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TMI Blog2025 (1) TMI 1407X X X X Extracts X X X X X X X X Extracts X X X X ..... s 153C having recorded the satisfaction note u/s 153C of the Act and not u/s 143(3) as was done by the AO. On perusal of the decision of the Tribunal in the case of Mukul Rani Thakur [2024 (11) TMI 1031 - ITAT DELHI] we observed that on identical facts and in same search of Hans Group on 06.01.2021 the AO completed the assessment u/s 143(3) having recorded the satisfaction note u/s 153C for the assessment years 2015-16 to 2021-22. Having regard to the first proviso to section 153C, AY 2023-24 relevant to the FY 2022-23 would be the year of search and therefore the Assessing Officer was required to complete the assessment for six assessment years prior to year of search AY 2023-24 u/s 153C for assessment years 2017-18 to 2022-23. AO completed the assessment for AY 2021-22 u/s 143(3) which is not permissible under law. We hold that the regular assessment made u/s 143(3) of the Act despite recording of satisfaction note u/s 153C from Assessing Officer of searched person and also as the AO of the person other than the searched person, is not permissible in law. Thus, we hold that the assessment framed u/s 143(3) of the Act for AY 2021-22 is void ab initio and the same is hereby quas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct as the assessment order has been passed taking adverse view of the material found in the course of search on the third person and the assessment year under consideration was not the year of search in view of the proviso to sec. 153C(1) of the IT Act and the assessment was not an abated assessment." By way of the above additional ground the assessee is challenging the very validity of the assessment made u/s 143(3) of the Act. The assessee's contention is that since the assessment was made pursuant to search and based on materials found in the course of search, the assessment in the case of the Assessee being the person other than the searched person should have been made u/s 153C of the Act instead of regular assessment u/s 143(3) and therefore the assessment made u/s 143(3) is void ab initio. 4. The additional ground raised by the assessee is purely a legal ground and going to the very validity of the assessment made u/s 143(3) of the Act and thus, respectfully following the decision of the Hon'ble Supreme Court in the cases of NTPC Vs. CIT and Jute Corporation of India Ltd. Vs. CIT (supra) the additional ground filed by the assessee is admitted. 5. The Ld. Counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted u/s 153C of the Act after complying with the requirements of the said section. The AO was needed to record necessary satisfaction u/s 153C of the Act and thereafter, to issue a notice u/sl53C calling the assessee to file return of income after considering the impact of the material found in the case of the person searched. It is submitted that in the present case although the AO has recorded separate satisfaction u/s 153C of the Act but the AO failed to issue a notice u/s 153C of the Act without which assessment u/s 153C could not be completed and has not been completed. In view of above, it is submitted that the assessment completed u/s 143(3) of the Act is in defiance of the provisions of section 153C of the Act ignoring the fact that the provisions of section 153A/ 153C is a complete code in itself. Reliance was placed on the decision of the Delhi High Court in the case of Pr. CIT & Anrs vs. Ojjus Medicare P. Ltd. & Ors in ITA No.52/2024 dated 03.04.2024 and also the decision in the case of M.D. Overseas P. Ltd. vs. Dy. CIT W.P. (C) 3092/2023 (Del.). 8. The Ld. Counsel further submits that taking cue from the above decision of Hon'ble Jurisdictional Delhi High Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the orders of the authorities below and the decisions relied on. In this case undoubtedly the addition made in the assessment order passed u/s 143(3) of the Act for the AY 2021-22 was based on the search and seizure operations conducted on Hans Group of cases on 06.01.2021, wherein the mobile phone of Shir Vaibhav Jain was seized and based on the watts app chats on 01.12.2020 in the mobile phone of Shri Vaibhav Jain, the addition came to be made while completing the assessment u/s 143(3) of the Act. The contention of the assessee in this appeal was that when once the assessment of the Assessee was made based on the materials seized in the case of Hans Group, such assessment should have been made u/s 153C of the Act having recorded the satisfaction note u/s 153C of the Act and not u/s 143(3) of the Act as was done by the Assessing Officer. 13. On perusal of the decision of the Tribunal in the case of Mukul Rani Thakur Vs. DCIT in ITA No.1483/Del/2024 dated 20.11.2024 we observed that on identical facts and in same search of Hans Group on 06.01.2021 the Assessing Officer completed the assessment u/s 143(3) of the Act having recorded the satisfaction note u/s 153C of the Act fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood covered within ambit of section 153C of the Act. This being so, domain for assessment qua undisclosed income for Assessment Year 2021-22 falls within sweep of section 153C of the Act. The AO has committed substantive error in proper appreciation of jurisdictional provisions of section 153C of the Act by excluding Assessment Year 2021-22 from the ambit of section 153C of the Act erroneously based on actual date of search rather than based on date of receipts s of incriminating documents. In order to frame assessment based on the searched document, the notice ought to have been issued under section 153A r.w.s. 153C of the Act. 15. The regular assessment passed by issuance of notice u/s 143(2) of the Act without out aid of section 153C of the Act despite 'satisfaction note' from AO of searched person thus, is not supportable in law. The impugned assessment framed under section 143(3) of the Act thus, is void ab-initio as rightly pleaded on behalf of the assessee. Hence, the assessment order passed is vitiated in law and requires to be quashed at the threshold." 14. In the case on hand undoubtedly the satisfaction note u/s 153C of the Act was recorded on 27.09.2022 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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