+W.p.(C) v. Assistant Commissioner Of Income Tax Centralcircle 25 , Delhi And Ors

$~100 IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 17176/2024 & CM APPL. 72905/2024GALAXY DREAM HOME DEVELOPERS PRIVATELIMITED.....PetitionerThrough:Mr. Rakesh Gupta, Mr. SomilAgarwal,Mr.DushyantAgarwal,Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX CENTRALCIRCLE 25 , DELHI AND ORS......RespondentThrough:Mr.GauravGupta,SSC,Mr.ShivendraSingh,JSC,Mr.YojitPareek, Advocates. % CORAM: HON'BLE THE ACTING CHIEF JUSTICEHON'BLE MR. JUSTICE TUSHAR RAO GEDELA O R D E R16.12.2024 1.The petitioner has filed the present petition, inter alia, impugning anotice dated 28.08.2024 (hereafter the impugned notice) issued under 153Cof the Income Tax Act, 1961 (hereafter the Act) as well as the proceedingsfor re-assessment of the petitioner’s income in respect of Assessment Year(AY) 2021-22. 2.The impugned notice is premised on the satisfaction note of theAssessing Officer (AO) of Mr. Samir Modi and Ms. Shivani Modi (searchedpersons), which recorded that documents containing information pertainingto the petitioner were found during the search conducted in the case of searched persons on 03.02.2021. 3.Admittedly, the satisfaction note does not contain any informationwhich may have a bearing on determining the petitioner’s income assessablein the AY 2021-2022. The note indicates that during the course of thesearch, a pen-drive was found, which contained certain informationregarding transactions entered into by HGEL (High Ground EnterprisesLtd.) with companies that had provided accommodation entries throughgeneration of bogus invoices. 4.In so far as the petitioner is concerned, information allegedly foundwas regarding a purported transaction of ₹1,05,39,368/-, which was allegedly supported by bogus invoice. However, the said transaction pertainsto the Financial Year 2014-15. Paragraph 13 of the satisfaction note is setout below: “13. Further, during the searched action, several digital deviceswere cloned and had been annexurised. In one red SanDisk pendrive which was cloned into the Hard-Disk marked as AnnexureA3, the tally data of entities had been maintained. The Managingdirector of High Ground Enterprises Limited i.e. SandeepRamkrishna Arora admitted that transactions between HighGround Enterprise Limited and companies may not be 100percent genuine. The pen drive contains all detailed transactionsdonebyHGELwiththecompanieswhomayprovidedaccommodation entries through generation of bogus invoicesfrom FY 2014-15 to FY 2020-21. ” 5.It is clear from the above that the information provided in thesatisfaction note dated 28.06.2024 entered by the AO of the searchedpersons could not possibly lead to the conclusion that the income of theAssessee for AY 2021-22 had escaped assessment. The pen drive foundcannot be considered as containing any incriminating material pertaining tothe petitioner in respect of AY 2021-22. Thus, the petitioner’s assessmentfor the said year could not be reopened under Section 153C of the Act. 6.Concededly, the aforesaid issue is covered by the decision of theSupreme Court in Commissioner of Income Tax-III, Pune v. SinhgadTechnical Education Society: [2017] 84 taxmann.com 290 as well as therecent decision of this court in Saksham Commodities Ltd. v. Income Tax Officer Ward 22 (1), Delhi & Anr.: 2024:DHC:2836-DB. 6.Concededly, the aforesaid issue is covered by the decision of theSupreme Court in Commissioner of Income Tax-III, Pune v. SinhgadTechnical Education Society: [2017] 84 taxmann.com 290 as well as therecent decision of this court in Saksham Commodities Ltd. v. Income Tax Officer Ward 22 (1), Delhi & Anr.: 2024:DHC:2836-DB. 7.It is relevant to set out paragraph 68 of the said decision which readsas under:68. The jurisdictional AO would have to firstly be satisfiedas under:68. The jurisdictional AO would have to firstly be satisfiedthat the material received is likely to have a bearing on or impactthe total income of years or years which may form part of the blockof six or ten AYs’ and thereafter proceed to place the assessee onnotice under Section 153C. The power to undertake such anassessment would stand confined to those years to which thematerial may relate or is likely to influence. Absent anymaterial that may either cast a doubt on the estimation of totalincome for a particular year or years, the AO would not bethe total income of years or years which may form part of the blockof six or ten AYs’ and thereafter proceed to place the assessee onnotice under Section 153C. The power to undertake such anassessment would stand confined to those years to which thematerial may relate or is likely to influence. Absent anymaterial that may either cast a doubt on the estimation of totalincome for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C. Itwould only be consequent to such satisfaction being reachedthat a notice would be liable to be issued and thus resulting inthe abatement of pending proceedings and reopening ofconcluded assessments.would only be consequent to such satisfaction being reachedthat a notice would be liable to be issued and thus resulting inthe abatement of pending proceedings and reopening ofconcluded assessments. [Emphasis added] 8.In view of the above the present petition is allowed and the impugnednotice issued under Section 153C of the Act in respect of AY 2021-2022 isset aside. VIBHU BAKHRU, ACJ DECEMBER 16, 2024/KG TUSHAR RAO GEDELA, J Click here to check corrigendum, if any