TaxTMI 
TaxTMI 
2026 (2) TMI 1439
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....rged commission, this fact was also admitted by him in the statements recorded u/s 132(4) of the Act. From the perusal seized incriminating material i.e. Excel sheet containing list of beneficiaries and their transactions of accommodation entries taken from Shell companies, transaction pertaining to assessee were also found. Accordingly, as per provisions of section 153C of the Act, satisfaction note, by the AO of the searched person was recorded on 24.03.2021 and seized material was handed over to the AO of assessee company. Thereafter, notice u/s 153C was issued on 26.03.2021 and duly served upon the assessee. In response, assessee filed return of income on 10.04.2021 declaring loss as was declared in the original return. Subsequently, notice u/s 143(2) was issued on 04.10.2021 to the assessee and thereafter, various notices u/s 142(1) was issued to the assessee. In response, assessee filed necessary replies and evidences. After considering the same, AO vide order dated 28.12.2021 passed u/s 153C r.w.s. 143(3) of the Act made the addition of INR 4,75,00,000/- towards unexplained credit u/s 68 of the Act and further addition of INR 14,25,000/- for unexplained expenditure was made ....
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....eet however, nowhere in the "Satisfaction Note", it is specified as to which entry pertained to the assessee. The assessee also claimed that the "Satisfaction Note" of the AO of the assessee is reproduced at page 4 of the assessment order, wherein again a reference is made of the Excel Sheet available at page 8 of the Annexure A-1 found from the premises of Nishant at 9-41(2), 2nd Floor, Kotla Mubarakpur, New Delhi however, nowhere in the "Satisfaction Note", it is observed by the AO that these documents "belonged to" or "pertained to" the assessee and further nowhere in the "Satisfaction Note", any amount is mentioned nor a reference of each assessment year is made to which such entry pertained to and common "Satisfaction Note" for all Assessment Years i.e. from AY 2011-12 to 2017-18 was recorded and thus, the "Satisfaction Note" is defective. 6. Reliance is placed on the judgement of the Hon'ble Karnataka High Court in the case of DCIT vs Sunil Kumar Sharma [2024] 469 ITR 197 (Karnataka) which was confirmed by the Hon'ble Apex Court by dismissing the SLP. 7. On careful consideration of the facts, we find that AO has recorded his satisfaction where in the "Satisfacti....
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....nder Section 153C r.w.s. Section 153A of the I.T Act, 1961 for the assessment years 2015-16 to 2021-22." 17. From the above, it could be seen that the Learned AO of the assessee herein had recorded consolidated satisfaction note for the Assessment Years 2015-16 to 2021-22. Whether recording of consolidated satisfaction note for various assessment years would prove fatal to the assumption of jurisdiction of the Learned AO and consequential framing of assessments under section 153C of the Act was subject matter of consideration by the Hon'ble Karnataka High Court in the case of DCIT us Sunil Kumar Sharma reported in 159 taxmann.com 179 (Karnataka) dated 22-1-2024, wherein it was held as under :- "53. Further, satisfaction note is required to be recorded under section 153C of the IT Act for each Assessment Year and in the impugned proceedings, a consolidated satisfaction note has been recorded for different Assessment Years, which also vitiates the entire assessment proceedings. In view of all these findings, it is said that the appeals do not have any substance for seeking intervention as sought for by the appellant/ Revenue. 17.1. We find that the Spec....
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.... the assessment order. The sheets bearing the names of nine parties therein and definitely not of the assessee, was analysed by the revenue to come to the conclusion that the items denoted with 'C' were cash entries and with 'B' were bank entries. The revenue proceeded to examine the bank entries and certain individuals were found and traced on Insights and other Income-tax Database who were supposedly paying the impugned amount. Now, on examination of the matter related to Ms Sita Gupta, first out of the nine entries, the AO claimed to have detected that she had received interest from Gulshan Homes and Infrastructure Pvt Ltd -the assessee herein. The Investigation Unit thereafter and not the AO of the assessee, collected details etc. from the assessee company and as is mentioned in the para 4.15 of the assessment order, the total amount of the alleged cash receipt/ interest was interpolated which did not at all figure in the impugned seized WhatsApp chat. Noteworthy, the name of the assessee was not at all appearing in any seized material. The ld. Counsel further elaborated that the revenue has relied on a WhatsApp chat between Mr Praveen Jain and Mr Sanjeev Gupta ....
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....alf of Gulshan Homes, the initial point of providing loan .... vii Para 12 is sufficient proof that this satisfaction note is copy of Appraisal report. It is mentioned that 'additionally AO may consider calculating the cash interest amount paid as addition in the hands of Gulshan ... ' and 'the monthly interest and date of payment of principle amount is mentioned above for the perusal of AO'. viii-Para13- it is clear that the sheet found is summary of undisclosed investments facilitated of various clients by Parveen in Gulshan Homes and he himself has invested through wife Seema Jain and person known as Mama .. ix. Para 14 - Further, Sh. Gulshan Nagpal was called on 16/09/2021 (a date definitely prior to the satisfaction note of AO of the searched person) for personal examination u/s 131(1A) ... (emphasis supplied by us) 20. The Learned AR submitted that that the Learned AO of the assessee was only required to be satisfied vis-a vis the seized material handed over by the AO of the searched person without any reference to any other information or document even if in his possession received from any source. The satisfaction note ....