ITAT Jaipur’s Mixed Findings on Cash, Jewellery and Loose-Paper Additions in Requisition-Year Assessment

1. Background of the Dispute

The matter in Praveen Kumar Saini Vs ITO (ITAT Jaipur) arose from proceedings initiated after a cash and jewellery interception during election surveillance, followed by a requisition under Section 132A of the Income Tax Act 1961. The case concerns Assessment Year 2014-15 and examines:

  • The validity of framing assessment under Section 143(3) read with Section 153B(1)(b) instead of Section 153A
  • Addition based on seized loose papers involving alleged gold trading activity
  • Addition of cash found in a vehicle and treated as unexplained under Section 69A
  • Addition of value of a gold necklace treated as unexplained investment under Section 69

The appeal before the Tribunal challenged both jurisdictional aspects and substantive additions.

1.1 Facts Leading to Requisition

  • On 15.11.2013, a Static Surveillance Team intercepted a Scorpio vehicle at Nawalgarh, District Jhunjhunu.
  • The assessee, engaged in civil construction, was travelling in this vehicle.
  • During interception, the following were found:
    • Cash of Rs 45,76,698
    • A gold necklace
    • Foreign currency
    • Certain loose papers (later marked as Annexure-AS)
  • A warrant under Section 132A was issued on 25.11.2013, and the Department requisitioned:
    • The cash of Rs 45,76,698
    • The gold necklace (valued by a registered valuer at Rs 79,439)
    • The loose papers

Subsequently, the assessee filed a return of income on 28.10.2015, declaring total income of Rs 31,20,000.

1.2 Assessment and First Appeal

The Assessing Officer (AO) completed assessment on 09.03.2016 under:

  • Section 143(3) read with Section 153B(1)(b)

Determining total income at Rs 4,81,22,550, the AO made, inter alia, the following additions:

  • Rs 80,000 – enhancement by estimating business income
  • Rs 4,26,48,355 – treated as income from other sources on basis of loose papers
  • Rs 45,76,698 – under Section 69A as unexplained cash
  • Rs 97,500 – under Section 69 as unexplained investment in gold necklace
  • Disallowance of deduction of Rs 1,00,000 claimed u/s Section 80C

The CIT(A) dismissed the appeal and upheld all additions and the assessment framework.

The assessee thereafter approached the ITAT Jaipur.

1.3 Delay in Filing Appeal and Its Condonation

There was a delay of 17 days in filing the appeal before the Tribunal. The assessee filed:

  • A condonation petition supported by an affidavit
  • An explanation that the order was uploaded on the portal and came to his notice only when he visited his counsel’s office in February 2026

The Tribunal accepted this explanation as constituting sufficient cause and condoned the delay, admitting the appeal.

2. Grounds Raised Before the ITAT

The assessee’s grounds (in substance) were:

  1. The assessment framed u/s Section 143(3) r.w.s. Section 153B(1)(b) is invalid and should have been completed under Section 153A, rendering it void ab initio.
  2. The addition of Rs 4,26,48,355 based on loose papers is unjustified.
  3. The addition of Rs 45,76,698 as unexplained cash under Section 69A is erroneous.
  4. The addition of Rs 97,500 in respect of the gold necklace as unexplained investment under Section 69 is not sustainable.
  5. A general ground reserving liberty to amend/add grounds.

3. Jurisdictional Issue: Whether Assessment Should Be Under Section 153A

3.1 Assessee’s Contention

The assessee argued:

  • Once a requisition under Section 132A is made, the special regime under Section 153A must apply.
  • The assessment completed u/s Section 143(3) r.w.s. Section 153B(1)(b) is, therefore, without jurisdiction and void.

3.2 Tribunal’s Analysis

The Tribunal examined the scheme of Section 153A and Section 153C, as interpreted in:

  • Shyam Sunder Khandelwal v. ACIT [2024] 161 taxmann.com 255 (Rajasthan High Court)
    (special procedure under Sections 153A to 153D has overriding effect for six preceding assessment years)

Key legal position noted:

  • Section 153A covers six assessment years immediately preceding the assessment year relevant to the previous year in which:
    • Search u/s Section 132 is initiated, or
    • Requisition u/s Section 132A is made
  • The requisition year itself is not one of those six preceding years.

In this case:

  • Requisition u/s Section 132A was made on 25.11.2013 (previous year relevant to AY 2014-15).
  • AY 2014-15 is the requisition year assessment year, not one of the six preceding years.

Accordingly:

  • AY 2014-15 is to be assessed under normal provisions, i.e. Section 143(3).
  • The purpose of Section 153B(1)(b) is only to prescribe the time limit for completing assessment for the requisition year.
  • Therefore, assessment u/s Section 143(3) r.w.s. Section 153B(1)(b) is valid.

3.3 Distinction from Cited Case Law

The Tribunal distinguished other decisions: