JCIT (OSD) Central Circle-I, Noida V. Minar Hotels Pvt Ltd, New Delhi

ITA 3640/DEL/2019

AI Insights

The case involves an appeal by the Revenue against Minar Hotels Pvt. Ltd., challenging the order of the CIT(A)-IV, Kanpur, which had set aside the assessment made under section 153C of the Income Tax Act, 1961 for the Assessment Year 2012-13. The core issue was the validity of the assessment in the absence of any material found and seized during a search operation. The Tribunal examined whether the notice under section 153C was validly issued, considering the legal requirements of having incriminating material and a satisfaction note for the relevant Assessment Year. The Tribunal concluded that the notice was invalid and quashed the assessment, leading to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131629 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-06-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2019
• Other Referred Cases: Sinhgad Technical Educational Society
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 153C

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 3640/Del/2019 : Asstt. Year: 2012-13 JCIT(OSD), Central Circle-1, Noida-201301 Vs. Minar Hotels Pvt. Ltd., 6, Todermal Lane, Connaught Place, New Delhi-110001 (APPELLANT) (RESPONDENT) PAN No. AAFCM9043B Assessee by : Sh. Rajat Jain, CA & Sh. Akshat Jain, CA Revenue by : Ms. Sarita Kumari, CIT DR Date of Hearing: 06.06.2023 Date of Pronouncement: 28.06.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the Revenue against the order of ld. CIT(A)-IV, Kanpur dated 04.01.2019. 2. The only issue to be adjudicated by us is whether the assessment can be held to be valid in the absence of any material found and seized during the search. 3. Heard the arguments of both the parties and perused the material available on record. 4. It is a settled position of law that notice u/s 153C of the Income Tax Act, 1961 is invalid ab-initio in absence of satisfaction note and incriminating seized material. From the plain reading of language of Section 153C of the Act and various ITA No. 3640/Del/2019 Minar Hotels Pvt. Ltd. 2 judicial pronouncements, it is clear that in order to reopen the assessment of other person u/s 153C of the Act for the Assessment Year earlier to the year of search, direct correlation must exist between existence of incriminating material and relevant Assessment Years. 5. In the instant case, admittedly, additions are not based on any incriminating document found and seized as a result of search. In fact, no seized or incriminating document is mentioned in the satisfaction recorded by Assessing Officer for the Assessment Year involved in the appeal. Further, the AO has not recorded the satisfaction for these relevant Assessment Year as envisaged u/s 153C of the Act. 6. In view of these facts and respectfully following the judgment of the Hon’ble Supreme Court in the case of Sinhgad Technical Educational Society, it is concluded that notice u/s 153C issued by the AO need to be treated as invalid and legally not sustainable and quashed, resulting in quashing of the assessment thus framed. 7. In the result, the assessment framed u/s 153C is void ab initio and hence the appeal of the revenue is liable to be dismissed. ITA No. 3640/Del/2019 Minar Hotels Pvt. Ltd. 3 8. In the result, the appeal of the Revenue is dismissed. Order Pronounced in the Open Court on 28/06/2023. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 28/06/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR