RAJAT ALLOYS PVT. LTD.,UTTAR PRADESH vs. ACIT, CENTRAL CIRCLE

PDF · subscribers
ITA 6737/DEL/2025Status: DisposedITAT Delhi16 September 2026AY 2019-2010 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the satisfaction note was recorded after April 1, 2021, for an assessee other than the searched party, the assessment should have been made under Section 147, not Section 153C. Consequently, the assessment order was quashed on this legal ground.

What were the facts?

The assessee filed an appeal against an order upholding additions made by the AO. A key issue was the validity of assessment proceedings under Section 153C of the Act, particularly regarding the satisfaction note recorded after April 1, 2021.

What were the issues?

The primary issue was whether the assessment proceedings under Section 153C were valid when the satisfaction note was recorded after April 1, 2021. Another issue concerned the validity of additions made under Sections 69A and 69C without sufficient evidence.

Which sections of the Income-tax Act were involved?

Section 153C,Section 147,Section 271(1)(c),Section 69A,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: MS. MADHUMITA ROY & SH. KRINWANT SAHAY

For Appellant: Ms. Chinu Bhasin, Advocate
Hearing: 01/07/2026Pronounced: 16/09/2026

PER KRINWANT SAHAY AM

Appeal in this case has been filed by the assessee against the order dated 20.02.2025 passed by the Ld. CIT(A)-25, New Delhi for the A.Y. 2019-20. Grounds of appeal are as under :-

“1. That the order passed by the Lal. A) and upheld by the Ed CIT(A) is contrary to the facts, had in law and must be quashed.

2.

That the Ld. AO erred in law and on facts in upholding the addition of Rs. 7,00,000 us 69A without disproving the genuineness of the loan repayment, which was supported by confirmations, bank statements, and audited financials.

3.

That the Ld. AO failed to appreciate that no cash was received 3 OR paid by the appellant, and no material was found in its possession during the search to justify the addition.

4.

That the Ld. AO erred in law and on facts in upholding the addition of Rs. 21,000 us 69C as alleged commission purely un RO assumption, without any evidence of actual expenditure OR incurrence.

5.

That the assessment is vitiated due to denial of opportunity in 5 cross examine third party witnesses whose statements were relied upon, violating principles of natural justice.

6.

That the Ld. AO failed to consider that the sewed documents were found in possession of third parties and not the appellant. RA and hence cannot be used

against the appellant without independent corroboration, 7. The Ld. AO alleged that the assessee has paid the commission 7 at 3 percent of the above mentioned amount i.c. Rs. 21,000, which is purely on assumption basis to be quashed.

8.

That the penalty proceedings initiated u/s 271(1)(c) of the Income Tax Act, 1961 are bad in law and liable to be quashed, as the additions made in the assessment order are based on mere R assumptions, uncorroborated third-party material, and without any finding of deliberate concealment OR furnishing of inaccurate particulars of income by the appellant.

9.

That the appellant craves the leave to add, amend, modify, DLEETE any of the grounds of appeal before OR at the time of hearing and all the above grounds are without prejudice to each other.”

2.

During proceedings before us the ld. Counsel of the assessee has filed an additional ground which is in fact on legal issue. This additional ground is regarding the notice / assessment of validity of section 153C of the Act proceedings post 01.04.2021 where satisfaction has been recorded thereafter. 3. The submission filed by the assessee on this issue is reproduced as under :-

4.

The Ld. Counsel of the assessee argued on the line of the written submission filed in support of the legal grounds which were raised as additional grounds during proceedings before us.

5.

Per contra the ld. DR relied on the orders of the AO and the Ld. CIT(A).

6.

We have considered the submission filed by the Ld. Counsel of the assessee on legal ground alognwith the additional ground during proceedings before us. Keeping in view the orders of the coordinate Bench in the case of Shaminder Singh (supra) and Geetanjali Bhanaya Vs. DCIT (supra) and Lekh Raj Vs. DCIT (supra). We find that since the satisfaction note has been recorded after 01.04.2021 in the case of the assessee who is other than the searched parties, therefore, the assessment was liable to be made u/s.147 of the Act and not u/s.153C of the Act on 10.03.2024. Therefore, in our considered view it is liable to be quashed on the legal issue raised by the assessee. Thus, the assessment order framed by the AO in this case is quashed.

7.

The appeal filed on this additional ground which is legal in nature filed by the Ld. Counsel of the assessee is allowed.

8.

Since we have quashed the assessment order passed u/s.153C on legal ground, so appeal on other grounds/ on merits just remains

academic in nature. Accordingly, we are not inclined to adjudicate them.

9.

In the result, the appeal filed by the assessee in this case is allowed.

Order pronounced in the court on 16.09.2026.

Sd/- Sd/-

[MADHUMITA ROY] [KRINWANT SAHAY] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16.09.2026 Neha, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

1.

Date of dictation of Tribunal order on computer 25.08.2026 2. Date on which typed draft order is placed before the dictating 27.08.2026 Member 3 Date on which typed draft order is placed before the other Member 16.09.2026 (in the case of DB) 4. Date on which the approved draft order comes to P.S/Sr.P.S 16.09.2026 5. Date on which the fair Order is placed before the dictating Member for 16.09.2026 sign 6. Date on which the fair Order is placed before the other Member for 16.09.2026 sign ( in the case of DB) 7. Date on which the Order comes back to P.S./Sr.P.S for uploading on 16.09.2026 ITAT website Date of uploading, if not, reason for not uploading 16.09.2026 8. 9. Date on which the file goes to the Bench Clerk 16.09.2026 10. Date on which order goes for xerox 11. Date on which order goes for endorsement 12. Date on which the file goes to the Superintendent/O.S. for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to dispatch section for dispatch the Tribunal Order 15. Date of dispatch of order 16. Date on which file goes to Record Room after dispatch the order

More judgments on Section 153C

All 9,619 judgments and leading authorities on Section 153C →

Recent GST High Court judgments

Search GST case law →