M/S POWERTECH ELECTROINFRA PVT LTD,DELHI vs. DCIT (CC) -25, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3455/Del/2026 (Assessment Year : 2014-15) M/s. Powertech Electroinfra Vs. DCIT(CC)-25 Pvt. Ltd. ARA Center 241, Tagore Park Jhandewalan Extension Model town –I Delhi - 55 North West, Delhi – 1100 09 PAN : AAFCP 0716 N (APPELLANT) (RESPONDENT) Assessee by Shri Sumit Lalchandani, Adv. and Shri Shivam Yadav, Adv. and Ms. Aananya Kapoor, Adv. Revenue by Shri Zafarul Haque Tanweer, CIT-D.R. Date of hearing: 04.08.2026 Date of Pronouncement: 19.08.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : The instant appeal filed by the assessee is directed against the order dated 10.02.2026 passed by the ld. Commissioner of Income-tax (Appeals)- Delhi-25 [hereinafter referred to as the ‘Ld. CIT(A)’] arising from the assessment order under section 153C of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] dated 19.03.2024 passed by the

ITA No. 3455/DEL/2026 [A.Y 2014-15] Powertech Electroinfra Pvt. Ltd. vs. DCIT(CC) Assessing Officer, DCIT/ACIT, Central Circle-25, New Delhi for the Assessment Year 2014-15. 2. Assessee filed the following grounds of appeal as under:

Re: Order passed by the Ld. CIT (A) in the given facts and circumstances is a perverse order 1. That on the facts and circumstances of the case, at the outset the order passed by the Ld. CIT (A) is being assailed of being a perverse order, as the same is passed without appreciating the facts and evidences on records, without considering the contentions raised by the appellant, without giving a proper ground wise finding, with a pre-conceived notion and merely in a haste and hurried manner, against the principles of natural justice. Re: Ground related to assumption of jurisdiction U/s 153C 2. That on the facts and circumstances of the case, the Ld. CIT (A) has failed to appreciate that the assumption of jurisdiction in this case, to make the assessment of the appellant under section 153C is bad in law and without jurisdiction. 3. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the satisfaction note (s) which is the foundation for triggering the assessment proceedings U/s 153C has been drawn in a cryptic and mechanical manner and thus the assessment proceedings conducted in pursuance thereto, stands vitiated. 4. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the proceedings-initiated U/s 153C is bad in law and without jurisdiction, due to the fact that the satisfaction note recorded is a consolidated satisfaction note which has been recorded for all the assessment years. 5. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that there is no description/analysis of seized material based on which satisfaction has been recorded; there is no year wise analysis of seized material; there is no year wise satisfaction that seized material is having a bearing on the determination of income. 6. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the proceedings-initiated U/s 153C is bad in law and without jurisdiction, due to the fact that Re: Ground related to placing reliance on the digital evidence 7. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the entire foundation of assessment proceeding is vitiated as addition has been made on the basis of material found in digital form. 8. That while confirming the assessment order, the Ld. CIT (A) has failed to appreciate that the Ld. A.O. has not brought on record certificate under section 65B of the Indian Evidence Act in respect of electronic records relied by the A.O, therefore in absence of such certificate under section 65B, such electronic records have no evidentiary value and the assessment made on the basis of such electronic record is unsustainable in law and liable to be quashed/deleted. Page 2 of 8

ITA No. 3455/DEL/2026 [A.Y 2014-15] Powertech Electroinfra Pvt. Ltd. vs. DCIT(CC) 9. That while confirming the addition made by the AO, the Ld. CIT (A) has not considered that the procedure mandated and prescribed under the Digital Evidence Investigation Manual issued by the CBDT in the year 2014 has not been followed, vide placing reliance on the digital data in this case. Re: the provisions of section 153C cannot be invoked in the present case 10. That the jurisdiction of the Ld. AO in passing the assessment order U/s 153C is vitiated in the present case, as in this case, the search was conducted on 18.10.2019 and the notice U/s 153C was issued after 1.04.2021, whereas the provisions of section did not exist after 1.04.2021 and hence the assessment proceedings are bad in law for the want of jurisdiction. 11. That it is a trite law that the date of handing over of the documents/recording of the satisfaction note, is to be considered as the triggering date in the case of the other person, and such date in the present case, falls after 1.04.2021, when the provisions of section 153C were already repealed. 12. That in the present facts of the matter, the Ld. AO does not have the jurisdiction to conduct assessment proceedings U/s 153C of the Income Tax Act in the case of the appellant and reliance in this regard is placed on the judgment of Harigovind v. ACIT [2025] 180 taxmann.com 197 (Madras) and other similar matters. Re: Ground related to delay in recording of the satisfaction note(s) 13. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that there is an inordinate delay in recording the satisfaction note considering the date of search which is 18.10.2019 and hence the assessment proceedings are vitiated as per the ratio laid down by the Hon'ble Supreme Court in the case of ratio laid down by the Hon'ble Supreme Court in the case of CIT vs. Calcutta Knitwears (2014) 362 ITR 673 (SC) r.w. Circular bearing No.24/2015 dated 31.12.2015 issued by the CBDT Re: Ground related to not following the mandate of section 144A of the Income Tax Act 14. That on the facts and circumstances of the case, while confirming the addition, the Ld. CIT (A) has failed appreciate that the assessment order is passed in a perverse manner, as the same is passed without taking into consideration the directions given under section 144A by the Additional/JCIT. 15. That on the facts and circumstances of the case and under law the Ld. CIT (A) has not considered that the assessment order is passed against the principle of natural justice and against the settled jurisprudence, as in the matter no directions were issued by neither the Additional/JCIT nor the same has been sought by the Assessing Officer in connection to the notice issued U/s 144A of the Income Tax Act. Re: Ground related to not providing an opportunity for cross examination 16. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that in this case, the assessment order has been passed without giving any opportunity of cross examination, Mr. Sunil Kumar Gupta and others. 17. That while not giving the opportunity of cross examination of "Mr. Sunil Gupta" and others, the Ld. CIT (A) has not considered the procedure

