TaxTMI 
TaxTMI 
2026 (8) TMI 48
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.... facts of the case are that a search and seizure procedure u/s 132 of the Act was carried out on the Alankit Group, Sh. Alok K Agarwal, his son Ankit Agarwal and some associates and key employees of Sh. Alok K Agarwal on 18.10.2019. Incriminating seized evidences recovered were found in the name of the assessee; hence, the case was centralized to Central Circle-28, New Delhi. Notice u/s 153C of the Act dated 28.12.2021 was issued. Further, notices u/s 143(2) of the Act dated 14.12.2022 and notice u/s 142(1) of the Act dated 15.12.2022 were issued. The assessee filed submissions and documents. On completion of proceedings, ld. AO passed order dated 30.03.2023 for A.Y. 2013-14. Likewise, Ld. AO passed separate orders for other seven assessment years. 4. Against separate eight assessment orders dated 30.03.2023 u/s 153C of the Act, the assessee preferred appeals before Ld. CIT(A) which were dismissed vide common order dated 10.02.2026. 5. Being aggrieved appellant/assessee preferred above captioned eight appeals. 6. Ld. Authorized Representative for appellant/assessee submitted that impugned assessment order u/s 153C of the Act dated 30.03.2023 passed by Ld. AO is barred by l....
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....n, allowing reasonable timeframe without being bound by rigid or narrow interpretation of timing linked to completion of assessment proceedings provided in Section 153B(1). Proceedings Under Section 153C Warrant Recording Of Separate Satisfaction The revenue submits that the recording of satisfaction note is not just a procedural but a statutory requirement under the law prescribed, which cannot be avoided. With regards to the date of completion of assessment proceedings, reliance is to be placed on the judgement of LKS Gold House (P) Ltd. vs. Deputy Commissioner of Income-tax [2024] 161 taxmann.com 604 (Madras) [18-01-2024] passed by the Hon'ble High Court of Madras. The relevant excerpt has been reproduced as under: "87. There is no time limit prescribed for the issuance of satisfaction note(s) under Section 153C of the Income Tax Act, 1961. In terms of decision of the Hon'ble Supreme Court in Calcutta Knitwears (supra) satisfaction notes under Section 158BC of the Income Tax Act, 1961 can be prepared by the "Assessing Officer" of the "searched person": (a) At the time of or along with the initiation of proceedings under Sectio....
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....onscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. In such a situation, the satisfaction note would be qua the other person. The second requirement of transmitting the documents so seized from the searched person would not be there as he himself will be the Assessing Officer of the searched person and the other person and therefore there is no question of transmitting such seized documents to himself." Section 153C: Reasoned Satisfaction Not Constrained by Rigid Timelines The revenue submits that recording of satisfaction under Section 153C is to be done on thorough examination of seized material and reasoned decision, allowing reasonable timeframe without being bound by rigid or narrow interpretation of timing linked to completion of assessment proceedings provided in Section 153B(1). Reliance in this regard is placed to the judgement of the Hon'ble Supreme Court in the case of Bhupinder Singh Kapur vs. Income-tax Officer [2025] 175 taxmann.com 690 (SC) [24-01-2025), which has reaffirmed the decision of the Hon'ble High Court of Delhi in the same case of Bhupinder Singh Kapur vs. Inco....
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....ble Income Tax Appellate Tribunal at the Ahmedabad Bench 'C' titled as Dilip Prasad Assistant Commissioner of Income Tax vs. Alap Somabhai Patel [2026] 186 taxmann.com 922 (Ahmedabad - Trib.) [14-05-2026]. The judgement clearly holds that where Assessing Officer of searched person and 'other person' was same, proceedings under section 153C still required recording of statutory satisfaction regarding seized material pertaining to other person and, therefore, assessments were not barred by limitation merely because Assessing Officer was common. The relevant excerpt has been reproduced as under: "80. However, after thoughtful consideration of the statutory framework contained under sections 153C and 153B of the Act, we are unable to persuade ourselves to accept the aforesaid contention advanced on behalf of the assessee. In our considered opinion, the entire argument of the assessee proceeds only on the aspect relating to "handing over" of documents while completely overlooking the foundational statutory requirement embedded in section 153C of the Act, namely, the mandatory "recording of satisfaction" by the Assessing Officer before assumption of jurisdiction ....
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....ceedings under section 153C are barred by limitation merely because the Assessing Officer of the searched person and the other person happened to be the same officer." Further, reliance is placed on the judgment of Indian National Congress vs. Deputy Commissioner of Income-tax [2024] 160 taxmann.com 606 (Delhi) [22-03- 2024]. The relevant excerpt has been reproduced as under: "23. For the purposes of invoking Section 153C of the Act it is incumbent upon the AO to be satisfied that the material gathered in the course of the search and pertaining to the non-searched person would have a bearing on the determination of the total income of such other person either for six AYs' or for the relevant AY or AYs'. Since the provision itself requires and enables the AO to undertake an assessment for a block period of ten years, it would clearly not be incumbent upon it to draw separate or independent satisfaction notes for each AY. A composite Satisfaction Note would suffice the requirements of Section 153C of the Act provided it embody details of the material gathered in the course of the search and pertaining to the AYs forming part of the block as a whole. As long ....
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....which pertains to the AYs' which are sought to be reopened. ... 34. As is manifest from the above, while the Section 153C notice was issued on 07 March 2023, the Satisfaction Note appears to have been provided to the petitioner on 28 and 30 June 2023. These writ petitions came to be preferred long thereafter on 19 March 2024. We take note of the statutory timeframes stipulated under Section 153B of the Act for completion of assessment proceedings and more particularly the Second and Third Proviso's which mandate assessment itself being completed within twelve months from the time when the books of account or material is handed over to the AO of the non-searched person. This would mean that in the present case and taking the date of handing over or recordal of satisfaction as constituting the date from which that period is liable to be reckoned, the assessment is liable to be completed by 31 March 2024. 35. The writ petitioner has thus chosen to approach this Court only a few days before the time for completion of assessment would expire and at the proverbial fag end of the proceedings. We consequently find no justification to interdict the assessment proce....
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.... Act') and the assessment order dated 16.03.2024 passed under Section 144 r.w.s. 153C of the Act by the Assessing Officer ('AO') are illegal, bad in law, barred by limitation and without jurisdiction." 3. The ld counsel for the assessee explained that search u/s 132 of the Act was conducted on M/s. Hans Group on 06.01.2021. During the course of search incriminating documents were seized in relation to assessee herein also. The AO while completing the assessment in M/s. Hans Group of cases noted that certain seized documents pertained to an information contained thereon relevant to Ajay Gupta i.e. person other than searched person, hence, a satisfaction note was drawn on 28.06.2022 to initiate proceedings u/s 153C r.w.s. 153A of the Act in the case of the assessee for AYs. 2015-16 to 2020-21. The relevant assessment year before us is AY 2015-16. The ld counsel for the assessee stated that the assessee's case was transferred to the Central Circle31, New Delhi by the order passed by the ld PCIT u/s 127 of the Act on 14.02.2022. The ld counsel for the assessee further stated that notice u/s 153C of the Act was issued to the assessee by ACIT, Central Circle-31, Delh....
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....ur attention to the decision of the Hon'ble Supreme Court in the case of Super Malls (supra) wherein, it is held in para 6 as under:- "6. This Court had an occasion to consider the scheme of Section 153C of the Act and the conditions precedent to be fulfilled/complied with before issuing notice under Section 153C of the Act in the case of Calcutta Knitwears (supra) as well as by the Delhi High Court in the case of Pepsi Food Pvt. Ltd. (supra). As held, before issuing notice under Section 153C of the Act, the Assessing Officer of the searched person must be "satisfied" that, inter alia, any document seized or requisitioned "belongs to" a person other than the searched person. That thereafter, after recording such satisfaction by the Assessing Officer of the searched person, he may transmit the records/documents/things/ papers etc. to the Assessing Officer having jurisdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of such other documents relating to such other person, the jurisdictional Assessing Officer may proceed to issue a notice for the purpose of completion of the assessment under Section 158BD of the Act a....
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....e searched person and also the Assessing Officer of the other person. However, as observed hereinabove, he must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. In such a situation, the satisfaction note would be qua the other person. The second requirement of transmitting the documents so seized from the searched person would not be there as he himself will be the Assessing Officer of the searched person and the other person and therefore there is no question of transmitting such seized documents to himself. " (Emphasis supplied) 4. Hon'ble Supreme Court held that where the AO of the searched person and other than the searched person is the same, it is sufficient by the AO to note in the satisfaction note that the documents seized from the searched person belonged to the other person and once the notice was sent then requirement of Section 153C of the Act is fulfilled. In case where the Assessing Officer of the searched person and the other person is the same there can be one satisfaction note prepared by the Assessing Officer as he himself is the Assessing Officer of the searched person and also ....