JAIDEEP HALWASIYA,INDIA V. ACIT, CENTRAL CIRCLE-4(3), KOLKATA, INDIA

ITA 2217/KOL/2025

AI Insights

The case involves Jaideep Halwasiya, a Non-Resident Indian, who appealed against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2019-20. The appeal was initially delayed by 326 days due to the assessee's inability to access the Income Tax Portal from outside India and the failure of his accountant in India to timely check the portal. The tribunal condoned the delay, citing a bona fide and reasonable cause. The core issue in the appeal was the validity of the proceedings initiated under Section 153C of the Income-tax Act, 1961, following a search operation on another individual, Shri Avtar Singh Kochar. The tribunal found that the notice issued to Halwasiya was barred by limitation as per the provisions of Section 153C(3), leading to the quashing of the notice and the assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831504 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 22-09-2025
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji & Ors., Royal Airways Ltd. vs. ADIT, Jute Corporation of India Ltd. Vs CIT, National Thermal Power Co. Ltd v. CIT, PCIT vs. Britannia Industries Ltd., Principal Commissioner of Income-tax vs. Shalimar Town Planners (P.) Ltd., Commissioner of Income-tax vs. Jasjit Singh, Harigovind vs. Assistant Commissioner of Income-tax Non-corporate
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHIT MRINAL
• Assessee Lawyers: S. K. TULSIYAN; LATA GOYAL; ARS
• Keywords: Reasonable cause; Document seized; Documents seized
• Section: 142(1); 132

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 2217/KOL/2025 (Assessment Year: 2019-20) Jaideep Halwasiya 3rd Floor, P34, India Exchange Place, Kolkata-700001 West Bengal Vs. ACIT, Central Circle 4(3) Office of the Assistant Commissioner of Income Tax, CC 4(3), Aayakar Bhawan Poorva, 110, Shantipally, EM Bypasss, Kolkata-700107, West Bengal (Appellant) (Respondent) PAN No. AAWPH1706L Assessee by : Shri S.K. Tulsiyan, & Ms. Lata Goyal, ARs Revenue by : Shri Mohit Mrinal, DR Date of hearing: 07.01.2026 Date of pronouncement: 20.01.2026 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals) Kolkata-27, (hereinafter referred to as the “Ld. CIT (A)”] dated 31.08.2024 for the AY 2019- 20. 2. At the outset, we note that the appeal of the assessee is barred by limitation by 326 days. At the time of hearing the counsel of the assessee submitted that the assessee is a Non-Resident Indian (NRI) and assessed to tax in India under PAN AAWPH1706L. The Printed from counselvise.com Page | 2 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 assessee stays outside India and his income tax matters are looked after by an accountant hired in India. The assessee was not able access Income Tax Portal Outside India and therefore, was not aware of the order passed by the ld. CIT (A) on 31.08.2024. The accountant who was looking after the income tax matters and having access to Income Tax Portal did not verify/ check the Portal at the appropriate time and thus, he was having no information about the said appellate order having been uploaded on the ITBA Portal on 31.08.2024 and thus, missed to communicate the same to assessee at the appropriate time. It was sometime in the month of August, 2025 when the assessee enquired from the said accountant about preparation of his ITR for the current A.Y 2025-26 from office of the tax advocate at Kolkata, it was then informed about the said order of the Ld. CIT (Appeals) having been uploaded on the Portal on 31.08.2024 and a copy was forwarded to him for his information. Immediately after having come to know about the said order, the appeal was filed before tribunal with delay of 326 days. Therefore, the ld. Counsel for the assessee submitted that the said delay in filing this appeal is unintentional and for bona fide and reasonable cause. The ld. Counsel for the assessee further stated that the assessee was not negligent in filing this appeal but for some unavoidable reasons and circumstances as stated above, it could not be possible for him to take steps for filing the appeal within the prescribed due date. On the above facts, as there was no deliberate delay or mala fides on the part of the assessee, the delay may be condoned. In support of his arguments, the ld. AR relied on the decisions of Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. 1167 1.T.R. 471 (SC) and the Printed from counselvise.com Page | 3 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 Coordinate bench of Delhi in the case of Royal Airways Ltd. vs. ADIT reported in [2006] 98 ITD 259 (ITAT Del]). 2.1. The Ld. D.R on the other hand strongly opposed the maintainability of the appeal as the delay was not explained with reasons. 2.2. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reason, hence, we condone the delay and adjudicate the appeal after respectfully following the decisions. The Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. 1167 1.T.R. 471 (SC), has held that the Courts should have a pragmatic and liberal approach while considering the petition for condonation of delay. Their Lordships have also held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice should be preferred. Similarly, the Hon'ble ITAT Delhi in the case of Royal Airways Ltd. vs. ADIT reported in [2006] 98 ITD 259 (ITAT Del]) has condoned the delay of 9 to 11 years in filing appeals by holding that it is a settled legal position that any delay caused on account of legal advice received or while perusing an abortive remedy should be treated as sufficient cause for such delay. 3. At the time of hearing the ld. Counsel for the assessee pressed additional ground, which is extracted below:- “that the proceedings u/s 153C of the Act initiated vide notice dated 13.12.2022 is not valid in terms of section 153C(3) of the Income-tax Act, 1961 (the Act).” 3.1. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of Printed from counselvise.com Page | 4 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 appeal challenging the proceedings u/s 153C of the Act initiated vide notice dated 13.12.2022 to be not valid in term of Section 153C(3) of the Income-tax Act, 1961 (the Act). In our opinion the issued raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts is required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688 , ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore, we are inclined to admit the same for adjudication. 4. The facts in brief are that the assessee filed the return of income on 29.08.2019, declaring total income of ₹25,22,240/-, which was processed u/s 143(1) the Act on 29.10.2019. The Director of Income Tax (Investigation) Delhi conducted a search action u/s 132 of the Act on 06.02.2019, in the case of Shri Avtar Singh Kochar during which certain incriminating materials were found and seized. These materials were in the form of digital evidences, conversations and WhatsApp Chats, etc. between Shri Avtar Singh Kochar and Shri Jaideep Halwasiya, the assessee having bearing on the determination of total income of the assessee (the other person) for the purpose of invoking the Provisions of Section 153C of the Act which were received by email on 26.09.2022, from the AO of the searched person i.e. DCIT CC-25, New Delhi. A satisfaction note dated Printed from counselvise.com Page | 5 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 21.10.2021 from the AO of the searched person, was received by the Ld. AO of the assessee on 31.01.2022. Accordingly, the proceedings u/s 153C of the Act were initiated by issuing notice u/s 153C of the Act dated 13.12.2022. The assessee complied with the said notice by filing the return of income on 20.02.2023. Thereafter, notice u/s 143(2) and 142(1) of the Act along with questionnaire were served on the assessee. Finally, the assessment was framed by the Ld. AO after taking into account the contentions and submissions of the assessee vide order dated 30.03.2023, passed u/s 153C of the Act, wherein the addition on account of unexplained money u/s 69A of the Act was made to the tune of ₹10,63,000/- beside making other additions of ₹7,90,955/- in respect of inter-heads set off. 4.1. The Ld. Authorized Representative vehemently submitted before us that the notice issued by the Ld. AO is hopelessly barred by limitation in terms of first proviso to Section 153C of the Act. The Ld. Authorised Representative argued that according to the said proviso to Section 153C of the Act , the date of initiation of search in case of other person u/s 153C of the Act is the date on which the Ld. AO of such other person receives the books of account or documents seized during the course of search. The Ld. Authorised Representative submitted by referring to the satisfaction note dated 21.10.2021 that the soft copy of the WhatsApp Chats which was seized documents in this case for the purpose of invoking Section 153C of the Act in the case of the assessee was received by the Ld. AO vide email dated 26.09.2022 via email. Therefore, the proceedings u/s 153C of the Act initiated vide notice dated 13.12.2022, is not valid in terms of section 153C(3) of the Act. The Ld. Authorised Representative in defense of his argument relied on Printed from counselvise.com Page | 6 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 the decisions of Principal Commissioner of Income-tax vs. Shalimar Town Planners (P.) Ltd. [2024] 161 taxmann.com 306 (SC)[21-03- 2024], Commissioner of Income-tax vs. Jasjit Singh [2023] 155 taxmann.com 155 (SC)/[2023] 295 Taxman 612 (SC)/[2023] 458 ITR 437 (SC)[26-09-2023] and Madras High Court in case of Harigovind vs. Assistant Commissioner of Income-tax Non-corporate [2025] 180 taxmann.com 197 (Madras)[28-10-2025]. The Ld. Authorised Representative therefore, prayed that the notice u/s 153C of the Act dated 13.12.2022, and also the consequent assessment are bad in law and may kindly be quashed. 4.2. The Ld. DR on the other hand relied on the orders of the authorities below. 5. After hearing the rival contentions and perusing the materials available on record, we find that in this case the proceedings were initiated u/s 153C of the Act vide notice dated 13.12.2022, after a search was conducted on Shri Avtar Singh Kochar on 06.02.2019. During the course of search certain incriminating materials were found and seized which were in the form of conversation and WhatsApp Chats between Shri Avtar Singh Kocar and the assessee. We note that the satisfaction note of the Ld. AO of the searched person dated 21.10.2021, was received by the Ld. AO of the assessee on 31.01.2022. We find that the satisfaction note mentioned the seized documents in the form of soft copy of WhatsApp Chats. The said seized materials were received by email on 26.09.2022 by the AO of assessee. The observations ande notings of the AO of the assessee in para 2.2 page 2 are extracted below for the sake of ready reference:- Printed from counselvise.com Page | 7 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 “\"Further copy of seized material (soft copy date of whatsapp chats between Avatar Singh Kochar and Jaideep Halwasiya) of Shri Avtar Singh Kochar, being searched person, having bearings on determination of total income of other person i.e. Shri Jaideep Halwaiya for the purpose of invoking provisions w/s 153C of the Act have been received vide email on 26.09.2022 from the Assessing Officer [ie. DCIT, C.C.