurant business. 9. The Ld. AR submitted that nothing incriminating was found during the course of search and that the additions made by Assessing Officer were not based on any incriminating materials/paper seized during search operation. The whole case has been framed on the basis of bank statement submitted in reply submitted in response to questionnaire issued by the AO as per para no 4 of the assessment order (APB, page no 14). He contended that it is an established law that no addition can be made u/s 153A otherwise than on the basis of incriminating document. As such, the additions made by the AO and sustained by the Hon’ble CIT(A) being not based upon any document found during the course of search, deserves to 8 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT be deleted. In support of arguments, he filed a short synopsis, relevant part of which reads as under: 12.1 That a search and seizure operation u/s 132 was carried out at the residential premises of the appellant on 27.02.2019. 12.2 It is a matter of record that nothing incriminating was found during the course of search and as such, the additions made by Assessing Officer were not based on any incriminating materials/paper seized during search operation. The whole case has been framed on the basis of bank statement submitted in reply submitted in response to questionnaire issued by the AO [Refer para no 4 of the assessment order at page no 14 of the PB]. Your Honor, it is an established law that no addition can be made u/s 153A otherwise than on the basis of incriminating document. As such, the additions made by the AO and sustained by the Hon’ble CIT(A) which are not based upon any document found during the course of search, deserves to be deleted. In this regard reliance is being placed upon the following case laws: - a) [2023] 154 taxmann.com 45 (SC) SUPREME COURT OF INDIA Principal Commissioner of Income-tax v. Jay Ace Technologies Ltd Section 68, read with section 153A, of the Income-tax Act, 1961 - Cash credits (Share application) - Assessment year 2008-09 to 2011-12 - Assessee filed return of income for relevant assessment years and said assessment was completed accordingly - Thereafter, a search was conducted at premises of assessee-company wherein certain share certificates were found which showed that certain companies had invested in shares of assessee's group of companies including assessee - Further, based on statement of one third party, 'R' Assessing Officer held allotment of shares to investor companies as bogus and made addition under section 68 - Commissioner (Appeals) and Tribunal had given concurrent findings of fact that no incriminating material had been found during search and brought on record by Assessing Officer to sustain additions - High Court held that since lower authorities had given a concurrent findings of fact that no incriminating material had been brought on record by Assessing Officer and said parties had filed detailed replies in response 9 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT to section 133(6) notices along with requisite details as required by Assessing Officer and moreover, investor companies had sufficient net worth to make investment in assessee's group of companies, said share certificates could not be treated as incriminating - High Court also held that since assessees were denied opportunity to cross-examine 'R', despite a specific request, said statement needed to be excluded and could not be relied upon as a piece of evidence to make any addition - Whether since issue was covered by judgment of Supreme Court in Pr. CIT v. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399/293 Taxman 141/454 ITR 212 (SC), special leave petition to be disposed of in terms of said judgment - Held, yes [Para 2] [In favour of assessee] b) [2023] 149 taxmann.com 399 (SC) SUPREME COURT OF INDIA Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. Section 153A, read with sections 132 and 143, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Conditions precedent) - Whether object of section 153A is to bring under tax undisclosed income which is found during course of search or pursuant to search or requisition; therefore, only in a case where undisclosed income is found on basis of incriminating material, Assessing Officer would assume the jurisdiction to assess or reassess total income for entire six years block assessment period even in case of completed/unabated assessment- Held, yes - Whether in case of search under section 132 or requisition under section 132A, Assessing Officer assumes jurisdiction for block assessment under section 153A and that all pending assessments/reassessments shall stand abated - Held, yes - Whether in respect of completed assessments/unabated assessments no addition can be made by Assessing Officer in absence of any incriminating material found during course of search under section 132 or requisition under section 132A - Held, yes - Whether, however, completed/unabated assessments can be reopened by Assessing Officer in exercise of powers under section 147/148 subject to fulfilment of conditions as envisaged/mentioned under section 147/148 and those powers are saved - Held, yes [Paras 8, 12 to 14] [In favour of assessee] c) [2023] 153 taxmann.com 155 (Calcutta) HIGH COURT OF CALCUTTA Principal Commissioner of Income-tax v. Phalguni Enclave (P.) Ltd. 10 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT Section 153A, read with section 143(3) of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Illustration) - Assessment year 2011-12 - Assessment of assessee was completed for relevant assessment year - Thereafter, a search was conducted at premises of assessee - Assessing Officer thereafter, made addition under section 153A/143 - Whether addition made by Assessing Officer were not based on any incriminating materials/paper seized during search operation and therefore, it deserved to be deleted - Held, yes [Para 5] [In favour of assessee] 10. Per contra, the Ld. DR relied on the impugned order, but he failed to rebut the contention of the ld. AR. 11. Heard both the sides, perused material on record, impugned order, written submission, and citations relied. Admittedly, the Ld. CIT(A) upholds the addition of Rs. 454706/- without acknowledging the fact that the additions made by Assessing Officer were not based on any incriminating materials/paper seized during search operation. It is noted that the addition was made based on the bank statement submitted with reply in response to questionnaire issued by the AO as evident from para 4 of the assessment order (APB, page no 14). It is settled law that no addition can be made u/s 153A otherwise than based on incriminating document. Meaning thereby that the additions made by the AO and sustained by the Hon’ble CIT(A) being not based upon any document found during the course of search, would be liable to be deleted. 11 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT 12. In the present case, since no incriminating material had been found during search nor brought on record by Assessing Officer and thus, the issue is squarely covered by judgment of Supreme Court in the case of Pr. CIT v. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399/293 Taxman 141/454 ITR 212 (SC). 13. Accordingly, we delete the addition of Rs. 454706/- made by Assessing Officer in absence of any incriminating material found during course of search under section 132 of the act. 14. Next, we take up the appeal in ITA No 276/Asr/2023 for adjudication. 15. In ground no. 2, the appellant challenge the validity of the assessment order passed by Ld. AO u/s 153A dated 08.04.2021 and the order passed by Ld. CIT(A) u/s 250(6) dated 10.05.2022 confirming the addition made by the AO are bad in law in as much as while passing the impugned orders the material relied upon/taken from are found from the premises of M/s Golden Tulip Hospitality during search which could have been only imported in assessee's case as per procedure prescribed u/s 153C which is not at all followed in instant case. 16. The Ld. AR submitted that the Ld. CIT(A) has erred in confirming the addition of Rs. 648720/- made u/s 69A by the learned AO on account of 12 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT difference in returned income and income as per certificate issued by M/s Naveen Aggarwal & Associates on 14.04.2018 without considering the fact that the document relied upon by the AO was found from the premises of M/s Golden Tulip Hospitality which were subject to search u/s 132 and as such the assessment proceedings had to be initiated vide notice u/s 153Cof the Income Tax Act. He pleaded that the assessment order may be quashed as void ab initio. In support, the Ld. AR filed written note, relevant part of the same reads as under: 9.1 That a search and seizure operation u/s 132 was carried out at the premises of Sh. Mohammad Nayeem Khan and the related parties Sh. Nasir Ahmad Dar, Sh. Muzaffar Ahmad Dar [The appellant] and Sh. Ishtiaq Ahmad Dar on 27.02.2019. 9.2 It is a matter of record that nothing incriminating, cash or undisclosed assets was found during the course of search from the residential premises of the appellant 301, Baba Building, residency road, Poloview, Srinagar which lead to conclusion that the appellant has earned total income of Rs 936250/- against the returned income of Rs 253530/-. The whole case has been framed on the basis of the CA certificate seized from the premises of company M/s Golden Tulip Hospitality Pvt. Ltd marked as page no 38 of annexure A-l. In these circumstances the proceedings were required to be initiated u/s 153C particularly considering the fact that the company M/s Golden Tulip Hospitality Pvt was separately searched and assessment was completed u/s 153A in the their case. 9.3 That there is no dispute to the fact that search and seizure was carried out at the premise of company M/s Golden Tulip Hospitality Pvt . However, the legal question to be addressed is that whether the assessment made u/s 153A for A.Y. 2018-19 is valid or not, particularly considering the mandate of section 153C, where any incriminating material belonging to or pertaining to a person other than person searched (as referred to in Section 153A) is seized during 13 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT search, then the only legal recourse available to the department was to proceed in terms of Section 153C of the Act by handing over the same to the A.O. who has jurisdiction over such person. 9.4 That the provisions of Section 153C of the Act enjoins upon the A.O. of the person searched that on being satisfied that books of account seized belongs to or pertain to some other persons, then, to handover the books of account to the AO having jurisdiction over such other person. Thereafter, the second AO, on being satisfied that the books of account and documents received have a bearing on the determination of the total income of the other person, should assume jurisdiction under section 153C of the Act, which is not the scenario in the present case. In this regard, relevant part of section 153C is produced as under: - "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, belongs 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 section153At :] 9.5 That the Ld. A.O. has completed the assessment under section 153A for the A.Y. 2018- 19 which is bad in law, since the addition has been made on the basis of material seized during search conducted on a person other than the assessee (i.e., M/s Golden Tulip Hospitality Pvt. ltd for which an independent 14 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT search warrant was issued). That the assessment proceedings can only be initiated in case of assessee u/s 153C and not 153A, only after satisfaction was arrived in the assessment proceedings of M/s Golden Tulip Hospitality Pvt, that the material found and seized during search, pertain to appellant. That the CIT(A) has failed to appreciate that the searched premises from where the income certificate was found does not belong to the assessee, thus, the assessment order u/s 153A is completely without jurisdiction, void- ab-initio and liable to be quashed. In this regard, reliance is placed on the following case laws:- a) 2021 (3) TMI 8 PCIT (CENTRAL) - 3 VERSUS ANAND KUMAR JAIN (HUF),SATISH DEV JAIN, SAJAN KUMAR JAIN AO has used this statement on oath recorded in the course of search conducted in the case of a third party (i.e., search of Pradeep Kumar Jindal) for making the additions in the hands of the assessee. As per the mandate of Section 153C, if this statement was to be construed as an incriminating material belonging to or pertaining to a person other than person searched (as referred to in Section 153A then the only legal recourse available to the department was to proceed in terms of Section 153C of the Act by handing over the same to the AO who has jurisdiction over such person. Here, the assessment has been framed under section 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act). As noted above, the Assessee had no opportunity to cross-examine the said witness, but that apart, the mandatory procedure under section 153C has not been followed. No perversity in the view taken by the ITAT. - Decided in favour of assessee. b) 2019 (3) TMI 1196 - ITAT DELHI - DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI VERSUS SMT. SHIVALI MAHAJAN, SMT. RINKU MAHAJAN, SHRI JATIN MAHAJAN, SHRI NITIN MAHAJAN, SMT. ANILA MAHAJAN, SHRI LALITMAHAJAN AND (VICE-VERSA) Assessment u/s 153A - addition based on excel sheet found during the course of search and also the statement of assessee during the course of search - addition in the case of various family members as unexplained investment in the acquisition of space in Indirapuram Habitat Centre - Whether any material found in the search of any other person than the assessee in appeal can be considered in the assessment under Section 15 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT 153Aof the assessee? - Whether the addition can be made only on the basis of statement given by the assessee during the course of search? - HELD THAT:-When during the course of search of an assessee any books, document or money bullion. jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly. Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A.We hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person. c) 2017 (7) TMI 1091 - DELHI HIGH COURT - PR. COMMISSIONER OF INCOME TAX CENTRAL-2, NEW DELHI VERSUS SUBHASH KHATTAR Additions made u/s 153A - proof of incriminating material found in search - Held that:- The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so-called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certainly, not under Section 153A.This goes to the root of the matter. - Decided in favour of assessee.” 17. Per contra, the Ld. DR stands by the impugned order, but he failed to rebut the contention of the ld. AR on the legal issue of validity of the assessment order. 18. Heard both the sides, perused material on record, impugned order, written submission, and citations relied. Admittedly, the Ld CIT(A) upholds 16 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT the addition of Rs. 648720/- made u/s 69A by the learned AO on account of difference in returned income and income as per certificate issued by M/s Naveen Aggarwal & Associates on 14.04.2018 without acknowledging the fact that the document relied upon by the Assessing Officer was discovered from the premises of M/S Golden Tulip Hospitality, which underwent a search under Section 132. Consequently, the assessment proceedings should have been initiated by the AO through a notice under Section 153C of the Income Tax Act. Further, the CIT(A) did not consider this vital fact that the searched premises from which the document being treated incriminating material was discovered do not belong to the assessee. 19. As per the mandate of Section 153C, if this statement was to be construed as an incriminating material belonging to or pertaining to a person other than person searched as referred to in Section 153A then the only legal recourse available to the department was to proceed in terms of Section 153C of the Act by handing over the same to the AO who has jurisdiction over such person. When during the course of search of an assessee any books, document or money bullion. jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other 17 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT person and thereafter, the Assessing Officer of such other person can proceed against such other person. 20. In the present case under appeal before us, admittedly. Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person. Under the circumstances, we are of the considered view, that in the present case, assessment proceedings must be initiated under Section 153C rather than Section 153A of the Act, after the satisfaction was being arrived in the assessment proceedings of M/S Golden Tulip Hospitality Pvt. that the material found and seized during search pertain to appellant. 21. We, therefore, hold that the assessment order passed under Section 153A by the AO is without jurisdiction and the same is as such quashed. 22. Since, the assessee gets relief on the legal grounds, and hence, other grounds on merits do not require adjudication in ITA No 276/Asr/2023. 18 ITA Nos. 275 & 276/Asr/2023 Ishtiaq Ahmad Dar v. Asstt. CIT 23. In the backdrop of the aforesaid discussion, we allow both the appeals of the assessee in the terms indicated as above. Order pronounced in the open court on 29.05.2024 Sd/- Sd/- (Udayan Dasgupta) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T. True Copy By Order