Jamna Dass Nikkamal Jain Saraf Private Ltd. Vs DCIT (ITAT Chandigarh)
Assessment Quashed: ITAT Chandigarh Rules AO Cannot Bypass Section 148B in Pre-Search Year — Mechanical Approval Invalidates Entire 143(3) Order
Search & seizure u/s 132 was conducted on 24.11.2022 in the group of Jamna Dass Nikkamal Jain. Assessee, a jewellery trader, had already filed its return on 04.11.2022. The case was later centralised & assessed u/s 143(3) on 31.03.2024 with additions of about ₹10.71 crore. CIT(A) partly sustained the additions, leading to cross appeals.
Before Tribunal, Assessee raised legal grounds contending that the assessment was void as A.Y. 2022-23 being one of the three years preceding the search year, could be assessed only u/s 148 read with Explanation 2(iv) & not u/s 143(3). It was argued that no approval u/s 148B was taken, & the so-called approval granted by Addl. CIT on 31.03.2024 was mechanical since the seized material ran into 1,596 pages, making it impossible for any real examination in a single day.
Tribunal admitted these legal grounds, noting they went to the root of jurisdiction, relying on NTPC Ltd. v. CIT (229 ITR 383 SC). It held that once a search is initiated, AO is deemed to have information suggesting escapement for the three preceding years & must issue notice u/s 148 after obtaining approval u/s 148B. AO’s act of continuing scrutiny u/s 143(3) after search, & even issuing notice beyond limitation, was contrary to law. Referring to Homelife Buildcon Pvt. Ltd. (Chandigarh ITAT, 17.07.2025), the Bench held that such assessments are void ab initio. The same-day approval by Addl. CIT was also held to be perfunctory & lacking application of mind, following AB Alcobev Pvt. Ltd. & Pushpanjali Construction Pvt. Ltd.. Accordingly, Tribunal declared that the assessment dated 24.08.2023 was without jurisdiction & quashed it in entirety.
