TaxTMI 
TaxTMI 
2026 (7) TMI 347
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....unsel has been considered in the case of Vinay Home Pvt. Ltd. in ITA No. 2459/Del/2025 order dated 06.02.2026 and the Coordinate Bench has held that the same is vitiated. 3. Ld. DR has heavily relied the impugned orders and submitted that the satisfaction note sufficiently discloses the material facts and consolidated approval does not vitiate the assessment orders pass on merits. 4. In this context, we find that at page No. 3 of the assessment order itself satisfaction note recorded for AY: 2011-12 to 2017-18 is reproduced. We find that the same satisfaction note was relied in the case of M/s Vinay Homes Pvt. Ltd. in its assessment order dated 28.12.2021 in regard to AY: 2016-17 and the Coordinate Bench in its order dated 06.02.2026 has considered this satisfaction note to have been not recorded in accordance with law and held that the assumption of jurisdiction was vitiated. The satisfaction note in the case of Vinay Home Pvt. Ltd. was also in the background of same search assessment proceeding in the case of Ashish Begwani group of cases, as for completeness we reproduce the relevant part of the order in the case of Vinay Home Pvt. Ltd. (supra): "5. Heard the cont....
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....al High Court in the case of Saksham Commodities vs ITO [2024] 161 taxmann.com 458 (Delhi) has held that the jurisdiction assumed u/s 153C is defective and quashed the order. The relevant observations of the Co-ordinate Bench are reproduced as under:- "16. Now let us come to the satisfaction note recorded by the Learned AO of the assessee herein. The Learned AO of the assessee herein recorded satisfaction note on 15-12-2022 assuming jurisdiction under section 153C of the Act which is enclosed in Pages 5 to 15 of the Paper Book. It is pertinent to note that the Learned AO of the assessee had recorded single and consolidated satisfaction note for Assessment Years 2015- 16 to 2021-22. For the sake of convenience, the last paragraph of the satisfaction note dated 15-12-2022 recorded by the Learned AO of the assessee herein is reproduced below:- "The above satisfaction notes recorded as the AO of the person searched has been placed on record. As AO of the person other than the searched person, I have also examined the above referred seized material and the contents of the same. After examining the entries in these documents, I am satisfied that these documents pertain ....
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....g for the appellants. 3. We are not inclined to interfere with the impugned judgment and order passed by the High Court of Karnataka at Bengaluru in Writ Appeal No. 831/2022 (T-IT) dated 22-01-2024/ Deputy Commissioner of Income-tax v. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka). 4. The Special Leave Petition is dismissed. 5. Pending application(s), if any, shall stand disposed of. 18. The Learned AR before us vehemently argued that the satisfaction note prepared by the AO of the assessee is still more audacious. The imaged messages are reproduced therein and legible copy is reproduced in para 4.2 to para 4.7 of the assessment order and the name of the assessee nowhere figures in these messages. As shown in para 4.2, the impugned images were found from the mobile phone of Shri Parveen Jain received from his son, Shri Vaibhav Jain and it shows nine names, Sita Gupta to Sanjeev Gupta- but name of the assessee is not there at all. Identical is the situation in para 4.4 of the assessment order. The Learned AR stated that it is beyond any sane comprehension that when name of the assessee is not even mentioned in the alleged seized docume....
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....e searched person, the Learned AO of the assessee was required to be satisfied that the material sent by the AO of the searched person (cloned data of Shri Parveen Jain's mobile vide seized document reference Annexure A-5) or any information therein ever belonged/ pertained to the assessee herein. As against this patent position of law, the AO of the assessee has used data from the Appraisal report (para 2 of assessment order) as below in his satisfaction note: i. Para 4- Upon this co-relation, various individuals were found and traced on Insight portal and other Income Tax database. ii. Para 5- Sita Gupta was found to have received interest from Gulshan Homes along with TDS...... iii. Para 8- From the TDS analysis above, it is clear that the amount of interest paid to Shikha is in 7 transactions.... iv. Para 9---further, additional evidences in the form of WhatsApp conversation between Sanjiv Gupta and Parveen Jain... v. Para 10-- Therefore, summons were issued to Gulshan Homes on 18/08/2021 (a date definitely prior to the satisfaction note of the AO of the searched person) to provide ledger account and interest payment details to parti....
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....tiated by unfairness and bias and the subsequent proceeding become an idle ceremony. 29. the stage of show cause notice itself. Such a close mind is inconsistent with the scheme of Rule 43 which is set out below. The aforesaid rule has been framed in exercise of the power conferred under Section 33 of The Marine Products Export Development Authority Act, 1972 and as such that Rule is statutory in nature. 31. It is of course true that the show cause notice cannot be read hyper-technically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show cause notice does not commence a fair procedure especially when it is issued in a quasi- judicial proceeding under a statutory ....