M/S SANDEE MEDICARE PVT LTD ,DELHI vs. DCIT (CC) -28, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER And SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA Nos.3456 & 3457/Del/2026 [Assessment Years : 2014-15 & 2015-16] M/s. Sandee Medicare Pvt. Vs DCIT (CC)-28 Ltd. ARA Center 231, Tagore Park Jhandewalan Extension Model Town Delhi – 110 055 Delhi – 110 009 PAN : AALCS 8160 K (APPELLANT) (RESPONDENT) Assessee by Shri Sumit Lalchandani, Adv. and Shri Shivam Yadav, Adv. Ms. Aananya Kapoor, Adv. Revenue by Shri Zafarul Haque Tanweer, CIT-D.R. Date of Hearing 04.08.2026 Date of Pronouncement 07.10.2026 ORDER PER NAVEEN CHANDRA [ACCOUNTANT MEMBER]: The above-captioned appeals are preferred by the assessee against the order dated 10.02.2026, passed by the Learned Commissioner of Income Tax (Appeals), Delhi - 25 (hereinafter referred to as ‘ld. CIT(A)’) under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), arising out of the same assessment order dated 27.03.2024 passed by the

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 Assessing Officer, DCIT/ACIT, Central Circle-28, New Delhi under Section 153C of the Act for A.Ys. 2014-15 and 2015-16, respectively. 2. Since the above captioned appeals were heard together and the facts in issues are identical, both the appeals are being disposed of by this common order for the sake of convenience and brevity. 3. The grounds of appeal raised by the assessee in ITA Nos.3456 and 3457/Del/2026 are as under: Re: Order passed by the Ld. CIT (A) in the given facts and circumstances is a perverse order 1. That on the facts and circumstances of the case, at the outset the order passed by the Ld. CIT (A) is being assailed of being a perverse order, as the same is passed without appreciating the facts and evidences on records, without considering the contentions raised by the appellant, without giving a proper ground wise finding, with a pre-conceived notion and merely in a haste and hurried manner, against the principles of natural justice. Re: Ground related to assumption of jurisdiction U/s 153C 2. That on the facts and circumstances of the case, the Ld. CIT (A) has failed to appreciate that the assumption of jurisdiction in this case, to make the assessment of the appellant under section 153C is bad in law and without jurisdiction. 3. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the satisfaction note (s) which is the foundation for triggering the assessment proceedings U/s 153C has been drawn in a cryptic and mechanical manner and thus the assessment proceedings conducted in pursuance thereto, stands vitiated. 4. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the proceedings-initiated U/s 153C is bad in law and without jurisdiction, due to the fact that the satisfaction note recorded is a consolidated satisfaction note which has been recorded for all the assessment years. 5. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that there is no description/analysis of seized material based on which satisfaction has been recorded; there is no year wise analysis of

Page 2 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 seized material; there is no year wise satisfaction that seized material is having a bearing on the determination of income. 6. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the proceedings-initiated U/s 153C is bad in law and without jurisdiction, due to the fact that Re: Ground related to placing reliance on the digital evidence 7. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the entire foundation of assessment proceeding is vitiated as addition has been made on the basis of material found in digital form. 8. That while confirming the assessment order, the Ld. CIT (A) has failed to appreciate that the Ld. A.O. has not brought on record certificate under section 65B of the Indian Evidence Act in respect of electronic records relied by the A.O, therefore in absence of such certificate under section 65B, such electronic records have no evidentiary value and the assessment made on the basis of such electronic record is unsustainable in law and liable to be quashed/deleted 9. That while confirming the addition made by the AO, the Ld. CIT (A) has not considered that the procedure mandated and prescribed under the Digital Evidence Investigation Manual issued by the CBDT in the year 2014 has not been followed, vide placing reliance on the digital data in this case. Re: the provisions of section 153C cannot be invoked in the present case 10. That the jurisdiction of the Ld. AO in passing the assessment order U/s 153C is vitiated in the present case, as in this case, the search was conducted on 18.10.2019 and the notice U/s 153C was issued after 1.04.2021, whereas the provisions of section did not exist after 1.04.2021 and hence the assessment proceedings are bad in law for the want of jurisdiction. 11. That it is a trite law that the date of handing over of the documents/recording of the satisfaction note, is to be considered as the triggering date in the case of the other person, and such date in the present case, falls after 1.04.2021, when the provisions of section 153C were already repealed. 12. That in the present facts of the matter, the Ld. AO does not have the jurisdiction to conduct assessment proceedings U/s 153C of the Income Tax Act in the case of the appellant and reliance in this regard is placed on the judgment of Harigovind v. ACIT [2025] 180 taxmann.com 197 (Madras) and other similar matters. Re: Ground related to signing the assessment order in violation of CBDT Instruction

Page 3 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 13. That the assessment order passed under section 153C of the Income Tax Act, 1961 dated 27.03.2024 is illegal and bad in law as the same is passed in violation of CBDT Instruction No. 1/2018 dated 12.2.2018 and as such the said assessment order is liable to be quashed. 14. That the assessment order passed under section 153C of the Income Tax Act, 1961 dated 27.03.2024 is illegal and bad in law Since in the instant case the assessment has been made under e-Proceedings facility, however, the assessment order has been signed manually, which vitiates the assessment on this ground. 15. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the assessment order is passed by manually signing, whereas the applicable statutory provisions, rules, var notifications, and departmental manuals mandate that the assessment order shall be digitally signed. Re: Ground related to delay in recording of the satisfaction 16. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that there is an inordinate delay in recording the satisfaction note considering the date of search which is 18.10.2019 and hence the assessment proceedings are vitiated as per the ratio laid down by the Hon'ble Supreme Court in the case of ratio laid down by the Hon'ble Supreme Court in the case of CIT vs. Calcutta Knitwears (2014) 362 ITR 673 (SC) r.w. Circular bearing No.24/2015 dated 31.12.2015 issued by the CBDT. Re: Ground related to not following the mandate of section 144A of the Income Tax Act 17. That on the facts and circumstances of the case, while confirming the addition, the Ld. CIT (A) has failed appreciate that the assessment order is passed in a perverse manner, as the same is passed without taking into consideration the directions given under section 144A by the Additional/JCIT. 18. That on the facts and circumstances of the case and under law the Ld. CIT (A) has not considered that the assessment order is passed against the principle of natural justice and against the settled jurisprudence, as in the matter no directions were issued by neither the Additional/JCIT nor the same has been sought by the Assessing Officer in connection to the notice issued U/s 144A of the Income Tax Act. Re: Ground related to not providing an opportunity for cross examination 19. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that in this case, the assessment order has been passed without giving any opportunity of cross examination, Mr. Sunil Kumar Gupta and others.

Page 4 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 20. That while not giving the opportunity of cross examination of "Mr. Sunil Gupta" and others, the Ld. CIT (A) has not considered the procedure prescribed in the 'Manual of Office Procedure Issued by The Directorate of Income Tax, CBDT', which is binding. Re: Ground related to not considering the retraction of Mr. Sunil Gupta while passing of the assessment order 21. That on the facts and circumstances of the case, the Ld. CIT (A) has failed appreciate that the major thrust of the addition made by the Ld. AO is based and placed on the statement of Mr. Sunil Kumar Gupta, which is duly retracted. 22. That the order passed by the Ld. CIT(A) is assailed of being a perverse order as the remand report referred in the order, has not been provided to the appellant for its perusal and comments. Re: Ground related to giving the approval U/s 153D in a mechanical manner 23. That on the facts and circumstances of the case and under law, the mandatory approval under section 153D has been given in a mechanical and cryptic manner which vitiates the entire assessment proceedings. Re: Ground related to merits of the addition 24. That on the facts and circumstances of the case the Ld. CIT (A) has erred in law and in facts in confirming the addition of Rs. 50,00,000/- under section 69A of the Income Tax Act. 25. That while confirming the addition, the Ld. CIT (A) has erred in noed en law and in facts in not considering that the provisions of section Manol 69A are not applicable to the present facts of the case. 26. That on the facts and circumstances of the case and under law, the Mo AO has erred in making the addition of Rs. 1,50,000/- under orli bor section 69C of the Income Tax Act. 27. The appellant hereby craves leave to add, alter, amend or delete any grounds.” 4. Brief facts of the case are that a search and seizure proceedings under Section 132 of the Act was carried out on the ‘Alankit Group of cases’ on 18.10.2019. During the proceedings, documents/materials pertaining to the assessee-company having tax implication on its income was found. It was

Page 5 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 found during the course of search proceedings, ledger related to ‘Sudhir Agarwal’ have been obtained from laptop of one Shri Sunil Kumar Gupta which contained some entries of the present assessee therefore, proceedings under section 153C of the Act was invoked. 5. During the course of assessment proceedings, the assessee submitted it has entered into a genuine transaction and that statement of Mr. Sunil Kumar Gupta does not ipso facto means that some illegitimate/bogus transaction has been entered by the assessee. The ld. AO, not satisfied with assessee’s explanation, made the following additions : i. Rs.25,00,000/- under section 69A of the Act ii. Rs.75,000/- under section 69C of the Act iii. Rs.25,00,000/- under section 69A of the Act iv. Rs.75,000/- under section 69C of the Act

Page 6 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 9. We have heard the rival submissions and perused the material available on record. The assessee has raised the issue of invalid assumption of jurisdiction under section 153C of the Act as no incriminating material belonging to the Assessee which has a bearing on total income of the assessee, was found during the course of the search and there being absence of any valid satisfaction being recorded as per law. 10. We find that a search was conducted on Alankit Group of cases on 18.10.2019 and the AO of the assessee, recorded his satisfaction note u/s 153C of the Act on 23.01.2024, as the assessee was a person other than searched person. For adjudicating the issues at hand therefore, it would be relevant to reproduce the Satisfaction note dated 23.01.2024 recorded by the AO of the assessee, i.e., non-searched person as under:

Page 7 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28

Page 8 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 11. From the reading of the above satisfaction note dated 23.01.2024, as recorded by the AO of the assessee, the non-searched person, we find that the AO has not accurately deployed the statutory text. The judicial precedence requires that the satisfaction note recorded must echo the specific statutory language assigned for determining the income of the assessee. The statutory requirement in the provisions of section 153C of the Act, mandates that the Assessing Officer must explicitly record that the documents seized during the course of search, have “a bearing on determination of the total income of the assessee”, which is absent in the aforesaid satisfaction note. Consequently, we apply the decision of Hon’ble Delhi High Court in the case of Saksham Commodities Ltd. v. ITO (2024) 464 ITR 1/ 338 CTR 418/161 taxmann.com 485 (Delhi), which held as under:

“48.**********However, the spectre of abatement insofar as the "other person" is concerned would arise only after the jurisdictional AO has formed the requisite satisfaction of the material having "a bearing on the determination of the total income of such other person" and having formed the opinion that proceedings under Section 153C are liable to be initiated. 50. What we seek to emphasise is that merely because Section 153C confers jurisdiction upon the AO to commence an exercise of assessment or reassessment for the block of years which are mentioned in that provision, the same alone would not be sufficient to justify steps in that direction being taken, unless the incriminating material so found is likely to have an impact on the total income of a particular AY forming part of the six AYs' immediately preceding the AY pertaining to the search year or for the "relevant assessment year".

In such facts and circumstances therefore, we hold that the satisfaction note, which has not recorded that seized documents have “a bearing on

Page 9 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28 determination of the total income of the assessee”, has vitiated the assumption of jurisdiction u/s 153C of the Act. Consequently, the notice u/s 153C as well as order under section 153C is considered invalid and unsustainable in law. We, accordingly, quash the order under section 153C of the Act for both the years. Ground 2 to 6 are allowed in aforesaid terms. 12. In the result, both the appeals filed by the assessee in ITA Nos.3456 & 3457/Del/2026 are allowed. Order pronounced in the open court on 07.10.2026.

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07.10.2026 Priti Yadav, Sr. PS

SHASHI Digitally signed by SHASHI KANT KANT PANDEY Date: 2026.10.09 PANDEY 12:33:17 +05'30'

Page 10 of 11

ITA Nos.3456 & 3457 [for A.Ys 2014-15 & 2015-16] Sandee Medicare Pvt. Ltd. vs. DCIT (CC)-28