SHIVLI AGARWAL,NOIDA vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-27, JHANDEWALAN EXTN.,

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ITA 5974/DEL/2025Status: DisposedITAT Delhi24 April 2026AY 2019-20208 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the satisfaction recorded by the Assessing Officer was not explicit enough to confirm that the seized material had a bearing on the determination of the assessee's total income. Relying on a jurisdictional High Court judgment, the Tribunal quashed the assessment orders.

What were the facts?

The assessee's appeals challenged the assessment proceedings initiated under Section 153C of the Income Tax Act. The core issue was the validity of the satisfaction recorded by the Assessing Officer before invoking Section 153C.

What were the issues?

Whether the satisfaction recorded by the Assessing Officer for initiating proceedings under Section 153C was valid and met the statutory requirements.

Which sections of the Income-tax Act were involved?

Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: YOGESH KUMAR U.S. & SHRI KRINWANT SAHAY

Hearing: 05/02/2026Pronounced: 24/04/2026

Heard together (2 matters)

ITA No. 5976/DEL/2025
ITA No. 5973/DEL/2025

Read from the judgment's own cause title. This page is filed under one of them.

1 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI) BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER ITA No. 5975/DEL/2025 (A.Y. 2017-18) ITA No. 5976/DEL/2025 (A.Y. 2018-19) ITA No. 5977/DEL/2025 (A.Y. 2019-20) Sharpi Agarwal, V Deputy Commissioner of D-88, First Floor, Sector-52, Gautam s Income tax, Circle-27 Room Buddha Nagar, Noida, No. 348, ARA Centre, Uttar Pradesh Jhandewalan Extension, PAN: AFNPA0503J New Delhi Appellant Respondent ITA No. 5972/DEL/2025 (A.Y. 2017-18) ITA No. 5973/DEL/2025 (A.Y. 2018-19) ITA No. 5974/DEL/2025 (A.Y. 2019-20) Shivli Agarwal, V Deputy Commissioner of D-88, First Floor, Sector-52, Gautam s Income tax, Circle-27 Room Buddha Nagar, Noida, Uttar Pradesh No. 348, ARA Centre, PAN: AEEPA0302F Jhandewalan Extension, New Delhi Appellant Respondent

Assessee by Sh. SumitLalchandani, Adv& Sh. ShivamYadav,Adv Revenue by Sh. Manish Kumar, CIT DR Date of Hearing 05/02/2026 Date of Pronouncement 24/04/2026

ORDER PER BENCH: The captioned appeals are filed by the above-mentioned

Assessees/Appellants, wherein Assessees have challenged the orders of

Ld. Commissioner of Income Tax (Appeals)-25, New Delhi (‘Ld. CIT(A)’ for

2 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

short), dated 29/07/2025 in ITA No. 5972/Del/2025, 5973/Del/2025

and 5974/Del/2025 and orders dated 31/07/2025 in ITA Nos.

5975/Del/2025, 5976/Del/2025and 5977/Del/2025 respectively

pertaining to the Assessment Years 2017-18, 2018-19 and 2019-20.

2.

As the identical issues are involved in the captioned Appeals, the

Appeals are heard together and decided in this common order. For the

sake of convenience ITA No. 5975/Del/2025 has taken as lead matter.

3.

The Assessee raised Identical grounds of appeal in all the Appeals

and the Ld. Counsel for the Assessee has argued on the Ground No. 2

of the Appeals which reads as under: -

“2. The notice issued under Section 153C of the Act and the consequent assessment proceedings are illegal, void ab initio, and without jurisdiction, as the statutory preconditions for invoking Section 153C of the Act were not satisfied, rendering the proceedings bad in law and liable to be quashed.”

4.

The Ld. Assessee's Representative contended that in the

satisfaction recorded by the A.O., nowhere it is mentioned and explicitly

made clear as to whether relevant seized material had a ‘bearing on the

determination of the total income of such other person’.The ld. Counsel

further relied on the land mark Judgment of the Hon’ble Jurisdictional

High Court in the case of Saksham Commodities Ltd. vs. ITO (2024) 464

ITR 1 (Delhi) (HC) and also the order of the Co-ordinate Bench of the

Tribunal in the case of Sh. Mukesh Chandra Agarwal Vs. DCIT in ITA No.

3 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

1786/Del/2025, order dated 08/12/2025 and sought for allowing

Ground No. 2 in all the Appeals.

5.

Per contra, the Ld. Departmental Representative vehemently

submitted that the satisfaction note has been properly recorded in the

light of incriminating material found and seized during the search

conducted on 18.10.2019, which led the A.O. of the searched party to

satisfy himself that the same belonged or pertaining or related to the

Assessee as the case may be and the satisfaction Note finally

culminating in the impugned assessment. Further contended thatthe

additions have been made on merits with an intention to recover the

actual tax dues from the Assessees, therefore, the technical grounds

cannot be entertained by the Tribunal, thus, sought for dismissal of

Ground No. 2 in all the Appeals.

6.

We have heard both the parties and perused the material available

on record. In order to decide the issue in hand, it is relevant to examine

the satisfaction recorded by the A.O. As the identical satisfactions have

been recorded the satisfaction recorded in the case of Sharpi Agarwal

produced at page No. 93 of the paper book in ITA No. 5975/Del/2025 is

reproduced as under:-

4 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

7.

As could be seen from the above satisfaction note, nowhere it is

explicitly clear as to whether the reserved seized material a ‘bearing on

the determination of total income of such other person.’ The Co-ordinate

Bench of the Tribunal in the case of Sh. Mukesh Chander Agarwal

(supra) on relying on the Hon'ble Supreme Court of India Judgment in

the case of Saksham Commodity (supra), in an identical situation

quashed the assessment order in following manners: -

5 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

“2. It emerges during the course of hearing that there arises the first and foremost legal issue of validity of the impugned section 153C proceedings/assessments framed on 31st March, 2023 itself between the parties; for want of a valid satisfaction recorded by the learned lower authorities. There is hardly any dispute that the learned Assessing Officer of the assessee (who happens to be a person other than the searched party) had set into the motion section 153C proceedings herein reading as under: “Reasons for satisfaction for issuing notice u/s 153C of the Income Tax Act, 1961 in the case of Sh. Mukesh Chandra Agrawal (PAN: ABWPA8709M) A search and seizure operation was carried out in the Alankit Group of cases on 18.10.2019 subsequently the said group was centralized to the jurisdiction of the undersigned. Accordingly, during the course of assessment proceedings u/s 153A of Alankit Group, material/ documents related to your case have been found. 1. Annexure A-1, MCAR, page 1 to 17:- found and seized at 173, Sita Ram Apartments, IP Extension, Delhi wherein copy of Sale deed dated 26.08.2015 in favour of Shri Mukesh Chandra Agrawal found Residential Plot Sale deed made in Agra, Uttar Pradesh, Plot no. 21, Area 166.47 Sq. Mtr. Located in Swapn Lok Kaloni Kakua, Agra by Vishal Infra Pvt Ltd for Sale to Shri Mukesh Chandra Agrawal, Total Value of Property Rs.6,00,000/-. 2. Annexure A-1, MCAR, page 30 to 46:- found and seized at 173, Sita Ram Apartments ,IP Extension, Delhi wherein copy of Sale deed dated 30.05.2019 of Residential flat in favour of Shri Mukesh Chand Agrawal found copy of Sale Deed in case of Residential Plot Area 138.28 Sq. Mtr Flat no.173, Sitaram Apartment, I P Extention Delhi-92 in favour of Shri Mukesh Chand Agarwal and Smt Neeta Agarwal, by Shri Ajay Tiwari, F14/118, Krishna Nagar, Delhi51.Total Value of Property Rs.1,80,00,000/-. 3. Annexure A-1, MCAR, page 51 to 65:- found and seized at 173, Sita Ram Apartments, IP Extension, Delhi wherein copy of Sale deed dated 21.04.2014 of Residential Plot in favour

6 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

of Shri Mukesh Chand Agrawal found copy of Residential Plot Sale deed made in Mathura, Uttar Pradesh, Plot Area 166.44 Sq. Mtr. Located in Mauja Bakal pur, Mathura by Agrawal Developers for Sale of Plot 44, Agrawal developers, MaujaBakalpur, Mathura Total Value of Property Rs. 16,00,000/-. The assessment proceedings are required to be taken u/s 153C of the Income Tax Act, 1961 as the warrant issued in the names of Sh. Alok Agarwal, Sh. Ankit Agarwal, M/s Alankit Ltd. And M/s Alankit Assignment.” 3. That being the case, learned CIT(DR) strongly supports the above satisfaction note inter alia that the same had been properly recorded in light of the relevant incriminating material found/seized during the course of search dated 18.10.2019 which led the Assessing Officer of the said searched party to satisfy himself that the same belonged or pertained or related to the assessee; as the case may be, leading to the Assessing Officer’s satisfaction note finally culminating in the impugned assessment framed in its hands. 4. Faced with this situation, the tribunal invited the Revenue’s attention to the clinching fact that the learned Assessing Officer’s above extracted satisfaction note has nowhere made it explicitly clear as to whether the relevant seized material had a “bearing on the determination of the total income of such other person”. Learned CIT(DR) seeks to buttress the point herein that such a satisfaction note has to be read in totality than after adopting a hyper technical approach. 5. We find no reason to accept the Revenue’s stand. We make it clear that there is no quarrel between the parties about the learned Assessing Officer of the assessee/third person not having clarified as to whether the relevant seized material had any “bearing………………….” as stipulated in section 153C(1) of the Act. Hon’ble jurisdictional high court’s recent landmark decision in Saksham Commodities Ltd. Vs. ITO (2024) 464 ITR 1 (Delhi)(HC) has settled the law in the assessee’s favour and against the department that such recording of section 153C satisfaction is not a mere mechanical exercise. We thus draw strong support therefrom to conclude that the learned assessing authority in the assessee’s cases had erred in law

7 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

and on facts in recording an improper satisfaction before initiating section 153C proceedings which vitiates the assessment itself in above terms. Ordered accordingly. All other remaining pleadings between the parties stand rendered academic. “ 8. In view of the above, we find merits in the Ground No. 2 of the

Assessees’ Appeals, accordingly the respective Assessment Orders are

hereby quashed. Since, we have allowed the Ground No. 2 of captioned

Appeals and quashed the Assessment Orders, other grounds of Appeal

require no adjudication.

9.

In the result, Appeals of the Assessee in ITA No. 5972/Del/2025,

5973/Del/2025 and 5974/Del/2025, ITA Nos. 5975/Del/2025,

5976/Del/2025 and 5977/Del/2025 are allowed.

Order pronounced in the open court on 24th April, 2026

Sd/- Sd/- (KRINWANT SAHAY) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 24.04.2026 Reshma Naheed, Sr.P.S Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT, NEW DELHI

8 ITA No. 5972, to 5977/Del/2025 Shivli Agarwal Vs. DCIT

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