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Facts
A search operation u/s 132 of the Income Tax Act was conducted on an 'entry operator' Sanjay Jain, leading to the identification of beneficiaries involved in generating cash against bogus billing. The group cases were centralized, and subsequent proceedings under Section 153C were initiated against the assessees, M/s Sh. Ram Ready Mix Concrete Pvt. Ltd. and Kamdhenu Cement.
Held
The Tribunal held that the satisfaction note for initiating proceedings under Section 153C was invalid because it did not explicitly state whether the seized material pertained to the assessee, which is a mandatory requirement under the law. Therefore, the assessments based on these satisfaction notes were considered non-est in the eyes of law.
Key Issues
Whether the proceedings initiated under Section 153C of the Income Tax Act, 1961, are valid when the satisfaction note by the Assessing Officer of the searched person does not explicitly link the seized material to the assessee.
Sections Cited
132, 153A, 153C, 194N
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Naveen Chandra
ORDER Per Bench: The instant batch of seven appeals involves the twin assessees herein M/s Sh. Ram Ready Mix Concrete Pvt. Ltd. and Kamdhenu Cement. All other relevant details thereof stand tabulated as under:
to 1064/Del/2025 Sh. Ram Ready Mix Concrete Pvt. Ltd. to 1067/Del/2025 Kamdhenu Cement Sl. I TA Nos. A.Y. Appellant Respondent Order passed Proceedings No. against u/s 1. 1061/Del/2025 2018-19 Sh. Ram DCIT CIT(A)-30, New 153C r .w.s . Ready M ix Delhi, DIN & order 143(3) Concr ete No.I TBA/APL/M/250/ Pvt. L td. 2024-25 / 1071680671(1) Dated 30.12.2024 2. 1062/Del/2025 2019-20 Sh. Ram DCIT CIT(A)-30, New 153C r .w.s . Ready M ix Delhi, DIN & order 143(3) Concr ete No.I TBA/APL/M/250/ Pvt. L td. 2024-25 / 10716850883(1) Dated 30.12.2024 3. 2020-21 Sh. 1063/Del/2025 Ram DCIT CI T(A)-30, New 153C r .w.s . Ready M ix Delhi, DIN & order 143(3) Concr ete No.I TBA/APL/M/250/ Pvt. L td. 2024-25 / 1071686755(1) Dated 30.12.2024 4. 1064/Del/2025 2021-22 Sh. Ram DCIT CIT(A)-30, New 153C r .w.s . Ready M ix Delhi, DIN & order 143(3) Concr ete No.I TBA/APL/M/250/ Pvt. L td. 2024-25 / 1071689750(1) Dated 30.12.2024 5. 2018-19 Kamdhenu 1065/Del/2025 DCIT CIT(A)-30, New 153C r .w.s . Cement Delhi, DIN & order 143(3) No.I TBA/APL/M/250/ 2024-25 / 1071679355(1) Dated 30.12.2024 6. 1066/Del/2025 2019-20 Kamdhenu DCIT CIT(A)-30, New 153C r .w.s . Cement Delhi, DIN & order 143(3) No.I TBA/APL/M/250/ 2024-25 / 10716883192(1) Dated 30.12.2024 7. 1067/Del/2025 2020-21 Kamdhenu DCIT CIT(A)-30, New 153C r .w.s . Cement Delhi, DIN & order 143(3) No.I TBA/APL/M/250/ 2024-25 / 1071683439(1) Dated 30.12.2024
Heard the assessees as well as the department. Case files perused.
We notice at the outset that there arises the first and foremost common/identical issue of validity of all these section 153C assessments itself; framed in furtherance to the department’s section 132 search action dated 26.10.2020, carried out in M/s Sanjay Jain and Mehta group of cases. This is to 1064/Del/2025 Sh. Ram Ready Mix Concrete Pvt. Ltd. to 1067/Del/2025 Kamdhenu Cement for the precise reason that Mr. Wadhwa has filed before us a copy of the relevant section 153C satisfaction note by the learned Assessing Officer of the searched person reading as under:
Faced with this situation, learned CIT-DR could hardly dispute that the above extracted section 153C satisfaction note does not throw any light as to whether the corresponding seized material belonged, pertained or related to the assessee; as the case may be. She vehemently argues that it is nowhere necessary for the Assessing Officer to explicitly make clear such a proposition in the satisfaction note. We are afraid that such a stand raised by the learned departmental authorities could not be accepted since going contrary to section 153C(1)(a) & (b) of the Act; be it in un-amended on or before 01.06.2015; or thereafter, as the case may. We thus invoke stricter interpretation as per Commissioner Vs. Dilip Kumar (2018) 9 SSC 1 (SC), CIT Vs. RRJ Securities Ltd. (2016) 380
to 1064/Del/2025 Sh. Ram Ready Mix Concrete Pvt. Ltd. to 1067/Del/2025 Kamdhenu Cement ITR 0612, PCIT vs. Jasjit Singh (2024) 336 CTR 634 (Delhi) and PCIT vs. Ojjus Medicare Pvt. Ltd. (2024) 465 ITR 101 (Del.) to conclude that all these impugned assessment are non-est in the eyes of law since based on an invalid satisfaction of the Assessing Officer of the searched assessee. Quashed accordingly.