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Facts
The assessee filed appeals against common orders for Assessment Years 2018-19, 2019-20, and 2020-21. The primary contention was that the assessment orders passed under Section 153C of the Income Tax Act were invalid because the Assessing Officer had failed to record the necessary satisfaction note.
Held
The Tribunal found that at the time of recording the satisfaction by the AO of the 'searched person' (16.08.2022), the AO of the 'other person' (assessee) was different. The jurisdiction over the assessee was transferred only on 05.09.2022, after the satisfaction was recorded. Therefore, relying on precedent, the Tribunal held that the assessments framed under Section 153C without the requisite satisfaction note by the appropriate AO were liable to be quashed.
Key Issues
Whether assessment orders under Section 153C are valid if the Assessing Officer fails to record a satisfaction note, especially when the AO of the 'searched person' and 'other person' are different at the time of recording satisfaction.
Sections Cited
153C, 153A, 127
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI YOGESH KUMAR U.S.
(A.Y. 2020-21) Sh. RajanVerma Vs. DCIT 101, 1st Floor, Laxmi Tower-II Central Circle-30 LSC, Pitampura, New Delhi SaraswatiVihar, North West Delhi-110034PAN: ACTPV3583E Appellant Respondent Appellant by Shri Ved Jain, Adv. and Shri AyushGarg, CA Respondent Ms. Amisha S. Gupt, CIT-DR by Date of Hearing 08.10.2025 Date of Pronouncement 23.12.2025 ORDER
PER YOGESH KUMAR U.S., JM:
The captioned appeals are filed by the assessee against the common order date 28.01.2025 of Learned Commissioner of Income Tax (Appeals)-30, New Delhi [“Ld. CIT(A)”, for short], for Assessment Years 2018-19, 2019-20 & 2020-21 respectively. As the appeals are pertaining to single assessee,involving similar issues to be decided, above appeals are heard tougher and decided in this common order. to 968/Del/2025 Rajan Verma vs. DCIT 2. Ld. Counsel for the assessee submitted that the AO who has passed the assessment orders u/s 153C of the Income Tax Act, 1961 ('Act' for short) has not recorded the satisfaction note. Since, the assessment has been framed by the concerned AO without recording the satisfaction, the assessment orders for the Assessment Years under consideration are liable to quashed. The Ld. Counsel has relied on the following judgments in support of his contentions. • Ratio of decision of Hon’ble Delhi High Court in the case of M/s Saksham Commodities Ltd. &Ors dated 09.04.2024 and • Ratio of decision of Hon’ble ITAT Delhi in the case of Sri Anil Chowdhary dated 30.08.2024.
Per contra, the Ld. DR disputing the contentions of the Ld. Assessee's Representative,submitted that notices u/s 153C of the Act was issued by Sri Praduman Meena, ACIT Central circle-30, who was the Assessing Officer of the assessee. The said Sri Praduma Meena was also the Assessing Officer of the ‘Searched person’ (Sri Sanjay Jain). Hence, in this case the Assessing Officer of the “Searched person” and the “Other person” were one and the same. Therefore, in his capacity as the AO of the Searched person, Sri Meena had duly recorded the ‘Satisfaction note’ for initiating proceedings u/s 153C r.w.s 153A of the Act in the case of M/s Ranjan Builders, proprietary to 968/Del/2025 Rajan Verma vs. DCIT concern of the assessee Sri Ranjan Verma. Ld. Ld. Departmental Representative further submitted that in cases where the AO of the ‘Searched person’ and the ‘Other person’ are same, there is no requirement for recording two separate Satisfaction Notes. The Ld. DR placed his reliance on the judgment dated 05.03.2020 of Hon’ble Supreme Court in the case of M/s Super Malls Pvt. Ltd.reported in [2020] 115 taxmann.com 105 (SC)and also reliance was also placed on the judgment of Hon’ble Delhi High Court in the case of M/s Ganpati Fincap Services Pvt. Ltd. [2017] 395 ITR 692. Thus, submitted that the argument of the Ld. AR requested to be negated.
We have heard the parties and perused the materials available in record. In the present case, the notice u/s 153C of the Act has been issued by DCIT, Central Circle-30 on 17.10.2022. It is evident from the record that the jurisdiction in the case of the assessee has been transferred u/s 127 of the Act by PCIT-12 on 05.09.2022 itself from DCIT, Circle-61(1) to DCIT, Central Circle-30 which can be corroborated from page 191-192 of the PB. The satisfaction has been recorded by an Officer namely Sh. Praduman Meena, DCIT, Central Circle-30, Delhi in the capacity of AO of the ‘Searched person’. After recording the satisfaction, the DCIT, Central Circle-30, Delhi on to 968/Del/2025 Rajan Verma vs. DCIT 16.08.2022 handed over the seized material, satisfaction recorded and the punchanama to the jurisdictional AO of the assessee at that point of time i.e. time DCIT, Circle 61(1), Delhi. From the above said fact, it is found that the contention of the Revenue that at the time of recording the satisfaction by the DCIT, Central Circle-30, Delhi “AO of the ‘Searched person’ and AO of the “other person” one of the same found to be incorrect. On the contrary, it is evident from the record that at the time of recording the satisfaction, the AO of ‘Searched person’ was Sh. Praduman Meena, DCIT, Central Circle-30, New Delhi AO of the other persons (assesse) was DCIT, Circle 61(1), Delhi. After recording the satisfaction by DCIT, Central Circle -30, New Delhi in the capacity of “ AO of the Searched persons” handed over the seized material, satisfaction of punchnama on 16.08.2022and the jurisdiction has been transferred from DCIT, Circle-61(1), Delhi to DCIT, Central Circle-30 Delhi on 05.09.2022. Thereafter, the DCIT, Central Circle, Delhi has issued the notice u/s 153C of the Act. Therefore, it is clear that at the time of recording the satisfaction by the DCIT, Central Circle-30, Delhi, “AO of the Searched persons” and the “AO of the other person” were the same. Thus, the judgments relied by the Revenue in the case of M/s Super Malls Pvt. Ltd. (supra) and Ganpati Finap Services Ltd. (supra) are not applicable in the present case.
On the other hand, as the assessment order has been passed u/s 153C of the Act by the AO without recording the satisfaction note. The ratio laid down by the Hon’ble Jurisdictional High Court in the case of Shaksham Commodity Ltd. &Ors. (supra) is squarely applicable to the present case. Findings merits in the contention of the Ld. Assessee's Representative, as the AO who has framed the assessment orders u/s 153C of the Act has not recorded the satisfaction note, we quash the respective assessment orders on the said ground itself. As we have quashed the assessment orders as no satisfaction has been recorded by the AO who has framed the assessments other grounds of appeal of the assessee requires no adjudication.
In the result, all the appeals filed by the assessee are partly allowed.
Order pronounced in open Court on 23rd December, 2025.