ELEGANT IT SOLUTIONS PRIVATE LIMITED,DELHI vs. DCIT/ACIT CEN CIR, GZB, GHAZIABAD

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ITA 7363/DEL/2025Status: DisposedITAT Delhi24 June 2026AY 2014-154 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 note was not recorded in accordance with law, as it was consolidated for multiple assessment years and based on regular books of account without specifying incriminating material. Therefore, the assumption of jurisdiction was vitiated.

What were the facts?

The assessee company's return was assessed under Section 153C based on search operations. Additions were made for alleged loan receipts and commission. The assessee challenged the validity of the satisfaction note recorded for the assessment.

What were the issues?

Whether the satisfaction note recorded under Section 153C was validly made for each assessment year and based on incriminating material. Whether a consolidated satisfaction note vitiates the assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 153C,Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA&

For Appellant: Adv. Sh, Vipin Garg, Adv
Hearing: 02.06.2026Pronounced: 24.06.2026

P a g e | 1 ITA No.7363/Del/2025 Elegant IT Solutions Private Limited (AY: 2014-15) IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, DELHI

BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER

ITA No.7363/Del/2025 (Assessment Year: 2014-15)

Elegant IT Solutions Vs. DCIT/ACIT, Central Private Limited, Circle, CGO, Complex-1 419, Competent House, Purani Hapur Chungi, F-14, Inner Middle Circle, Ghaziabad, Connaught Place, Uttar Pradesh – 201002 New Delhi – 110001 स्थायीलेखासं./जीआइआरसं./PAN/GIR No: AABCE5690G Appellant .. Respondent

Appellant by : Sh. Akhilesh Kumar, Adv. Sh, Vipin Garg, Adv. Respondent by : Sh. Vikram Singh Sharma, CIT, DR

Date of Hearing 02.06.2026 Date of Pronouncement 24.06.2026

O R D E R PER ANUBHAV SHARMA, JM:

This appeal is preferred by the Assessee against the order dated 18.09.2025 of the Ld. Commissioner of Income Tax (Appeals)-3, Noida

P a g e | 2 ITA No.7363/Del/2025 Elegant IT Solutions Private Limited (AY: 2014-15) (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in Appeal No: CIT (A), Noida-3/10025/2013-14 arising out of the assessment order dated 18.03.2024 u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by DCIT, Central Circle, Ghaziabad for AY: 2012-13.

2.

Heard and perused the record. Assesse is a company and its return was subject of assessment u/s 153C of the Act on the basis of search and seizure operations in the M/s Alankit Group on 18.10.2019 and thereupon the impugned addition of Rs.75,00,000/- was made u/s 68 of the Act on account of alleged receipt of loan from entry operator companies of M/s Alankit Group of cases. Further an addition of Rs.2,25,000/- u/s 69C as alleged commission @ 3% of made and the same has been sustained by ld. CIT(A) for which assessee’s in appeal.

3.

We find that on behalf of assesse at page 92 of the paper book copy of satisfaction note dated 21.08.2023 is made available. Ld. Counsel has submitted that this satisfaction note is not recorded in accordance with law and a consolidated satisfaction note for AY: 2014-15 to 2020-21 has been recorded on the basis of ledger account which shows that in AY: 2014-15 only that there was a debit entry and in subsequent AY: 2015-16, 2016-17

P a g e | 3 ITA No.7363/Del/2025 Elegant IT Solutions Private Limited (AY: 2014-15) and 2017-18 there was only credit entries in the ledger account. It was submitted that thus except for AY; 2014-15 there was no allegation of any incriminating material being available for other years still a consolidated satisfaction note has been recorded.

3.1 Ld. DR has however defended the same by submitting that it is merely a procedural defect.

4.

After giving thoughtful consideration to the material on record we are of the considered view that what assessing officer alleges to be incriminating material is merely a regular books of account in the form of ledger entry and what is incriminating in that has not at all been discussed in the satisfaction note. It is now settled that satisfaction note is required to be recorded u/s 153C of the Act for each assessment year and a consolidated satisfaction note if not recorded for each assessment year vitiates the entire proceedings. More so, in case like present when what is alleged to be incriminating material is merely a copy of ledger account. Thus, relying the aforesaid proposition of law settled by Hon’ble Delhi High Court in the case of Saksham Commodities Ltd. v. ITO [2024] 161 taxmann.com 485 (Delhi), we are inclined to hold that the assumption of jurisdiction was vitiated and

P a g e | 4 ITA No.7363/Del/2025 Elegant IT Solutions Private Limited (AY: 2014-15) thus, all subsequent proceedings including issuing of notice and concluding assessment proceeding are liable to be quashed.

5.

Accordingly, the ground No. 1 is sustained and remaining ground become academic in nature. The appeal is allowed and the impugned assessment order is quashed.

Order pronounced in the open court on 24.06.2026

Sd/- Sd/- (Amitabh Shukla) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated 24.06.2026 Rohit, Sr. PS

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