SMT. SUFHILA CHANDRA,DEHRADUN V. ACIT, CC-, DEHRADUN

ITA 151/DDN/2024

AI Insights

The case involves Smt. Sushila Chandra, who appealed against the order of the Commissioner of Income Tax (Appeals)-3, Noida, concerning the assessment year 2019-20. The primary legal issue was the validity of the proceedings under sections 148/147 of the Income-tax Act, 1961, which were initiated based on incriminating material seized during a search operation in the case of Sh. Krishan Sharma & Smt. Sheetal Sharma. The department argued for the sustainability of these proceedings, referencing the case of PCIT Vs. Naveen Gupta. However, the Tribunal noted conflicting precedents that supported the assessee's position, leading to the quashing of the reopening of the assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633006 (ITAT-DEHRADUN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Other Referred Cases: PCIT Vs. Naveen Gupta (2024) 168 taxmann.com 574 (Del), Shyam Sunder Khandelwal Vs. ACIT (2024) 161 taxmann.com 255 (Raj.), PCIT Vs. VSL Mining Company Pvt. Ltd. (2024) 167 taxmann.com 373 (Ker), Amit Kumar alias Amit Saraf Vs. Union of India (2024) 462 ITA 205 (Del), Commissioner of Income-Tax Vs. Vegetable Products Ltd. [1971] 80 ITR 14 (Kol.)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. S. RANA
• Assessee Lawyers: NITISH GUPTA
• Section: 147; 2

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DEHRADUN “SMC” BENCH, DEHRADUN BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER (Through Video Conferencing) ITA No.151/DDN/2024 Assessment Year: 2019-20 Smt. Sushila Chandra, 57, Lane-4, Krishan Vatika, Lane-1, Phase-1, Doon Divine, Dhurankas, Sahastradhara Road, Dehradun Vs. ACIT, Central Circle, Dehradun PAN :AJEPC9713B (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2019-20, arises against the Commissioner of Income Tax (Appeals)-3 [in short, the “CIT(A)”], Noida’s order dated 10.07.2024 passed in case no. CIT(Appeal) Noida-3/10030/2018-19, involving proceedings under Assessee by Sh. Nitish Gupta, CA Department by Sh. A.S. Rana, Sr. DR Date of hearing 21.03.2025 Date of pronouncement 13.06.2025 ITA No.151/DDN/2024 2 | P a g e section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused. 2. It transpires during the course of hearing that there arises the first and foremost legal issue of validity of the impugned section 148/147 proceedings itself since initiated on the basis of a seized material found in the course of search carried out in case of one Sh. Krishan Sharma & Smt. Sheetal Sharma on 02.02.2022. This clinching fact duly emerges from a perusal of the CIT(A)’s lower appellate discussion at page 7 onwards that the department has proceeded to add the assessee’s cash payments/receipts; as the case may be, going by the corresponding entries found to have made in the seized material. It is in this factual backdrop that the department has strongly contested the assessee’s above legal ground that section 148/147 mechanism set into motion herein is indeed sustainable in law than that under section 153C of the Act going by PCIT Vs. Naveen Gupta (2024) 168 taxmann.com 574 (Del) settling the issue against the assessee. We, however, note that various other judicial precedents i.e. Shyam Sunder Khandelwal Vs. ACIT (2024) 161 taxmann.com 255 (Raj.); PCIT Vs. VSL Mining ITA No.151/DDN/2024 3 | P a g e Company Pvt. Ltd. (2024) 167 taxmann.com 373 (Ker) and Amit Kumar alias Amit Saraf Vs. Union of India (2024) 462 ITA 205 (Del) have adjudicated the very issue in assessee’s favour. And also that their lordships concluded that section 148/147 proceedings initiated on the basis of such seized incriminating material leads to initiation of the specific provision under section 153C than the general reopening mechanism under section 148/147 of the Act. Hon’ble jurisdictional high court of Uttarakhand has admittedly not decided the instant issue in either party’s favour. That being the case, we hereby quash Commissioner of Income-Tax Vs. Vegetable Products Ltd. [1971] 80 ITR 14 (Kol.) that the view favouring the assessee in such an instance ought to be adopted and quash the impugned reopening herein forming subject matter of record. Ordered accordingly. All other pleadings on merits stand rendered academic. 3. This assessee’s appeal is allowed in above terms. Order pronounced in the open court on 13th June, 2025 Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13th June, 2025. RK/- Copy forwarded to: 1. Appellant ITA No.151/DDN/2024 4 | P a g e 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "