TaxTMI 
TaxTMI 
2026 (5) TMI 458
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....ng grounds of appeal:- "1. That on the facts and in the circumstances of the case the order passed by the CIT(A) u/s. 250 of the Act dated 28.10.2025 is bad in law, violative of principles of natural justice and unjust. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in confirming the assessment order passed by the Assessing Officer (AO) determining the total income of the appellant at Rs. 24,02,250/- as against the declared income of Rs. 10,92,090/- vide order u/s. 153C of the Income Tax Act, 1961 dated 13.03.2024. 3. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in upholding the order passed u/s. 153C of the Income-tax Act, 1961, which is barred by limitation and thus, deserves to be quashed. 4. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on the facts in upholding the initiation of proceedings u/s. 153C of the Act based on a defective, unspecific and vague satisfaction note which has been drawn on the strength of an undated & unsigned one loose sheet of paper which document does not at all indic....
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....arbitrary additions made by Assessing officer based on generic WhatsApp chats without providing the Certificate u/s. 65B of the Information Technology Act, 2000 and without following the procedures laid down under the Indian Evidence Act 1972 read with the Information Technology Act, 2000. 10. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in making an ad-hoc and arbitrary addition amounting to Rs. 13,10,160/- on substantive basis in the hands of the appellant and on protective basis in the hands of Sh. Shishir as the Ld. AO was himself not sure in whose hands the addition has to be made as the said addition have been made totally on arbitrary & ad-hoc basis on the premises of some non-speaking undated & unsigned dumb documents supported by generic/unconnected WhatsApp chats which itself have no evidentiary value and that too without following the procedures laid down under the Indian Evidence Act, 1971 read with the Information Technology Act, 2000. 11. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in upholding the wrong invocation of Sec. 69A and Sec. 115BBE of the A....
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....furnished a Compilation of Case Laws as under: The issues as well as the facts involved in the captioned appeals are identical and therefore, joint common written submissions are being submitted herewith for ITA No. 8205/DEL/2025 and ITA No. 156/DEL/2026 as under: A. BRIEF CASE DETAILS 1. That proceedings u/s. 153C of the Act were initiated in case of the captioned assessees on the basis of the material found & seized (i.e., Pg. no. 28 of Annexure-A4) during the course of search action conducted at the premises of one, Mr. Ramavtar Agarwal at S-92, Panchsheel Park, New Delhi covered under Dinesh Tyagi Group of Cases on 16.05.2018. 2. That the satisfaction was recorded by the AO of the person searched on 17.01.2022 wherein the aforesaid material was relied upon for initiation of proceedings u/s. 153C of the Act in case of the captioned assessees. The copy of the satisfaction note is provided at Page No. 1 of Paper-Book and is also imaged hereunder along with the seized material relied upon in the Satisfaction Note: SATISFACTION NOTE OF AO OF THE PERSON SEARCHED ALLEGED INCRIMINATING SEIZED MATERIAL FORMING PART OF SATISFACTION NO....
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....he Hon'ble Bench and Ld. DR on 13.03.2026, the acknowledged copy of the said letter dated 09.03.2026 is enclosed at Page Nos. 39-42 of this WS. 2) That in the instant batch of appeals, the proceedings u/s. 153C of the Act have been initiated on the basis of the alleged information gathered during the course of search conducted on 16.05.2018 at the residential premises of one Mr. Ram Avtar Agarwal at S-92, Panchsheel Enclave, New Delhi. 3) That the assessment in case of the person searched, i.e., Mr. Ram Avtar Agarwal was framed vide order u/s. 153A of the Act dated 28.09.2021. The copy of the assessment order framed u/s. 153A of the Act dated 28.09.2021 in case of Mr. Ram Avtar Agarwal for AY 2017-18 is provided at Page Nos. 3-205 of Paper-Book. 4) That the notice u/s. 153C of the Act in the instant cases of appellant have been issued on 12.12.2022, i.e., after one year & three months' time from the date of assessment framed u/s. 153A of the Act in case of person searched. The copy of the notice u/s. 153C of the Act dated 12.12.2022 is provided at Page No. 2 of Paper-Book. 5) That at this juncture, it is important to place reliance on the judgeme....
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....d as delayed and accordingly, the said notice will be time barred. 8) That in order to streamline the assessment procedure with regard to issuance of notice for framing assessment in case of person other than person searched, the CBDT issued Circular No. 24/2015 dated 31.12.2015 wherein it clarified that Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari-materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'ble SC in case of Calcutta Knitwears (supra), apply to proceedings u/s. 153C of the IT Act, for the purposes of assessment of income of other than the searched person. The copy of the CBDT Circular No. 24/2015 dated 31.12.2015 is provided at Page Nos. 206-207 of Paper-Book. Accordingly, the afore-stated principles laid down by the Hon'ble Supreme Court in the case of Calcutta Knitwears (supra) and by the Hon'ble Delhi High Court in the case of Bharat Bhushan Jain (supra) in terms of delay in issuance of notice u/s. 158BD squarely applies to issuance of notice u/s. 153C of the Act as well. 9) That at this juncture, it is worthwhile to place reliance on the....
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....heet (alleged seized material) has been relied upon for initiation of assessment proceedings u/s. 153C of the Act in both the cases on the basis of alleged incriminating material unearthed during the course of search (as imaged above). 3) From the perusal of the aforesaid Satisfaction Note recorded by the Ld. AO and the alleged seized material relied upon, the following crucial facts are totally unascertainable: i. That as to how it has been alleged that the assessee has undertaken any undisclosed transaction pertaining to AY 2017-18; ii. That what amount of income has remained undisclosed by the assessee in his respective hand; iii. That what is the nature & the relevant amount of transaction which has remained undisclosed as just the description of the alleged sheet has only been mentioned in the Satisfaction Note without determining exactly which amount is the undisclosed income of the assessee specifically; iv. That how the alleged seized material pertains to the assessee v. That as to how it is being alleged that the alleged seized material has a bearing on the determination of total income of the assessee for AY 2017-18. ....
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.... of a dumb document and accordingly, the order of the Tribunal deleting the entire addition in the absence of a relevant material was upheld. b) Hon'ble Karnataka High Court in the case of DCIT v. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka) vide order dated 22.01.2024 [Copy of the judgement dated 22.01.2024 is enclosed at Page Nos. 68 to 93 of CCL] held as under: "26. It is established in law by the Hon'ble Apex Court that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent/Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal." c) Hon'ble ITAT, Delhi....
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....ly on the basis of uncorroborated noting in loose papers found during search because the addition on account of alleged on-money receipts made simply on the basis of uncorroborated noting and scribbling on loose sheets of papers made by some unidentified person and having no evidentiary value, is unsustainable and bad-in-law." In view of the aforementioned legal position, it is unambiguously clear that dumb documents (undated, unsigned random notings) cannot at all be relied upon for making addition while framing assessment under the relevant provisions of Income Tax Act, 1961 and thus, following the said settled position of law, the assumption of jurisdiction by recording satisfaction note based on a dumb document is not permissible under law and accordingly, the very assumption of jurisdiction is bad in law, illegal and void. 12) In addition to the above, it further most respectfully submitted that when the satisfaction note is absolutely devoid of any categorization/specification of the undisclosed income with reference to the documents relied/mentioned therein, the issuance of notice u/s. 153C of the Income Tax Act, 1961 is legally unsustainable and bad in law....
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....sdictional AO would have to firstly be satisfied that the material received is likely to have a bearing on or impact the total income of years or years which may form part of the block of six or ten AYs' and thereafter proceed to place the assessee on notice under Section 153C. The power to undertake such an assessment would stand confined to those years to which the material may relate or is likely to influence. Absent any material that may either cast a doubt on the estimation of total income for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C. It would only be consequent to such satisfaction being reached that a notice would be liable to be issued and thus resulting in the abatement of pending proceedings and reopening of concluded assessments." 14) From the perusal of the contents of the aforesaid judgement, it is unambiguously clear that the incriminating material based on which satisfaction has been recorded to initiate proceedings u/s. 153C of the Act must itself indicate that it has a bearing on the determination of total income for a particular year in case of the person other than the person searched.....
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....ion 153C of the Act." ii) The Hon'ble ITAT, Delhi in the case of Rajiv Agarwal v. ACIT in ITA No. 2948/Del/2023 vide order dated 31.12.2024 [Copy of the judgement dated 31.12.2024 is enclosed at Page Nos. 145 to 163 of CCL] following the judgement of the Jurisdictional Delhi High Court in case of Canyon Financial Services Ltd. Vs. ITO [399 ITR 202] held as under: "14......... When the satisfaction notes are compared with the notice u/s. 142(1) of the Act along with the annexure having analysis of the seized material, it appears that at the time of assumption of jurisdiction by way of recording the satisfaction, the AO of the assessee before us had not applied his mind while issuing the notice on 17.06.2021 and it was only while issuing notice under sub section (1) of section 142 of the Act, the analysis of the documents was done. Thus, in regard to the appeals of the assessee, we find substance in the ground No.1 as raised before us. Thus, the Ld. CIT(A) has erred in law by not appreciating that the impugned assessment orders in both the years were based on illegal assumption of jurisdiction on the basis of satisfaction note which was recorded without application ....
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....ly belong to the Assessee Firm.. ...................... nevertheless at the stage of sending notice under Section 153C, the AO has to record a specific reason or reasons, why the material seized from the other person has a nexus to the assessee, to whom the notice under that provision is addressed. In this case, this never happened. Thus, for the previous years, the rule in CIT v Kabul Chawla [2016] 380 ITR 573/234 Taxman 300/61 taxmann.com 412 (Delhi), i.e., that in the absence of any incriminating materials, the previous years' assessments cannot be disturbed, applies. 24. In the present case, therefore, the failure of the AO to record a specific satisfaction as to how the recovered material belonged to the assessee in the note that preceded the notice issued under it, vitiates the assessments." In view of the afore-stated facts and settled law, it is hereby prayed before your honor to kindly quash the assessment orders framed u/s. 153C of the Act all dated 13.03.2024 in case of all the captioned assessees in the interest of natural justice as the same has been passed on the basis of wrong assumption of jurisdiction by recording a defe....
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....ce is placed on the judgement delivered by the Hon'ble ITAT, Chennai in case of M/s.KP Construction vs. ACIT in ITA No.437/Chny/2021 wherein vide order dated 05.04.2024 [Copy of the judgement dated 05.04.2024 is enclosed at Page Nos. 188 to 197 of CCL], it was held as under: "In the present case, on perusal of satisfaction note recorded by the AO of a searched person, we find that there is no reference to the seized materials considered by the AO to frame assessment and make additions for relevant A Y 2016-17 which is clearly evident from the seized materials referred to by the AO in Page No.4 of the order where he referred Annexure No. ANN/RB/ISPC/B&D/1O, but said material did not find mention by the AO in the satisfaction note. From the above, it is undisputedly clear that there is no live link between the satisfaction arrived at by the AO and incriminating material found during the course of search and thus, in our considered view, the satisfaction note recorded by the AO as required under provisions of Sec. 153C of the Act, is not in accordance with law and further, notice issued by the AO on the basis of said incorrect satisfaction is illegal ab initio and liable to b....
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.... of the aforesaid Manual, it can be seen that it is directed by the CBDT that the Digital Evidence Collection Form and Mobile Phone Evidence Collection Form should be enclosed in the order, however, no such form was enclosed with the assessment order which is a matter of record. The CBDT has prescribed such forms for validation of the el ctronic evidence being relied upon by the department, without following such norms as prescribed by the CBDT, the said electronic data cannot be relied which is a settled law as the said evidences remain unverified & unsubstantiated if the proper procedure as prescribed by such Manual is not followed. e) It is also apparent from the said Manual that the Digital Forensic Report containing the details of containing details of hash value and the details of all mahazar drawn to open the digital evidence at various times to gather further evidences should be included as an annexure to the assessment order and if the chain of custody form is present, the same can be annexed to the assessment order. The Manual states that these documents establish the integrity of the digital data and therefore, conversely, if the said documents like Digital Fore....
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....gi enclosed at Page Nos. 208 - 216 of Paper-Book (Relevant Page No. 212) that neither hash value nor IMEI Number of the Mobile Phone is mentioned which is a clear violation of the procedure of collection & storage of electronic evidence as prescribed under the said Manual. i) In view of the above, the additions so made by placing reliance on inadmissible electronic evidence (incl. WhatsApp Chats) are liable to be deleted and therefore, the entire additions so made in the instant cases of the appellant deserves to be deleted. In this regard, reliance is placed on the following judicial pronouncements: • Hon'ble ITAT, Delhi in the case of DCIT, Central Circle-13, Delhi vs. M/s Balar Marketing Pvt. Ltd. in ITA No. 3143 to 3148/Del/2023 vide order dated 18.03.2026 held as under: "25. We thus come to a stage where it becomes relevant to again rely the provisions of the Manual issued by the Board to find out how the Board recognizes the due procedure to be adopted to ensure the admissibility of digital evidences and we find that by virtue of para 6.8 of the Manual while giving directions as to how the forensic imaging of cloning of the devices have to be do....
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.... that that tax authorities applied some provisions and instructions of the Manual, at time of search but, failed to maintain the records as per the instructions in Manual for Panchnama, mobile device collection form, certificate u/s. 65B of the Evidence Act and most importantly the chain of custody form. ............. 40. Then it is also pertinent to mention that the incriminating evidences relied by the AO is not the primary evidence existing in the laptop or computer wherein the alleged Sambhav software was installed, but, are merely images of Sambhav software which allegedly Mr. Vimal Jain was sharing with counterparts for acknowledging the transactions. Similarly, on going through the Whatsapp chats as part of the annexure to the assessment order, the same do not contain any message which will narrate any transaction on its own, but, only mention some figures which are allegedly to be codes. When original Sambhav software could not be retrieved from any of the electronic devices the images in the phones of Mr. Vimal Jain were, no doubt, secondary evidences only and that all the more required that if they were to be relied the instructions given by the Board to....
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....ersons mentioned (supra). In revenue view of the above, we do not have any hesitation in holding that proceeded on a wrong premise while relying on assessee's whatsapp chat " • The Hon'ble Supreme Court in the case of Ambalal Sarabhai Enterprise vs Ks Infraspace LLP Limited vide CIVIL APPEAL NO(s). 9346 OF 2019 (arising out of SLP (Civil) No(s). 23194 of 2019) vide order dated 6 January, 2020 held that "the WhatsApp messages which are virtual verbal communications are matters of evidence with regard to their meaning and its contents to be proved during trial by evidence−in−chief and cross examination." • The Hon'ble Chennai Tribunal in the case of DCIT, Cc-1(4), Chennai vs M/S. John Kumar Trust ITA No.3028/CHNY/2019 vide order dated 13.05.2022 also observed that "First of all, WhatsApp messages cannot be considered as a conclusive evidence to draw an adverse inference against the assessee, unless those WhatsApp messages are supported by corroborative evidences to indicate that those messages and contents represents undisclosed income of the assessee." • The Hon'ble VISAKHAPATNAM Tribunal in the case of ACIT vs M/S. S....
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....set aside". In view of the afore-stated legal position and facts of the case, it is hereby prayed before your honor to kindly delete the entire additions so erroneously made by placing reliance on WhatsApp Chats without following the due procedure laid down under the Indian Evidence Act, 1872 and the Digital Evidence Investigation Manual 2014 and oblige. V. The assessment proceedings u/s. 153C of the Act has been initiated by recording satisfaction based on borrowed satisfaction from the Competent Authority which is not permissible under law and thus, the Satisfaction Note so drawn by the Jurisdictional Assessing Officer is defective and accordingly, the impugned assessment order based on such defective satisfaction note is liable to be quashed meaning thereby that the assessment so framed u/s. 153C of the Act is out of jurisdiction 1) That in the instant cases, the satisfaction by the Jurisdictional Assessing Officer has been recorded on 05.12.2022 wherein he has mentioned that "the approval from the competent authority has been obtained in this case and Notices u/s. 153C of the I. T. Act, 1961 has been issued for AY 2017-18". The copies of satisfaction ....
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....conclusions drawn by another authority or system. This concept finds its roots in administrative law principles that demand statutory powers must be exercised by the authority vested with them, not by proxy or delegation. When the Income Tax Act confers power on the Assessing Officer to form a reason to believe, it is that specific officer who must personally be satisfied about the escapement of income. They cannot simply borrow the satisfaction of the Investigation Wing. 5) In this regard, reliance is placed on the following landmark judicial pronouncements establishing the principle that the authority which has been entrusted with jurisdiction to act under law should act independently without involving any other authority: a) Hon'ble Supreme Court of India in the case of Anirudh Sinhji Karan Sinhji Jadeja Vs. State of Gujarat, (1995) 5 SCC 302 vide order dated 11.08.1995 [Copy of the judgement dated 11.08.1995 is enclosed at Page Nos. 254 to 260 of CCL] observed at Para 11 as under: "If a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If the discretion is exercised under the direction or in ....
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....ion which does not satisfy the requirement of law as the Ld. JAO has to apply his independent mind to record satisfaction for initiation of proceedings u/s. 153C of the Act and thus, the jurisdiction has been wrongly assumed for initiation of proceedings u/s. 153C of the Act without independent application of mind based on borrowed satisfaction. Accordingly, the assessment order so framed u/s. 153C of the Act is bad in law and therefore, deserves to be quashed. VI. The assessment order u/s. 153C of the Act dated 13.03.2024 is bad in law and deserves to be quashed as the same has been passed based on a mechanical approval u/s. 153D of the Act In view of the facts detailed in the afore-stated submissions, it can be seen that the Ld. Addl. CIT, Central Range-1, Delhi has granted a mechanical approval without proper application of mind and thus, the order deserves to be quashed on this count as well. Reliance placed on the following judicial pronouncements: - i) PCIT v. Shiv Kumar Nayyar (Delhi High Court) in ITA 285/2024 & CM APPL 28994/2024 [Copy of the judgement is enclosed at Page Nos. 287 to 294 of Compilation of Case Laws (CCL)], ii) Asst. CIT ....
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....h dated 13.03.2024 and oblige." 9. The Ld. AR for the assessee argued that the assessment orders so framed u/s. 153C of the Act dated 13.03.2024 deserves to be quashed on not one but many counts. The Ld. AR for the assessee also furnished a Summary of Arguments wherein six arguments were made challenging the validity of the assessment order so framed, the said summary of argument is also reproduced hereunder: On the basis of the arguments listed below, the very assessment orders so passed u/s. 153C of the Act dated 13.03.2024 deserves to be quashed: I. The notice u/s. 153C of the Act dated 12.12.2022 for AY 2017-18 is barred by limitation due to inordinate delay as laid down by CBDT Circular No. 24/2015 dated 31.12.2015 and thus, notice u/s. 153C is bad in law, void-ab-initio being barred by limitation and accordingly, the entire assessment proceedings along with consequent demand deserves to be quashed Matter covered by the following judicial precedents: i. Hon'ble Supreme Court of India in the case of CIT vs. Calcutta Knitwears in Civil Appeal No. 3958 of 2014 wherein vide order dated 12.03.2014 ii. Hon'ble Delhi High Court in the c....
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.... in the case of Rajiv Agarwal v. ACIT in ITA No. 2948/Del/2023 vide order dated 31.12.2024 [Copy of the judgement dated 31.12.2024 is enclosed at Page Nos. 145 to 163 of CCL] iv. The Hon'ble Madras High Court in the case of Agni Vishnu Ventures (P.) Ltd. v. DCIT [2023] 157 taxmann.com 242 (Madras) vide order dated 28.06.2023 [Copy of the judgement dated 28.06.2023 is enclosed at Page Nos. 164 to 187 of CCL] v. The Hon'ble Delhi High Court in the case of PCIT, Delhi-18 v. N.S. Software (Firm) [2018] 93 taxmann.com 21 (Delhi) vide order dated 18.04.2018 III. The assessment has been framed by placing reliance on some alleged material seized from third party not forming part of the impugned Satisfaction Note meaning thereby that the assessment so framed u/s. 153C of the Act is out of jurisdiction Matter covered by the following judicial precedents: • Hon'ble ITAT, Chennai in case of M/s.KP Construction vs. ACIT in ITA No.437/Chny/2021 order dated 05.04.2024 [Copy of the judgement dated 05.04.2024 is enclosed at Page Nos. 188 to 197 of CCL] IV. The additions have been made by placing reliance on inadmissible electr....
