NARENDER NATH,DELHI vs. DCIT CENTRAL CIRCLE-2, DELHI

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ITA 4990/DEL/2025Status: DisposedITAT Delhi08 January 2026AY 2021-2022Bench: Sh. Satbeer Singh Godara, Judicial Member & Sh. S. Rifaur Rahman (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer failed to properly record satisfaction that the impugned seized documents pertained to or related to the assessee, which is a prerequisite for initiating proceedings under Section 153C. The Tribunal referred to a previous decision on a similar issue.

What were the facts?

The assessee filed an appeal against the order of CIT(A) arising from assessment proceedings under Section 153C r.w.s. 143(3) of the Income Tax Act for AY 2021-22. The assessment was based on seized documents during a search operation.

What were the issues?

Whether the Assessing Officer properly recorded satisfaction for initiating proceedings under Section 153C based on seized documents?

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3),Section 153C(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman

For Appellant: CA &
For Respondent: Ms. Amish S. Gupt, CIT-DR
Hearing: 08.01.2026Pronounced: 08.01.2026

ORDER

Per Satbeer Singh Godara, Judicial Member:

1.

This assessee’s appeal for Assessment Year 2021-22, arises against the CIT(A)-23, Delhi’s DIN & order No. ITBA/APL/S/250/2025–26/1078979102(1) dated 28.07.2025, in proceedings u/s 153C r.w.s. 143(3) of the Income Tax Act, 1961 (in short “the Act”)

2.

Heard both the parties at length. Case file perused.

3.

We advert to the assessee’s first and foremost substantive ground/legal arguments herein that both the learned lower authorities have erred in law and on facts in framing the impugned section 153C r.w.s. 143(3) assessment dated

Narender Nath 30.03.2024; in furtherance to the searched party’s Assessing Officer’s satisfaction dated 25.03.2023 and his assessing authority on the very date, as the case may be, which has been wrongly upheld in the lower appellate discussion.

4.

That being the case, learned CIT-DR vehemently argues that the impugned twin satisfactions herein had been properly recorded by the Assessing Officer(s); be it that of the searched assessee or appellant third party herein. Her case accordingly is that we ought to uphold the same in very terms.

5.

We have given our thoughtful consideration to both the party’s foregoing rival pleadings. There is hardly any dispute that the learned departmental authorities had carried out the impugned search on 23.03.2021 in M/s KK Spun Group. And that the said searched party’s learned Assessing Officer recorded his section 153C satisfaction dated 25.02.2023 for proceeding against assessee/appellant before us. The said learned Assessing Officer appears to have recorded that the corresponding seized document during the course of search “belonged to” the assessee/appellant who happens to be the third party u/s 153C of the Act.

6.

Faced with this situation, the Revenue could once again not dispute that section 153C(1)(a) stipulates the category of the seized material as “any money, bullion, jewellery.....”

Narender Nath which could be held as belonging to a third person and such documents etc. could only be treated as pertaining to or information therein as relating to such a person. Meaning thereby that the learned Assessing Officer has not properly recorded his satisfaction that the impugned seized documents either pertained to or related to the assessee which forms a conditioned precedent before proceedings him/third person. This tribunal’s recent decision in Prashant Premchand Bafana Vs. ACIT IT(SS)A No. 119 & 120/Pun/2022 decided on 08.04.2025 has already settled the very issue in the assessee’s favour and against the department. We thus conclude in this backdrop that the impugned assessment dated 30.03.2024 deserves to be quashed since based on an improper section 153C satisfaction. Ordered accordingly.

7.

All other remaining pleadings between the parties stand rendered academic.

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