PANKAJ SHARMA,DELHI V. DY. COMMISSIONER OF INCOME TAX, DELHI

ITA 939/DEL/2024

AI Insights

The case involves twin appeals by Smt. Bharti Sharma and Sh. Pankaj Sharma against the orders of the Commissioner of Income Tax (Appeals)-30, New Delhi, which upheld the assessments made under section 143(3) of the Income-tax Act, 1961. The assessments were based on materials seized during a search operation on M/s. Hans Group of cases, which allegedly implicated the appellants in on-money transactions related to property sales. The primary legal issue was the validity of the assessments under section 153C, given that the assessments for the year of the search were made directly under section 143(3). The Tribunal admitted the additional grounds raised by the appellants, citing the Supreme Court's decision in National Thermal Power Co. Ltd. vs. CIT, and ultimately quashed the assessments, referencing several landmark decisions that clarified the proper application of section 153C.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 40584 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2021-2022
• Other Referred Cases: National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC), CIT-7 Vs. RRJ Securities Ltd. (2016) 380 ITR 612 (Del), PCIT Vs. Ojjus Medicare (P) Ltd., (2024) 465 ITR 101 (Del), CIT Vs. Jasjit Singh (2024) 465 ITR 101 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL YADAV
• Section: 148; 143(3); 132; 22; 153C; 101

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.898/Del/2024 Assessment Year: 2021-22 Smt. Bharti Sharma, 34, Ground Floor, Vikas Marg, Vijay Block, Laxmi Nagar, Delhi Vs. Dy. CIT, Central Circle-31, Delhi PAN:AVIPS8100N (Appellant) (Respondent) With ITA No.939/Del/2024 Assessment Year: 2021-22 Sh. Pankaj Sharma, 34, Ground Floor, Vikas Marg, Vijay Block, Laxmi Nagar, Delhi Vs. Dy. CIT, Central Circle-31, Delhi PAN:AOCPS0956F (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM These twin assesses Smt. Bharti Sharma and Sh. Pankaj Sharma have filed their instant as may appeals ITA Nos. Assessee by Sh. Pankaj Sharma, Assessee in person Department by Sh. Sunil Yadav, CIT(DR) Date of hearing 24.03.2025 Date of pronouncement 28.03.2025 ITA No.898 & 939/Del/2024 2 | P a g e 898/Del/2024 and 939/Del/2024 for assessment year 2021-22, against the Commissioner of Income Tax (Appeals)-30 [in short, the “CIT(A)”], New Delhi’s orders dated 31.01.2024 and 05.02.2024 passed in case nos. 10099/2020-21 and 10095/2020-21, respectively, involving proceedings under section 153C r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Heard both the assesses as well as the department at length. Case files perused. 3. It emerges during the course of hearing that both these assessees have raised their identical substantive grounds challenging validity of the impugned assessments framed u/s 143(3) than that under section 153C or under section 148 of the Act, as the case may be. The Revenue vehemently argues that the assessees’ instant additional ground(s) could not be allowed to be raised at this belated stage. We do not find any merit in the Revenue’s instant technical objections in light of the hon’ble apex court landmark decision in National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC) having settled the issue long-back that the tribunal could indeed admit the ITA No.898 & 939/Del/2024 3 | P a g e additional ground in section 254 appellate proceedings in order to determine the correct tax liability of an assessee provided all the relevant facts duly form part of the records. We make it clear that since we are dealing with the above limited legal issue of validity of the impugned assessment framed u/s 143(3) of the Act, all the relevant facts thereto duly form part of the records. We thus admit the assessee’s foregoing additional grounds in very terms. 4. Next come the basic relevant facts. It is not disputed between the parties even as per the assessment discussion(s) that there was a search/seizure operation carried out on M/s. Hans Group of cases on 06.01.2021 wherein one mobile phone of Sh. Vaibhav Jain was seized from G-2, Plot No. 5, Sikka Complex, Preet Vihar, New Delhi. Sh. Vaibhav Jain was found to be a real estate broker. And that the learned departmental authorities could allegedly decipher an image of a receipt relating to sale of property at 2nd floor, D-48, Anand Vihar, Delhi, indicating both these assessee’s having acted as vendees therein. It is in view of the said receipts that the learned ITA No.898 & 939/Del/2024 4 | P a g e Assessing Officer framed his twin assessments herein dated 29.12.2022 under section 143(3) of the Act making the corresponding on-money payments and other additions, as the case may be in these assesses hands which stand upheld in the lower appellate proceedings. 5. It is in this factual backdrop that there arises the first and foremost legal issue of validity of the impugned section 153C assessments itself. The Revenue’s vehement contention before us is that given the fact that AY 2021- 22 happens to be the year of search itself, learned lower authorities have rightly framed the assessments herein under section 143(3) of the Act. 6. We have given our thoughtful consideration to the assessee’s pleadings and Revenue’s foregoing vehement contentions. We find no reason to sustain the impugned section 153C assessment. We first of all deem it appropriate to quote section 153C(1) 1st proviso stipulating that “reference to the date of initiation of search under section 132 or making of requisition………, shall be construed as reference to the date of receiving the ITA No.898 & 939/Del/2024 5 | P a g e books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction…..” Hon’ble jurisdictional high court’s recent various landmark decisions, CIT-7 Vs. RRJ Securities Ltd. (2016) 380 ITR 612 (Del), PCIT Vs. Ojjus Medicare (P) Ltd., (2024) 465 ITR 101 (Del) and CIT Vs. Jasjit Singh (2024) 465 ITR 101 (SC) have already settled the issue that the reference in such an instance u/s 153C is the date when the Assessing Officer records his corresponding 153C satisfaction. We, therefore, are of the considered view that the given fact that the learned lower authorities have framed section 243(3) assessments in these twin assessees’ cases based on the seized materials, without either taking recourse to section 153C or section 148 of the Act, as the case may be, the same are not sustainable in law. We accordingly quash the impugned twin assessments in very terms. Ordered accordingly. 7. All other pleadings on merits herein stand rendered academic 8. These twin assessee’s as many appeals are allowed in above terms. A copy of this common order be placed in the respective case files. ITA No.898 & 939/Del/2024 6 | P a g e Order pronounced in the open court on 28th March, 2025 Sd/- Sd/- (ANNAPURNA GUPTA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28th March, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "