RAMJAN MOHMED YUSUF KOKANI,NASHIK V. ASSISTANT COMMISSIONER OF INCOME TAX, CC-2, NASHIK, NASHIK

ITSSA 26/PUN/2022

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The case involves appeals by Ramjan Mohmed Yusuf Kokani against the consolidated order of the CIT(A), Pune-12, which confirmed additions made by the Assessing Officer on account of unexplained investments and cash deposits. The primary legal contention was the validity of notices issued under section 153C of the Income Tax Act, which were challenged as being time-barred. The Tribunal examined whether the notices should be considered valid from the date of the original search or from the date of the satisfaction note. Citing precedents from the Supreme Court, the Tribunal concluded that the notices were indeed time-barred as they were issued considering the date of the original search instead of the date of the satisfaction note.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787640 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 26-05-2022
• Other Referred Cases: Commissioner of Income-tax vs. Jasjit Singh, PCIT vs. Shalimar Town Planners Private Limited
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Unexplained investment
• Section: 144; 132; 153A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / IT(SS)A Nos.25 & 26/PUN/2022 िनधाᭅरण वषᭅ / Assessment Years : 2010-11 & 2011-12 Ramjan Mohmed Yusuf Kokani, 500, Gadge Baba Lane, Indira Gandhi Path, Trimbakeshwar, Nashik- 422212. PAN : AHXPK9482G Vs. ACIT, Central Circle-2, Nashik. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the consolidated order dated 29.11.2021 passed by Ld. CIT(A), Pune-12 [‘Ld. CIT(A)’]. 2. Registry has pointed out delay in filing of these appeals, however we find that the instant appeals are filed before 30-05-2022 which is the extended time limit allowed by Hon’ble Supreme Court Assessee by : Shri Pramod S. Shingte Revenue by : Shri Amit Bobde Date of hearing : 21.08.2025 Date of pronouncement : 17.11.2025 Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 2 due to covid pandemic. Therefore, we treat these appeals as good and proceed to decide the appeals. 3. Since identical facts and common issues are involved in both the above captioned appeals of the assessee, therefore, we proceed to dispose of the same by this common order. IT(SS)A No.25/PUN/2022, A.Y. 2010-11 : 4. The assessee has raised the following grounds of appeal :- “1. On the facts and in law the CIT(A) is not justified in confirming addition on account of unexplained investments to the extent of Rs.13,60,667/-. 2. On the facts and in law the CIT(A) is not justified in confirming addition on account of unexplained Cash Deposited in Kailash Nagari Patasantha to the extent of Rs.2,74,371/-. 3. On the facts and in law the CIT(A) is not justified in considering cash in hand a Rs.2,00,000/- as against claimed by the appellant Rs 38,56,332/- which has resulted into unexplained investment of Rs.13,60,667/- and unexplained cash deposit Rs.2,74,371/- as per cash flow considered by CIT(A) in his appellate order. 4. On the facts and in law the CIT(A) is not justified in considering payment of Rs.4,49,000 in FY 2009-10 as the same is appearing in the Balance Sheet as at 31.03.2009 and no evidence was found proving that the impugned payment was made in FY 2009-10. 5. On the facts and in law the CIT(A) is not justified in considering cash payment of Rs.6,16,667/- in respect of advance for GAT No.9294/1 to 5 on the basis of assumption which is not supported by any evidence found in search action or without bringing on record any evidence during assessment or appellate proceedings, this has resulted into shortage of cash as per cash flow considered by CIT(A) in appellate order and the same has resulted in addition on account of unexplained investment and cash deposit in Kailash Nagari Patasantha. 6. On the facts and in law the CIT(A) is not justified in estimating income of the assessee at Rs.9,00,000 as against claimed by the assessee in return of income filed at Rs.1,90,800/-. Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 3 7. On the facts and in law the CIT(A) is not justified in not verifying the claim of the assessee in ground raised that the AO had recorded satisfaction for issuing notice u/s 153C beyond the time limit and hence the said notice for AY 2010-11 is time barred. 8. The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal.” 5. Facts of the case, in brief, are that the assessee is an individual engaged in the business of running a hotel and also carrying on agricultural activity and has not furnished his return of income for the period under consideration. A search action u/s 132 of the Act was conducted on 08.09.2015 in the case of Mr. Parvez Mohammad Yusuf Kokani & Avaze Mohammad Yusuf Kokani & during the search incriminating documents pertaining to the assessee were found and seized from the searched premises. Accordingly, seized material was forwarded to the Assessing Officer & satisfaction note dated 26.09.2017 was recorded by him and notices u/s 153A r.w.s. 153C of the Act for the assessment year 2010-11 to assessment year 2015-16 were issued. Vide order dated 29.12.2017 assessment order u/s 144 r.w.s. 153A r.w.s. 153C of the Act was passed by determining total income of Rs.97,74,370/- for the period under consideration. Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 4 6. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A). After considering the reply of the assessee, Ld. CIT(A) partly allowed the appeal of the assessee, however the legal ground regarding challenge to the validity of notice dated 26.09.2017 issued u/s 153C of the Act being time barred, was dismissed by Ld. CIT(A) by observing as under :- “9. Vide this ground of appeal, the appellant contended that the notice issued u/s 153C on 26.09.2017 was barred by limitation and bad in law. As per the inferred date of search, the specified assessment year would be AY 2016-17 and the six assessment years immediately preceding the assessment year relevant to be previous year in which search was conducted or requisitioned would be AYs 2010-11 to 2015- 16. Since the impugned notice year falls under the six year matrix as mentioned u/s 153C of the Act, the assessing officer had the jurisdiction to issue notice u/s 153C for the impugned assessment year 2010-11. Further, the appellant has presumed that the satisfaction was recorded in F.Y. 2017-18 but no details are filed in this regard. In absence of any such details and in absence of any evidence, the ground of appeal can not be considered on the basis of presumptions of the appellant. For this reason itselt, even the case laws relied upon by the appellant cannot be considered in his case. In view of the above. this ground raised by the appellant is dismissed.” 7. Again being aggrieved with the above order passed by Ld. CIT(A), the assessee is in appeal before this Tribunal. 8. Ld. AR appearing from the side of the assessee submitted before us that the assessee has raised as many as 8 grounds of appeal before the Tribunal out of which ground no.7 is legal wherein the validity of notice issued u/s 153C is challenged being Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 5 issued beyond the time limit of 6 years period prescribed under the Act. In this regard, Ld. AR submitted before us that the date of search is not relevant but the date of recording of satisfaction note is relevant. Ld. AR submitted that satisfaction note in the case of the assessee was recorded on 26.09.2017 and therefore the notice u/s 153C of the Act in the case of the assessee can be issued only for earlier 6 years i.e. starting from assessment year 2012-13 to assessment year 2017-18 only. However, notices u/s 153C of the Act in the case of the assessee were issued on the basis of date of search i.e. 08.09.2015 instead of date of recording of satisfaction note i.e. 26.09.2017. Ld. AR further submitted that the assessee was not the searched person but was the other person whose documents were found during the course of the search and therefore section 153C was made applicable in his case. Ld. AR submitted that in the case of other person who was not searched the triggering event is not the date of the original search but rather the date when the Jurisdictional Assessing Officer of the other person obtains the possession of the documents which is initiated by recording of the satisfaction note. Ld. AR accordingly submitted that in the instant case in hand the satisfaction note was recorded on 26.09.2017 Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 6 therefore the 6 years period is required to be calculated from this date and not from the date of original search. In support of this contention, Ld. AR relied on the judgement passed by Hon’ble Supreme Court in the case of Commissioner of Income-tax vs. Jasjit Singh [2023] 155 taxmann.com 155 (SC)/[2023] 458 ITR 437 (SC)[26-09-2023] which was subsequently followed by Hon’ble Supreme Court in the case of PCIT vs. Shalimar Town Planners Private Limited (2024) 161 taxmann.com 306(SC). Accordingly, Ld. AR requested before the bench to declare the notice issued u/s 153C for assessment year 2010-11 as time barred since it was beyond the 6 years period prescribed under the Act and as directed by Hon’ble Supreme Court. 9. Ld. DR appearing from the side of the Revenue relied on the order passed by subordinate authorities and requested to confirm the same, however he was unable to furnish any material or case law in his support. Ld. DR also could not controvert the findings given by Hon’ble Supreme Court in the case of Jasjit Singh (supra) which is relied on by the assessee. Ld. DR also provided copy of satisfaction note dated 26-09-2017 recorded in the case of the assessee. Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 7 10. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book and case law relied on by the assessee. In this regard, we find that admittedly incriminating documents related to the assessee were found at the searched premises and the proceedings u/s 153C of the Act were rightly initiated in the case of the assessee. However, it is the claim of the assessee that the satisfaction note in the case of the assessee was recorded on 26.09.2017 and notices u/s 153C could be issued only for previous 6 years i.e. starting from assessment year 2012-13 to assessment year 2017-18. Therefore, it is the contention of Ld. counsel of the assessee that the notices issued by considering the original date of search as the triggering event is not correct and the 6 years should be reckoned from the date of satisfaction note and accordingly the notices could have been issued only from assessment year 2012-13 to assessment year 2017-18 and consequently the notices issued for assessment year 2010-11 & 2011-12 becomes time barred since they were issued beyond the time limit prescribed under the Act. In this regard, reliance was placed on the judgement passed by Hon’ble Supreme Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 8 Court in the case of Jasjit Singh (supra) wherein it was held as under :- “HELD ■ 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. [Para 9] ■ It is opined that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation v. Dy. CIT [2012] 20 taxmann.com 214 (Delhi) adopted, the Assessing Officer 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 Assessing Officer. 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 Supreme Court adopts. [Para 10] ■ Thus, there is no merit in the appeals, they are accordingly dismissed. [Para 11] 11. The above judgement passed in the case of Jasjit Singh (supra) was approved by Hon’ble Supreme Court in the review proceedings in the case of Commissioner of Income-tax vs. Jasjit Singh [2025] Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 9 173 taxmann.com 575 (SC). Subsequently, Hon’ble Supreme Court followed the above Judgement in the case of PCIT vs. Shalimar Town Planners Private Limited (2024) 161 taxmann.com 306 (SC) by observing as under :- “1. Leave granted in SLP(C) no. 20504/2023. 2. These appeals are disposed of in terms of the decision of this Court in CIT v. Jasjit Singh [2023] 155 taxmann.com 155/295 Taxman 612/458 ITR 437 (SC). 3. Accordingly, notices under section 153C of the Income-tax Act, 1961 will be valid for a period of six years from the end of the financial year preceding the date on which the satisfaction was recorded. 4. The appeals are disposed of in the above terms. 5. Pending application(s), if any, shall also stand disposed of.” 12. Considering the totality of the facts of the case and respectfully following the above judgements passed by Hon’ble Supreme Court in the case of Jasjit Singh (supra) & Shalimar Planners Pvt. Ltd. (supra), we are of the considered opinion that the notices issued by considering the original date of search as the triggering event is not correct and the 6 years should be reckoned from the date of satisfaction note and accordingly in the case of the assessee the notices could have been issued only from assessment year 2012-13 to assessment year 2017-18. Therefore, we find force in the arguments of Ld. counsel of the assessee that the notice u/s 153C of the Act issued in the case of the assessee for assessment Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 10 year 2010-11 & 2011-12 are time barred since they were issued considering the original date of search which is 08.09.2015 instead of considering the date of satisfaction note recorded which is 26.09.2017. Accordingly, the notices issued u/s 153C of the Act will be valid for a period of six years from the end of the financial year preceding the date on which the satisfaction note was recorded. Accordingly, the notice u/s 153C issued in the case of the assessee for asstt year 2010-11 which is prior to Assessment Year 2012-13 is held to be time barred and therefore the consequential assessment order passed for assessment year 2010-11 which is prior to Assessment Year 2012-13 is also held to be void ab initio. Accordingly, ground no.7 raised by the assessee is allowed. 13. Since we have decided ground no.7 in favour of the assessee & the notice u/s 153C of the Act & the consequential assessment are held to be void ab initio, the other grounds raised by the assessee on merits of the case becomes infructuous and therefore need not to be adjudicated. 14. In the result, the appeal filed by the assessee in IT(SS)A No.25/PUN/2022 for A.Y. 2010-11 is allowed. Printed from counselvise.com IT(SS)A Nos.25 & 26/PUN/2022 11 IT(SS)A No.26/PUN/2022, A.Y. 2011-12 : 15. Since the facts and issues involved in the appeal of the assessee for the assessment year 2011-12 are identical to the facts of the case for assessment year 2010-11, therefore, our decision in IT(SS)A No.25/PUN/2022 for A.Y. 2010-11 shall apply mutatis mutandis to the appeal of the assessee in IT(SS)A No.26/PUN/2025 for A.Y. 2011-12. Accordingly, the appeal of the assessee in IT(SS)A No.26/PUN/2022 for A.Y. 2011-12 is also allowed. 16. To sum up, both the above captioned appeals filed by the assessee are allowed as indicated above. Order pronounced on this 17th day of November, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 17th November, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), Pune-12. 4. The Pr.CIT/CIT concerned. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "