ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, GUWAHATI vs. PUSHPA DEVI CHAURASIA, GUWAHATI

ITA 81/GTY/2020Status: DisposedITAT Guwahati09 October 2026AY 2016-1720 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal of the Revenue. The primary issue revolved around the satisfaction note required under Section 153C. The CIT(A) had deleted the addition on the ground that the AO had not recorded a valid satisfaction note in his dual capacity. However, the Tribunal, relying on the Supreme Court judgment in Super Malls (P) Ltd. Vs. Pr.CIT (2020), held that when the AO is the same for both the searched person and the assessee, a separate satisfaction note for the assessee is not mandatory if the AO is satisfied that the seized documents belong to the assessee. The Tribunal reproduced the satisfaction note recorded by the AO, which clearly indicated that seized documents belonged to M/s. Supreme Zarda House (Prop. Smt. Puspa Devi Chaurasia). The Tribunal found that the AO had referred to seized documents like bank deposit loose sheets and retail invoices, which were not recorded in the books of accounts, as evidenced by the statement recorded under Section 132(4). Therefore, the Tribunal overruled the objection regarding the non-fulfillment of the mandatory requirement of a valid satisfaction note. Since both parties did not argue the case on merits, the Tribunal did not adjudicate on the merits. The appeal of the revenue was allowed.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) dated 11.12.2019, which deleted an addition of Rs. 1,50,41,690/- made by the Assessing Officer (AO) under Section 143(3)/153C of the Income Tax Act, 1961, for Assessment Year 2016-17. A search and seizure operation under Section 132 was conducted on the assessee's group on 29.03.2016. The assessee, Smt. Puspa Devi Chaurasia, is engaged in trading Pan Masala and Mouth Freshener. A notice under Section 153C was issued on 01.03.2018, and the assessee filed a return declaring an income of Rs. 44,63,730/-. Incriminating documents were seized, and a voluntary disclosure of Rs. 1,50,00,000/- was made, which was later retracted. The AO made the addition, and the CIT(A) deleted it, primarily on legal grounds.

What were the issues?

1. Whether the Ld. CIT(A) erred in deleting the addition of Rs. 1,50,41,690/- made by the AO under Section 143(3)/153C, thereby quashing the AO's order and restoring it. 2. Whether the Ld. CIT(A) erred in holding that the AO's orders were barred by limitation, considering the assessee's compliance with notices after 31.12.2017. 3. Whether the Ld. CIT(A) erred in admitting an additional ground on technical and legal issues without referring back to the AO for comments, thereby violating Rule 46A. 4. Whether the Ld. CIT(A) was justified in deleting the addition solely on legal grounds without considering the merits, and if the AO's order should be restored. 5. Whether the Ld. CIT(A) erred in holding that the AO did not record a satisfaction note, when the AO was the same for the searched persons and the assessee, implying no non-application of mind. 6. Whether the Ld. CIT(A) focused on a narrow observation of the assessment order without considering the merits and the malpractice of tax evasion in the group cases. 7. Whether the Ld. CIT(A) failed to consider the logical grounds of the AO, given the grave nature of tax evasion and the satisfaction note recorded. Assessee's Contention (as inferred from the judgment): The assessee argued that the AO had not recorded a valid satisfaction note in his dual capacity as AO for the searched person and the assessee, relying on various judgments. Revenue's Contention: The Revenue argued that the AO was the same for both the searched persons and the assessee, making a separate satisfaction note unnecessary. They relied on the Supreme Court judgment in Super Malls (P) Ltd. Vs. Pr.CIT and contended that the CIT(A)'s order, passed before this judgment, should be considered retrospectively applicable. They also argued that judgments relied upon by the CIT(A) did not support the assessee's case.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3),Section 131(1),Section 132(4),Section 153C,Section 153A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI

For Appellant: Shri S.P. Bhati, FCA
For Respondent: Shri M.C. Omi Mingshen, CIT-DR
Hearing: 23.07.2026Pronounced: 09.10.2026

PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

This is an appeal filed by the revenue against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals), Guwahati-2 (hereinafter referred to as “the Ld. CIT(A)], dated 11.12.2019, on the following grounds of appeal:

2 Pushpa Devi Chaurasia “1. That the Ld CIT(A) erred in facts and in law in deleting the addition of Rs. 1,50,41,690/- made by the Assessing Officer u/s 143(3)/ 153C and hence the impugned order of the Ld. CIT(A) is liable to be quashe

The order continues below.

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