DS SPICECO P. LTD.,DELHI vs. DCIT CENTRAL CIRCLE 6, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, NEWDELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.3959/DEL/2025 (Assessment Year : 2015-16) M/s. DS Spiceco P. Ltd., vs. DCIT, Central Circle 6, 4828/24, Prahlad Lane, Delhi. Ansari Road, Daryaganj, Delhi – 110 002. (PAN : AAECD6959Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri R.S. Singhvi, Advocate Shri Satyajit Goel, Advocate REVENUE BY : Shri Mahesh Kumar, CIT DR Date of Hearing : 05.03.2026 Date of Order : 13.05.2026 O R D E R PER S. RIFAUR RAHMAN, AM : 1. This appeal is filed by the assessee against the order of the Ld. Commissioner of Income-tax (Appeals)-24, New Delhi [hereinafter referred to as ‘ld. CIT(A)] dated 29.05.2025 for the Assessment Year 2015-16. 2. In this case, the assessee has, inter alia, challenged the validity of assumption of jurisdiction u/s 153C of the Income-tax Act, 1961 (for short

2 ITA No.3959/DEL/2025 ‘the Act’). 3. Brief facts of the case are, a search u/s 132 of the Act was conducted in the case of Alankit Group on 18.10.2019. Pursuant thereto, certain material was allegedly found and seized, on the basis of which proceedings u/s 153C were initiated in the case of the assessee. The Assessing Officer recorded satisfaction and issued notice u/s 153C on 23.01.2023. The ld. CIT(A) dismissed the challenge to the assumption of jurisdiction u/s 153C and upheld the assessment order. Against the order of CIT(A), the assessee is in appeal before is raising following concise grounds of appeal :- 1. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding the validity of notice u/s 153C of the Income Tax Act, 1961 even though same was bad in law on following counts: a. Barred by limitation as the year under reference falls beyond the six years period b. Without incriminating material c. Common and vague satisfaction note 2. That on facts and circumstances of the case, the Ld. CIT(A) was not justified in upholding the following additions in respect of loan taken from M/s Alankit Ltd.: a. Addition of Rs. 3,00,00,000/- u/s 68 in respect of loan b. Addition of Rs. 20,79,945/- u/s 69C in respect of claim of interest on loan. c. Addition of Rs. 12,00,000/- u/s 69C on the notional ground of commission expense 3. That on the facts and circumstances of the case, the Ld. CIT(A) has grossly erred in upholding the additions u/s 68 and

3 ITA No.3959/DEL/2025 69C in respect of loan received from M/s. Mangaljyoti Syndicate Pvt Ltd. and M/s JAR Metal Pvt. Ltd. even though same are contrary to the scope of proceedings u/s 153C of the Act. 4. That on facts and circumstances of the case, the Ld. CIT(A) was not justified in upholding the following additions in respect of loan taken from M/s. Mangaljyoti Syndicate Pvt Ltd.: a. Addition of Rs. 1,85,00,00,000/- u/s 68 in respect of loan b. Addition of Rs. 27,63,945/- u/s 69C in respect of claim of interest on loan c. Addition of Rs. 5,55,000/- u/s 69C on the notional ground of commission expense 5. That on facts and circumstances of the case, the Ld. CIT(A) was not justified in upholding addition in respect of loan taken from M/s. JAR Metal Pvt Ltd.: a. Aaddition of Rs. 50,00,000/- u/s 68 in respect of loan b. Addition of Rs. 4,06,037/- u/s 69C in respect of claim of interest on loan c. Addition of Rs. 75,000/- u/s 69C on the notional ground of commission expense 6. That on the facts and circumstances of the case, the Ld. CIT(A) has erred into upholding the validity of the assessment order u/s 153C even though same is without valid requisite approval u/s 153D of the Act. 7. That the orders passed by lower authorities are not sustainable on facts and are bad in law. Additional Ground: 1(i) That on the facts and circumstances of the case, the CIT(A) was not justified in upholding the validity of notice u/s 153C even though same was issued without jurisdiction and in direct violation of amended provisions of section 147 and 148 of the Act.

4 ITA No.3959/DEL/2025 (ii) That the third party search material having been handed over the assessing officer after 01/04/2021, the assumption of jurisdiction u/s 153C is contrary to section 153C(3) of the Act and thus void-ab-initio.”

5 ITA No.3959/DEL/2025 8. Considered the rival submissions and material available on record. We observed that he issue which arises for our consideration is whether the jurisdiction assumed u/s 153C of the Act is valid in law where the satisfaction note recorded by the Assessing Officer is common and does not identify any specific incriminating material qua the relevant assessment year. We observed that the Assessing officer has recorded following satisfaction note for issuance of notice u/s 153C :-

6 ITA No.3959/DEL/2025 ITA

7 ITA No.3959/DEL/2025 of total income for the relevant assessment year. The satisfaction note thus forms the very foundation of jurisdiction and must reflect due application of mind. It is incumbent upon the Assessing officer to identify the material qua each year before proceeding to assume jurisdiction u/s 153C of the Act. 10. On perusal of the satisfaction note in the present case, we find that the Assessing Officer has recorded a common satisfaction note for multiple assessment years without making any distinction or identifying any year specific incriminating material. There is no reference to any document or evidence demonstrating undisclosed income for the year under consideration. The satisfaction note does not contain any quantification or even a prima facie analysis of alleged undisclosed income and appears to have been recorded in a mechanical manner. We are of the view that such a generalized and omnibus satisfaction clearly reflects non-application of mind and fails to meet the statutory requirement of section 153C of the Act. 11. The Hon’ble Supreme Court in CIT vs. Sinhgad Technical Education Society (397 ITR 344) has categorically held that existence of incriminating material qua each assessment year is sine qua non for valid assumption of jurisdiction u/s 153C of the Act. Further, Hon’ble Delhi High Court in the case of Saksham Commodities Ltd. v. ITO [2024] 464 ITR 1 (Delhi) has distinctly held that the satisfaction recorded must be specific and must

8 ITA No.3959/DEL/2025 clearly indicate the incriminating material relatable to each assessment year, failing which the assumption of jurisdiction would be invalid. The Hon’ble High Court emphasized that a generalized or omnibus satisfaction, without reference to specific material and without establishing nexus with the income of the relevant year, cannot sustain proceedings u/s 153C. 12. We further observed that the assessee has further made reference to various decisions of Coordinate Bench which are found to be relevant and applicable to the present case :- i. Vidur Chharia v. DCIT (ITA No. 209/Del/25) (Delhi-Trib) ii. Alankit Insurance TPA Ltd. v. DCIT (ITA No. 3801/Del/26) (Delhi-Trib) iii. Sakshi Agarwal v. DCIT (ITA No. 4216 to 4223/Del/25) (Delhi Trib) iv. Blue Ocean Travels Pvt. Ltd. v. DCIT (ITA No. 3281 to 3287/Del/24) (04/12/2024) (ITAT, Delhi) v. 3D Tradex P. Ltd v. ADIT (ITA No. 2065 to 2070/Del/22) (12/02/2025) (ITAT, Delhi) vi. Maheshwari Coal Benefication & Infrastructure (P.) Ltd. v. DCIT [2025] 171 taxmann.com 842 (Nagpur - Trib.)

9 ITA No.3959/DEL/2025 nothing on record to establish any nexus between such material and any undisclosed income of the assessee. In absence of corroboration and in the absence of opportunity of cross-examination, such material cannot be treated as incriminating in nature. Further, the transactions in question are duly recorded in the books of account of the assessee, thereby negating any inference of undisclosed income. 14. It is also not in dispute that the assessment for the year under consideration was unabated and as such in absence of recording of specific satisfaction note, the assumption of jurisdiction u/s 153C is vitiated at the threshold. In view of the foregoing discussion and respectfully following the ratio laid down by the Hon’ble Supreme Court in Sinhgad Technical Education Society (supra) and the Hon’ble Delhi High Court in Saksham Commodities Ltd. v. ITO (supra), we are of the considered opinion that the satisfaction recorded by the Assessing Officer is defective, being common, vague and mechanical, and does not satisfy the mandatory requirements of section 153C of the Act. Consequently, the assumption of jurisdiction u/s 153C is invalid and unsustainable in law and accordingly, the notice issued u/s 153C and the consequent assessment order is hereby quashed. The Ground No. 1(b) and 1(c) are allowed. 15. As the assessment order has been quashed on the legal ground of

10 ITA No.3959/DEL/2025 jurisdiction, the other legal grounds as well grounds on merits of the addition are not required to be adjudicated. 16. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on this 13TH day of May, 2026.

SD/- SD/- (VIMAL KUMAR) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 13.05.2026 TS