IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH ‘SMC’ NEW DELHI

BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT

ITA No. 914/DEL/2025 (AY 2011-12)

ITA No. 915/DEL/2025 (AY 2012-13)
ITA No. 916/DEL/2025 (AY 2013-14)
ITA No. 917/DEL/2025 (AY 2014-15)
AND
ITA No. 918/DEL/2025 (AY 2015-16)

ACIT, CENTRAL CIRCLE-25, VS. HONEY ARORA,

DELHI A-101, 4TH FLOOR,
ROOM NO. 317, 3RD FLOOR, ARA SHARDAPURI
CENTRE, JHANDEWALAN RAMESH NAGAR,
EXTENSION, DELHI – 55 DELHI – 15
(PAN: ARNPA8541J)

(APPELLANT) (RESPONDENT)

Appellant by : Sh. Shyam Manohar Singh, Sr. DR.

Respondent by : Sh. Amit Kumar Gupta, Adv.

Date of Hearing 08.05.2025

Date of Pronouncement 11.06.2025

ORDER

These appeals by the Revenue are directed against the separate orders of

the Ld. CIT(A)-31, Delhi relating to assessment years 2011-12 to 2015-16

respectively. Since these appeals are related to the same assessee, hence, these

appeals were heard together and disposed of by this common order by dealing

with the facts of ITA NO. 914/Del/2025 (AY 2011-12) being the lead case. The
Revenue has raised as many as 09 grounds of appeal, however, Ld. DR only

argued the jurisdictional ground relating to assumption of jurisdiction by the AO

u/s. 153A of the Act, because the issue on merit was not adjudicated by the Ld.

CIT(A), being academic.

2. The brief facts of the case are that a search u/s. 132(1) of the Act was

conducted in the case of the assesse i.e. Honey Arora, at his residence on

06.02.2019. Consequently, notices u/s. 153A of the Act was issued on

17.12.2020 asking the assesse to file the return within 15 days of receipt of

the notice. In response to the notice u/s. 153A of the Act the assesse filed the

return for the relevant year on 20.12.2020 showing income of Rs. 48,000/-.

Subsequently, notice u/s. 143(2) of the Act was issued on 17.01.2021 fixing the

case for hearing on 20.01.2021. Notice u/s. 142(1) of the Act alongwith the

detailed questionnaires was sent to the assesse on 08.01.2021 and 14.01.2021

for filing its reply on before 11.01.2021 & 20.01.2021. Thereafter, AO made

the addition of Rs. 32,21,576- u/s. 69A of the Act and assessed the income at

Rs. 32,69,576/- u/s. 153A of the Act. Against the above order, assesse

preferred an appeal before the ld. CIT(A), who vide his impugned order has

treated the assessment as annulled and allowed the appeal of the assesse.

3. Aggrieved with the order of the Ld. CIT(A), Revenue is in appeal before

the Tribunal.

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4. I have heard the rival contentions and gone through the facts of the case.

Ld. I find Ld. CIT(A) has discussed the issue in dispute elaborately by observing

