Vinod Kumar Maheshwari Vs DCIT (ITAT Delhi)
The Delhi ITAT allowed nine appeals filed by Shri Vinod Kumar Maheshwari and Shri Krishan Kumar Maheshwari against orders of the CIT(A), New Delhi, concerning proceedings under Section 153C read with Section 143(3) of the Income Tax Act, 1961. The proceedings arose from a Section 132 search conducted on 18.10.2019 in the Alankit Group and related cases.
In Shri Vinod Kumar Maheshwari’s seven appeals for AYs 2013-14 to 2019-20, the principal issue concerned the validity of the Section 153C assessments for want of a valid satisfaction. The Assessing Officer of the searched person had recorded satisfaction on 10.03.2022 stating that the seized documents belonged to a person other than the searched person. The Tribunal noted that, following the amendment to Section 153C(1)(a) by the Finance Act, 2015, effective from 01.06.2015, the expression “belongs to” applied to specified seized or requisitioned material such as money, bullion, jewellery or other valuable articles or things, whereas documents or books of account were covered through the expressions “pertaining to” or “relating to” under Section 153C(1)(b).
The Revenue argued that recording satisfaction was procedural and that “belonging”, “pertaining” and “relating” could be treated as interchangeable. The Tribunal rejected this contention, relying on the third member decision in Prashant P. Bafna vs. ACIT and the principle of strict interpretation of taxing statutes stated in Commissioner vs Dilip Kumar (2018) 9 SCC 1 (SC) (FB). It accordingly quashed all seven assessments as non-est.
For Shri Krishan Kumar Maheshwari, the Tribunal quashed the Section 153C assessment for AY 2014-15 because the notice dated 16.05.2023 placed that assessment year beyond the maximum period stipulated under Section 153A Explanation 1. For AY 2017-18, the addition was Rs. 3,17,540, below the Rs. 50 lakh pecuniary threshold. The Tribunal therefore relied on PCIT vs Ojjus Medicare (P.) Ltd (2024) 465 ITR 101 (Del) and quashed that assessment as well.
All nine appeals were consequently allowed, while other pleadings on merits were rendered academic. The order was pronounced on 19.05.2026.
Cases Discussed
- Prashant P. Bafna vs. ACIT (ITAT Pune), IT(SS)A Nos. 119 & 120/Pune/2022 dated 08.04.2025
- PCIT vs Ojjus Medicare (P.) Ltd (Delhi High Court), (2024) 465 ITR 101 (Del)
- Commissioner vs Dilip Kumar (SC), (2018) 9 SCC 1 (SC) (FB)
FULL TEXT OF THE ORDER OF ITAT DELHI
The instant batch of nine cases involves the twin assessees herein Shri Vinod Kumar Maheshwari and Krishnan Kumar Maheshwari. This former assessee has filed his seven appeals ITA Nos. 1859 to 1865/Del/2025; for assessment years 2013-14 to 2019-20, in ITA Nos. 1859 to 1865/Del/2025 and 2014-15 & 2017-18 in ITA Nos. 1866 & 1867/Del/2025, against Commissioner of Income Tax (Appeals)-25 (for short, “CIT(A)”), New Delhi’s order all dated 29.01.2025; passed in DINs and Orders No. ITBA/APL/M/250/2024-25/1072658249(1), ITBA/ APL/M/ 250/2024-25/1072656475(1), ITBA/ APL/ M/ 250/ 2024-25/1072658636(1), ITBA/ APL/ M/ 250/ 2024-25/ 1072660065(1), ITBA/APL/M/250/2024-25/xxxxxxxxx, ITBA/APL/M/250/2024-25/1072662444(1), ITBA/APL/M/ 250/ 2024-25/ 1072662894(1), respectively. The latter assessee on the other hand, has instituted his twin appeals ITA Nos. 1866 & 1867/Del/2025; for assessment years 2014-15 & 2017-18 against CIT (A), New Delhi’s orders dated 29.01.2025, passed in DINs & Order Nos. ITBA/APL/M/250/2024-25/1072664295(1) & ITBA/ APL/M/250/2024-25/1072664931(1). Relevant proceedings in all these cases are u/s 153C r.w.s. 143(3) of the Income Tax Act, 1961; hereinafter referred to as, ‘the Act’.
Heard both the assessees as well as the department at length. Case files perused.
2. It next emerges with the able assistance coming from both the parties that the former assessee Shri Vinod Kumar Maheshwari’s seven appeals ITA Nos. 1859 to 1865/Del/2025 raise the first and foremost legal issue of validity of the impugned section 153C assessments; all framed on 23.03.2023 for want of a valid satisfaction recorded in his case. We make it clear that all these nine cases involving both these assessees, arise from the learned departmental authorities’ section 132 search action dated 18.10.2019 carried in M/s Alankit Group and related cases.
That being the case, learned counsel straightway takes us to page 219 to 225 in the paperbook compiling the searched party’s Assessing Officer’s section 153C satisfaction dated 10.03.2022 to the effect that “in view of description of the documents found and seized, I am satisfied that the documents………………… belongs to a person other than the persons searched”. This being the clinching factual position, we note that going by the amendment in section 153C(1)(a) vide Finance Act, 2015 w.e.f. 01.06.2015, the learned Assessing Officer could have treated “any money, bullion, jewellery or other valuable article or things, seized or requisition” as belongs to a person other than the searched one”. Meaning thereby that the legislature has nowhere stipulated the said clinching expression is to be made applicable in case of seized documents which could only be treated as “pertaining” or “relating” to u/s 153C(1)(b) of the Act.
3. Learned CIT(DR) vehemently submits that such an exercise of recording section 153 satisfaction is only procedural in nature which deserves to be liberally construed as all these three statutory expressions of “belonging” or “pertaining” or “relating” to are very much interchangeable; and, therefore, we ought to uphold the impugned satisfaction recorded as per law.
4. We have given our thoughtful consideration to the assessee’s and the Revenue’s foregoing vehement stands. We find merit in the former assessee’s instant legal argument. Section 153C(1)(a) of the Act incorporating “belongs to” admittedly has been treated as applicable for the specified set of seized or requisitioned material in the nature of many bullion, jewellery etc., which admittedly does not include documents or books of accounts; as it has been invoked in the assessee’s/appellant’s case. This tribunal’s “third member” decision in the Prashant P. Bafna vs. ACIT IT(SS)A Nos. 119 & 120/Pune/2022 dated 08.04.2025 has further settled the very issue in the assessee’s favour and against the department as well. We thus invoke stricter interpretation of the taxing statute herein in light of Commissioner vs Dilip Kumar (2018) 9 SCC 1 (SC) (FB) to quash all these impugned assessments framed in the former assessee’s case as non-est ones in the eyes of law. His all seven appeals ITA Nos. 1859 to 1865/Del/2025 succeed therefore.
5. The outcome in the latter assessee; Shri Krishan Kumar Maheshwari’s twin appeals ITA Nos. 1866 & 1867/Del/2025, could hardly be any different. We notice from a perusal of case records that the learned Assessing Officer issued his section 153C notice to the assessee on 16.05.2023; and, therefore, going by section 153A Explanation 1, for the purpose of counting ten assessment years from the end of the assessment year 2024-25, the former assessment year herein A.Y. 2014-15 turns out to be beyond the maximum stipulated period which has gone unrebutted from the Revenue side. We thus quash learned Assessing Officer’s section 153C assessment framed in his case in very terms.
6. Coming to the latter assessment year A.Y. 2017-18, we find that the addition made in this latter assessee’s hands is only of Rs. 3,17,540/- i.e., less than the pecuniary threshold limit of Rs. 50 Lakhs. We thus invoke PCIT vs Ojjus Medicare (P.) Ltd (2024) 465 ITR 101 (Del) to quash both these assessments for the very precise reason in the assessee’s favour and against the department. These latter assessee’s twin appeals ITA Nos. 1866 & 1867 are accepted therefore.
All other pleadings between the parties on merits stand rendered academic.
8. These twin assessee’s responding nine appeals ITA Nos. 1859 to 1867/Del/2025 are allowed in above terms. A copy of this common order be placed in the respective case files.
Order pronounced in the open court on 19.05.2026 .
