KIRAN AGARWAL,NOIDA vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-25, JHANDEWALAN EXTN.,

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ITA 5978/DEL/2025Status: DisposedITAT Delhi03 June 2026AY 2019-20206 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 recorded for initiating proceedings under Section 153C was devoid of application of mind. It did not specify the material found or how it bore upon the assessee's income, making the assessment order bad in law.

What were the facts?

The assessee's appeal challenges the jurisdiction assumed under Section 153C of the Income Tax Act. The challenge is based on the contention that the satisfaction note recorded by the Assessing Officer lacks specific details about incriminating material found during a search of another entity (Alankit Group).

What were the issues?

Whether the satisfaction note recorded for initiating proceedings under Section 153C was valid and demonstrated due application of mind. Whether the assessment order was vitiated due to a defective satisfaction note.

Which sections of the Income-tax Act were involved?

Section 153C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA&

For Appellant: Adv. Sh. Shivam Yadav, Adv
Hearing: 02.04.2026Pronounced: 03.06.2026

P a g e | 1 ITA No.5978/Del/2025 Kiran Agarwal (AY: 2019-20) IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.5978/Del/2025 (Assessment Year: 2019-20) Kiran Agarwal Vs. DCIT, Central Circle-25 D-88, First Floor, Sector Room No. 317, ARA 52, Gautam Buddha Nagar Centre, Jhandwalan Extn. Noida, UP – 201301 New Delhi – 110055 स्थायीलेखासं./जीआइआरसं./PAN/GIR No: AALPA3768J Appellant .. Respondent

Appellant by : Sh. Ananya Kapoor, Adv. Sh. Shivam Yadav, Adv. Sh. Sumit Lalchandani, Adv.. Respondent by : Sh. Mahesh Kumar, CIT, DR

Date of Hearing 02.04.2026 Date of Pronouncement 03.06.2026

O R D E R PER ANUBHAV SHARMA, JM:

This appeal is preferred by the assessee against the order dated 15.10.2024 of the Ld. Commissioner of Income Tax (Appeals)-25, New

P a g e | 2 ITA No.5978/Del/2025 Kiran Agarwal (AY: 2019-20) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN No.: ITBA/APL/M/250/2025-26/1078901916(1) arising out of the assessment order dated 02.03.2024 u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the DCIT, CC-25, New Delhi for AY: 2019-20.

2.

On hearing both sides we find that on behalf of assesse ground No. 2 & 11 were argued by which the assumption of jurisdiction on the basis of satisfaction recorded for the purpose of Section 153C of the Act is challenged and it was contended on behalf of the assessee by ld. Counsel that the satisfaction note does not even refer to any material which form basis for making conclusion that any incriminating material was found during search of another person.

2.1 Ld. DR has countered the same by submitting that the satisfaction note recorded in the case of assesse should be read along with satisfaction note recorded in the case of searched person.

3.

Giving thoughtful consideration to the material on record and the submission we find that asessee’s return was filed declaring income of Rs.7,88,940/- and consequent to search and seizure operation in the Alankit

P a g e | 3 ITA No.5978/Del/2025 Kiran Agarwal (AY: 2019-20) Group allegedly incriminating evidences were found of this group providing accommodation entries in various forms and accordingly the satisfaction note was recorded u/s 153C of the Act by the assessing officer of the searched person and the copy of same has been provided at page No. 119 of the paper book and for convenience of further discussion we reproduce the same:

P a g e | 4 ITA No.5978/Del/2025 Kiran Agarwal (AY: 2019-20) 4. We find that thereafter the satisfaction note has been recorded by the assessing officer of non-searched person, who is the present assessee and for convenience the satisfaction note of the assessee is also recorded:

“satisfaction note for Initiating proceedings u/s 153C of the Income Tax Act 1961 in the case of Smt Kiran Agarwal (PAN- AALPA3768J) by AO of the other than the searched persons: A search and seizure action was conducted on 18.10.2019 in Alankit Group at the premises of Sh. Alok Kumar Agarwal, Sh. Ankit Agarwal, M/s Alankit Limited and M/s Alankit Assignments Limited at 3584/4 Narang Colony, Gali No. 4, Tri Nagar, Delhi. Subsequently the said group was centralized to the jurisdiction of Central Circle 28, New Delhi. During course of assessment proceeding u/s 153A of Alankit Group materials/documents which has been determining the total income of Smt Kiran Agarwal (PAN-AALPA3768J) were found. The Assessing Officer of the said group of cases has recorded his/her satisfaction that the documents etc, also contain information that relates to Smt Kiran Agarwal i.e, the other person and bearing on determination his total income. The satisfaction recorded by the said Assessing Officer is placed on record. The ITR details have been extracted from ITBA and perused. It has been found that total sales/turnover and income as per information/documents received are not declared. On an examination of the same, it has found that it is a fit case to issue notice u/s 153C for AY. 2014-15 to 2020-21.”

5.

Now, very apparently, in the satisfaction note recorded in the case of present assesse there is a mere mention of the search conducted in the Alankit Group and there is no reference to any material which was found or examined by the assessing officer of the non-searched person and if it all what was the nature of transaction involving the assessment year 2014-15 to 2020-21 and there is no assertion in the satisfaction note as to how the alleged

P a g e | 5 ITA No.5978/Del/2025 Kiran Agarwal (AY: 2019-20) incriminating evidence has bearing on the income of the assesse fo these years. We have no doubt that manner in which the assessing officer has recorded the satisfaction note is completely devoid of any sign of application of mind. Hon’ble Delhi High Court in the case of Saksham Commodities Limited (2024)464 ITR 1/338, has taken into consideration similar satisfaction note recorded in the case of search assessments of other entities arising out of search of Alankit Group and has held that consolidated satisfaction note recorded for the several assessment years, without indicating how material relied has bearing on income, is bad in law and fatal to the assessments.

6.

In the light of aforesaid we are inclined to sustain the ground No. 2 & 11. The appeal is allowed and the impugned assessment order stand quashed.

Order pronounced in the open court on 03.06.2026

Sd/- Sd/- (Amitabh Shukla) (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 03.06.2026 Rohit, Sr. PS

P a g e | 6 ITA No.5978/Del/2025 Kiran Agarwal (AY: 2019-20) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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