as under:-

“8.1 I have carefully considered the facts and circumstances of the

case and carefully perused assessment order, submissions of
Appellant, remand report, rejoinder to the remand report, judicial
precedents cited by the Appellant and the material available on
record. Through Ground No. 6 the Appellant seeks to assail the
very basis of assumption of jurisdiction by the AO u/s 153A of the
Act. It has been contended by the Appellant that the AO is not
justified in passing the assessment order under section 153A of the
Act since the search conducted on the Appellant was illegal
because of following reasons:
a) Summons u/s 131(1A) were issued to the Appellant and his
family members on the date of the search i.e. 06.02.2019
b) Hence there was no reason to believe to conduct search against
the Appellant on the date of search i.e. 06.02.2019.
c) The panchnama was not drawn in the name of the Appellant.
d) The copy of search warrant was not provided to the Appellant in
spite of repeated requests.
e) The search was conducted on the Appellant as mistaken
identity.
8.2 It has been argued that the department has conducted an illegal
search on the Appellant as the Summons u/s 131(1A) (Annexure A) were
issued to the Appellant and his family members on the date and time of
the search and no panchnama (Annexure-C) was made in the name of
the Appellant. Even the search warrant was not issued in the name of the
Appellant (Annexure-B). The search conducted on the Appellant was
illegal because of following reasons.
8.3 It has further been contended that the Search Warrant was not in the
name of the Appellant (Annexure-B). The search was conducted on the
Appellant due to mistaken identity. Summons u/s 131(1A) were issued to
the Appellant and his family members on the date and time of the search
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i.e. 06.02.2019 at 09.00 am. The summons was to appear at 09.00 am
and the search was itself conducted at 09.00 am on 06.02.2019. Both
issuing of summons and search dated 06.02.2019 at timing 09.00 am
clearly suggests that department was not at all clear in his actions. It is
the basic principle of search that you cannot dilute the privacy of a
person until and unless you are clear about the consequence of your
actions. The power of search is to be used very sparingly because it is the
longest arm in the armory of the Department. The summons was issued
to the Appellant and his family members at the time when the search
parties entered the premises of the Appellant. Hence there was no
reason to believe to conduct search against the Appellant on the date of
search i.e. 06.02.2019.
8.4 It has also been contended that from the perusal of the search
warrant, it is clear that the search has been conducted on the Appellant
under section 132(1) (c) of the Act. Section 132(c) says that Search can be
conducted on an assessee if the Department in consequence of
information in his possession has reason to believe that "any person is in
possession of any money, bullion, jewellery or other valuable article or
thing and such money, bullion, jewellery or other valuable article or thing
represents either wholly or partly income or property which has not
been, or would not be, disclosed for the purposes of this Act". From the
contents of the search warrant it is clear that the search was conducted
on Shri Avtar Ltd. and with regard to the search of these persons, the
premises of the Appellant were covered. From the whole episode it is
clear that search was not conducted on Appellant but it was conducted
on the premises of the Appellant in respect of search of the aforesaid
persons, meaning thereby that the whole process of issuing notices and
completing assessment under section 153A/143(3) is unwarranted.
8.5 From the entire sequence of events i.e. from the conclusion of the
search to issuing show cause notices to the Appellant under section
153A, it appears that the search is conducted on the Appellant on a
mistaken identity. It is a well decided law that when a search is
conducted on a mistaken identity and no incriminating document or
record was found in the course of search, notice under section 153A had
been held to be invalid, the case in point is that of Dr. Gautam Sen v. CCIT
[2016] 74 taxmann.com 128 (Bom.). The Appellant has obtained copy of
search warrant and copy of Panchnama under Right to Information Act,
2005 (hereinafter referred to as "RTI").

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8.6 The Appellant contends that these documents were never provided
to him in spite of various requests made in this regard during the
assessment proceedings. The Appellant vehemently opposes the validity
of the search on the following grounds.
1. Summons u/s 131(1A) were issued to the Appellant and his family
members on the date and time of the search i.e. 06.02.2019. The
summons had been issued to the Appellant and his family members at
the time when the search parties entered the premises of the Appellant.
Hence, there was no reason to believe to conduct search against the
Appellant on the date of search i.e. 06.02.2019.
2. A perusal of the search warrant, shows that the search was not
conducted on Appellant. Warrant was issued in the name of Shri Avtar
Singh Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh Kochar and
M/s HL Forex Pvt. Ltd and not to the Appellant.
3. The search was concluded on the premises of the Appellant and the
Panchnama was drawn in the name of Shri Avtar Singh Kochar, Shri
Gagandeep Singh Kochar, Shri Hari Singh Kochar and M/s HL Forex Pvt.
Ltd. The Panchnama was not in the name of the Appellant. The search on
the petitioner is on a mistaken identity.
4. The following opening line of statement of Appellant as recorded
during search clearly shows that it was recorded in the case of a search
on M/s H.L. Forex Pvt. Ltd and not in the case of a search of the
Appellant:
"Statement of Sh. Honey Arora S/o Sh. Anand Arora, aged 30 years
R/o 3rd floor A-107 Sharda Puri, Ramesh Nagar New Delhi-110015
in the case of M/s H. L. Forex Pvt Ltd recorded on 07.02.2019 at
13.10 PM on oath u/s 132(4) of the Income Tax Act, 1961 during
the course of Search proceedings u/s 132 of the Income Tax Act at
3rd floor A-107 Sharda Puri, Ramesh Nagar New Delhi- 110015."
5. The penalty Notice issued by JCIT, Central Range-7 in the subject of
notice mentions " Show cause Notice for imposition of penalty for
violation of section 269ST of the Income Tax Act, 1961 in the case of Sh.
Honey Arora (PAN: ARNPA8541J) in Kochar Group (Dos: 06.02.2019) for
the A.Y. 2018-19-reg". The Subject of notice also makes it very clear that
it was search on Kochar Group and not on the Appellant.

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8.7 On the basis of above documents and notices received by the
Appellant it has been argued that there was no search conducted on the
Appellant and consequently all assessments done thereafter deserves to
be nullified.
8.8 The AO in the reply of RTI has mentioned that seized material and
copy of statement was provided to the Appellant during the time of
assessment. In this regard the Appellant countered it by stating that the
said documents were never provided to him. During the entire
assessment proceedings, the Appellant requested in every
communication with the AO for copies of various documents, but it was
never mentioned in any notice or communication by the AO that the
same has been provided to the Appellant. Even the partial documents
which were provided to Appellant were through application under RTI.
The Appellant had to file Appeal before JCIT for receiving the balance
documents. Hence, it has been contended that the Appellant was never
provided any document during the assessment proceedings and was
never communicated that documents were provided to him earlier. The
whole Search as well as assessment is against the principles of natural
justice.
8.9 The copies of seized material, warrants and Panchnama have been
filed by the Appellant during these appellate proceedings. From the
perusal of the same, it seen that the facts as narrated by the appellant
above do emanate from these documents and that search was not
conducted on the Appellant. Warrant was issued in the name of Shri
Avtar Singh Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh Kochar
and M/s HL Forex Pvt. Ltd and not in the name the Appellant. The search
was concluded on the premises of the Appellant and the Panchnama was
drawn in the name of Shri Avtar Singh Kochar, Shri Gagandeep Singh
Kochar, Shri Hari Singh Kochar and M/s HL Forex Pvt. Ltd. The
Panchnama was also not in the name of the Appellant.
8.10 In this regard, the Appellant has placed on record a copy of decision
of Hon'ble ITAT Delhi in the case of Sanjay Jain Vs. PCIT (Central Circle)-3
Delhi. On the identical ground Hon'ble Delhi ITAT G bench vide its order
dated 22.05.2024 in the case of Sanjay Jain Vs. PCIT (central Circle)-3
Delhi (ITA No.1587/Del/2024 and ITA No.1588/Del/2024) dated
22.05.2024 has quashed the whole assessment proceedings. The facts of
the said case and that of the case of the Appellant are from beginning to
end the same and identical. The Appellant has taken the same ground at
the time of assessment proceedings also. The crux of the issue is that
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search warrant was not issued in the name of the Appellant. On the
perusal of search warrant No. 7262 dated 06.02.2019, it is clear that
search was not made on Appellant. As stated earlier, Warrant was issued
in the name of Shri Avtar Singh Kochar, Shri Gagandeep Singh Kochar,
Shri Hari Singh Kochar and M/s HL Forex Pvt. Ltd and not in the name of
the Appellant.
8.11 It is seen that on identical facts and circumstances, a search was
also conducted on Shri Sanjay Jain in the above mentioned case on the
same date i.e. 06.02.2019 vide search warrant No. 7263- the very next
warrant following the warrant in the case of the premises of the
Appellant bearing No.7262- which was also issued in the name of Shri
Avtar Singh Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh Kochar
and M/s HL Forex Pvt. Ltd and not in the name of Shri Sanjay Jain. In the
above case it has been held by Hon'ble Delhi ITAT that assessment under
section 153A cannot be upheld in the name of such person in whose case
search action is not initiated u/s 132. The relevant paragraph of the
order in the case of Sanjay Jain (supra) is reproduced below:-
"22. The provisions of Sec. 153A of the Act mandates that to issue
a notice u/s 153A, a search must have been initiated in case of the
said person based on a warrant of authorization issued in the
name of very such person, i.e., to invoke the provisions of Sec.
153A, initiation of search u/s 132 in case of the said person is a
pre- requisite. The person referred under Sec. 153A and Sec. 132 is
one & the same person. It is an undisputed & undeniable fact that
there must be an issuance of a valid warrant of authorization of
search in the name of the very person u/s 132 of the Act in whose
case proceedings u/s 153A of the Act are initiated. In the case of
the assessee, the Warrant of Authorization, Warrant no. 7263 on
Form 45, was issued in the names of "Avtar Singh Kochar,
Gagandeep Singh Kochar, Hari Singh Kochar, M/S. H.L. Forex Pvt.
Ltd." And not in the name of the assessee, i.e., Sh. Sanjay Jain.
23. Therefore, we find merit in the argument of the Ld. AR that
when no Warrant of Authorization has been issued u/s 132 of the
Act in the name of the assessee then the assessment proceedings
& orders cannot be framed u/s 153A of the Act in case of the
assessee. Hence, the orders framed u/s 153A of the Act in case of,
the assessee are non est, invalid, void-ab-initio, illegal and
unlawful. Further, the facts of the instant case of the assessee are
also similar to the case of Jindal Stainless Ltd. v. ACIT, CC-6 [2009]
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 120 ITD 301 (Delhi) as relied upon by the Ld AR whereby the
Cordinate Bench held that the assessments framed on the assessee
under section 153A are invalid assessments when there is no
warrant of authorization of search u/s 132 of the Act in his own
name. Accordingly, following the decision of the coordinate bench
only, it is held that the assessments framed u/s 153A of the Act in
case of the assessee are non-est, invalid, void-ab-initio, illegal and
unlawful and deserves to be quashed in the interest of justice."
8.12 Upon careful consideration of the facts and circumstances of the
case and the material on record, I find that the case of the Appellant is
pari materia with the case of Sanjay Jain (supra). The facts and
circumstances of the case of the Appellant and those of the said case are
identical. The Appellant's case has to meet the same fate as that of the
case of Shri Sanjay Jain. Therefore, respectfully following Hon'ble Delhi
Bench of ITAT, I hold that the action of the AO in assuming the
jurisdiction u/s 153A of the Act is not justified. Hence, the assessment so
made u/s 153A of the Act is hereby annulled. This ground raised by the
Appellant is, therefore, allowed.
8.13 Since the very assessment order does not survive having been
annulled as above, the other grounds raised by the Appellant remain of
academic interest only. Therefore, the same are not being adjudicated
upon here. However, for a discussion on some of the other grounds
raised here, appellate order passed by me u/s 250 of the Act in respect of
the order u/s 143(3) of the Act for assessment year 2019-20 in
Appellant's own case, may be referred to.
9. In the result, the appellant's appeal is allowed.”
5. Ld. DR relied upon the order of the Assessing Officer.

6. Per contra, Ld. AR for the assessee has relied upon the order of the Ld.

CIT(A). Moreover, he submitted that the captioned appeals are not

maintainable, in view of the CBDTs’ Circular No. 05/2024 dated 15.03.2024

which was later amended by the CBDT’s Circular No. 09/2024 dated 17.9.2024,

as the tax effect in respect of the aforesaid assessment years i.e. 2011-12 to

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2015-16 is less than 60 lacs in each year and on this account the captioned

appeals are not maintainable and also the case of the assessee also does not

fall within the exceptions as contained in CBDT’s Circular No. 05/2024 dated

15.03.2024.

