DCIT Vs Falguni Suryakant Thakar (ITAT Ahmedabad)
₹4 Crore Cash Allegation Dies on Jurisdiction:- 153C Jurisdiction Collapses: ITAT Ahmedabad Quashes ₹4 Cr Addition & Penalty for AY 2009-10; Receipt Date, Not Search Date, Is the Key: ITAT Invalidates 153C Notice Beyond Limitation
The Ahmedabad “C” Bench of the ITAT, vide order dated 30.12.2025 in DCIT v. Falguni Suryakant Thakar (IT(SS)A No. 94/Ahd/2025; ITA No. 1563/Ahd/2025 & CO No. 87/Ahd/2025, AY 2009-10), dismissed the Revenue’s appeals on quantum and penalty and upheld quashing of assessment u/s 153C by the CIT(A), holding the proceedings to be barred by limitation and without jurisdiction.
The case arose from a search u/s 132 on 06.03.2018 in the SSS (Satyam–Sangani–Shaligram) Group, during which a laptop allegedly showed cash payment of ₹4 crore by the assessee for purchase of a flat. Based on satisfaction recorded by the AO of the searched person on 18.02.2021 and issuance of notice u/s 153C on 15.11.2021, the AO completed an ex-parte assessment for AY 2009-10 making an addition of ₹4 crore u/s 69 and levied penalty of ₹1.34 crore u/s 271(1)(c).
The Tribunal affirmed the CIT(A)’s finding that in the case of a non-searched person, the “search-relevant year” for Section 153C is the year in which seized material is received by the jurisdictional AO, and not the year of search. Since the material was effectively received around FY 2021-22 (AY 2022-23), the six-year block could extend only up to AYs 2016-17 to 2021-22, and even the extended ten-year window (subject to ₹50 lakh threshold) could not travel back to AY 2009-10.
Relying on binding Supreme Court jurisprudence in CIT v. Jasjit Singh (including dismissal of Revenue’s review petition), and Delhi/Gujarat High Court rulings such as SSP Aviation, RRJ Securities and Parag Rameshbhai Gathani, the ITAT rejected the Revenue’s plea that limitation should be computed from the date of search or that COVID-19 exclusions/TOLA could cure the defect. Absence of clarity on the actual date of receipt of seized material and unexplained delay further vitiated the proceedings.
Consequently, the ITAT upheld quashing of the assessment u/s 153C, dismissed the Revenue’s quantum appeal, and held that once the assessment itself is void, the penalty u/s 271(1)(c) cannot survive. The assessee’s cross-objection on merits was rendered academic and dismissed
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
These two appeals are filed by the Revenue as against the appellate order dated 17-06-2025 against the quantum appeal passed under section 153C r.w.s. 144 of the Income Tax Act 1961 (hereinafter referred as the Act) and appellate order dated 18-06-2025 against the penalty order levied under section 271(1)(c) of the Act relating to the same Asst. Year 2009-10. The assessee has filed Cross Objection against quantum appeal in IT(SS)A No. 94/Ahd/2025. Since common issue is involved in these appeals, the same are disposed of by this common order.