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ITA No. 3455/DEL/2026 [A.Y 2014-15] Powertech Electroinfra Pvt. Ltd. vs. DCIT(CC) prescribed in the 'Manual of Office Procedure Issued by The Directorate of Income Tax, CBDT', which is binding. Re: Ground related to not considering the retraction of Mr. Sunil Gupta while passing of the assessment order 18. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the major thrust of the addition made by the Ld. AO is based and placed on the statement of Mr. Sunil Kumar Gupta, which is duly retracted. 19. That the order passed by the Ld. CIT(A) is assailed of being a perverse order as the remand report referred in the order, has not been provided to the appellant for its perusal and comments. Re: Ground related to giving the approval U/s 153D in a mechanical manner 20. That on the facts and circumstances of the case and under law, the mandatory approval under section 153D has been given in a mechanical and cryptic manner which vitiates the entire assessment proceedings. Re: Ground related to merits of the addition 21. That on the facts and circumstances of the case the Ld. CIT (A) has erred in law and in facts in confirming the addition of Rs. 2,05,00,000/- under section 68 of the Income Tax Act. 22. That while confirming the addition, the Ld. CIT (A) has erred in law and in facts in not considering that the provisions of section 68 are not applicable to the present facts of the case. 23. That on the facts and circumstances of the case and under law, the AO has erred in making the addition of Rs. 6,15,000/- under section 69C of the Income Tax Act. 24. The appellant hereby craves leave to add, alter, amend or delete any grounds.” 3. Brief facts of the case are that the assessee is a Pvt. Ltd. company and is engaged in the business of the manufacturing and trading of shoes/socks and electric power substations etc. A search and seizure operation under section 132 of the Act was conducted in the case of "Alankit Group of cases" on 18.10.2019. During the search proceedings, documents/material(s) pertaining to the assessee company was found. It was stated that during the course of search proceedings at Alankit Group, ledger related to "Sudhir Agarwal" have been obtained from laptop of one "Sh. Sunil Kumar Gupta from the residence of the said Sh. Sunil Kumar Gupta, and the same was

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ITA No. 3455/DEL/2026 [A.Y 2014-15] Powertech Electroinfra Pvt. Ltd. vs. DCIT(CC) seized which was contained some entries of the present assessee and hence based on this, the proceedings u/s 153C of the Act was invoked in the case assessee. Thereafter, the Ld. AO, however, made the addition of Rs. 2,05,00,000/- under section 68 and of Rs. 6,15,000/- under section 69C of the Act in case of the assessee. 4. Aggrieved by the assessment order, the assessee filed this appeal before the ld. CIT(A) who vide order dated 10.02.2026, upheld the additions. Aggrieved, the assessee is in appeal before us. 5. Before us, the ld. counsel for the assessee took the legal ground questioning the assumption of jurisdiction u/s 153C. The ld AR vehemently stated that the satisfaction note recorded by the AO does not record that the seized material has a bearing on the determination of income of the assessee. 6. On the other hand, ld. DR relied on the order of the CIT(A). 7. We have heard the rival submissions and have perused the relevant material on record. For adjudicating the issue at hand, it would be relevant to reproduce the Satisfaction note dated 24.11.2022 recorded by the AO of the assessee, i.e., non-searched person as under:

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ITA No. 3455/DEL/2026 [A.Y 2014-15] Powertech Electroinfra Pvt. Ltd. vs. DCIT(CC)

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ITA No. 3455/DEL/2026 [A.Y 2014-15] Powertech Electroinfra Pvt. Ltd. vs. DCIT(CC) income of such other person" and having formed the opinion that proceedings under Section 153C are liable to be initiated. 50. What we seek to emphasise is that merely because Section 153C confers jurisdiction upon the AO to commence an exercise of assessment or reassessment for the block of years which are mentioned in that provision, the same alone would not be sufficient to justify steps in that direction being taken, unless the incriminating material so found is likely to have an impact on the total income of a particular AY forming part of the six AYs' immediately preceding the AY pertaining to the search year or for the "relevant assessment year". In such facts and circumstances therefore, we hold that the satisfaction note is invalid which vitiates the assumption of jurisdiction u/s 153C of the Act. Consequently, the notice u/s 153C as well as order under section 153C is not sustainable in law. We, accordingly, quash the order under section 153C of the Act. The appeal is allowed in aforesaid terms. 9. In the result, the appeal filed by the assessee in ITA No.3455/Del/2026 is allowed.

Order pronounced in the open court on 19.08.2026 Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 19.08.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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