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Judgment
This is a batch of seven appeals pertaining to the same assessee for Assessment Years (A.Ys) 2014-15 to 2020-21. Since the facts are interconnected, hence these seven appeals are being disposed of through a single order. For the sake of convenience, ITA No. 1772/Del/2026, pertaining to A.Y. 2014-15, is being taken as the lead case.
ITA No. 1772/Del/2026 arises from order dated 28.01.2026, passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), by Ld. CIT(A), Delhi-25. In this case, there was a search and seizure operation on the Alankit Group on 18.10.2019. In this case, the important date to be noted is 24.06.2022, being the date on which the satisfaction note has been drawn on the searched person. Thereafter, the satisfaction has been drawn by the AO of the “other person” (assessee) on 8.8.2022. A perusal of the impugned orders reveal that substantial addition has been made in the hands of the assessee during all these years under consideration.
Aggrieved, the assessee approached the Ld. CIT(A) with the grounds challenging the assumption of jurisdiction as also challenging the addition on merits. It is noteworthy that the challenge to assumption of jurisdiction was on account of the date of search being after 1.4.2021, and proceeding flowing there on u/s 153C of the Act. The assessee has also challenged that the case of Ojjus Medicare Pvt. Ltd. reported in 465 ITR 101 would apply to the years under consideration. Needless to say, the Ld. CIT(A) has dismissed the legal grounds through detailed findings and has also dismissed the averments of the assessee on merits of the case.
Aggrieved, the assessee has approached the ITAT with several grounds for A.Y. 2014-15, challenging both the assumption of jurisdiction and the additions made on merits. The same may be extracted as under:
“1.On the facts and circumstances of the case and in law, the notice u/s 153C issued by the assessing officer is bad-in-law, barred by limitation and without jurisdiction and, therefore, the said notice along with the assessment order passed on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so.
2.On the facts and circumstances of the case and in law, the notice u/s 153C issued by the assessing officer is illegal and without jurisdiction. The assessing officer has not complied with the provisions of section 153C and other allied provisions for issuance of such notice. Accordingly, the notice u/s 153C along with the assessment order passed on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so.
3.On the facts and circumstances of the case and in law, the satisfaction note (s) recorded u/s 153C of the Act are bad-in-law and without jurisdiction and, accordingly, the assessment proceedings initiated on the foundation of such to be quashed and CIT(A) erred in not holding so.
4.On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law without jurisdiction and barred by limitation and CIT(A) erred in not holding so.
5.On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition of Rs. 2,00,000/-made by the Assessing Officer on account of alleged unexplained money u/s 69A of the Act and CIT(A) erred in not holding so.
6.On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition of Rs. 6,000/- made by the Assessing Officer on account of alleged unexplained expenditure u/s 69C of the Act and CIT(A) erred in not holding so.
7.On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is contrary to the provisions of section 153D of the Income Tax Act, 1961 and CIT(A) erred in not holding so.”
Before us, the Ld. AR proposed to confine his arguments to the jurisdictional issues and the primary issue that was raised for our consideration was the fact that the search had taken place after 1.4.2021 and, therefore, the framing of assessment u/s 153C could not be sustained. The Ld. AR relied on a number of authorities and placed on record several orders of coordinate benches of ITAT.
The Ld. DR relied on the findings given by the Ld. CIT(A) and stated that the assessee could not justify any of the amounts added by the Ld. AO.
We have considered the rival submissions and have gone through the records before us. We find that a similar issue arose in the case of MLR Foods Pvt. Ltd. Vs. DCIT in ITA No. 1796 to 1799/Del/2026 and 1800 to 1802/Del/ 2026, order dated 10.07.2026. This order has been authored by this Bench only and since the legal issues raised before us in these appeals have been adjudicated, we may extract the relevant portions from this order for reference:
“3.We have carefully considered the rival submissions and have gone through the records before us. It is clear by now that, in the case of a person, who is potentially a subject matter of section 153C of the Act, the date of search in his case would be the date of the recording of satisfaction, which in this case is 18.08.2023. Since, this date is clearly beyond the date of 01.04.2021, hence, there is no hesitation in holding that the proceedings u/s 153C of the Act are void-ab-initio. For this purpose, we can do no better than to extract certain portions from the head-note of the decision in the case of Shivdham Buildtech (P) Ltd. (supra) as under:
“Considered the rival submissions and material placed on record. The assessee in appeal has assailed validity of the assessment order passed under section 153C read with section 143(3). It is an undisputed fact that addition has been made in the hands of the assessee on protective basis consequent to search in the case of Alankit Group on 18-10-2019. The satisfaction note in case of the assessee was drawn by the AO on 11-10-2022. As per the first proviso to section 153C(1), the date of search in the case of person other than the searched person shall be the date on which books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person are received by the AO of other person. Thus, in the case of a person other than the searched person, the relevant date would be the date on which relevant documents or seized material is received by the AO of the person other than the searched person. [Para 19]
It is viewed that in absence of specific date of handing over the seized material to AO of the assessee, the date of issue of order under section 127 has been wrongly assumed by the CIT(A) as the date on which seized material was received by the AO of assessee. The Jurisdictional High Court in the case of Pr. CIT (Central-1) v. Ojjus Medicare (P.) Ltd. [2024] 161 taxmann.com 160/465 ITR 101 (Delhi) has held that where the date of handing over of documents is not available, date of issuance of satisfaction note by the Assessing Officer under section 153C would be pertinent for the purpose of first proviso to section 153C. In the present case, the AO had recorded satisfaction on 11-10-2022. Since, the date of handing over of seized material is not emanating from the records, the date of recording of satisfaction i.c., 11-10-2022 shall be considered as the date of receiving seized material by the AO of the assessee. [Para 20]
Section 153C was amended by the Finance Act, 2021 with effect from 1-4-2021 whereby sub-section (3) was inserted. [Para 21]
By virtue of above amendment to section 153C, no assessment under section 153C can be made in the case of other person under section 153C if the date of search falls beyond 1-4-2021. As a corollary, any notice issued for making assessment under section 153C in the case of a non-searched person after 1-4-2021 would be non-est. [Para 22]
Thus, applying the amended provisions of section 153C and the law explained by the Jurisdictional High Court in the case of Ojjus Medicare (supra), to the facts of the instant casc, it is found that the notice under section 153C issued by the AO to assessee and thereafter, assessment order passed under section 153C is unsustainable and is liable to be quashed on the ground of jurisdiction. In this regard, force is also drawn from the decisions of coordinate Benches in the case of Smt. Geetanjali Bhayana v. DCIT [2026] 183 taxmann.com 95 (Delhi - Trib.) and Lekh Raj v. DCIT [ITA No.3181/Del/2025, dated 30-3-2026]. It is held accordingly. [Para 23]”
Accordingly, all the seven appeals filed by the assessee are allowed.”
Considering the clear legal position regarding searches conducted after 1.4.2021, the assessment orders cannot be treated as being sustainable in the eyes of law. Accordingly, the assessee succeeds with respect to the grounds challenging assumption of jurisdiction.
The findings for A.Y. 2014-15 will apply mutatis mutandis for the remaining appeals also.
In the result, all the appeals of the assessee are allowed.