PRINCIPAL COMMISSIONER OF INCOME TAX-7, DELHI vs. 3D TRADEX PRIVATE LIMITED
What did the High Court hold?
The High Court held that the issue in the present appeals is squarely covered by its previous decision dated September 18, 2026, in ITA No. 744/2026. In that prior decision, the Court had considered an appeal against an ITAT order that set aside proceedings under Section 153C of the Income Tax Act, 1961. The ITAT's reasoning, which the High Court upheld, was that the satisfaction note recorded by the AO was vague and did not clearly link the seized incriminating material to any specific assessment year. The Court noted that the satisfaction note simply recorded the seizure of a hard disk and the initiation of proceedings under Section 153C for assessment years 2010-11 to 2015-16, without explaining the relevance of the material to those years. The High Court found no merit in the Revenue's appeal in that instance, as the matter was covered by the judgment in *Saksham Commodities Limited v. Income Tax Officer* (2024) 161 taxmann.com 485. Consequently, the present appeals were also disposed of in terms of that prior decision, leading to the rejection of the Revenue's appeals.
What were the facts?
The appeals were filed by the Principal Commissioner of Income Tax-7, Delhi (Revenue) against the assessee, 3D Tradex Private Limited. The appeals challenged orders passed by the Income Tax Appellate Tribunal (ITAT). The Revenue's counsel drew the High Court's attention to a previous order dated September 18, 2026, in ITA No. 744/2026, which involved the same question of law and the same assessee. The previous order had considered an appeal against an ITAT order dated February 12, 2025. The core issue in the previous appeal was whether the ITAT was justified in setting aside proceedings under Section 153C of the Income Tax Act, 1961, due to a satisfaction note not clearly mentioning the year to which the incriminating material related. The High Court noted that the present appeals raise the same issue.
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 the assessment year to which the incriminating material related? (Question of law and fact, concerning Section 153C of the Income Tax Act, 1961). Assessee's Contention (as per the Tribunal's finding in the referred order): The satisfaction note was obscure and vague, not identifying the alleged undisclosed income with any specific assessment year. The Tribunal held that in the absence of particulars of incriminating material with reference to the specified assessment years, such a satisfaction note does not grant the Assessing Officer (AO) jurisdiction under Section 153C. The income assessed under Section 153C did not appear to relate to any incriminating material, nor was the material shown to be attributable to different assessment years (2010-11 to 2015-16). The assessee's plea of non-maintainability of jurisdiction under Section 153C was covered by the judgment in *Saksham Commodities Ltd.* (supra). Revenue's Contention (as per the High Court's observation in the referred order): The Revenue argued that the Tribunal was not justified in setting aside the proceedings. However, the High Court found no merit in the Revenue's appeal after perusing the satisfaction note and the Tribunal's order, stating the issue was squarely covered by the judgment in *Saksham Commodities Ltd.* (supra).
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 11:41:40
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 11:41:40
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 11:41:40
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
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- Dineshkumar Chhaganlal Manavadaria, Junagadh vs ITO Ward 1, JunagadhITA 837/RJT/2025[2020-21]Status: Disposed9 Oct 2026AY 2020-21
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