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Facts
The appeals were filed against the orders of the CIT(A) concerning proceedings initiated under Section 153C of the Income-tax Act, 1961, for assessment years 2016-17 and 2017-18. The assessee raised a legal ground challenging the sustainability of the assessments due to a lack of valid satisfaction recorded by the departmental authorities.
Held
The Tribunal held that the satisfaction recorded by the revenue authorities was not specific enough to link the seized material to the assessee and its income, which is a mandatory prerequisite for initiating proceedings under Section 153C. Therefore, the assessments were found to be unsustainable.
Key Issues
Whether the assessments under Section 153C were sustainable in law without a valid and specific satisfaction recorded by the revenue authorities linking seized material to the assessee's income.
Sections Cited
153C, 132(1), 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
Assessment Year: 2016-17 Vs. ACIT, M/s. Glacier Tradex Pvt. Ltd., T-2/197, Phase-1, Central Circle-29, Mangolpuri Industrial Area, Delhi Delhi PAN: AADCG5572F (Appellant) (Respondent) With Assessment Year: 2017-18 Vs. ACIT, M/s. Agnate Fashions Ltd., T-2/197, Phase-1, Central Circle-29, Mangolpuri Industrial Area, Delhi Delhi PAN: AANCA0641B (Appellant) (Respondent) Assessee by Sh. Mukesh Jain, CA Sh. R.B. Gupta, Adv. Sh. Samyak Jain, Adv. Department by Sh. Dayainder Singh Sidhu, CIT(DR) Date of hearing 30.09.2025 Date of pronouncement 30.09.2025 ORDER PER SATBEER SINGH GODARA, JM Both these assessees, namely, M/s. Glacier Tradex Pvt. Ltd and M/s. Agnate Fashions Ltd. have filed their instant as many 562/Del/2025 against the order of Commissioner of Income Tax (Appeals)-25 [in short, the “CIT(A)”], New Delhi’s orders, both dated 05.11.2024 passed in case no. 11463/2015-16 and 10422/2016-17, involving proceedings under section 153C of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively. Heard both the parties. Case files perused.
It transpires during the course of hearing that at the outset the assessee has raised legal ground that the impugned twin section 153C assessments herein are not sustainable in law for want of a valid satisfaction recorded by the learned departmental authorities on 23rd September, 2019, reading as follows:
This being the clinching factual position, learned CIT(DR) could hardly dispute that the above extracted section 153C satisfaction has nowhere made it clear as to which specific seized material found during the course of search either belonged or pertained or related to the assessee thereby having a bearing on its income of the relevant previous year so as to satisfy the rigor of section 153C(1)(a) to (b) of the Act. Various judicial precedents i.e PCIT Vs. Dev Technofab Ltd. (2025) 170 taxmann.com 664 (SC) and PCIT Vs. Ojjus Medicare (P) Ltd., (2024) 465 ITR 101 (Del) and CIT Vs. Jasjit Singh (2024) 465 ITR 101 (SC) have already settled the issue that a valid satisfaction forms sine qua non for initiation of section 153C proceedings culminating in the impugned assessments as is the assessee’s arguments before us.
Faced with this situation, we are of the considered view that both the learned lower authorities have erred in law and on facts in proceeding against the assessee under section 153C of the Act without recording a valid satisfaction. The Revenue’s vehement contentions supporting the same stand rejected therefore. Both these impugned assessments for assessment years 2016-17 and 2017-18 are hereby quashed in very terms.
These assessee’s twin appeals & 562/Del/2025 are allowed.