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2025 Supreme(Online)(ITAT) 6266
INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
Shri S. Rifaure Rahman, AM, Shri Mahavir Singh, VP
Shri Anil Kumar Gupta – Appellant
Versus
ACIT, Central Circle 30 – Respondent
ITA No.208/Del/2023
For the Appellants/Petitioners: Shri Suresh Kumar Gupta, CA
For the Respondents: Shri Rajesh Mahajan, Sr. DR
Assessment proceedings initiated under flawed jurisdiction and inadequate evidentiary certification render additions unsustainable.
Headnote:(A) Income Tax Act, 1961 - Sections 143(1), 132, 153C, 153A, 153D, 69C, 115BBE - Validity of assessment proceedings and additions made - Assessee organized a marriage function; however, discrepancies arose around the date and amount reported. The Court found that there was no proper satisfaction note recorded in compliance with mandatory requirements of the Act and the evidence relied upon lacked necessary certification under Section 65B of the Indian Evidence Act. The assessment order was quashed as the foundations of jurisdiction and evidence were flawed. (Paras 1-12)
(B) The satisfaction under Section 153C lacks proper identification of incriminating material required for other assessment years; hence actions taken are deemed unsustainable. (Paras 11-12)
Facts of the case:
The assessee filed an original return declaring income which was questioned due to search records that implicated additional unreported income related to a marriage function organized by the assess for their daughter.
Findings of Court:
The Court determined that essential compliance with evidentiary rules was lacking, leading to the inability to substantiate the assessment actions against the assessee.
Issues: The primary issues involved the legitimacy of the assessment initiated and the evidence's admissibility without appropriate certification.
Ratio Decidendi: The Court ruled that proper procedures under statutory provisions were not adhered to, especially regarding satisfaction notes and admissible evidence requirements, resulting in the actions being void.
Result: Appeal partly allowed.
| Table of Content |
|---|
| 1. beginning and initiation of appeal processes by the assessee. (Para 1 , 2) |
| 2. discussion on evidence related to the marriage function organized. (Para 3 , 4 , 5 , 6) |
| 3. grounds and challenges raised by the appellant against the order. (Para 8 , 9) |
| 4. court's findings regarding procedural errors and assessment legitimacy. (Para 10 , 11 , 12) |
| 5. final decision and outcomes from the appeal. (Para 13 , 14) |
ORDER
PER S. RIFAUR RAHMAN, AM :
1. This appeal has been filed by the assessee against the order of ld. Commissioner of Income-tax (Appeals)-30, New Delhi (hereinafter referred to as ‘ld. CIT (A)’) dated 12.01.2023 for the Assessment Year 2018-19.
2. Brief facts of the case are, assessee filed its original return of income on 30.08.2018 declaring income of Rs.19,46,090/- and the same was processed under section 143 (1) of the Income-tax Act, 1961 (for short ‘the Act’) at returned income. A search and seizure operation u/s 132 of the Act was carried out in Seven Seas Hospitality Pvt. Ltd. group of cases on 03.05.2018. During the course of search, various documents/books of account were found and seized. The case of the assessee was centralized with Ward 58 (3), Delhi. The Assessing Officer observed that while examining the seized documents of the group, certain documents pertaining to Shri Anil Kumar Gupta, the assessee were found. The Assessing Officer of the searched person recorded his satisfaction on 05.02.2021 that these documents did not belong to the searched person and belongs to the assessee, the person other than searched person. The Assessing Officer of the assessee also recorded his satisfaction on 05.02.2024 that action u/s 153C is attracted. Subsequently, the case was transferred to Central Circle 30. Accordingly, notice u/s 153C r.w.s. 153A was issued on 05.02.2021. In response, the assessee filed its original return of income. Notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee. In response, ld. AR for the assessee attended the proceedings and submitted relevant information as called for.
3. The Assessing Officer, during assessment proceedings, observed that the assessee organised marriage function of his daughter and it was contracted to Seven Seas Hospitality Pvt. Ltd.. During the course of search, at the premises of Seven Seas Hospitality Pvt. Ltd., Annexure A-25 was found and seized. As per one of the images found from the Hard Disk, there is estimate of function organised by the assessee on 30.06.2017 and the same was contracted to the searched entity. The same was reproduced at page 3 of the assessment order. The Assessing Officer observed that the document found during the search contains carefully prepared details of all the transactions and it clearly states that cheque as well as cash was received as advance by Seven Seas Hospitality Pvt. Ltd. for the function of the assessee. From the document, it was observed that estimate of function was Rs.46,15,000/- and out of this, payment of Rs.12,15,000/- was made by cheque and rest were in cash. During the post search investigation, it was submitted by Seven Seas Hospitality Pvt. Ltd. that function was organised on 30.06.2017 by the assessee and bill of Rs.12,15,000/- was raised and the settlement of Rs.12,15,000/- was explained.
4. Further in para 8 of the assessment order, the Assessing Officer observed that during the course of assessment proceedings in the case of Seven Seas Hospitality Pvt. Ltd., they submitted reply regarding payment received on 03.04.2021. The following was submitted by them with regard to receipts from the assessee, for the sake of clarity the same are reproduced below :-
“Advance in cash of Rs.10 lacs was received on 02.04.2016 and Rs.10 lacs on 25.05.2016, and with regard to various payments made to other persons making a total of Rs.12 lacs it is submitted that this was directly paid by the customer to the respective parties. And the balance amount was received through two cheques/RTGS of Rs.8,00,0
