KJL Developers (P) Ltd. Vs DCIT (ITAT Delhi)
153C Assessment Quashed: Invalid 143(2) Notice and Defective Satisfaction Note Vitiate Entire Proceedings
The Delhi Bench “C” of the ITAT, in KJL Developers (P.) Ltd. v. DCIT (AY 2014-15), quashed the assessment framed under section 153C read with section 143(3), holding that the very assumption of jurisdiction was invalid.
The case arose from a search conducted in the Dalal Group in September 2017, based on which proceedings under section 153C were initiated against the assessee on the strength of loose sheets allegedly evidencing cash payments. The AO made additions aggregating to over ₹5.66 crore under section 69A. The CIT(A) upheld both the jurisdiction and additions.
Before the Tribunal, the assessee challenged the proceedings on multiple jurisdictional defects, including (i) invalid satisfaction notes, (ii) non-compliance with CBDT Circular No. 19/2019 mandating DIN, and crucially, (iii) issuance of notice under section 143(2) in a manner not prescribed by CBDT.
The ITAT accepted the additional legal ground, holding that the notice under section 143(2) was not in the prescribed format and hence invalid in law. Following coordinate bench decisions (Renu Singh and Tarun Gupta), and applying settled principles on section 153C, the Tribunal held that the assessment framed pursuant to an invalid notice was void ab initio. Once the jurisdiction itself failed, the additions based on alleged “dumb documents” could not survive.
Accordingly, the ITAT quashed the entire assessment, allowing the appeal on jurisdictional grounds alone, without adjudicating the merits of additions or levy of interest
FULL TEXT OF THE ORDER OF ITAT DELHI
