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Facts
A search and seizure action was conducted, leading to the seizure of documents. A satisfaction note was recorded based on these documents for initiating action under Section 153C of the Act. Additions were made to the assessee's income based on these documents. The CIT(A) deleted these additions but rejected the assessee's challenge to the jurisdiction under Section 153C.
Held
The Tribunal held that the documents relied upon for initiating action under Section 153C were unsigned, failing to satisfy the condition that the document must belong to the assessee. Therefore, the assumption of jurisdiction by the AO was not validly assumed.
Key Issues
Whether the assumption of jurisdiction under Section 153C by the AO was valid, given that the seized documents were unsigned.
Sections Cited
153C
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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA
O R D E R PER NAVEEN CHANDRA, A. M.: This appeal by the assessee is preferred against the order of the 1. Addl. Ld. Commissioner of Income Tax (Appeals) dated 21.02.2014 pertaining to A.Y. 2009-10.
Page 1 of CO 77/Del/2024 Kunjan Arora A search and seizure action was carried out in Mahesh Mehta 2. group of cases on 30.06.2009 where certain documents pertaining to the assessee were found and seized. On the basis of these documents, a satisfaction note was recorded for initiating action u/s 153C of the Act. Notice u/s 153C was issued on 14.06.2011 on the basis of documents seized and addition of Rs. 18.40 crores was made in the hands of the assessee on account of payment made out of books for acquisition of company. Another addition of Rs. 1.50 crores was made on account of expenditure incidental to the purchase of property.
Aggrieved the assessee preferred an appeal before the ld CIT(A), who deleted the said addition. The assessee had also challenged before the ld CIT(A) the jurisdiction of the AO with regard to proceedings u/s 153C of the Act which was rejected by the ld CIT(A).
Aggrieved revenue is before us against the deletion of the addition made while the assessee is before us in Cross Objection on account of rejection of its ground with regard to assumption of jurisdiction u/s 153C of the Act. We take up the issue of assumption of jurisdiction u/s 153C first.
The ld AR of the assessee argued that the documents relied upon by the AO which were found during the search on the basis of which satisfaction note u/s 153C was recorded, was unsigned. As the Page 2 of CO 77/Del/2024 Kunjan Arora document was unsigned therefore, the law at that time requiring the document should belong to the assessee, is not satisfied. It is stated by the ld counsel that the amendment with regard to inclusion of the term pertaining to was brought into the statue w.e.f. 01.06.2016. Therefore, in the impugned AY 2009-10, the condition of document belonging to the assessee is not satisfied. Therefore, assumption of jurisdiction by the AO cannot be considered as validly assumed.
Per contra the ld DR relied on the orders of the AO and the ld CIT(A).
We have heard the rival submissions and perused the material available on record. A perusal of the satisfaction note shows that the satisfaction note is based on sale agreement which is found and seized during the course of search in the case of Mahesh Mehta on 30.06.2009. The said agreement, attached at pages 89 to 91 of the paper book, is an agreement between Shri Mahesh Mehta, Mrs. Kusum Mehta and Ms. Kunjan Arora with regard to sale of property for Rs. 25 crore. We find that this sale agreement is dated 22nd February 2008 but has no signature of either purchaser or the seller. The said agreement is unsigned by Kunjan Arora, the assessee.
Page 3 of CO 77/Del/2024 Kunjan Arora For a greater understanding, the satisfaction note for issue of 8. notice u/s 153C of the Act is reproduced as under:-
Page 4 of CO 77/Del/2024 Kunjan Arora The documents purported to be belonging to the assessee does 9. not have any signature of the assessee, therefore, condition laid down in section 153C, of books of account or document, belonging to the assessee is not satisfied. We, therefore, are of the considered view that the notice u/s 153C suffers from legal lacuna and therefore, the assumption of jurisdiction u/s 153C has not been validly assumed and is devoid of any legal sustenance. Accordingly, notice u/s 153C is liable to be quashed and the resultant order framed u/s 153C is also liable to be quashed. We order accordingly. The Cross Objection of the assessee is allowed.
Since, the appeal has been decided on legal ground, the ground 10. of merit of the revenue become academic and are dismissed as being academic.
Order pronounced in the open court on 09/02/2026.