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TMI Blog2024 (7) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... VB of the Act). Hence, the ratio laid down in the case of Manish Maheshwari [ 2007 (2) TMI 148 - SUPREME COURT] referred in the context of section 158BD proceedings shall apply mutatis mutandis to Section 153C proceedings also. In the facts of the case before the Hon ble Karnataka High Court, the ld AO in his order had held that reasons formed to reopen the assessment on the basis of assessee s voluntary depositions and seized materials are in order and further that assessee s objection on that aspect has been rejected by his order dated 07.06.2010. Admittedly, no proceedings were initiated u/s 153C of the Act thereon and hence there was patent non-application of mind on the part of the ld AO. Accordingly assessment was duly quashed by the Hon ble Karnataka High Court. It is further noted that the Special Leave Petition (SLP) preferred by the revenue against this decision was dismissed by the Hon ble Supreme Court in [ 2023 (6) TMI 1175 - SC ORDER] Thus we hold that the CIT(A) had rightly quashed the reassessment proceedings u/s 147 of the Act in the facts and circumstances of the instant case. We do not find any infirmity in the said order. Accordingly, the grounds raised by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act on 24.12.2017, accepting the return. A Search and seizure action was carried out on 18.10.2019 u/s 132 of the Act in the case of Alankit Group, its key promoter, Shri Alok K Agarwal, his son- Ankit Agarwal, and some of his close associates and key employees. During the course of search action, in the case of Alankit Group, digital data was seized from the laptop of one Sunil Kumar Gupta, who is employee and accountant of Shri Alok Kumar Agarwal, in which the name of the assessee was appearing in some list. This information was passed on by DDIT(Inv.)-7(4), New Delhi dated 15.03.2015 to the ld AO of the assessee. Based on the information, the ld AO of the assessee concluded that the assessee has received accommodation entry in the form of bogus Long-Term Capital Gains (LTCG)/ Short-Term Capital Gains (STCG) of ₹3,64,21,799/- from M/s Alankit Ltd through one entry operator namely Sri Alok Kumar Agarwal. Accordingly, ld AO sought to reopen the assessment for AY 2017-18 by issuance of notice u/s 148 of the Act on 28.03.2021, which was duly served on the assessee well within the prescribed time. In response to the above notice, the assessee filed his return of income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in detail the modus operendi of providing the entries of capital gains/losses to their clients. 5.4.4 In view of the above analysis, it can be concluded that this seized paper, based on its contents and the statement of Mr. S K Gupta, acquires the nature of Incriminating paper. 5.4.5 Once it is established that the seized paper is an incriminating material found during the search operation on Alankit Group and pertains to third party i.e. Mr. Deepak Gambhir, then correct section under which any addition on the basis of this paper can be made in the case of the appellant, is Section 153 C of the Act. 5.5 Some judicial decisions in this regard are as under 5.5.1 The decision of the Co-ordinate Bench of Hon'ble ITAT Amritsar in the case of ITO Vs Arun Kumar Kapoor, ITA No. 147 (ASR.) of 2010 dated 21.06.2011: 8. On a perusal of the above provisions, it would be clear that the provisions of s. 153C of the Act were applicable, which supersedes the applicability of provisions of ss. 147 and 148 of the Act. As we have already noted hereinabove that the documents were seized during the search under s. 132 of the Act and the same were sent to the assessee's AO at Amritsar by the off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der was rightly quashed by the Learned CIT(Appeals). In the present case before us, it is an admitted fact, as also evident from the reasons recorded and the assessment order that the initiation of reopening proceedings was made by the Assessing Officer on the basis of information received from the Directorate of Income- tax (Inv.) on the basis of search seizure operation conducted at the premises of Rock Land Group of Cases and the documents related to the assessee found during the course of search were made available to the Assessing Officer of the present assessee. We thus respectfully following the decision of Co-ordinate Bench of the ITAT in the case of ACIT vs. Arun Kapur - 140 TT) 249 (Amritsar) hold that provisions of sec. 153C of the Act were applicable in the present case for framing the assessment, if any, which excludes the application of sec. 147 of the Act, hence, notice issued under sec. 148 of the Act and assessment framed in furtherance thereto under sec. 147 read with section 143(3) of the Act are void ab initio. The reassessment in question is accordingly quashed. The ground No. 1 is accordingly allowed. 5.5.3 Jitender Jain vs ITO bearing ITA No. 5078/Del/2019 Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch in the case of Sushil Gaur (supra) had the occasion to consider identical set of facts. In that case also the search in the premises of Santosh Medical College was under consideration. The relevant findings of the coordinate bench reads as under: - 8.1 have heard both the parties and perused the records, especially the impugned order as well as the Paper Book. On having gone through the decisions cited above especially the decision of Amritsar Bench in the case of ITO vs. Arun Kumar Kapoor (supra), I find that in that case as in the present case before me, reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153 C were applicable which excludes the application of sections 147 and 148 of the Act. The ITAT held the notice issued under sec. 148 and proceedings under sec. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the notice issued u/s. 148 and the assessment framed u/s. 147 of the Act isvoid-abinitio. 16. Since the assessment has been quashed, I do not find it necessary to dwell into the merits of the case. Accordingly, the appeal filed by the assessee is allowed. 5.5.4 Sushil Gaur, Shelly Agarwal vs. ITO, in ITA No. 1500/Del/2017 and ITA No. 1501/Del/2017: 6. At the time of hearing, Ld. Counsel of the assessee has filed a Paper Book containing pages 1 to 22 in which the Assessee's counsel has attached the written submissions; copy of reasons recorded and the copy of the order of the ITAT, New Delhi in the case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016. He contended that the action taken by the Assessing Officer under sec. 147 is not tenable for the simple reason that provisions of sec. 153 C of the Act are applicable in this case and not the provisions laid down under sec. 147 of the Act. He further submitted that it is an admitted position of the fact as it is also evident from the assessment order that the Assessing Officer has initiated reassessment proceedings in the present case on the basis of information received based on the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT, New Delhi decision in the case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016, wherein the reassessment was quashed on the similar facts and circumstances by following the ITAT, Amritsar decision in the case of ITO vs. Arun Kumar Kapoor (supra). In the present case before me, it is an admitted fact, as also evident from the reasons recorded and the assessment order that the initiation of reopening proceedings was made by the Assessing Officer on the basis of information available with the AO. 1 thus respectfully following the decision of Co-ordinate Bench of the ITAT, Amritsar in the case of ACIT vs. Arun Kapur - 140 TT) 249 vs. (Amritsar) and the ITAT, Delhi decision in the case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016 hold that provisions of sec. 153C of the Act were applicable in the present case for framing the assessment, if any, which excludes the application of sec. 147 of the ~ hence, notice issued under sec. 148 of the Act and assessment framed in furtherance thereto under sec. 147 read with section 143(3) of the Act are void ab initio. Hence, the reassessment in question is accordingly qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 4.2 that reasons formed to reopen the assessment on the basis of assessee s voluntary depositions and seized materials are in order and further that assessee s objection on that aspect has been rejected by his order dated 07.06.2010. Admittedly, no proceedings were initiated u/s 153C of the Act thereon and hence there was patent non-application of mind on the part of the ld AO. Accordingly assessment was duly quashed by the Hon ble Karnataka High Court. It is further noted that the Special Leave Petition (SLP) preferred by the revenue against this decision was dismissed by the Hon ble Supreme Court in SLP (Civil) Diary No. 7976/23 dated 27.03.2023. 6. In view of the aforesaid observations and respectfully following the judicial precedents relied upon herein above, we hold that the ld CIT(A) had rightly quashed the reassessment proceedings u/s 147 of the Act in the facts and circumstances of the instant case. We do not find any infirmity in the said order. Accordingly, the grounds raised by the revenue are dismissed 7. Since the assessment is quashed, there is no need to adjudicate the other arguments advanced by the ld AR on merits of the addition as it would be academic in natu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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