-25, New Delhi) of searched person.\" 5.1. We have also perused the provisions of Section 153C(3) of the Act which provides that nothing contained in this section shall apply in relation to search initiated u/s 132 of the Act or books of account, other documents or any assets requisitioned u/s 132A of the Act on or after 1st April, 2021. Therefore, the date of search on the assessee for the purpose of Section 153C of the Act is the date when the materials in the form of soft copy of WhatsApp Chats were supplied by the Ld. AO of the searched person to the Ld. AO of the assessee i.e. on 26.09.2022. Therefore, the notice issued u/s 153C of the Act dated 13.12.2022, as well as the assessment framed u/s 153C of the Act dated 20.03.2023, are invalid and nullity. The case of the assessee find support from the decisions of the Hon’ble Apex Court in the cases of Principal Commissioner of Income-tax vs. Shalimar Town Planners (P.) Ltd. (supra) and in case of Commissioner of Income-tax vs. Jasjit Singh (supra). Similarly, Hon'ble Madras High Court in case of Harigovind vs. Assistant Commissioner of Income- tax Non-corporate (supra) has decided the issue in favour of the assessee. For the sake of ready reference we extract the operative part of the said decision of the Hon’ble Madras High Court passed, wherein the Hon'ble Court had held as under:- “44. Certainly, there cannot be two different dates for initiation of search for the other person. Hence, for all practical purpose, the initiation of search would be the same date and it is apparent upon reading the provisions of Section 153C of the Act. In the provision of Section 153C(1) of the Act, the date of initiation of search is mentioned as the date of handing over of materials and as per the first proviso, the same date would apply for the purpose of abatement also. When such being the case, no other date will come into picture for the purpose of determination of initiation of search for other Printed from counselvise.com Page | 8 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 person. At this juncture, it would be apposite to refer the judgement rendered by the Hon'ble Apex Court in Jasjit Singh (supra), wherein, it was held on the aspect as to whether the first proviso to Section 153C would apply only for the purpose of abatement of pending proceedings or otherwise. 45. When a similar contention was raised before the Hon'ble Supreme Court in the aforesaid case of Jasjit Singh (supra), the same was recorded in the said judgement as \"..The revenue argued that the proviso to Section 153C(1), is confined in its application to the question of abatement\". However, while deciding the said issue, the Hon'ble Apex Court had arrived at a conclusion and rendered its judgement by stating that \".the revenue's argument is insubstantial and without merit\".. When such being the case, it is clear that the Hon'ble Apex Court had rejected the contention of the revenue that \"the first proviso to Section 153C(1), is confined in its application to the question of abatement\", which means, as per the law laid down by the Hon'ble Apex Court, the said provision is not only for the purpose of abatement but also for all the other practical purposes. 46. For ready reference, the relevant portion of the judgement rendered in the case of Jasjit Singh (supra) is extracted hereunder: \"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 | 9 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 [**Emphasis supplied] 47. A reading of the above shows that the Hon'ble Apex Court had rejected the contention of the respondent and hence, it is clear that the first proviso to Sub-Section (1) of Section 153C is not only for the purpose of abatement but also for all other purposes, viz., initiation of search for other person in terms of Section 153C(3) of the Act. In such case, the date of initiation of search for the petitioner is the date, on which the documents were handed over to the JAO of the petitioner, i.e., 25.11.2022 is the date of initiation of search for the petitioner. 48. In terms of Sub-Section (3) of Section 153C, the provision of Section 153C will not apply for any search, which is initiated on or after 01.04.2021. 49. As stated above, in this case, the date of handing over of seized material to the petitioner's JAO is on 25.11.2022 and the said date is the date of initiation of search for the petitioner. Thus, in the present case, it is crystal clear like cloudless sky that the initiation of search was subsequent to 01.04.2021, for which, the provisions of Section 153C will not apply. Therefore, the impugned notices dated 07.02.2023 is unsustainable and the same were issued without authority and against the provisions of Sub-Section (3) of Section 153C of the Act. 50. In such view of the matter, all the impugned notices are liable to be quashed and accordingly, all the impugned notices dated 07.02.2023 issued by the 2nd respondent are quashed.” 5.2. We find that in the said decision of the Hon'ble Madras High Court, the decision of the Hon'ble Apex Court in the case of CIT Vs Jasjit Singh (supra) has been followed. Therefore, respectfully following the above decisions ,we are inclined to quash the notice issued u/s 153C of the Act as well as consequent assessment framed by the AO. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 20.01.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 20.01.2026 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 10 ITA No. 2217/KOL/2025 Jaideep Halwasiya; A.Y. 2019-20 Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "