SHRI BIR KUMAR JAIN,DELHI V. ACIT CENTRAL CIRCLE-25, NEW DELHI, DELHI

CO 164/DEL/2025

AI Insights

The case involves an appeal by the Assistant Commissioner of Income Tax (ACIT) against Shri Bir Kumar Jain concerning the assessment year 2019-20. The assessment was initially framed under section 143(3) following a search operation that uncovered unaccounted jewellery. However, the Commissioner of Income Tax (Appeals) quashed this assessment, stating it was invoked under incorrect provisions of the law, specifically not adhering to the procedural requirements of section 153A, which applies to cases following a search operation. The Tribunal upheld the CIT(A)'s decision, agreeing that the assessment should have been conducted under section 153A, given the timing and nature of the search and subsequent seizure.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839250 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 01-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDER SINGH
• Assessee Lawyers: PAWAN VED
• Keywords: Set aside
• Section: 143(3); 132; 153A; 69

Judgement Text

"P a g e | 1 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4359/Del/2025 (Assessment Year: 2019-20) ACIT, CC-25 Room No. 317, 3rd Floor, ARA Centre, Jhandewalan Extension, Delhi – 110055 Vs. Shri Bir Kumar Jain 17/71, West Punjabi Bagh, New Delhi - 110026 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AAKPJ3978Q Appellant .. Respondent CO. No.164/Del/2025 Arising out of ITA No.4359/Del/2025 (Assessment Year: 2019-20) Late Shri Bir Kumar Jain 17/71, West Punjabi Bagh, New Delhi - 110026 Vs. ACIT, CC-25 Room No. 317, 3rd Floor, ARA Centre, Jhandewalan Extension, Delhi – 110055 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AAKPJ3978Q Appellant .. Respondent Appellant by : Sh. Pawan Ved, Adv. Sh. Mohit Gupta, FCA Sh. Mirza Muhiuddin Baig, CA Respondent by : Sh. Jitender Singh, CIT, DR Printed from counselvise.com P a g e | 2 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) Date of Hearing 03.02.2026 Date of Pronouncement 18.02.2026 O R D E R PER ANUBHAV SHARMA, JM: This appeal and Cross Objection preferred by the Revenue and the Assessee against the order dated 25.03.2025 of the Ld. CIT(A)-29, New Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in Appeal No : CIT(A), Delhi-29 10579/2018-19 arising out of the assessment order dated 23.04.2021 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the DCIT, CC-25 for AY: 2019-20. 2. On hearing both sides we find that assessment was framed u/ 143(3) of the Act wherein additions were made u/s 69 of the Act on account of jewellery found in the lockers operated during the course of search on 21.02.2019 & 03.04.2019. We find that admittedly, the search assessment was framed in pursuant to search action initiated in the case of Avtar Singh Kochar, Gagandeep Singh Kochar, Hari Singh Kochar, M/s H.L. Forex Pvt. Ltd. in the residential premises of appellant son Sh. Sanjay Jain at H. No. 17, Printed from counselvise.com Road No. 71, Punjabi Bagh West, New Delhi, was also searched locker in his name jointly held with hi 133(3) of the Act was passed. lockers jewellery was found and seized and addition was made which has been deleted by the ld. CIT(A) quashing the assessment proceedings u/s 143(3) of the Act holding that assessment has been completed invoking incorrect provisions of the Act. The relevant para 6.3 & 6.5 of the findings of ld. CIT(A) are reproduced below: “6.3 I have perused the assessment order, submission of the appellant and the facts of the case. It is seen that the last authorization of search u 03.04.2019. Appellant has submitted a copy of panchnama dated 03.04.2019 in the paper book filed during the appellate proceedings which is reproduced as under: Shri Bir Kumar Jain (AY: 2019 d No. 71, Punjabi Bagh West, New Delhi, was also searched locker in his name jointly held with his wife were found and restrain 133(3) of the Act was passed. However, subsequently, on operation of lockers jewellery was found and seized and addition was made which has been deleted by the ld. CIT(A) quashing the assessment proceedings u/s 143(3) of the Act holding that assessment has been completed invoking rect provisions of the Act. The relevant para 6.3 & 6.5 of the findings of ld. CIT(A) are reproduced below: 6.3 I have perused the assessment order, submission of the appellant and the facts of the case. It is seen that the last authorization of search u/s 132 of the Act was executed on 03.04.2019. Appellant has submitted a copy of panchnama dated 03.04.2019 in the paper book filed during the appellate proceedings which is reproduced as under: P a g e | 3 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) d No. 71, Punjabi Bagh West, New Delhi, was also searched where s wife were found and restrain order u/ However, subsequently, on operation of lockers jewellery was found and seized and addition was made which has been deleted by the ld. CIT(A) quashing the assessment proceedings u/s 143(3) of the Act holding that assessment has been completed invoking rect provisions of the Act. The relevant para 6.3 & 6.5 of the findings of 6.3 I have perused the assessment order, submission of the appellant and the facts of the /s 132 of the Act was executed on 03.04.2019. Appellant has submitted a copy of panchnama dated 03.04.2019 in the paper book filed during the appellate proceedings which is reproduced as under: Printed from counselvise.com P a g e | 4 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) Printed from counselvise.com P a g e | 5 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) Printed from counselvise.com P a g e | 6 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) 6.4 Thus, the search in the case of the appellant was initiated in F.Y. 2019-20 relevant to A.Y. 2020-21 and therefore assessment for A.Y. 2019-20 should have been framed u/s 153A of the Act, if at all whereas the AO has framed the assessment u/s 143(3) of the Act. Addition for jewellery should also have been made in A.Y. 2020-21 rather than A.Y. 2019-20. In this regard, the provisions of section 153A are reproduced as under: “153A. Assessment in case of search or requisition. (1)Notwithstanding anything contained in section 139, section 147, section 148, section 149, Section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003(but on or before the 31st day of March, 2021, the Assessing Officer shall- [a] issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year Printed from counselvise.com P a g e | 7 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years :Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years:... (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in subsection (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to subsection (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.—For the removal of doubts, it is hereby declared that,— (i)save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.\" 6.4.1 Reference is further made to provisions of section 153B of the Act which mention about them last of the authorization as conclusion of search, as under: \"Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment,— (a) in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b) of sub-section (1) of section 153A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed; Printed from counselvise.com P a g e | 8 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section. 132 or for requisition under section 132A was executed:..... (2) The authorisation referred to in clause (a) and clause (b) of sub-section (1) shall be deemed to have been executed,— (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; or (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.” 6.5 Thus, the provisions of section of 153A r.w.s. 153B provide for the assessment or reassessment of six assessment years immediately proceeding the assessment year relevant to the previous in which search was conducted. The year in which search was conducted is further defined in 153B(2) as the conclusion of search as recorded in the last Panchnama drawn. Therefore, from the reading of provisions of the Act, it is clear that the AO has wrongly framed assessment u/s 143(3) of the Act whereas the last panchnama was drawn and the seizure was affected in F.Y. 2019-20 relevant to A.Y. 2020-21. Thus, I do not find any basis to sustain the addition which has been made by invocation of proceedings under wrong provisions of the Act and for the wrong year. However, no comments are made on the merits of additions as the proceedings themselves have been found to be initiated under wrong provisions. Accordingly, the assessment order u/s 143(3) is liable to be quashed. Accordingly, these grounds of appeal are allowed.” 3. The assessee on his part in the cross objection has submitted that the approval granted u/s 153D of the Act is granted in a mechanical manner. 4. Taking into consideration the facts and circumstances we find that last panchnama where seizure was effected was drawn on 03.04.2019 for operation of locker No. 887 maintained with Syndicate Bank invoking Printed from counselvise.com P a g e | 9 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) provisions of Section 153B r.w.s 153A of the Act the assessment for AY: 2019-20 should have been framed u/s 153A of the Act as against u/s 143(3) of the Act. Thus, conclusion of the assessment without issuing of jurisdictional notice u/s 153A of the Act vitiates assessment and the conclusion of ld. CIT(A) needs no interference. 5. When aforesaid is considered in the light of approval granted u/s 153D of the Act, on 22.04.2021 we find that on 22.04.2201 itself assessing officer had requested for granting approval by letter F. No. DCIT/CC-25/2020-21/81 dated 22.04.2021 and approval was granted on 22.04.2021 by letter F. No. Addl.CIT/CR-7/2021-22/102. 6. The consolidate approval for 7 Assessment Years 2013-14 to 2019-20 has been granted. It also comes up from the approval that there is a very general observation which has no bearing in the case of assessee as has been mentioned as it is not a case of reliance electronic evidences as for convinience that part of the approval in para 3 of the approval letter is reproduced below: “3. Copies of the final assessment orders should be forwarded to this office immediately after passing the orders. Proposal for retention of seized material should also be forwarded to this office within time as per IT Act, 1961. Before passing the final Printed from counselvise.com P a g e | 10 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) order, in case, there is requirement of protecting the interest of revenue, permission u/s 281B from Pr. CIT(C)-3. New Delhi should be taken. Office note indicating additions in relevant assessment years should be indicated in all Assessment Years. You have certified about perusal and verification of data seized in electronic format through working copies having certified hash values as that of original hard drives/CDs/ pen drives/mobile data & any other electronic data. You have also certified to the undersigned that all information available in AIR/CIB/from other Law Enforcement Agencies have been properly scrutinized by you before finalizing the draft assessment order. Please ensure that penalty is levied under proper section of the Income Tax Act, 1961.” 7. The aforesaid discussion leaves us with no doubt to hold that at one end Ld. CIT(A) has not fallen in error in holding invocation of wrong provision for concluding assessment u/s 143(3) of the Act. On the other hand, the ground raised by assessee challenging the grant of approval in a mechanical manner deserves to be sustained. 8. Consequently, appeal of the revenue is dismissed and Cross Objection is sustained and the impugned assessment order stand quashed. Order pronounced in the open court on 18.02.2026 Sd/- (Manish Agarwal) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 18.02.2026 Rohit, Sr. PS Printed from counselvise.com P a g e | 11 ITA No.4359/Del/2025 CO 164/Del/2025 Shri Bir Kumar Jain (AY: 2019-20) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "