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 Shri Karan Singh, Village : Khoh, Distt. Gurgaon, Haryana Vs. Income Tax Officer, Ward : 2 (3), Gurgaon.
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 Modern Papers, B-95, Wazirpur Industrial Area, Delhi. Vs. Income-tax Officer Ward 34(3), New Delhi
 ACIT, Central Circle -4, New Delhi. Vs. JKG Construction Pvt. Ltd. B-174, Yojna Vihar, Delhi
 Jet Lite (India) Ltd, Jet Air House, 13, Community Centre, Yusuf Sarai, New Delhi Vs. DCIT, Central Circle-6, New Delhi
 Late Shri Bhushan Lal Sawhney, through his L.R / Wife Smt. Sneh Lata Sawhney, 6, Link Road, Jangpura Extension, New Delhi Vs. The DCIT, Central Circle-7, New Delhi.
 Neetu Juneja, Prop. Tirupati Indane, 28n Netaji Colony, Sanoli Raod, Panipat, Haryana Vs. Income Tax Officer, Ward-3, Panipat, Haryana
 Shri Sukhdev Singh, Village Kayampur, Tehsil Nakur, Distt. Saharanpur Vs. Income Tax Officer, Ward : 1, Saharanpur
 Manoj Singhal, H. No. 9-10, Alipur Road, Civil Lines, New Delhi Vs. Pr. CIT-5, New Delhi
 DLF Universal Ltd, 3rd Floor, Shopping Mall, Arjun Marg, DLF City, Phase-1, Gurgaon Vs. DCIT, Circle-1(1), Gurgaon
 M/s. Honeywell International (India) Pvt. Ltd, 1st Floor, Unitech Trade Centre, Sector 43, Block C, Sushant Lok Phase-I, Gurgaon Vs. Addl CIT Range 4, New Delhi
 Duggal Estates Pvt. Ltd. HN 1140 Nehru Colony NH 3 Faridabad Haryana vs. Income Tax Officer, Ward 1 (2) Faridabad.
 Shri Shyam Sunder Infrastructure (P) Ltd., [Formerly known as M/s. Shalom Exim (P) Ltd. Vs. The Income Tax Officer, Ward 8 (3), New Delhi.
 DCIT, Central Circle 31, New Delhi. vs. M/s. Madhvilata Granite (India) Pvt. Ltd., 11 12, Ambika Mills Compound, Senapati Bapat Marg, Mahalaxmi, Mumbai

Late Shri Bhushan Lal Sawhney, through his L.R / Wife Smt. Sneh Lata Sawhney, 6, Link Road, Jangpura Extension, New Delhi Vs. The DCIT, Central Circle-7, New Delhi.
June, 01st 2021

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES “A” : DELHI

BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND

SHRI B.R.R KUMAR, ACCOUNTANT MEMBER

ITA.Nos.427, 428, 429, 430, 431 & 432/Del./2017

Assessment Years 2006-07, 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12

&
ITA.Nos.434, 435, 436, 437, 438 & 439/Del./2017

Assessment Years 2006-07, 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12

Late Shri Bhushan Lal

Sawhney, through his L.R / The DCIT,

Wife Smt. Sneh Lata [vs. Central Circle-7,
Sawhney, 6, Link Road,

Jangpura Extension, New Delhi.

New Delhi – 110 024.

PAN EJKPS1519F [AABFS5250R]

(Appellant) (Respondent)

Shri Rakesh Gupta, Advocate

For Assessee : And

Shri Somil Aggarwal, Advocate

For Revenue : Shri Satpal Gulati, CIT-DR

Date of Hearing : 05.04.2021
Date of Pronouncement : 01.06.2021

ORDER


PER BHAVNESH SAINI, J.M.

All the above appeals are directed against the
different Orders of the Ld. CIT(A)-25, New Delhi, Dated
25.10.2017, for the A.Ys. 2006-2007 to 2011-2012 on
quantum assessments and Orders Dated 26.10.2016
2

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

challenging the levy of penalty proceedings under section

271(1)(c) of the I,.T. Act, 1961 for the A.Ys. 2006-2007 to

2011-2012.

2. We have heard the Learned Representative of

both the parties and perused the material available on

record.

3. An application have been filed on behalf of the

assessee intimating therein that assessee got expired on

02.12.2018 and Smt. Sneh Lata Sawhney, wife of the

assessee, wants to implead as his legal heir in all he above

appeals. The Death Certificate of the assessee along with

Affidavit of the Legal Representative are placed on record. In

view of the above, the assessee is substituted through Legal

Representative Smt. Sneh Lata Sawhney. Before proceeding

further, it would be relevant to dispose of the quantum

appeals as under :
3

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

ITA.Nos.427 to 432/Del./2017 – A.Ys. 2006-07 to 2011-12 :

4. Briefly the facts of the case are that in all the

assessment years under appeals a search and seizure

operation under section 132 of the I.T. Act, 1961 was

carried-out on assessee and other Group of cases on

28.07.2011. Warrant of Authorization under section 132 of

the I.T. Act, 1961 was also issued in the name of the

assessee. Notice under section 153A of the I.T. Act were

issued to the assessee requiring him to file return of income

for the assessment year under appeal. The assessee in

response to the notice filed return of income under section

153A of the I.T. Act, 1961. The A.O. issued statutory notices

and asked for the details. The A.O. noted that during the

assessment year under consideration, the assessee derived

income from other sources, the details of the same are

placed on record. The A.O. in A.Y. 2006-2007 noted that as

per information available with the Investigation Wing the

assessee was having Foreign Bank Account with HSBC

Bank at Geneva, Switzerland bearing A/c. No.IBNxx78840
4

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

with IDxx52687. This account was having a client profile
name Bhushan Lal Sawhney and/or Smt. Sneh Lata
Sawhney in Client Profile Code xx91436. This information
was received from the competent authority under exchange
of information framework of DTAC/DTAA between India and
France. The A.O. has noted the account details in para 5.1
of the assessment order and noted that assessee had made
telephonic conversation with the Officials of HSBC Bank,
Geneva. The A.O. further noted that assessee has not
declared the above bank account in the return of income
and the funds of this account was also not disclosed by the
assessee. The explanation of assessee was called for with
regard to deposits in this bank account and source of the
same was also asked to be explained. The A.O. noted that
initially no details have been furnished by the assessee.
During the search proceedings, statement under section
132(4) of the I.T. Act of the assessee was recorded, relevant
extract of the statement are reproduced in para-5.3 of the
assessment order in which A.O. has referred to statement of
Son of the Assessee Mr. Praveen Sawhney recorded


5

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

intimating that assessee has maintained bank accounts
with HSBC, Geneva, Switzerland, to which, assessee
explained that he was wrong in giving this information
because assessee has never maintained any bank accounts
outside India. The A.O. then referred to statement of Mr.
Praveen Sawhney, Son of the Assessee recorded on
28.07.2011 with reference to the bank account maintained
with HSBC, Geneva, Switzerland. Later on, statement of
assessee was also recorded on 09.11.2015, details of which
are noted in the assessment order, to which, assessee
denied to have maintained any such bank account. The A.O,
however, on the basis of the information received in this
matter, made addition of Rs.9,18,54,176/- on account of
maximum outstanding balance lying in the bank account
maintained with HSBC, Geneva, Switzerland. The A.O, thus,
completed the assessment for the A.Y. 2006-2007 under
section 153A read with Section 143(3) of the I.T. Act, 1961,
vide assessment order Dated 02.03.2015.
4.1. 6

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

It may be noted here that in the remaining A.Ys

i.e., 2007-2008 to 2011-2012, the A.O. on the similar basis

concluced that since assessee has unexplained bank

deposits with HSBC, Geneva, Switzerland in A.Y. 2006-

2007, therefore, in subsequent A.Ys i.e., A.Ys. 2007-2008 to

2011-2012 assessee has earned interest on the same

deposits, therefore, addition was made on account of

unexplained interest earned on the aforesaid deposits in

HSBC Bank, Geneva, Switzerland. The A.O. passed the

assessment orders under section 153A read with Section

143(3) of the I.T. Act, 1961, Dated 02.03.2015.

4.2. The assessee challenged the above addition on

merits as well as on legal grounds before the Ld. CIT(A),

however, the appeals of the assessee have been dismissed.

5. The assessee in the present appeals have

challenged the legality of the assessment orders passed as

being time barred as well as since no incriminating material

have been recovered during the course of search, therefore,

no addition could be made against the assessee. The
7

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

assessee also challenged the additions made on account of

unexplained deposit in the bank account maintained with

HSBC, Geneva, Switzerland and interest earned thereon.

Various grounds of appeals has been taken by the assessee

in these appeals.

5.1. We have heard both the the Parties who have also

filed written submissions which are also taken into

consideration.

6. Learned Counsel for the Assessee submitted that

it is an undisputed fact that search was conducted on

28.07.2011 on the assessee. Learned Counsel for the

Assessee referred to paper book filed by the Ld. D.R.

containing letter Dated 22.08.2019 of ACIT, Central Circle-7

[ A.O.] to the CIT-DR in which it was categorically stated

that last panchanama was drawn on 26.09.2011. He has,

therefore, submitted that in F.Y. 2011-2012 search is

executed and last panchanama drawn. Learned Counsel for

the Assessee, therefore, submitted that impugned
8

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

assessment orders passed on 02.03.2015 are barred by
limitation because of search took place on 28.07.2011 as
mentioned in the assessment orders and thus the limitation
to pass assessment orders expire on 31.03.2014 as per
Section 153B(1)(a) of the I.T. Act, 1961. But, the impugned
orders have been passed on 02.03.2015. The Ld. CIT(A) did
not appreciate the above issue. He has submitted that
reason of passing the assessment orders Dated 02.03.2015
advanced by the Ld. CIT-DR was that since a reference
under section 90 of the I.T. Act, 1961 was made to Swiss
Authority and no information was received till the time of
passing of the assessment orders, hence, the time limit was
extended by one year under Explanation-IX of Section 153B
of the I.T. Act, 1961. He has submitted that the Ld. CIT-DR
has furnished a letter Dated 26.06.2015 together with
information asked for in relation to the assessee received
from Swiss Authority. It may be seen that as per A.O’s
admitted case, reference was made under section 90 of the
I.T. Act, 1961 under the provisions of “Exchange of
Information”, Article of Indo-Switzerland Double Taxation
9

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

Avoidance Agreement [DTAA] and such information was
required for the period from 01.04.1995 to 31.03.2012
seeking information under the provisions of “Exchange of
Information” Article 26 of Indo-Switzerland Double Taxation
Avoidance Agreement [DTAA]. He has submitted that the
above stated such reference made under section 90 is bad
in Law and Revenue could not have made any such
reference for seeking information for the period prior to
01.04.2011 and hence such illegal reference could not have
been made in Law, could not have lead to extension of time
limit for passing the assessment orders. Thus, the time limit
in passing the impugned assessment orders in the case of
the assessee expired on 31.03.2014 itself. He has further
submitted that in fact the Revenue could not have made
reference for the period prior to 01.04.2011 which is evident
from the following :-

6.1.1. Administrative assistance by Swiss

Competent Authority in their letter dated 26th June, 2015
10

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

addressed to Government of India, MOF, FT & TR and filed
by Ld. CIT(DR) on 11.1.2021 through email reads as under:

“In accordance with Article 26 DTA CH-IN,
administrative assistance for questions concerning
the application of domestic law can only be provided
for information starting from the financial years
2011/2012 as the prior years are not covered by
temporal scope of Article 26 of the amended Double
Tax Agreement between India & Swtizerland.

Therefore we can only provide you with information
from 1 April 2011 (see decision A-4232/2013 of 12
December 2013 of the Swiss Federal Administrative
Court).

6.1.1.2. The Learned Counsel for the Assessee
submitted that the Agreement between The Republic of
India and The Swiss Confederation for avoidance of
double taxation with respect to taxes on income as
modified by Notification No.S.O.2903(E) Dated
11

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

27.12.2011. Copy of Notification No.S.O.2903(E) Dated
27.12.2011together with amended protocol filed to show
it apply to later period. Therefore, reliance is placed on
the following judicial decisions which hold that if the
Reference based upon which the limitation is sought to
be extended is held bad, limitation so extended would
also be bad in law. :-

6.1.2. The ITAT, Pune Bench, Pune in the case of ITO
vs. Vilsons Particle Board Industries Ltd.,
ITA.No.447/PN/2013, dated 21.12.2016 (Pune) in which
it was held as under :

“41. Applying the principles laid down by the
Apex Court in Sahara India (Firm) Vs. CIT and
Another (supra), we hold that where no show cause
notice was given to the assessee before making the
order proposing conduct of special audit under
section 142(2A) of the Act, in the present case and
the CIT having approved the said proposal though
12

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

after giving opportunity of hearing to the assessee is

vitiated because of non-compliance with the

principles of natural justice. Accordingly, the

assessment order passed in the facts of present case

is beyond the period of limitation and hence, the

same is invalid and bad in law ”

