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Facts
The assessee filed appeals against the CIT(A)'s orders for assessment years 2019-20 and 2020-21, arising from proceedings under section 153C read with section 143(3) of the Income Tax Act. The core issue was the validity of the satisfaction note issued by the Assessing Officer.
Held
The Tribunal held that the satisfaction note by the Assessing Officer must explicitly state that the seized material has a bearing on the determination of the assessee's total income. Relying on a landmark decision by the jurisdictional High Court, the Tribunal found the satisfaction notes in this case to be null and void.
Key Issues
Whether the satisfaction note under Section 153C of the Income Tax Act, 1961, is valid if it does not explicitly state that the seized material has a bearing on the determination of the assessee's income.
Sections Cited
153C, 143(3), Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
ORDER
Per Satbeer Singh Godara, Judicial Member:
These assessee’s twin appeals for Assessment Years 2019- 20 and 2020-21 arise against the CIT(A)-30, New Delhi’s DIN & order Nos. ITBA/APL/M/250/2024-25/1072166771(1) and 1072172353(1) both dated 15.01.2025, in proceedings u/s 153C r.w.s. 143(3) of the Income Tax Act, 1961 (in short “the Act”), respectively.
Heard both the parties at length. Case files perused.
We notice at the outset during the course of hearing that there arises the first and foremost issue of validity of the Vaaan Infra Pvt. Ltd. impugned section 153C proceedings/assessments itself as the assessee has filed a copy(ies) of the Assessing Officer’s corresponding satisfaction note before us which nowhere indicate that the seized material has been held as having any bearing on determination of it’s income.
Faced with this situation, learned CIT-DR vehemently argues that the impugned satisfaction note has rightly been recorded strictly in tune with section 153C of the Act wherein it is nowhere mandatory to incorporate the clinching statutory expression “bearing” therein. We are afraid that the Revenue’s forgoing vehement contentions hardly deserves to be accepted since hon’ble jurisdictional high court’s recent landmark decision Saksham Commodities Ltd. v.ITO (2024) 464 ITR 1 has already settled the issue in the assessee’s favour that the Assessing Officer of the known search person/third party must indicate in his latter satisfaction note that the corresponding seized material does have bearing of determination of it’s total income. We thus conclude in this factual backdrop that both the impugned section 153C satisfaction forming subject matter of adjudication are null and void in very terms. Quashed accordingly.
All other remaining pleadings between the parties stand rendered academic.