Zubin Paul Driver Vs ACIT (ITAT Mumbai)
Section 147 Assessment Held Invalid Because Seized Third-Party Material Required Proceedings Under Section 153C; Assessment Declared Invalid Because Search Material Triggered Section 153C, Not Section 147
The assessee appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), dated 09.10.2025 for Assessment Year 2010-11, arising from an assessment made under Section 143(3) read with Section 147 of the Income Tax Act. The appeal challenged the reopening of assessment under Section 147, the validity of framing the assessment under Section 143(3) read with Section 147 instead of Section 153C, and the additions of ₹84,52,000 under Section 69 and ₹8,85,000 as interest income.
The assessee had originally filed a return declaring total income of ₹1,38,65,530, which was processed under Section 143(1). The assessment was subsequently reopened under Section 147 based on information received from the DCIT, Central Circle-6(2), Mumbai following a search conducted in the case of Samira Group. Relying on seized material, including page 42 of Annexure A-1, page 172 of Annexure A-6, and material found at the residence of Smt. Vijaya Iyer, the Assessing Officer concluded that the assessee had advanced cash loans and earned interest thereon. Consequently, additions of ₹84,52,000 and ₹8,85,000 were made. Although the CIT(A) had initially deleted the additions, the Tribunal, in Revenue’s appeal, restored the matter to the CIT(A) for fresh adjudication on merits while dismissing the assessee’s cross-objection relating to reopening. Thereafter, the CIT(A) passed the impugned order confirming the additions.
