PRINCIPAL COMMISSIONER OF INCOME TAX-7, DELHI vs. 3D TRADEX PRIVATE LIMITED
What did the High Court hold?
The Delhi High Court 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 noted that the satisfaction note reproduced by the Tribunal clearly showed that the AO had not recorded any satisfaction regarding the relatability of the incriminating material to a particular assessment year. The satisfaction note merely recorded the seizure of a hard disk and the initiation of proceedings under Section 153C for assessment years 2010-11 to 2015-16, without indicating how the material was relevant for those years. The Court found the issue squarely covered by its prior judgment in *Saksham Commodities Limited v. Income Tax Officer* (2024) 161 taxmann.com 485. Consequently, the Revenue's appeals were rejected, and the Tribunal's order was upheld. No issue was expressly left undecided.
What were the facts?
The appeals were filed by the Principal Commissioner of Income Tax-7, Delhi (Revenue) against 3D Tradex Private Limited (assessee). The appeals challenged orders passed by the Income Tax Appellate Tribunal. The Revenue's counsel drew the Court's attention to a previous order dated September 18, 2026, in ITA No. 744/2026, which involved the same question of law and arose in the case of the same assessee. The Court was informed that the issue in the present appeals was admittedly covered by the aforementioned decision. The Revenue's appeals were filed against orders of the Tribunal that 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 under Section 153C of the Income Tax Act, 1961, on the ground that the satisfaction note did not clearly mention that the incriminating material related to a specific assessment year? (Question of law and fact, concerning Section 153C of the Income Tax Act, 1961). Assessee's Contention (Implicit from Tribunal's order): The satisfaction note was obscure and vague, not identifying the alleged undisclosed income with any assessment year. In the absence of particulars of incriminating material with reference to specified assessment years, the Assessing Officer (AO) lacked jurisdiction under Section 153C. The material was not attributable to different assessment years (2010-11 to 2015-16), and the plea of non-maintainability of jurisdiction was covered by the judgment in *Saksham Commodities Ltd.* (supra). Revenue's Contention (Implicit from Court's observation): The Revenue argued that the Tribunal was not justified in setting aside the proceedings. The Court, however, found no merit in the Revenue's appeal.
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 11:41:41
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 11:41:41
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 11:41:41
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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