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....at Page Nos. 198 to 253 of CCL] ii. Hon'ble Supreme Court of India in the case of Anirudh Sinhji Karan Sinhji Jadeja Vs. State of Gujarat, (1995) 5 SCC 302 vide order dated 11.08.1995 [Copy of the judgement dated 11.08.1995 is enclosed at Page Nos. 254 to 260 of CCL] iii. Hon'ble Delhi High Court in the case of CIT vs. SPL‟S SIDDHARTHA LTD. in ITA No.836 of 2011 vide order dated 14.09.2011 [Copy of the judgement dated 14.09.2011 is enclosed at Pg Nos. 261 to 268 of CCL] iv. Hon'ble Delhi High Court in the case of Principal Commissioner of Income Tax v. Meenakshi Overseas Pvt. Ltd. in ITA 692/2016 wherein vide order dated 26.05.2017 [Copy of the judgement dated 26.05.2017 is enclosed at Page Nos. 269 to 286 of CCL] VI. The assessment order u/s. 153C of the Act dated 13.03.2024 is bad in law and deserves to be quashed as the same has been passed based on a mechanical approval u/s. 153D of the Act Matter covered by the following judicial precedents: i) PCIT v. Shiv Kumar Nayyar (Delhi High Court) in ITA 285/2024 & CM APPL 28994/2024 [Copy of the judgement is enclosed at Page Nos. 287 to 294 of Compilation of Case Laws (CCL)],....
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....arched, namely, Mr. Ram Avtar Agarwal, on 28.09.2021 and the maximum period of relaxation which was allowed by the CBDT lapsed on 30.09.2021 in view of Press Release dated 25.06.2021 which stated at Para B.16 as under: "Time Limit for passing assessment order which was earlier extended to 30th June, 2021 is further extended to 30th September, 2021." b. Therefore, the inordinate delay committed in issuance of notices u/s. 153C of the Act on 12.12.2022 is not covered even by the relaxation of limitation period provided by CBDT as aforesaid and thus, the notices u/s. 153C of the Act so issued on 12.12.2022 after the delay of almost 15 months' time is barred by limitation in view of the binding judgment of the Hon'ble Jurisdictional High Court of Delhi in the case of CIT v. Bharat Bhushan Jain [2015] 61 taxmann.com 89 (Delhi) wherein it has been held that if any notice u/s. 158BD (153C) of the Act is issued beyond 10 months' time from the date of assessment order framed in the case of person searched, the same will be considered as delayed and accordingly, the said notice will be time barred. c. Furthermore, the Ld. AR of the assessee submitted that the asses....
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....ings u/s. 153C of the Act based on a defective, unspecific and vague satisfaction note which has been drawn on the strength of an undated & unsigned one loose sheet of paper which document does not at all indicate that it has a bearing on the determination of income of the appellant and therefore, the notice issued u/s. 153C of the Act on the basis of the vague Satisfaction Note which has no value in the eyes of law, the same is illegal and not valid under law." b. The Ld. AR submitted that vide Ground No. 4, the assessee have duly challenged the satisfaction note which inter alia includes the argument raised that the Ld. JAO has not drawn the Satisfaction Note independently due to the fact that he was himself not satisfied to initiate the assessment proceedings u/s. 153C of the Act on the basis of the very alleged seized material which was an undated and unsigned loose sheet from which it could not be ascertained as to which assessment year, the said material pertains to and therefore, the Ld. JAO took the approval from higher authority to take a shelter and shoulder as the Ld. JAO himself was not satisfied that any proceeding can be initiated u/s. 153C of the Act for a p....
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....y ranging between 10 months of one-and-half years cannot be considered contemporaneous to assessment proceedings. We are of the opinion that notices were not issued in conformity with the requirements of section 158BD, and were unduly delayed. The appeals of the Revenue, accordingly, fail and are dismissed." b) The Ld. AR for the assessee further submitted that if the original limitation for framing of assessment u/s. 153A of the Act in case of the person searched, namely, Sh. Ram Avtar Agarwal is considered as prescribed under Second Proviso to Clause (b) to Sec. 153B of the Act (as the date of search was 16.05.2018), i.e., 18 months from the end of the financial year in which the last of the authorization for search was executed, i.e., 30.09.2020 then the delay in issuance of notices u/s. 153C of the Act in case of Sh. Rajdeo Singh and Sh. Shishir, would have been more than two years & two months' time, however, due to relaxations provided by the CBDT on account of COVID-19 Pandemic, that inordinate delay of more than two years & two months' time fallen down to 15 months after exhausting the benefit of COVID-19 Pandemic relaxations as last extended vide CBDT's Press Rele....
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.... (Page No. 1 of the Paper-Book) and Ld. JAO (Page No. 46 of the Written Submissions) for comparison, the same are reproduced below for ready reference: SATISFACTION NOTES in case of Sh. Shishir (ITA No. 156/DEL/2026) SATISFACTION NOTES in case of Sh. Rajdeo Singh (ITA No. 8205/DEL/2025) f) The Ld. AR for the assessee submitted that it is a settled law that in the absence of a seized material which specifically and clearly indicate that there exists an undisclosed income for a particular assessment year which belongs to a person other the person searched, no satisfaction for initiation of assessment proceedings u/s. 153C of the Act can be drawn. To buttress the said contention, the Ld. AR of the assessee relied upon several judicial precedents including the judgment of the Hon'ble Jurisdictional High Court of Delhi in the case of Saksham Commodities Ltd. vs. Income Tax Officer [2024] 161 taxmann.com 485 (Delhi)/[2024] 464 ITR 1 (Delhi), the relevant contents of the said judgement in case of Saksham Commodities are reproduced hereunder: "67. On an overall consideration of the aforesaid, we come to the firm conclusion that the "incriminating materia....
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....d thus, the Ld. AO has assumed the jurisdiction to initiate proceedings u/s. 153C of the Act without following the due process under the law and therefore, the very assessment orders so passed u/s. 153C of the Act both dated 13.03.2024 are legally unsustainable and void-ab-initio and accordingly, deserves to be quashed on account of a defective satisfaction note. h) The Ld. AR further added that the satisfaction note is defective and also suffers from another anomaly that the Ld. JAO has not recorded his satisfaction independently rather the Ld. JAO has taken approval from another superior authority for initiation of proceedings u/s. 153C of the Act in case of the assessees, namely, Sh. Shishir and Sh. Rajdeo Singh as can be clearly seen from the perusal of the Satisfaction Note so recorded by Ld. JAO dated 05.12.2022 at Para 7 (v) which states that "the approval from the competent authority has been obtained in this case and Notices u/s. 153C of the I. T. Act, 1961 has been issued for AY 2017-18" and thus, the said satisfaction note so drawn by the Ld. JAO is illegal and has been drawn against the law as there is no requirement to take any approval from another authority ....
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....s envisaged u/s. 153C of the Act and thus, the satisfaction note so drawn by the Ld. JAO is defective on this count as well. 13. To contrary to the submissions of the Ld. AR, the Ld. DR submitted that as far as the delay in issuance of notice u/s. 153C of the Act is concerned, the same may be ignored due to COVID-19 Pandemic, as regard the contention of Ld. AR with regard to the borrowed satisfaction and issuance of notice u/s. 153C of the Act, the Ld. DR submitted that the said arguments were not raised before the Ld. CIT(A) and this Tribunal and thus, should not be adjudicated upon. Further, the Ld. DR placed reliance on the authorities below. 14. Having considered to the facts and the legal position involved in the matter coupled with the submissions made by both the parties, we are in complete agreement with the arguments so raised by the assessee and we find that the contentions of the Ld. DR are devoid of any merit. The contention of the Ld. DR that the grounds which have not been raised before the Ld. CIT(A) cannot be raised before the Hon'ble Tribunal has no legs to stand in the eyes of law as the law with regard to the admission of additional grounds is no longer res....
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....of the Act dated 12.12.2022 from the date of framing of assessment in case of person searched, namely, Mr. Ram Avtar Agarwal on 28.09.2021 and thus, we find merit in the arguments and submissions of the assessee. 16. In view of the above, we are bound by the binding judgement of the Hon'ble Jurisdictional High Court of Delhi in the case of Bharat Bhushan Jain (supra) keeping in view the principles of judicial discipline and accordingly, following the view taken by the Hon'ble Jurisdictional High Court of Delhi in the case of Bharat Bhushan Jain (supra), since in the instant two appeals before us in case of Sh. Rajdeo Singh in ITA No. 8205/DEL/2025 and in case of Sh. Shishir in ITA No. 156/DEL/2026, the notices so issued u/s. 153C of the Act both dated 12.12.2022 after a delay of 15 months are barred by limitation and consequently, the assessment orders passed by the Assessing Officer u/s. 153C of the Act both dated 13.03.2024 are invalid, void ab initio and accordingly, are hereby quashed being non-est in the eyes of law and therefore, the additional ground so raised by the assessees are allowed. 17. Though we have already quashed the very assessment order by allowing the add....
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...." which is spoken of would have to be identified with respect to the AY to which it relates or may be likely to impact before the initiation of proceedings under Section 153C of the Act.......". 19. Since we have quashed the entire assessment orders dated 13.03.2024 u/s. 153C of the Income Tax Act, 1961, in case of Shri Rajdeo Singh and the facts in the case of Shri Rajdeo Singh are exactly similar to the facts in Shishir, the findings are applicable mutatis mutandis in view of foregoing paras above, therefore, the other grounds of appeals so raised by the assessees are not being adjudicated and thus, are left open. 20. In the result, the appeals of both the assessees are allowed. Order pronounced in the open court on this 29th day of April, 2026. ============= Document 1 Tem hissisure Liekasin a Quiseste Slope. ----- ----------- Delbi Document 2 ADM 45,0,00 2,26, 60 000 Com Blame Anno 27500 1,11,15,000 3,37,51,500 Shane Ceat 9000 99 20,26,500 Expanse e 6% 250,000 RTGS Meene Sil 3,00,000 Sidderk Suje 3,50,00 Tuesinh 15, 000 3,82,51,500 3,82,51,500 Details of Shares Tifl. Auro Cent R.D. Shig....
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....18 Document 6 ADM 45,00,000 3,37,51,500 2,26, 60 euro Car 1,11,15,000 Blan Anno 27500 9000 Stone cent 20,26,500 Expense e 6% 250,000 RTGS Means Sin 3,00000 SidderP Suje 350 Tresin 3,82,51,500 3,82,51,500 Details 1.Shares Tift. Auro Cent R.D. Sigh 1500 - Subhash Sin 3000 Galima Singh - 300 Michir Samir 4000 1000 Tava Smije 4000 Sharet Singh 10,000 1000 Means Sugh 5000 2500 27,00 2000 9000 Document 7 Name of the assesce .. Shishir Singh PAN AVJP59637B Status Individual Assessment Year 2017-18 A search was conducted in the case of Shri Dinesh Tyagi on 16-05-2018. During the proceedings of Search and Seizure action at premises of Shri Ramavtar Aggarwal. incriminating documents were found and seized. The information contained in these documents pertains to Shishir Singh The brief description of these documents are as under .- S.No. Premise/ Party/ Annexurer Page No. Description of document seized. 1 Annexure A-4. Page No. 28 seized from premise of Sh. Ramavtar Aggarwal. S 92 Panchsheel Park, New Delhi These pages contains Receipt regarding transaction amounting to Rs. 38251500/- for tr....
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.... belongs to the other persons (use Annexure if required) While examining the copies documents and information contained therein pertaining to Sh. Shach& Singh Le. the person other than the searched person, as provided by the AO of the person searched upon, vide email dated 15.09.2022. I am satisfied that action u/s 153C of L.T. Act, 1961 is envisaged. Accordingly, the approval from the competent authority has been obtained in this case and Notices u/s 153C of the 1.T. Act. 1961 has been issued for the A.Y. 2017-18 8. Assessment Years involved 2017-18 Green Green Income Tax Officer, Ward-60(1), New Delhi. Dated: 05 .12.2022 Document 9 Name of the assesce .. Rajdeo Singh PAN .. AJPPS7845D Status Individual Assessment Year 2017-18 A search was conducted in the case of Shri Dinesh Tyagi on 16-05-2018. During the proceedings of Search and Seizure action at premises of Shri Ramavtar Aggarwal, incriminating documents were found and seized. The information contained in these documents pertains to Rajdeo Singh The brief description of these documents are as under :- S.No. Premise/ Party/ Annexure/ Page No. Description of document seized. - Annexure A-4, Page....