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TMI Blog2025 (2) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... unds, except the difference in figures of addition:- 1. "That the Ld. CIT(A) erred in upholding the action of the Ld. Assessing Officer solely on the basis of assessment order of Ld. AO without considering the facts, case laws and submissions made during the course of CIT(A) proceedings and without providing any opportunity of being heard, which is in gross violation of principles of natural justice. 2. That the Ld. CIT(A) erred in upholding the action of the Ld. Assessing Officer in making the impugned addition of Rs. 2,03,03,850/- solely on the basis of mere conjectures, suspicion and surmises, without having any corroborative/independent evidences. 3. That the Ld. CIT(A) has erred in law and in facts to confirm action of the AO on the basis of loose piece of paper which was seized during the search and seizure operations on third party. 4. That the assessee prays permission to add, delete or amend one or more grounds of appeal." 2. The Ld. Counsel for the assessee submits that assessee has filed additional legal ground of appeal with a prayer to admit the additional ground which is in respect of the validity of assessment made u/s 143(3) of the Act. Ld. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T passed in ITA No. 1239/Del/2024 (AY 2021-22) vide order dated 28.01.2025 in favour of the assessee, wherein assessment has been quashed. Hence, he requested that similarly in the instant two appeals, by following the aforesaid order, the assessments be quashed. 7. Ld. DR relied upon the orders of the authorities below. But she could not controvert the aforesaid contention of the Ld. AR. 8. We have heard both the parties and perused the records. We find considerable cogency in the contention of the Ld. Counsel for the assessee that in the case of 3rd co-owner of the property (Arti Dhall), exactly similar and identical additional ground has been dealt by the Coordinate Bench of Delhi Tribunal in the case of Arti Dhall vs. DCIT passed in ITA No. 1239/Del/2024 (AY 2021-22) vide order dated 28.01.2025 and decided in favour of the assessee by quashing the assessment, wherein, the Coordinate Bench has passed the following order:- "3. Heard rival contentions. The assessee has raised the following additional ground: "The impugned order of assessment u/s 143(3) of I.T. Act is not valid in law as the same has been passed in complete defiance of the provisions of sec. 153C of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear of search, for the purpose of above section, is substituted by date of handing over of the documents by the Assessing Officer of the person searched to the Assessing Officer of the other person (present assessee). These dates i.e. 09.09.2022 or 27.09.2022 are the dates when the satisfaction by the AO as both the AO of the person searched and that of the other person were recorded and therefore, these dates are relevant for determining the date of handing over the document to the AO for determining the year of search as per first proviso to section 153C. It is submitted that based on these facts, the assessment year 2023-24 relevant to FY 2022-23 is the year of search and in view of the provisions of section 153C of the Act having regard to first proviso thereof, the AO was required to complete assessment for six assessments year prior to the year of search i.e. AY 2023-24 u/s 153C for AY 2017-18 to AY 2022- 23. 7. It is further submitted that on the above analogy, the assessment for AY 2021-22 would fall in the block period in view of the first proviso to section 153C of the Act. If that be the case, which is the correct position of law, such assessment was required to be com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch pertains to assessment u/s 143(3) for the same assessment year i.e. 2021-22 and based on the material and search involved in the present case. Copy of the order enclosed. 10. Therefore, Ld. Counsel submits that it is not in dispute in view of facts stated above, that assessment under appeal has been framed under incorrect provision of law i.e. 143(3) instead of the same mandated under law to be completed u/s 153C only. It is submitted that the judicial courts have dealt the issue of assessment completed under incorrect section in favor of assessee in the following decisions: • CIT v. T. Rangroopchand Chordia [2016] 241 Taxman 221 (Madras HC); • Dr. K.M. Mehaboob v. DCIT [2012] 26 taxmann.com 54 (Kerala HC); • Ashok ji Chandu ji Thakur v. PCIT [2021] 130 taxmann.com 130 (Guj. HC) • Shri Om Prakash Jalkhotia v. ACIT ITA Nos.968, 969, 970 & 971 /Del./2021 • Mikado Realtors P. Ltd. ITA no. 50/DEL/2021; • Sanjay Thakur v. The DCIT (Central Circle) In ITA No.3559/DEL/2015 ; • DCIT v Vinod Kumar in ITA no. 2550/DEL/2015; 11. On the other hand, Ld. DR strongly supported the orders of the authorities below. 12. Heard rival submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this backdrop, the assessee contends that in the light of provision of section 153C of the Act, data of search stands substituted by the data of handing the documents by the AO of the person searched to the AO of the other person namely, the present assessee. The date of handing over is 21.06.2021 which falls in previous year 2021-22 relevant to Assessment Year 2022-23 by applying the proviso to section 153C of the Act. The immediate preceding year prior to the year of search i.e. AY 2021-22 in question would fall in block years having regard to proviso to section 153C of the Act. Consequently, it was incumbent upon AO to assess the alleged undisclosed und income pertaining to AY 2021-22 in the hands of the assessee under section 153C of the Act and such assessment of income emanating from search is outside the scope of section 143(3) of the Act. 14. We find substantial force in the plea raised on behalf of the assessee. While search in the instant case was carried on 06.01.2021 i.e. previous year relevant to Assessment Year 2021- 22, the documents were handed over in the previous year relevant to Assessment Year 2022-23. Based on such matrix, the assessment upto Assessment Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the result, appeal of the Assessee is partly allowed as indicated above."
9. In view of the aforesaid factual matrix, we respectfully following the binding precedent in the case of 3rd co-owner of the property (Arti Dhall), as aforesaid and quash the assessment in the instant case and accordingly, allow the Additional Ground raised by the Assessee. Since we have quashed the assessment made u/s. 143(3) for the AY 2021-22 on legal ground, the other grounds raised by the assessee on merits are not adjudicated since they have become only academic in nature at this juncture
10. As regards ITA No. 1240/Del/2024 (assessment year 2021-22) in the case of Preet Goyal vs. DCIT CC-31, New Delhi is concerned, since exactly the similar and identical Additional Ground has been decided in Reena Mittal's case (ITA No. 1238/Del/22024 AY 2021-22) as aforesaid, hence, our aforesaid decision taken in Reena Mittal's case shall apply mutatis mutandis to the case of Preeti Goyal, ITA No. 1240/Del/2024 (AY 2021-22) as well. We hold and direct accordingly.
11. In the result, both the assessee's appeals also stand allowed in the aforesaid manner.
Order pronounced on 04.02.2025. X X X X Extracts X X X X X X X X Extracts X X X X
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