7. In the background of the aforesaid discussions and upon careful

perusing the finding of the Ld. CIT(A), as reproduced above, I note that Ld.

CIT(A) has rightly observed from the perusal of the copies of seized material,

warrants and Panchnama the search was not conducted on the Assessee.

However, Warrant was issued in the name of Shri Avtar Singh Kochar, Shri

Gagandeep Singh Kochar, Shri Hari Singh Kochar and M/s HL Forex Pvt. Ltd and

not in the name the Assessee. The search was concluded on the premises of

the Assessee and the Panchnama was drawn in the name of Shri Avtar Singh

Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh Kochar and M/s HL Forex

Pvt. Ltd. The Panchnama was also not in the name of the assessee. Ld. CIT(A)

has further noted that ITAT, ‘G’ Bench, Delhi vide its order dated 22.05.2024 in

the case of Sanjay Jain Vs. PCIT (Central Circle)-3 Delhi (ITA No.1587/Del/2024

and ITA No.1588/Del/2024) dated 22.05.2024 has quashed the whole

assessment proceedings exactly on identical facts and circumstances of the

case. The facts of the said case and that of the case of the Assessee are from

beginning to end are exactly same and identical. The Assessee has taken the

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same ground at the time of assessment proceedings also. The crux of the issue

is that search warrant was not issued in the name of the Assessee and on the

perusal of search warrant No. 7262 dated 06.02.2019, it is clear that search

was not made on assessee. As stated earlier, Warrant was issued in the name

of Shri Avtar Singh Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh

Kochar and M/s HL Forex Pvt. Ltd and not in the name of the Assessee. On

identical facts and circumstances, a search was also conducted on Shri Sanjay

Jain in the above mentioned case on the same date i.e. 06.02.2019 vide search

warrant No. 7263 the very next warrant following the warrant in the case of

the premises of the Assessee bearing No.7262 which was also issued in the

name of Shri Avtar Singh Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh

Kochar and M/s HL Forex Pvt. Ltd and not in the name of Shri Sanjay Jain. In

the above case it has been held by Delhi ITAT that assessment under section

153A cannot be upheld in the name of such person in whose case search action

is not initiated u/s 132. Hence, the case of the assessee pari materia with the

case of Sanjay Jain (supra). The facts and circumstances of the case of the

Assessee and those of the said case are identical. The Assessee’s case has to

meet the same fate as that of the case of Shri Sanjay Jain. Therefore,

respectfully following Delhi Bench of ITAT, Ld. CIT(A) rightly held that the

action of the AO in assuming the jurisdiction u/s 153A of the Act is not

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justified. Hence, the assessment so made u/s 153A of the Act was declared as

annulled. In view aforesaid discussions and respectfully following the

aforesaid precedent, we do not find any infirmity in the order of the Ld. CIT(A)

quashing the reopening and thus we affirm the same and accordingly,

dismissed this issue raised in Revenue’s Appeal on the jurisdictional side, as

argued by the both the sides. Even otherwise, the captioned appeals are not

maintainable in view of the CBDT’s instructions, as the tax effect in the

assessment years 2010-11 to 2015-16 is less than the prescribed limit in each

year, hence, the same is also dismissed on this count.

8. My aforesaid decision for assessment year 2011-12 will apply mutatis

mutandis to other remaining appeals.

9. In the result, all the 05 appeals filed by the Revenue stand dismissed.

Order pronounced in the Open Court on 11.06.2025.

Sd/-
(MAHAVIR SINGH)
VICE PRESIDENT
‘SRBHATNAGAR’

Copy forwarded to: -

1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT

ASSTT. REGISTRAR, ITAT

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