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Facts
The assessee's appeals arise from assessments framed under Section 153C read with Section 143(3) of the Income Tax Act. The assessments were based on a search conducted in a group of cases which led to the centralization of the assessee's case and subsequent satisfaction recorded by the Assessing Officer.
Held
The Tribunal held that the satisfaction recorded by the Assessing Officer for initiating proceedings under Section 153C was not sufficiently clarified to establish that the seized material belonged to or pertained to the assessee. Consequently, the assessments were deemed invalid.
Key Issues
Whether the satisfaction recorded by the Assessing Officer for initiating proceedings under Section 153C was valid and met the requirements of the Act, and whether the seized material pertained to the assessee.
Sections Cited
153C, 143(3), 132, 127
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Asstt. Year : 2020-21 Kamaladityya Construction Pvt. Ltd. Vs DCIT, 201, Co-operative Colony, Bokaro Central Circle-30, Steel City, Jharkhand-827001 New Delhi110002 (APPELLANT) (RESPONDENT) PAN No. AADCK8525G Assessee by : Sh. Devesh Poddar, Adv. & Sh. Devashish Chatterji, Adv. 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 assessee’s three appeals in 830 & 831/Del/2025 for Assessment Years 2018-19, 2019-20 & 2020- 21 arise against the CIT(A)-30, New Delhi’s DIN & order No. ITBA/APL/M/250/2024-25/1071411822(1), 1071412015(1) & 1071412233(1) all dated 20.12.2024, 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.
A combined perusal of the assessee’s instant three case files indicates that it has raised the first and foremost ground 830 & 831/Del/2025 Kamladityya Construction Pvt. Ltd. of validity of the impugned section 153C r.w.s. 143(3) assessments itself; all framed on 13.03.2023. We make it clear that the search action herein had been carried out by the learned departmental authorities on 26.10.2020 in M/s Sanjay Jain and Mehta group of cases. Learned CIT-DR seeks to explain the fact that the assessee herein was regularly assessed at Dhanbad, Jharkhand. And that it was in light of the said search that it’s case was centralized on 18.03.2021 with the Central Circle-30, New Delhi. This followed the learned departmental authorities’ information from Central Circle-30, New Delhi sent to the assessee’s Assessing Officer at Dhanbad on 05.08.2022; who, inturn, recorded his satisfaction u/s 153C of the Act to issue the corresponding notice dated 08.09.2022. We further note that the PCIT, Dhanbad thereafter passed his section 127 order dated 16.11.2022 transferring the assessee’s assessment jurisdiction to New Delhi in the foregoing terms. All this admittedly culminated in the impugned assessment framed in assessee’s case by the learned DCIT, Central Circle-30, New Delhi as upheld in the lower appellate discussion.
3.1 This is what leaves the assessee aggrieved who has raised it’s first and foremost substantive ground that the impugned assessments have not been framed in pursuance to a valid satisfaction u/s 153C of the Act.
830 & 831/Del/2025 Kamladityya Construction Pvt. Ltd. 4. That being the case, we granted ample opportunity to the department to place on record the former satisfaction recorded in the assessee’s case by the Assessing Officer of the searched person hereinabove. Learned CIT-DR has produced a copy thereof recording the following alleged satisfaction:
A letter dated 05.08.2022 from the O/o DCIT, Central Circle-3, New Delhi has been received on 25.08.2022 stating therein that a search and seizure proceedings under section 132 of IT Act was conducted on a entry operator Sanjay Jain along with his facilitators and some of his beneficiaries who were found to be generating cash against bogus billing of cement and other such items on 26.10.2020. It has been observed that the M/s Kamaladityya Construction Pvt. ltd. PAN-AADCK8525G has made unaccounted cash transaction/accommodation entries pertaining to various companies concern/individual which were found to be related to Sanjay Jain & Mehta.
Faced with this situation, we are of the considered view that the above extracted satisfaction nowhere clarifies as to whether the same had been recorded in tune with section 153C(1)(a)(b) of the Act that the corresponding seized material either belonged to or pertained to or related to the assessee as per Prashant Premchand Bafana Vs. ACIT [TS-462-ITAT-2025 (PUN) (TM)] and Saksham Commodities Ltd. Vs. ITO (2024) 161 taxmann.com 485 (Del.)
We accordingly are of the considered view that the impugned all three assessments are non-est in the eyes of law since lacking the learned Assessing Officer’s section 153C valid satisfaction recorded therein. The Revenue’s foregoing 830 & 831/Del/2025 Kamladityya Construction Pvt. Ltd. vehement contentions in support thereof are hereby rejected. The assessee succeeds in it’s instant first and foremost substantive ground therefore.
All other pleadings between the parties on merits stand rendered academic.