TaxTMI 
TaxTMI 
2026 (2) TMI 1244
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.... challenges the validity of the notice dated 30th March 2025 issued under Section 153C of the Income Tax Act, 1961 ("the IT Act") for the A.Y.2016-17. 3. Brief facts of the case are as under:- (a) The Petitioner is a company engaged in the business of advertising. Apparently, a search and seizure operation under Section 132 of the IT Act was conducted on 3rd February 2021 in the case of Mr. Samir Modi and Ms. Shivani Modi. Concurrently, a search was conducted on 6th February 2021 at the residential premises of one Shri Sandeep Arora. (b) Based on the material allegedly seized during the search on Shri Sandeep Arora, the Assessing Officer of the searched person recorded a satisfaction note on 27th June 2024. Consequently....
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....he searched person. He further submitted that the satisfaction note of the Assessing Officer of the Petitioner i.e., Respondent No. 1, is undated. He also relied upon the CBDT Circular No.24/2015 dated 31st December 2015, which clarifies that the ratio of Calcutta Knitwears (supra) applies to proceedings under Section 153C of the IT Act. To buttress his argument regarding the meaning of "immediately", Mr. Gandhi relied upon the decision of the Delhi High Court in CIT V/S Bharat Bhushan Jain [(2015) 370 ITR 695 (Delhi)] and the Gujarat High Court in Pr. CIT V/S Jitendra H. Modi HUF [(2018) 403 ITR 110 (Gujarat)], wherein delays of 9 to 15 months were held to be fatal. 6. On the second issue, Mr. Gandhi submitted that the satisfaction note....
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....quire a DIN. He submitted that the Circular is very clear that internal communications would not require a DIN. 9. In rejoinder, Mr. Gandhi pointed out that this Court in Sanjay Nathalal Shah (supra) has already considered and distinguished the said decision of the Gujarat High Court in Rameshkumar Tulsidas Kaneriya (supra), holding that the binding Circular of the CBDT and the law laid down by this Court in Ashok Commercial Enterprises (supra) must prevail. 10. We have considered the rival submissions and perused the papers available on record. The first issue is whether the satisfaction note was recorded within the time frame contemplated by law. The Hon'ble Supreme Court in Calcutta Knitwears (supra) has laid down the law regar....
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.... 12. The CBDT Circular No. 24/2015 dated 31st December 2015 explicitly states that the guidelines of the Hon'ble Supreme Court in Calcutta Knitwears (supra) apply to proceedings under Section 153C of the IT Act. Therefore, the Assessing Officer of the searched person was required to record satisfaction, at the latest, immediately after the completion of the assessment of the searched person. We find support in the decision of the Delhi High Court in Bharat Bhushan Jain (Supra), where a delay of 10 months was held to be fatal. Similarly, the Gujarat High Court in Jitendra H. Modi HUF (Supra) held that a period of 9 months could not be termed as "immediate". In Parag Rameshbhai Gathani V/S ITO [(2025) 180 taxmann.com 662 (Gujarat)], a ....
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.... are completed of the searched person. Further, this is also clarified by the Circular No.24/2015 issued by the Board itself. Accordingly, we hold that the proceedings are barred by limitation. 14. The second issue pertains to the absence of DIN on the satisfaction note. This issue is no longer res integra insofar as this Court is concerned. In Ashok Commercial Enterprises (Supra), this Court held as under:- "18(d) The said Circular also applies to the satisfaction note dated 13th July 2021 issued by respondent no. 1. The satisfaction note will fall within the scope of paragraph 2 of the Circular as a communication of the specified type issued to any person. Therefore, the satisfaction note dated 13th July 2021 and the impugned ....
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....cedural aspect. We are afraid we cannot subscribe to the above findings for two reasons. Firstly, the regularization has to happen only in terms of Circular No. 19/2019 and only in a case where the conditions of paragraph 3 are fulfilled. Secondly, we have held that not following Circular No. 19/2019 cannot be simply termed as a procedural irregularity. Therefore, the decision in the case of the Gujarat High Court would not assist the case of the Revenue. Further, it is fairly settled that dismissal of SLP in limine would not amount to merger of the order of the High Court with that of the Supreme Court. If at all any support is required for this proposition, then reference can be made to the decision of the Hon'ble Supreme Court in the....