TaxTMI 
TaxTMI 
2026 (10) TMI 492
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....itiated u/s 153C of I.T. Act, 1961 on 22.12.2020 are barred by limitation on the basis of decision of Supreme Court in the case of CIT-III vs. M/s. Calcutta Knitwears, Ludhiana 2014 (6) SCC 444 and CBDT Circular no.24/2015 DATED 31.12.2015." 4. At the time of hearing, ld. AR submitted the facts and his submissions which are given below :- I. A single, consolidated satisfaction note under Section 153C of the Income-tax Act, 1961, without recording year-wise satisfaction of escapement of income, is invalid in law (i) Fact of the appellant's case - The assumption of jurisdiction under Section 153C is vitiated as the satisfaction note recorded on 07.12.2020 (PB Vol. 1 - Page No. 91) for A. Y. 2011-12 to A. Y. 201718 by then A.O. DCIT Circle 43(1), New Delhi is a single, omnibus note lacking any year-wise identification of incriminating material or escapement of income. It is settled law that satisfaction must demonstrate a clear nexus between seized material and determination of income for each assessment year. In absence thereof, the jurisdictional requirement remains unfulfilled, rendering the proceedings void ab initio. (ii) Satisfaction of the searched....
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....213) (iii) Notice u/s 153A of I. T. Act 1961 in the case of the appellant's mother Gouri Madan was issued on 03.10.2017 (PB Vol. 1 - Page No. 231) (iv) Assessment in the case of Naveen Madan (PB Vol. I - Page No. 213) and Gouri Madan were made on 25.12.2018 (PB Vol. 1 - Page No. 231). (v) CIT (Appeal) order passed on 30.01.2020 in the case of appellant's mother Gouri Madan (PB Vol. 1 - Page No. 118). (vi) Satisfaction note in the case of searched person recorded on 29.06.2020 (Page No. 87 to 88 of PB Vol. 1). (vii) Satisfaction note in the case of appellant recorded on 07.12.2020 (PB Vol. 1 - Page No. 91) (viii) Judgements relied upon: - i. Supreme Court in the case of CIT-III vs. M/s Calcutta Knitwears, Ludhiana [2014 (6) SCC 444] (PB Vol. No. 3 - Page No. 159 to 171) In Para 44 (PB Vol. No. 3 - Page No. 170) SC has observed that the satisfaction note could be prepared either of the following stages: - (a) at the time of or along with the initiation of proceedings against the searched person under Section 158BC of the Act; (b) along with the assessment proceedings under Section 158BC of the A....
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....Court in order dated 02.04.2026 in Special Leave Petition (Civil) 12308/2026 @ Diary No(s). 16191/2026 (Page No. 402 of PB Vol. 3). e) ITAT Delhi in the case of ACIT Circle 29(1), New Delhi vs. Raj Kumar Jalan in ITA No. IT (SS) A No. 28/Del/2012 dated 08.07.2015 wherein period of above three years from date of completion of assessment of searched person cannot be considered as immediate or immediately proximate (Refer Para 13 to 16 at Page No. 249 of PB Vol. 3). 5. Further, the ld. AR of the assessee submitted list of dates and events which are reproduced below :- 6. On the other hand, ld. DR of the Revenue heavily relied on the findings in the cases of Hon'ble Supreme Court in the case of CIT vs. Jasjit Singh (2023) 155 taxmann.com 155 and Hon'ble Delhi High Court in the case of PCIT vs. Ojjus Medicare (P.) Ltd. Ojjus and Jasjit Singh and finally relied on the orders of lower authorities. 7. Considered the rival submissions and material placed on record. We observed that the search was conducted in the case of Smt. Gouri Madan and Sh.Naveen Madan on 22.10.2016, the searched persons and the relevant satisfaction note was prepared only on 07.12.2020, which is afte....
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.... one-andhalf 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 COVID19 Pandemic relaxations as last extended vide CBDT's Press Release dated 25th June, 2021 till 30.....
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....id settled position of law has been unanimously followed by various judicial forums consistently. We are vested with the power to adjudicate any issue which goes to the root of the matter and it is bound to decide the issues raised before us as per the law. In the instant case, the additional ground so raised by the assessee that the notice u/s 153C of the Act is time barred goes to the root of the matter and keeping in view the facts, the said additional ground deserves to be admitted. Hence, admitted for adjudication. 11. We are of the view that the instant appeal before us are squarely covered by the ratio of the judgement delivered by the Hon'ble Jurisdictional High Court of Delhi in the case of Bharat Bhushan Jain (supra) since, there is an inordinate delay of about 15 months in issuance of notices u/s 153C of the Act on 12.12.2022 from the date of framing of assessment in the case of the person searched, namely, Mr. Ram Avtar Agarwal on 28.09.2021 and the said delay is not covered by the relaxations provided in the limitation period keeping in view the COVID-19 Pandemic as rightly argued by the Ld. AR for the assessee as mentioned at Paras 11(a) to 11(c) above that i....
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....nd issues raised by the assessee are kept open. 9. The facts on the other appeal is also similar to the fact in ITA No. 7276/Del/2025, the findings are applicable mutatis mutandis, therefore, appeal filed by the assessee vide ITA No. 7277/Del/2025 is allowed. 10. In the result, both the appeals filed by the assessee are allowed. Order pronounced in the open court on this 24th day of August, 2026. ============= Document 1 LIST OF DATES & EVENTS Sh. Naman Madan (PAN: CXTPM3666A) A.Y. 2016-17 & 2017-18 (common to both years) | ITA Nos. 7276 & 7277/Del/2025 Date Event / particulars Paper Book / source reference I. SEARCH & PROCEEDINGS AGAINST THE SEARCHED PERSONS (parents) 13.05.1996 Date of birth of the assessee, Sh. Naman Madan (aged 20 on the date of search). Synopsis (On Merits) 22.10.2016 Search & seizure u/s 132 in the Sukhija Group, covering the parents' residence at 19/14 East Punjabi Bagh, New Delhi. DOS PB Vol. 1 - p.66-67 24.10.2016 Panchnama drawn; two mobile phones (Annexure A-1 & A-2) seized - source of the WhatsApp chats/screenshots relied upon. PB Vol. 1 - p.68-72 (chats p.44-52) 03.10.2017 Notice u/s 153A issued to the mother, Smt. Gouri Mada....