Sita Gupta Vs DCIT (ITAT Delhi)
Improper Jurisdiction Fatal- Satisfaction Note Dictates Jurisdiction -Assessment u/s 143(3) Invalid When 153C Applies – Assessments Must Be u/s 153C, Not 143(3)
The cases arose out of a search on 06.01.2021 at the premises of Praveen Kumar Jain where forensic extraction of mobile data revealed WhatsApp chats & images showing construction expenses & alleged cash components in relation to property. Based on such seized material, satisfaction notes were recorded on 30.07.2022 & 30.12.2022 in the case of the searched person Praveen Kumar Jain & non-searched persons Sita Gupta & SRG Custodians. AO proceeded to frame assessments u/s 143(3) for AY 2021-22 adding Rs.25 lakh as unexplained expenditure u/s 69C r.w.s. 115BBE, which was confirmed by CIT(A).
Before Tribunal, Assessee argued that once satisfaction was recorded on 30.12.2022 for initiating proceedings based on seized material, the correct provision to invoke was u/s 153C & not u/s 143(3). By deeming fiction in law, the date of recording satisfaction becomes the date of search, & accordingly six years preceding would be AYs 2017-18 to 2022-23. Since AY 2021-22 fell within this block, assessment had to be under 153C.
Tribunal found merit in this contention, relying on earlier coordinate bench decisions in Hans Group search cases involving cloned data of Praveen Kumar Jain. It was held that the impugned assessment orders u/s 143(3) dated 31.12.2022 were without jurisdiction & thus invalid. The assessments ought to have been made only u/s 153C. Accordingly, Tribunal quashed the assessment orders in both appeals
