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Facts
Four assessees filed appeals against assessment orders framed under Section 153C of the Income Tax Act, 1961, based on a search conducted in a group of cases. The Assessing Officer proceeded to disallow/add expenditure claims without recording any satisfaction regarding the seized material.
Held
The Tribunal held that the lower authorities erred in law and fact by disallowing/adding travelling expenditure without recording the mandatory satisfaction under Section 153C, which is a condition precedent. The assessment orders were quashed.
Key Issues
Whether the assessments under Section 153C are valid without the Assessing Officer recording satisfaction based on seized material?
Sections Cited
153C, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
Sh. Mayank Chaurasia, Vs. DCIT, 575, 1st Floor, Central Circle-27, Double Storey, New Delhi New Rajinder Nagar, New Delhi PAN: AAEPC7666E (Appellant) (Respondent) Assessee by Sh. Rohit Jain, Adv. Ms. Tejasvi Jain, CA Sh. Shivam Gupta, CA Department by Ms. Amisha S. Gupta, CIT(DR) Date of hearing 01.12.2025 Date of pronouncement 01.12.2025 ORDER PER SATBEER SINGH GODARA, JM These four assessees, namely, Sh. Vijay Anand Chaurasi, Sh. Rajiv Chaurasia, Sh. Navneet Chaurasia and Sh. Mayank Chaurasia have filed their instant as many appeals 3473, 3474 & 3475/Del/2025 for assessment year 2016-17 against the Commissioner of Income Tax (Appeals)-29, New Delhi’s orders, all dated 31.03.2025, passed in case nos. CIT(A), Delhi-29 11073/2015-16, 11078/2015-16, 11081/2015-16 and 11080/2015-16, involving proceedings under section 153C r.w.s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively.
2 | P a g e Heard both the parties. Case files perused.
It transpires during the course of hearing that these assessees raise their identical first and foremost legal ground challenging validity of the impugned section 153C assessments, all framed on 30.03.2023, by the Assessing Officer(s) in furtherance to the search(es) in question in M/s. Kamla Prasad (KP) group of cases on 15th and 27th January, 2020 lasting up to 2nd March, 2020. We notice that the said search thereafter led the Assessing Officer of the searched person(s) to record his satisfaction under section 153C of the Act against these assessees; and, he accordingly forwarded the relevant seized material to their Assessing Officer(s). And that the assessees’ Assessing Officer(s) in this manner then recorded his satisfaction on 24th March, 2022 to proceed against all of them under section 153C of the Act.
A combined perusal of all these four appeal files indicated that the Assessing Officer thereafter took up assessment proceedings under section 153C of the Act. He sought to proceed against these assessees in light of some alleged seized material found in yet another search carried out in residential premises of Sh. Ramesh Hemrajani and Sh. Mukesh Hemrajani on 05.01.2020 as under:
3 | P a g e “Vijay Anand Chaurasia Proceedings u/s 153C of the Act 16.03.2023 During the course of search proceedings at the premise of Sh. Ramesh Hemrajani & Sh. Munish Hemrajani on 05.01.2020, various annexures marked as Annexure A-1 to A-23 have been seized. The relevant copy of seized material i.e. Annexure A-1 to A-23 is being provided to Sh. Pramod Kumar Jaipuria to provide the replies on the content mentioned on the pages of Annexure A-1 to A-23. The reply should be furnished by 20/03/2023 positively.”
We are informed that all this followed the learned Assessing Officer(s)’ assessments framed in the assessees’ cases on 30th March, 2023, inter alia, disallowing/adding identical travel expenditure etc. which stands upheld in the CIT(A)’s lower appellate discussion in identical terms. This is what leaves all these four assessees aggrieved.
We have given our thoughtful consideration to the assessees’ and the Revenue’s respective vehement legal submissions. Suffice to say, we make it clear that there is no material on record indicating the learned Assessing Officer(s) in the assessees’ to have record any satisfaction before he took cognizance of the relevant seized material found in yet another search (supra) than that carried out in M/s. Kamla Pasand group of cases. It is thus an instance wherein the learned Assessing Officer had proceeded to disallow/add the assessees’ expenditure claims without recording any satisfaction regarding the relevant seized material as having 4 | P a g e any bearing in their respective cases. We thus are of the considered view that both the learned lower authorities have erred in law and on facts in disallowing/adding the assessees’ travelling expenditure etc. without recording any satisfaction under section 153C of the Act which forms a condition precedent in light of PCIT Vs. Anand Kumar Jain HUF (2021) 133 taxmann.com 288 (Del), CIT-7 Vs. RRJ Securities Ltd. (2016) 380 ITR 612 (Del), PCIT Vs. Ojjus Medicare (P) Ltd., (2024) 465 ITR 101 (Del) and CIT Vs. Jasjit Singh (2024) 465 ITR 101 (SC). We thus quash all these impugned identical four assessments framed on 30th March, 2023 in very terms therefore. All other remaining pleadings on merits between the parties stand rendered academic.
These four assessees’ appeals 3473, 3474 & 3475/Del/2025 are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 1st December, 2025 Sd/- Sd/- (MANISH AGARWAL) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 5th December, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5 | P a g e