MINOTI MALHOTRA,DELHI V. DCIT CENTRAL CIRCLE 14, DELHI

ITA 6405/DEL/2025

AI Insights

The case involves Minoti Malhotra, who appealed against the assessment order issued by the Deputy Commissioner of Income Tax, Central Circle-14, New Delhi. The assessment was based on a notice under section 153C of the Income Tax Act, 1961, following a search operation on the premises of Sh. Samir Modi & Smt. Shivani Modi on February 3, 2021. The legal contention raised was that the notice was issued under a provision that became inapplicable post-April 1, 2021, due to amendments in the law. The Tribunal, referencing decisions from the Delhi and Madras High Courts, found the notice to be without authority and quashed the assessment order.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848536 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Delhi
• Assessment Year: 2021-2022
• Appeal Filed On: 10-10-2025
• Other Referred Cases: PCIT vs. Ojjus Medicare (P.) Ltd. [2024] 465 ITR 101 (Delhi), Harigovind vs. ACIT [2025] 180 taxmann.com 197 (Madras), Smt. Geetanjali Bhayana vs. DCIT [2026] 183 taxmann.com 95 (Delhi - Trib.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: JASMEET SINGH
• Keywords: Set aside
• Section: 148; 143(3); 132

Judgement Text

"P a g e | 1 ITA No. 6405/Del/2025 Minoti Malhotra (AY: 2021-22) IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.6405/Del/2025 (Assessment Year: 2021-22) Minoti Malhotra S-65, Third Floor, Greater Kailash, Greater Kailash Part-II, South Delhi, 110048, New Delhi Vs. DCIT, Central Circle-14 Room No. 354, 3rd Floor, E-2, ARA Centre, Jhandewalan Extension New Delhi – 110055 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AALPM1164C Appellant .. Respondent Appellant by : Sh. Jasmeet Singh, Adv. Sh. Pranav Manon, Adv. Respondent by : Sh. Jitender Singh, CIT, DR Date of Hearing 18.02.2026 Date of Pronouncement 25.03.2026 O R D E R PER ANUBHAV SHARMA, JM: This appeal preferred by the assessee against the order dated 13.08.2025 of Ld. Commissioner of Income Tax, (Appeal)-26, Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No : ITBA/APL/S/250/2025- Printed from counselvise.com P a g e | 2 ITA No. 6405/Del/2025 Minoti Malhotra (AY: 2021-22) 26/1079588703(1)arising out of the assessment order dated 30.01.2024 u/s 153C r.w.s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by DCIT, CC-14 AY: 2021-22. 2. Heard and perused the records. At the time of hearing ld. AR has argued on the additional ground, by which the assessment order is challenged on the basis that same is initiated on the basis of a notice u/s 153C of the Act but same was not applicable after 1st April 2021. The issue being purely legal in nature and goes to the root of jurisdiction, and arise from facts already available on record is thus admitted for hearing. 3. On hearing on merit of this additional ground we find that the notice dated 23.03.2023 was issued by the Ld. Assessing Officer under section 153C(1) of the Income-tax Act, 1961 in the case of the appellant on the basis of search operation u/s 132 of the Income Tax Act, 1961 carried out on 03.02.2021 and on subsequent dates at different business and residential premises of Sh. Samir Modi & Smt. Shivani Modi Group of cases. Various incriminating papers/documents were found and seized during the course of search & seizure operation. Further satisfaction note was recorded on Printed from counselvise.com P a g e | 3 ITA No. 6405/Del/2025 Minoti Malhotra (AY: 2021-22) 21.03.2023 by the AO of person searched and proceedings u/s 153C were initiated in the case of the appellant and additions were made. 4. Now as per the settled law the date of search in case of ‘other person’ should be date of recording of satisfaction note i.e. 21.03. 2023 as held in PCIT vs. Ojjus Medicare (P.) Ltd. [2024] 465 ITR 101 (Delhi). 5. The issuance of the impugned notice dated 23.03.2023 is asserted tobe grossly in controverting of section 153C(3) of the Act as the said provision become inapplicable in relation to searches initiated on or after 01.04.2021. Reliance was placed on decision in Harigovind vs. ACIT [2025] 180 taxmann.com 197 (Madras) and Smt. Geetanjali Bhayana vs. DCIT [2026] 183 taxmann.com 95 (Delhi - Trib.). 6. The only assertion of ld. DR was that this ground was not raised below but no law to the contrary was cited. However, it can be seen that the law was amended w.e.f. 1.4.2021 by Finance Act, 2021, and as per the amended law, no action u/s 153C of the Act could be taken on the searchcarried out on or after 01.04.2021.The assessment should be either u/s 143(3) of the Act or should be completed u/s 148 of the Act as per the amended provisions. Reliance for this can be placed on the decision of a bench in the case of Smt. Printed from counselvise.com P a g e | 4 ITA No. 6405/Del/2025 Minoti Malhotra (AY: 2021-22) Geetanjali Bhayana vs. Deputy Commissioner of Income Tax /2026] 183 taxmann.com 95 [Delhi-Trib.] decision dated 27.01.2026 where in both of us were on bench and we had concluded as follows: “18. The facts of the aforesaid case of hon'ble Madras High court are squarely applicable to the facts of the present case. It is also a matter of fact that the AO himself has initiated the proceedings u/s 153C of the Act for AY 2018-19 to AY 2020-21 though the date of search in the case of Shri Kuldeep Bishnoi was 23.07.2019 and as per the same, the search year was AY 2020-21. Thus, by respectfully following the judgement of hon'ble Madra High court in the case of Harigovind (supra), we set aside the notice issued u/s 153C on the assessee as the date of handing over the material i.e. 03.12.2021 is the date of initiation of search. The issuance of notice us 153C dt. 06.12.2021 is without any authority and contrary to subsection (3) of section153C of the Act and thus the consequent order passed u/s 153C of the Act is quashed. The additional grounds of appeal Nos. I to Ill are thus, allowed.” 7. Thus we are inclined to sustain the additional ground and allow the appeal. The impugned assessment order stands quashed. Order pronounced in the open court on 25.03.2026 Sd/- (Manish Agarwal) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 25.03.2026 Rohit, Sr. PS Printed from counselvise.com P a g e | 5 ITA No. 6405/Del/2025 Minoti Malhotra (AY: 2021-22) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "