IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Assessment Year: 2014-15 Mysore Finlease Pvt. Ltd. Vs. ACIT, C/o- Kapil Goel, Adv., Central Circle-27, F-26/124, Sector-7, Rohini, New Delhi New Delhi PAN:AAACM6761B (Appellant) (Respondent)

Assessee by Dr. Kapil Goel, Adv.

Department by Ms. Baljeet Kaur, CIT(DR) Date of hearing 28.01.2025 Date of pronouncement 28.02.2025 ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2014-15, arises against the Commissioner of Income Tax (Appeals)-29 [in short, the “CIT(A)”], Delhi’s order dated 15.09.2023 passed in case no. 10510/2016-17 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

2. Heard both the parties. Case file perused.

3. It emerges during the course of hearing that the assessee’s first and foremost substantive ground raised in the instant appeal challenges the validity of the impugned assessment framed on 22.12.2016 itself as not sustainable in law given the fact that it had been subjected to a search action dated 23rd July, 2015.

4. We wish to make it clear there is no dispute raised at the Revenue’s behest regarding the assessee’s status on the “searched” persons on 23rd July, 2015. We wish to reiterate here that the assessment year before is assessment year 2014-15, wherein, the assessee had filed its return of income on 30th September, 2014. Meaning thereby that its assessment on the date of search was indeed an abated one going by section 153(A1) 2nd proviso, and therefore, we are of the considered view that going by statutory provisions containing a non-obstante clause “notwithstanding anything contained in section 139……….”, the learned lower authorities have erred in law and on facts in assessing it under the normal provision than the foregoing specific provision applicable in case of searched person.

5. Learned counsel has further quoted this tribunal’s order in ITA No.1074/Pn/2007 deciding the very issue against the department as under:

“5. The assessee vide petition dated. 12-9-2012 made a request for admission of additional ground of appeal which reads as under:-

"The ld. Commissioner of Income tax (Appeals) erred in confirming the assessment order under section 143(3) of the Income Tax Act passed on 27-12-2006 without considering the fact that a search and seizure action on the appellant under section 132(1) of the Act was carried out on 30- 11- 2006, the pending assessment had already abated on the date of the search under the second proviso to Section 153A of the Act which therefore had to be quashed."

6. In the said petition it was submitted by the assessee that a search and seizure action u/s 132(1) of the Act took place on the assessee on 30-11-2006 and on the date of the search the assessment for the A.Y. 2004-05 was pending. However, the A.O. passed the assessment order u/s. 143(3) on 27.12.2006 which had already abated as per the second proviso to Section 153A of the Act. It was further submitted that after the search, the A.O. issued notices under Section 153A for six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place and accordingly the A.O. passed the order u/s. 153A read with Section 143(3) for all these six assessment years on 27.11.2008 including the year of the search and seizure i.e. assessment year 2007-08. It was further submitted that the assessee filed an appeal against the order u/s.153A read with Section 143(3) before the C.I.T. (Appeals) which is pending. It was further submitted that since the assessment order for the A.Y. 2004-05 has been passed after the search operation on 30.11.2006 in pursuance to the pending assessment on that date, the same will not have any legal validity and it is to be quashed. The reliance was also placed in Abhay Kumar Shroff vs CIT and Ors reported in (200