LANDCRAFT DEVELOPERS PRIVATE LIMITED V. ASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE 27, DELHI & ANR.

W.P.(C)/3509/2025

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The case involves Landcraft Developers Private Limited, the petitioner, who challenged a notice issued by the Assistant Commissioner of Income Tax under Section 153C of the Income Tax Act, 1961, for the Assessment Year 2018-19. The notice was based on documents seized during a search operation under Section 132 of the Act concerning entities of the Alankrit Group. The petitioner argued that the notice lacked incriminating material specific to the relevant assessment year. The court referenced several precedents, including decisions from the Supreme Court and previous rulings by the Delhi High Court, to support the conclusion that without incriminating material for the specified year, the notice and subsequent proceedings were not maintainable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 671441 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 21-04-2025
• Assessment Year: misc
• Other Referred Cases: Saksham Commodities Ltd. v. Income Tax Officer, Commissioner of Income Tax-III, Pune v. Sinhgad Technical Education Society, Deputy Commissioner of Income Tax Central Circle 20 v. M/s U.K. Paints (Overseas) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: GAURAV GUPTA; SHIVENDRA SINGH; YOJIT PAREEK
• Assessee Lawyers: SALIL KAPOOR; SUMIT LALCHANDANI; ANANYA KAPOOR; SHIVAM YADAV
• Keywords: Income Tax; Incriminating material; Limitation; Re-assessment; Search and seizure
• Section: 148; 132; 139(1); 153C; 148A(b); 148A(d)

Judgement Text

"$~110 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3509/2025 and CM APPL. 16394/2025 LANDCRAFT DEVELOPERS PRIVATE LIMITED .....Petitioner Through: Mr Salil Kapoor, Mr Sumit Lalchandani, Ms Ananya Kapoor and Mr Shivam Yadav, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 27, DELHI & ANR. .....Respondents Through: Mr Gaurav Gupta, senior standing counsel with Mr Shivendra Singh and Mr Yojit Pareek, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 21.04.2025 1. The petitioner has filed the present petition impugning a notice dated 19.12.2023 issued under Section 153C of the Income Tax Act, 1961 [the Act] in respect of Assessment Year 2018-19. The petitioner also prays that the respondents be restrained from proceeding further with the aforesaid impugned notice. 2. The petitioner had filed its return of income under Section 139(1) of the Act in respect of Assessment Year [AY] 2018-19 on 28.10.2018. 3. On 24.03.2022, a notice under Section 148A(b) of the Act was issued by the Assessing Officer [AO] calling upon the petitioner to show cause why proceedings for re-assessment of income chargeable to tax in respect of AY 2018-19 not be initiated. This was followed by an order dated 25.04.2022 passed under Section 148A(d) of the Act holding that it was a fit This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/04/2025 at 16:03:50 case for issuance of a notice under Section 148 of the Act. The petitioner was served with the said order along with a notice under Section 148 of the Act. 4. In the meanwhile, a search was conducted under Section 132 of the Act in respect of entities belonging to the Alankrit Group and panchnamas dated 18.10.2019 and 21.10.2019 were prepared. Thereafter, the AO of the searched entities prepared a satisfaction note recording his satisfaction that certain documents, which were found and seized during the course of the search conducted under Section 132 of the Act belong to the Assessee. The relevant documents and material found during the search were also handed over by the AO exercising jurisdiction in respect of the searched person(s) to the AO exercising jurisdiction in respect of the Assessee. On receipt of the said material, the AO also examined the same and recorded his satisfaction that the documents and material handed over had a bearing on the income of the Assessee. Paragraph 3 of the said satisfaction note recorded by the AO on 08.11.2023 is relevant and is set out below: “3. From the analysis of ledgers related to Sh. Sudhir Gupta, the following beneficiary is seen to have taken accommodation entry against unaccounted cash or otherwise as tabulated below: Beneficiary FY Particulars as per Ledger Amount Debited in Ledger Amount Credits in Ledger Landcraft Developers Pvt. Ltd. 2009-10 Vijaya Bank-Diwakar- 190 1,00,00,000 2010-11 Vijaya Bank- Diwakar 1,00,00,000 2011-12 HDFC Bank – Diwakar (38263) 30,00,000 2012-13 Vijaya Bank- Diwakar 88,32,310 2013-14 Axis Bank – AFL (2682) 1,69,00,000 Axis Bank Diwakar 2,05,00,000 80,00,000 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/04/2025 at 16:03:50 2014-15 Axis Bank – AFL (32682) 1,48,44,280 Axis Bank – Diwakar 2,63,00,000 2,62,83,277 Axis Bank – New Wave - 6118 2,95,00,000 35,00,000 Vijaya Bank – Diwakar 15,00,000 Vijaya Bank – New wave 20,00,000 2015-16 Axis Bank – Diwakar 52,00,000 Axis Bank – EURO Finmart (22444) 35,00,000 Axis Bank-Newwave- 6118 25,00,000 Cash 35,00,000 Landcraft Developers Pvt. Ltd. 2012-13 Cash 48,32,000 5. A plain reading of the aforementioned satisfaction note dated 08.11.2023 indicates that the AO did not find any incriminating material having a bearing on the income of the petitioner for AY 2018-19. Concededly, absent any material for the relevant assessment year, the proceedings under Section 153C of the Act could not be initiated for the said year. 6. The aforesaid issue is covered by the decision of this Court in Saksham Commodities Ltd. v. Income Tax Officer: [2024] 161 taxmann.com 485 (Delhi) and the decision of the Supreme Court in Commissioner of Income Tax-III, Pune v. Sinhgad Technical Education Society: [2017] 8 S.C.R. 463 as well as the decision in the case of Deputy Commissioner of Income Tax Central Circle 20 v. M/s U.K. Paints (Overseas) Ltd.: Civil Appeal No.6634/2021, decided on 25.04.2023. 7. The petitioner also challenged assessment as being barred by limitation. However, it is not necessary to examine that question since This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/04/2025 at 16:03:50 admittedly, the challenge to the impugned notice is required to be sustained on the ground that it had been issued without any incriminating material in respect of the relevant assessment year. 8. In view of the above, the impugned notice is set aside. All proceedings initiated by the AO pursuant to the said notice are also set aside. The pending application is also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J APRIL 21, 2025 RK Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 30/04/2025 at 16:03:50 "