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Facts
The Revenue appealed against the CIT(A)'s relief granted to the assessees, M/s Elan Buildcon Pvt. Ltd. and M/s Elan Ltd. The appeals stemmed from assessment orders passed under Section 153C of the Income Tax Act, based on a search conducted on M/s Elan Group.
Held
The Tribunal held that the Assessing Officer's satisfaction recorded for invoking Section 153C was invalid. This was because the AO used the expressions "belongs to" and "relates to" interchangeably, which is not permissible under the law, especially in light of previous judicial pronouncements. Consequently, the assessments based on this invalid satisfaction were not sustainable.
Key Issues
Validity of the satisfaction recorded by the Assessing Officer for invoking Section 153C of the Income Tax Act, 1961.
Sections Cited
153C, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Asstt. Year : 2019-20 DCIT, Vs Elan Buildcon Pvt. Ltd. Central Circle-7, L-1/1100, First Floor, Street New Delhi-110055 No. 25, Sangam Vihar, New Delhi-110062 (APPELLANT) (RESPONDENT) PAN No. AADCE6806C : Asstt. Year : 2019-20 DCIT, Vs Elan Limited Central Circle-7, L-1/1100, First Floor, Street No. 25, New Delhi-110055 Sangam Vihar, New Delhi-110062 (APPELLANT) (RESPONDENT) PAN No. AADCE3341G Assessee by : Sh. Paritosh Jain, Adv. Sh. Rajat Jain, CA & Sh. Akshat Jain, CA Revenue by : Sh. Dayainder Singh Sidhu, CIT-DR Date of Hearing: 08.10.2025 Date of Pronouncement: 08.10.2025 ORDER Per Satbeer Singh Godara, Judicial Member: These Revenue’s three appeals i.e. & 1330/Del/2025 for assessment years 2018-19 & 2019-20 involve the twin assessees herein M/s Elan Buildcon Pvt. Ltd. and M/s Elan Ltd. wherein it is agitated against the CIT(A)-24, New Delhi’s DIN & order No. ITBA/APL/M/250/2024- 25/1070970906(1), 1070978946(1) & 1071060241(1) dated Elan Limited ITA No. 1329 & 1330/Del/2025 Elan Buildcon Pvt. Ltd. 06.12.2024 and 10.12.2024, 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 that the Revenue herein is aggrieved against the learned CIT(A) corresponding findings on merits granting relief to the assessee thereby interfering with the Assessing Officer’s respective assessment findings in his as many assessments making various additions in the assessee’s hands. We are next informed that the tribunal’s co-ordinate bench common order dated 23.09.2025 has already quashed the impugned section 153C assessments itself since based on an invalid satisfaction, involving the very search, as under:
“3. It transpires at the outset that both these assessee’s raise their first and foremost identical substantive ground challenging validity of the impugned section 153C assessments itself. There is not dispute between the parties that the learned departmental authorities had carried out the search in question in M/s Elan Group on 29.05.2018. Learned CIT-DR vehemently submits that it was the said search which led to seizure of the corresponding incriminating material followed by section 153C satisfaction recorded in these twin assessee’s cases on 19.01.2021. That being the case, there would be hardly any quarrel in light of PCIT vs. Jasjit Singh (2024) 336 CTR 634 (Delhi) and PCIT vs. Ojjus Medicare Pvt. Ltd. (2024) 465 ITR 101 (Del.) that the date of initiation of the search in question in an instance of invocation of section 153C(1) 1s t proviso could be that of recording of the satisfaction itself which comes to be on 19.01.2021 only.
Elan Limited & 1330/Del/2025 Elan Buildcon Pvt. Ltd.
A perusal of the case records next indicates that the learned Assessing Officer had recorded his satisfaction on 19.01.2021 followed by issuance of his notice dated 27.01.2021 to the assessee(s) as follows: “I have gone through the above mentioned documents and I am satisfied that above mentioned documents seized from the premises of M/a Elan India Pvt. Ltd., M/s Best Selling Realty Pvt. Ltd., M/s K & T Realty Services Pvt. Ltd, Golf view Corporate Tower, 2 n d/3 r d Floor, Golf Course Road, Sector-12, Gurugram, Haryana-122001 party AP-6 & Ap-6A during the course of search belong to/contain information which relates M/s Elan Ltd. (PAN: AADCE3341G) and have a bearing on the determination of its total income. Hence, notice u/s 153C of the Income Tax Act, 1961 is being issued for A.Ys. 2013-14 to 2018-19 and notice u/s 143(2) for A.Y. 2019-20.”
Faced with this situation, Mr. Sidhu vehemently argues that the learned assessing authority had rightly proceeded against the assessee(s) after recording his satisfaction that the seized material in question “belong to/contain information which relates to M/s Elan Ltd.” His endeavour therefore is to support the above section 153C satisfaction as strictly in tune with the provisions of the Act.
We have given our thoughtful consideration to the assessee’s and the Revenue’s foregoing vehement contentions regarding validity of the impugned satisfaction. We find no merit to express our concurrence with the Revenue’s stand herein. We make it clear first of all that the learned Assessing Officer had admittedly involved both the foregoing statutory expressions “belongs to” as well as “relates to” herein which could not be held as a proper satisfaction in accordance with law. This is for the precise reason that the legislature has itself incorporated the foregoing former expression of “belongs to” as involving “any money, bullion, jewellery...........” etc. in sub-clause (a) and the latter category of “pertains to” or “relates to”; for any books of account or documents etc.; respectively. Learned CIT-DR couldn’t rebut the clinching fact that the assessing authority’s foregoing satisfaction has used both the above statutory expressions as interchangeable which is not in accordance with stricter interpretation in light of Commissioner Vs. Dilip Kumar (2018) 9 SSC 1 (SC). This is indeed coupled with the fact that the tribunal’s learned “Third Member” in Prashant Premchand Bafana Vs. Addl. CIT [IT-462-ITAT-2025 (Pine)] has already settled the issue in the assessee’s favour that the above Elan Limited & 1330/Del/2025 Elan Buildcon Pvt. Ltd. three statutory expressions have to be used in the specified circumstances thus treating them as interchangeable one. We are accordingly of the considered view that given the fact that the instant issue stand settled upto hon’ble Third Member u/s 255(4) of the Act, the impugned satisfaction herein has not been validly recorded which renders the corresponding assessment(s) herein as not sustainable in law. The same stand quashed in very terms therefore.
Same order to follow in the latter assessee M/s Elan Buildcon Pvt. Ltd. three appeals 771 & 773/Del/2025 since involving identical set of facts.”
4. That being the case, we are of the considered view that the Revenue’s instant three appeals in these twin assessees respective cases must also follow the suit in very terms therefore. Rejected accordingly.
All other pleadings on merits between the parties stand rendered academic.