6.1.3. The ITAT, Delhi Benches, Delhi in the case of
PHI Seeds Ltd. vs. DCIT, (2015) 45 CCH 318 held as
under:

“7.4. In the present proceedings what we

are examining, is whether the extended period of

limitation as provided under Explanation l(iii) of

Section 153 is available to the Assessing Officer for

completion of assessmen t u/s 143(3), or not. The

assessee contends that the order u/s 142(2C),

extending the period granted for completion and

submission of audit report is made without an

application being made for extension by the assessee
13

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

and for any good and sufficient reason, and hence
the extension is bad in law and hence the A.O would
not get the benefit of the extended period of time to
specified in Explanation l(iii) of Section 153 of the Act.
In our view, the Tribunal has jurisdiction to
adjudicate the issue as to whether an order of
assessment 143(3), is passed within the period of
limitation prescribed under the Act or not. For coming
to such a conclusion, in our view the Tribunal can
examine whether the order passed u/s 142(2A) or
u/s 142(2C) is in accordance with law or not. The
order passed u/s 142(2A) or u/s 142(2C) cannot be
appealed separately. But when an assessment order
is challenged, then the different aspects which are
integral to the process and ultimate completion of
amount can be challenged in Appeal. For example a
notice u/s 148 or reasons recorded by the A. O prior
to re-opening of assessment cannot be challenged
separately. But an assessment order can be
challenged in an Appeal before the Ld. CIT(A) or the
14

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

ITAT on the ground that the re-opening itself is bad in
law, as the notice is illegal or not served or that there
is no material based on which reasons were recorded
etc. Every facet of an assessment can be challenged
in appeal to deny once liability to be charged to tax or
to challeng the quantum of tax demanded. In the case
of hand, the legality of the orders passed u/s 142
(2A) or u/s 142(2C) can be challenged to demonstrate
that the order of assessment has been passed
beyond the period of limitation. Thus, we reject this
contention of the Ld. CIT. DR.

8. In view of the above, discussion, we have no
hesitation in holding to hold that the extension of time
framed by the A.O for submission of audit report u/s
142 (2C) of the Act vide order dated 28th June, 2004
is bad in law. Consequently the Assessing Officer
would not get extension of time for completion of
assessment in terms of Explanation 1 (iii) to Section
153 for the purpose of computation of limits. Hence,
15

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

the assessments are barred by limitation as per the
table given at Para 7 of the order. The Assessment for
the A. Y1996-97 was to be complete on or before
31/3/2004 and the assessment order for the
Assessment Year 1997-98 to 2000-01 had to be
completed on or before 22/9/2004 and the
assessment for the A. Y 2001-02 had to be completes
on or before 23/8/2004, but all these assessments
were completed on 27/9/2004, which is beyond the
period of limitation specific in the Act. Hence they are
bad in law.”

6.1.4. The ITAT, Delhi Bench, Delhi in the case of
Consulting Engineering Services India Pvt. Ltd. & Anr. vs.
Asstt. CIT & Anr., reported in (2019) 198 TTJ 0121 (Del)
held as under :

“15. We have given a thoughtful consideration

to the orders of the authorities below and have

carefully perused the records qua the issue. It is true

that noticed dated 21.11.2011 was for both the A.Ys
16

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

i.e. 2008-09 and 2009- 10. However, each A.Y is
considered to be a separate unit and, therefore, for
each A. Y, the Assessing Officer must bring out his
case. A perusal of the said notice, which is exhibited
at pages 67 to 70 of the paper book, clearly reveals
that though the notice pertained to accounts of A.Y.
2008-09, but entire financial details referred to
therein pertain to A.Y 2009-10. Even the order u/s
142(2A) of the Act dated 27.12.2011 which is
exhibited at pages 91 to 98 of the paper, the ACIT
has specifically mentioned that "the special audit u/s
142(2A) of the Act in the case of captioned assessee
for A.Y 2009-10 is ordered accordingly". This clearly
proves that while making a reference u/s 142(2A) of
the Act and thereafter passing the order u/s 142(2A)
of the Act, the Assessing Officer did not apply his
mind and mechanically adopted the figure of A.Y.
2009-10 and passed the order u/s 142(2A) of the Act
for A.Y 2009-10 without realising that he is dealing
with A.Y 2008-09.
16. 17

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

The contention of the Id. DR that the letter

to the appellant referred to both the A. Ys i.e. 2008-

09 and 2009- 10 and, therefore, there is no error in

the same. We do not find any force in this contention

of the Id. DR. As mentioned elsewhere, since each

A.Y is considered as a separate unit the Assessing

Officer should have made out a case for A. Y 2008-09

only and since the order framed u/s 142(2) of the Act

also refers to A.Y 2009-10, then the same cannot be

used for A. Y 2008-09.

17. The quarrel before us is as to whether the

assessment order framed u/s 143(3) is passed

within the period of limitation period prescribed

under the Act or not. In our considered opinion, for

coming to such a conclusion, we can examine

whether the order passed u/s 142(2A) of the Act is in

accordance with law or not. It is true that the order

passed u/s 142(2A) of the Act is not appealable but

when an assessment order is challenged, then the
18

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

different aspects, which are integral to the process

and ultimate completion of the amount can be

challenged in appeal and since the ground before us

is challenged for assessment being barred by

limitation, we are well within our rights to consider

all material aspects which were considered while

framing the assessment order u/s 143(3) of the Act. ”

6.1.5. In the case of Sunder Exports vs. DCIT,

reported in (2009) 126 TTJ 0853) (Del), the ITAT, Delhi

Bench held as under :

“Assessment—Limitation—Extension of limitation under
Explanation l(iii) to s. 153—As per the proviso to s. 142(2C)
as applicable during the relevant asst. yr. 2003- 04, the AO
can extend the time for furnishing of report under s. 142(2A)
only on an application made by the asses see— Assessee
having made no such application, AO erred in extending the
time for filing such report on the application of the auditor
and, therefore, the assessment order passed by the AO
after receiving the audit report was barred by limitation.”
6.1.6. 19

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

In the case of DCIT vs. Ramachandra Dashrath

Hande & Co., reported in (2010) 36DTR 0431 (Mum), the

ITAT, Mumbai Bench, Mumbai held as under :

“Assessment—Limitation—Extension of limitation under
Expln.-1 (iii) to s. 153 - Prior to amendment in s.142(2C),
the AO had no power to suo motu extend the period for
furnishing the report by special auditor and therefore
excluding such period, assessment was barred by
limitation- further, the IT Act being a specific Act, the
General Clauses Act may not generally apply to the
limitation period. ”

6.1.7. The Hon’ble High Court of Rajasthan in the
case of CIT vs., Bajrang Textiles reported in [2007] 294
ITR 561 (Raj.) (HC), it was held as under:

“Direction of the AO for special audit of assessee’s
accounts under s. 142(2A) one day before the expiry of
limitation for completing the block assessment being
merely to get extension of time and AO having asked
the special auditor to prepare the books of account in
20

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

the form of cash book and ledger on the basis of seized
documents/papers and also trading and P&L a/c which
is apparently beyond the scope of the provisions of s.
142(2A), the direction for special audit was illegal and
consequently, the assessment was barred by time ”

6.1.8. In the case of Sadana Electric Stores vs. CIT,
reported in (2013) 219 Taxman 0294 (All) it was held as
under :

“Assessment—Time limit for completion— Order passed
beyond limitation period—Sustainability-Assessee was
subjected to special audit by approval of CIT—
Assessee was asked to obtain special audit report u/s
152(2A)—Accounts audited in report was submitted—
However limitation for completion of assessment u/s
153(l)(b) expired—Assessee contended that subsequent
assessment order passed by AO was time barred—
Held, in case of Sadana Electric Company vs.
Commissioner of Income Tax and another ITA.No. 167
2008, 152(2A), identical facts were dealt wherein Court
21

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

held that section 153(1)(a) reads that no order of
assessment shall be made u/s 143 or Section 144 at
any time after expiry of two years from end of A.Y. in
which income was first assessable—Order of
assessment had been passed in violation of period
prescribed in aforesaid provision, therefore, order
passed by AO, CIT and ITAT was set aside—Therefore
order passed by lower authorities including Tribunal
could not be sustained as facts and circumstances
were identical”

6.1.9. In the case of IPF India Property Cyprus (No. I)
Ltd. vs. DCIT, ITA No. 6077/2018, (also reported in
(2020) 183 ITD 0046) (Mum), the ITAT Mumbai Bench,
Mumbai held as under :

“7. Coming to the second point, we find that there
is no dispute that if no draft assessment order was to
be issued in this case, the assessment would have
been time barred on 31st December 2017 but the
22

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

present assessment order is passed on 17th August
2018. Once we hold that no draft assessment order
could have been issued in this case, as the provisions
of Section 144C(1) could not have been invoked in this
case, the time limit of completion of assessment was
available only upto 31st December 2017. The mere
issuance of draft assessment order, when it was
legally not required to be issued, cannot end up
enhancing the time limit for completing the assessment
under section 143(3). We, therefore, uphold the plea of
the assessee on this point as well. The impugned
assessment order is indeed, in our considered view,
time barred. We, accordingly, hold so.”

6.1.10. The Learned Counsel for the Assessee further
submitted that in under-mentioned cases the Hon’ble
Courts have held that restraint order under section
132(3) was bad and such bad restraint order cannot give
authority to extend the limit under section 158BE of the
I.T. Act, 1961.
23

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

1. Late D.T.S. Rao through L/H D.S. Manjunath
vs.Asstt. CIT, (2007) 106 ITD 570 (Bang)

2. Rakesh Sarin vs. DCIT, (201 1) 333 ITR 451 (Mad)

3. S.K. Katyal through L/H Mrs. Ranjana Katyal vs.

DCIT, (2007) 111 TTJ 0008 (Del)

4. CIT vs. S.K. Katyal, (2009) 308 ITR 168 (Del)

5. Golderest Finance (India) Ltd. vs. DCIT, (2006) 105

TTJ 926 (Mum)

6. CIT vs. Pawan Kumar Garg, (2011) 334 ITR 240

6.1.11. Learned Counsel for the Assessee, therefore,

submitted that since no information could have been

provided for assessment years under appeals i.e., 2006-

2007 to 2011-2012 and the protocol also started from

01.04.2011, therefore, no reference could be made by the

Revenue Authorities for assessment years under appeals

i.e., 2006-2007 to 2011-2012. The Reference is, therefore,

invalid and no limitation could have been extended to pass

the assessment orders after 31.03.2014. He has, therefore,

submitted that limitation extended on the basis of such

Reference which could not have been made in Law in the

instant case for the period prior to 01.04.2011 i.e., for A.Ys.

2006-2007 to 2011-2012 is bad and impugned assessment

orders are barred by limitation.
6.1.12. 24

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

Learned Counsel for the Assessee has also

submitted that the assumption of jurisdiction under section

153A of the I.T Act, 1961 for assessment years under

appeals is also bad in Law when there was no incriminating

material found as a result of search relevant to assessment

years under appeals. In support of his contention he has

relied upon Judgments of Hon’ble Delhi High Court in the

case of CIT vs., Kabul Chawla reported in 380 ITR 573 (Del.)

and Pr. CIT vs., Meeta Gut Gutia reported in 395 ITR 526

(Del.) in which the Departmental SLP have been dismissed

by the Hon’ble Supreme Court reported in 96 taxmann.com

468 (SC). He has also referred to panchanama executed in

the case of assessee which did not find mention any

incriminating material relevant to any assessment years

under appeals which could be the basis for making any

addition. He has, therefore, submitted that since no

incriminating material was found in assessment year under

appeals, therefore, no addition could be made against the

assessee. Learned Counsel for the Assessee again by

referring to the above evidences submitted that since no

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

information could have been provided by the Swiss

Authorities to the Revenue Authorities in India for

assessment years under appeals, therefore, no incriminating

evidence was found to show that additions are based on any

incriminating material. Learned Counsel for the Assessee

also submitted that assessee since the very beginning has

denied to have maintained any bank accounts with HSBC,

Geneva, Switzerland. Therefore, onus is upon the A.O. to

prove by specific and reliable evidence that assessee

maintained any such bank account. Therefore, in the
absence of any evidence or material on record against the

assessee, even the addition on merit are without any basis.

The additions on account of notional interest are based on

mere suspicion and as such no addition could be made.

7. On the other hand, the Ld. D.R. relied upon the

Orders of the authorities below. The Ld. D.R. submitted that

assessee challenged that assessments in these cases were

time barred. In this regard, it is relevant to note that time

barring date as per provisions of Section 153B is
26

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

31.03.2015 as against 31.03.2014 because the exclusion of
the time period as provided by Clause-ix of Explanation to
Section 153B of the I.T. Act, 1961 as applicable in the case
of the assessee. He has submitted that in this case
information was called for from Foreign Competent
Authority under Exchange of Information through Reference
Dated 05.12.2012 and the information thereto was received
back as on 10.07.2015. As per the Explanation, the time
barring date would got extended by one year if response
could not have been received within one year. The Ld. D.R.
however, did not dispute that last panchanama was drawn
on 26.09.2011 as is also confirmed by the A.O. vide his
letter Dated 22.08.2019. The Ld. D.R. also filed copies of the
panchanama in these cases on record. The Ld. D.R. also did
not dispute the letter Dated 26.06.2015 referred to by the
Learned Counsel for the Assessee during the course of
arguments. The Ld. D.R. further submitted that Son of the
Assessee Mr. Praveen Sawhney admitted that assessee has
maintained bank account with HSBC, Geneva, Switzerland
in his statement recorded on 28.07.2011. Seized document
27

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

Annexure-A1 of Party-SR-1 was found and seized during the

course of search proceedings at the residence of the

assessee which reflects details of Swiss Bank Account which

document was confronted to the assessee, but, assessee did

not reveal any information. The Ld. D.R, therefore,

submitted that addition have been rightly made in the case

of the assessee and decisions of the Hon’ble Delhi High

Court in the cases of Kabul Chawla (supra) and Meeta Gut

Gutia (supra) are not applicable in this case.

8. We have considered the rival submissions and

perused the material on record. It is not in dispute that

search was conducted in the case of assessee on

28.07.2011. Both the parties have placed on record copies

of the panchanama drawn in the case of assessee at the

time of search and thereafter, but, the same did not disclose

if any, incriminating material much less than the material

was found during the course of search to connect the

assessee with maintenance of any bank account with HSBC,

Geneva, Switzerland. The Ld. D.R. also placed on record
28

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

letter of the A.O. Dated 22.08.2019 in which it is clearly
mentioned by the A.O. that last panchanama was drawn on
Dated 26.09.2011. Learned Counsel for the Assessee also
placed on record letter Dated 26.06.2015 issued by Swiss
Competent Authority addressed to the Government of India
in which it is specifically mentioned that information as
required could be provided from F.Y. 2011-2012 as the prior
years are not covered by temporal scope of Article 26 of the
Amended Double Taxation Avoidance Agreement between
India and Switzerland. Therefore, such information could be
provided from 01.04.2011. Learned Counsel for the
Assessee also placed on record Notification Dated
27.12.2011 between India and Switzerland Confederation
for avoidance of double taxation. These would clearly show
that these are applicable after assessment years under
appeals and as per information provided vide letter Dated
26.06.2015 no such information could be provided prior to
01.04.2011. Therefore, Swiss Authorities have not provided
any information to Revenue Authorities in India about
assessee’s bank account with HSBC, Geneva, Switzerland
29

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

for assessment years under appeals i.e., A.Ys. 2006-2007 to

2011-2012. Thus, there is no incriminating material

available on record to make any addition in any assessment

years. It may also be noted here that assessee since the very

beginning denied to have maintained any such bank

accounts with HSBC, Geneva, Switzerland. There is no

material available on record that assessee made deposits in

HSBC Bank A/c in A.Y. 2006-2007 or thereafter earned any

interest in remaining assessment years under appeals.

8.1. Considering the totality of the facts and

circumstances of the case above, it is also clear that

during the course of search no incriminating material

was found against the assessee for maintaining any such

bank accounts with HSBC, Geneva, Switzerland.

Whatever information was supplied by the Swiss

Authorities subsequently to the Revenue Authorities in

India, no such information was provided for the period

prior to 01.04.2011. Therefore, it is clear that no

information have been provided by the Swiss Authorities
30

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

that assessee maintained any bank account with HSBC,

Geneva, Switzerland in assessment years under appeals

i.e., 2006-2007 to 2011-2012. Therefore, it is clear that

no incriminating material was found against the assessee

so as to make any addition against the assessee. The

Hon’ble Delhi High Court in the case of CIT vs., Kabul

Chawla (supra) held as under :

“vii. Completed assessments can be interfered with by

the A.O. while making the assessment under

section 153A only on the basis of some

incriminating material unearthed during the course

of search or requisition of documents or

undisclosed income or property discovered in the

course of search which were not produced or not

already disclosed or made known in the course of

original assessment”

8.2. The Hon'ble Delhi High Court in its recent

decision in the case of Pr. CIT vs. Meeta Gutgutia (supra) in

paras 69 to 72 has held as under :
“69. 31

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

What weighed with the Court in the above

decision was the “habitual concealing of income and

indulging in clandestine operations” and that a person

indulging in such activities “can hardly be accepted to

maintain meticulous books or records for long.” These

factors are absent in the present case. There was no

justification at all for the AO to proceed on surmises and

estimates without there being any incriminating

material qua the AY for which he sought to make

additions of franchisee commission.

70. The above distinguishing factors in

Dayawanti Gupta (supra), therefore, do not detract from

the settled legal position in Kabul Chawla (supra) which

has been followed not only by this Court in its

subsequent decisions but also by several other High

Courts.

71. For all of the aforementioned reasons, the

Court is of the view that the ITAT was justified in

holding that the invocation of Section 153A by the
32

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

Revenue for the AYs 2000-01 to 2003-04 was without

any legal basis as there was no incriminating material

qua each of those AYs.

Conclusion

72. To conclude :

(i) Question (i) is answered in the negative i.e., in favour
of the Assessee and against the Revenue. It is held that
in the facts and circumstances, the Revenue was not
justified in invoking Section 153 A of the Act against the
Assessee in relation to AYs 2000-01 to AYs 2003-04.”

8.2.1. The above Judgment is confirmed by the

Hon’ble Supreme Court by dismissing the SLP of the

Department. Therefore, on this reason alone no addition

could be made of any unexplained bank deposits or interest

earned thereon in any of the assessment years. In view of

the above, we set aside the Orders of the authorities below

and delete the entire additions. In view of the above, there is

no need to decide the remaining grounds of appeals which
33

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

are left with academic discussion only. Accordingly, all the

appeals of the Assessee are allowed.

9. In the result, all the appeals of the Assessee are

allowed.

ITA.Nos.434 to 439/Del./2017 – A.Ys 2006-07 to 2011-12:

10. In all these appeals, assessee challenged the levy

of the penalty under section 271(1)(c) of the I.T. Act, 1961 in

all the assessment years under appeals i.e., 2006-2007 to

2011-2012.

11. Learned Counsel for the Assessee has placed on

record copy of the notice issued by A.O. under section 274

read with Section 271(1)(c) of the I.T. Act, 1961 Dated

02.03.2015 issued by the A.O. before levy of the penalty for

assessment years under appeals in which the A.O. has

mentioned “have concealed the particulars of your income or

furnished inaccurate particulars of such income”. He has,

therefore, submitted that A.O. was not sure as to for which

limb of Section 271(1)(c) of the I.T. Act whether penalty is to

be initiated for concealment of particulars of income or
34

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

furnishing inaccurate particulars of such income. Therefore,
the show cause notices are illegal and bad in law and liable
to be quashed. He has submitted that issue is covered by
the Judgment of the Hon’ble Delhi High Court in the case of
Pr. CIT vs., Sahara India Life Insurance Company Ltd., 2019
(8) TMI 409 (Del.) vide Judgment Dated 02.08.2019 in paras
21 and 22 held as under :

“21. The Respondent had challenged the upholding of
the penalty imposed under Section 271(1) (c) of the Act,
which was accepted by the ITAT. It followed the decision
of the Karnataka High Court in CIT v. Manjunatha Cotton
& Ginning Factory 359 ITR 565 (Kar) and observed that
the notice issued by the AO would be bad in law if it did
not specify which limb of Section 271(1) (c) the penalty
proceedings had been initiated under i.e. whether for
concealment of particulars of income or for furnishing of
inaccurate particulars of income. The Karnataka High
Court had followed the above judgment in the subsequent
order in Commissioner of Income Tax v. SSA’s Emerald
35

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

Meadows (2016) 73 Taxman.com 241 (Kar), the appeal

against which was dismissed by the Supreme Court of

India in SLP No.11485 of 2016 by order dated 5th

August, 2016.

22. On this issue again this Court is unable to find
any error having been committed by the ITAT. No
substantial question of law arises.”

11.1. He has, therefore, submitted that penalty is not

leviable in any of the assessment years under appeals.

12. The Ld. D.R. on the other hand relied upon the

Orders of the authorities below.

13. After considering the rival submissions, we are of

the view that no penalty is leviable in any of the assessment

years under appeals. In assessment years under appeals

since quantum addition have already been deleted by us on

quantum appeals (supra), therefore, no basis is left for

levying of penalty under section 271(1)(c) of the I.T. Act.

Further the show cause notices issued by the A.O. on
36

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

02.03.2015 prior to levy of the penalty, the A.O. has not

mentioned therein specifically for which limb of Section

271(1)(c) of the I.T. Act, 1961, the penalty proceedings have

been initiated i.e., whether for concealment of particulars of

income or furnishing inaccurate particulars of such income.

therefore, show cause notices issued by the A.O. are illegal

and bad in Law and vitiate the entire penalty proceedings.

Thus, no penalty could be levied against the assessee. In

view of the above discussion, we set aside the Orders of the

authorities below and cancel the penalty in all the

assessment years under appeals.

14. In the result, all the appeals of the Assessee

are allowed.

15. To sum-up, all the appeals of the Assessee are

allowed.

Order pronounced in the open Court.

Sd/- Sd/-
(B.R.R. KUMAR) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Delhi, Dated 01st June, 2021

VBP/-
37

ITA.Nos.427 to 432/Del./2017 &
ITA.Nos.434 to 439/Del./2017

Late Shri Bhushan Lal Sawhney through his L.R./
Wife Smt. Sneh Lata Sawhney, New Delhi.

Copy to

1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT ‘A’ Bench, Delhi
6. Guard File.

// BY Order //

Assistant Registrar : ITAT Delhi Benches :
Delhi.

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