PRINCIPAL COMMISSIONER OF INCOME TAX-7, DELHI vs. 3D TRADEX PRIVATE LIMITED
What did the High Court hold?
The High Court, in the prior order (ITA No. 744/2026), held that the Income Tax Appellate Tribunal was justified in setting aside the proceedings under Section 153C of the Income Tax Act, 1961. The Court found that the satisfaction note, as reproduced by the Tribunal, did not clearly indicate the relatability of the incriminating material to any particular assessment year. The satisfaction note merely recorded the seizure of a hard disk and the initiation of proceedings for assessment years 2010-11 to 2015-16 without specifying how the seized material was relevant to those years. The Court relied on its own judgment in Saksham Commodities Limited v. Income Tax Officer (2024) 161 taxmann.com 485. Consequently, the Revenue's appeal was rejected. The present appeals were disposed of in terms of this prior decision.
What were the facts?
The appeals were filed by the Principal Commissioner of Income Tax-7, Delhi against the respondent, 3D Tradex Private Limited. The appeals challenged orders passed by the Income Tax Appellate Tribunal (ITAT). The High Court of Delhi was considering these appeals. The Revenue's counsel brought to the Court's attention a previous order dated September 18, 2026, passed in ITA No. 744/2026, which involved the same issue and the same assessee. The Court noted that the present appeals were admittedly covered by this prior decision. The prior decision had dealt with an appeal against an ITAT order dated February 12, 2025, which had set aside proceedings under Section 153C of the Income Tax Act, 1961.
What were the issues?
1. Whether the Income Tax Appellate Tribunal was justified in setting aside proceedings initiated under Section 153C of the Income Tax Act, 1961, on the ground that the satisfaction note did not clearly mention the assessment year to which the incriminating material related? (Question of law) Assessee's Contention (as per the prior order): The Tribunal was justified in setting aside the proceedings because the satisfaction note was obscure and vague, failing to identify the alleged undisclosed income with any specific assessment year. The incriminating material was not shown to be attributable to the assessment years 2010-11 to 2015-16, rendering the Assessing Officer's assumption of jurisdiction under Section 153C invalid. The assessee relied on the judgment in Saksham Commodities Ltd. (supra). Revenue's Contention (as per the prior order): The Revenue contended that the Tribunal was not justified in setting aside the proceedings. However, the judgment records no specific arguments made by the Revenue beyond the general appeal against the Tribunal's order.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2026 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2026 at 11:41:38
Learned counsel appearing for the Revenue-appellant draws the attention of this Court to the Order dated 18.09.2026 passed in ITA No. 744/2026, whereby an appeal involving the same question arising in the case of the assessee was considered and disposed of.
The said order is reproduced and reads as under:
“1. The appeal in hands is directed against order dated 12.02.2025 passed by the Income Tax Appellate Tribunal, Delhi “E” Bench: New Delhi (hereinafter referred to as ‘Tribunal’).
The question before us, in short is, as to whether the Tribunal was justified in setting aside the proceedings under Section 153C of the Income Tax Act,1961 (hereinafter referred to as ‘the Act of 1961’) holding, inter alia, that the satisfaction note does not clearly mention that the incriminating material relates to which year.
While allowing the assessee's appeal in paragraph no.13.1, the Tribunal has recorded thus:
“13. 1. It is evident from the 'Satisfaction Note that the alleged undisclosed income is not identifiable with any assessment year. In the absence of any particular of incriminating material available with reference to AYs specified in the 'Satisfaction Note', such obscure and vague 'Satisfaction Note' does not entitle the AO to assume juri iction under s. 153C of the Act. Neither the income assessed under s. 153C of the Act appears to relate to any incriminating material nor the so called incriminating material has been shown to be attributable to different AYs 2010-11 to 2015-16. The plea of the assessee towards non-maintainability of juri iction under s. 153C in such facts is squarely covered in favour of the assessee by the judgment in Saksham Commodities Ltd.(supra).”
The aforesaid view of the Tribunal is based on judgment of this Court rendered in case of Saksham This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2026 at 11:41:38
Commodities Limited v. Income Tax Officer reported in (2024) 161 taxmann.com 485. 5. We have heard learned counsel for the appellant and perused the satisfaction note, which has been reproduced by the Tribunal at page no.4 of its order. The perusal of the satisfaction note so reproduced clearly shows that the Assessing Officer had not recorded any satisfaction regarding the relatability of the incriminating material qua particular assessment year.
The satisfaction note simply records seizure of hard disk and that the proceedings under section 153C of the Act of 1961 is to be initiated for assessment years 2010-11 to 2015-16, without indicating anything as to how the material is relevant for those assessment years.
We, therefore, do not find any merit and substance in the appeal so filed by the Revenue, as the issue in hands is squarely covered by the judgment of this court in the case of Saksham Commodities Ltd. (supra).
The appeal is, therefore, rejected.
All pending applications are also disposed of accordingly.”
The issue arising in the present appeals is admittedly covered by the aforesaid decision dated 18.09.2026 in ITA No. 744/2026. Consequently, the present appeals are also disposed of in terms thereof.
All pending applications, if any, shall stand disposed of accordingly.
SUBRAMONIUM PRASAD, J
RENU BHATNAGAR, J SEPTEMBER 22, 2026/bs/sm This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2026 at 11:41:38
More judgments on Section 153C
- Neepaben Sunnybhai Motwani, Rajkot vs Income Tax Officer, RajkotITA 875/RJT/2026[2021-22]Status: Disposed19 Oct 2026AY 2021-22
- Neepaben Sunnybhai Motwani, Rajkot vs The Income Tax Officer, RajkotITA 874/RJT/2026[2020-21]Status: Disposed19 Oct 2026AY 2020-21
- Venish Vinodray Lalani, Rajkot vs Income Tax Officer, MorbiITA 197/RJT/2026[2019-20]Status: Disposed19 Oct 2026AY 2019-20
- Ajay Singh, Kota vs DCIT, Central Circle, KotaITA 495/JPR/2026[2016-17]Status: Disposed13 Oct 2026AY 2016-17
- Dineshkumar Chhaganlal Manavadaria, Junagadh vs ITO Ward 1, JunagadhITA 837/RJT/2025[2020-21]Status: Disposed9 Oct 2026AY 2020-21
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