Sh. Priya Mohan Khatana vs ITO, Ward-3(3)

PER ANUBHAV SHARMA, JM:

This appeal preferred by the assessee against the order dated 16.01.2026 of Ld. Commissioner of Income Tax (Appeals) -3, Gurgaon (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) Appeal No: 11397/CIT(A)-3/Gurgaon/2019-20 arising out of the assessment order dated 29.12.2019 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by ITO, Ward-3(3) Gurgaon, for AY: 2013-14.

On hearing both sides we find that the appellant has challenged the impugned order on legal grounds by asserting that the assessment year involved 2013-14 falls beyond the 6 years period for which the assessment u/s 153C could have been completed. Reliance in this regard has been placed in the decision of Hon’ble Delhi High Court in the case of Ojjus Medicare Pvt. Ltd. Vs. PCIT (Central)-1 [2024] 465 ITR 101 (Delhi),

These contentions have been rebutted by the ld. DR by asserting that in regard to satisfaction note the assessing officer has already mentioned this fact in assessment order and certainly on the basis of satisfaction note only the notice u/s 153C must have been issued. She has relied decision of Coordinate Bench at Delhi in Smt. Yamini Kapoor Vs. DCIT (2025) 174 taxmann.com 248 (Delhi-Trib.) to contend that defect in grant of approval cannot be question by Tribunal. She has also contended that even otherwise there is a collective examination of the incriminating materials by the superior authority as per the CBDT guidelines and assessing officer keeps senior officers well informed of the issue involved and therefore approval granted u/s 153D is merely an administrative function and cannot be question before the Tribunal.

Now, in regard to issue of assessment year being beyond the period for which assessment could have been completed. We find that assessing officer mentions that notice u/s 153C was issued on 25.03.2019, however, at page No. 1 of the paper book assesse has provided copy of notice dated 07.11.2019 issued u/s 153C of the Act. There is no reference of this notice in the assessment order dated 29.12.2019. Thus, assuming the notice was issued on 07.11.2019 the search year happens to be 2021-22 and the assessment year would be beyond the period of 6 years. The law is settled that in case of non-searched person the date of receipt of the material or recording of satisfaction shall be determinative for calculating relevant years for which assessment u/s 153C can be opened. Reliance in this regard is placed on the decision of Hon’ble Delhi High Court in Ojjus Medicare Pvt. Ltd. (supra) and Hon’ble Supreme Court in case of CIT v. Jasjit Singh (2025) 476 ITR 157.

Then at page No. 112 of the paper book assesse has provided copy of information received under the Right to Information Act, 2005 wherein assesse had sought from the assessing officer the copy of satisfaction note recorded by the assessing officer of the searched person as well as of the assesse and the assessing officer had refused to give satisfaction note in regard to searched person on the pretext that it is a third party information and with regard to assesse it was submitted that information sought by assesse is not readily traceable and hence, cannot be provided. Thus, the only conclusion that can be drawn is that the assessing officer was not sure if the satisfaction was in fact recorded because in the assessment order also there is no reference of these aspects rather the first paragraph of the assessment order is considered it mentions of the information being received by the assessing officer and on perusal of the same the notice u/s 153C was issued. Thus, is appears that without recording satisfaction, jurisdiction of assessment u/s 153C was assumed that vitiates whole proceedings and the final outcome.

Then at page No. 99 copy of approval granted u/s 153D dated 28.12.2019 is provided which shows that on 28.12.2019 draft assessment order for AY: 2012-13 to 2017-18 were received and on the same date approval was granted. The manner in which the approval is granted certainly indicates that at the time granting of approval there was complete non-application of mind and what ld. DR submits that assessment was a collective exercise does not justify grant of approval in such mechanical manner. Specially when now it is established that there was not even satisfaction note on record then for what good reasons the approval is justified. Whatsoever contentions ld. DR has raised have been considered in the catena of decisions by the co-ordinate benches and Hon’ble Jurisdictional High Court in the case of Shiv Kumar Nayyar in ITA No.285/2024 [TS-343-HC2024-Delhi] where in it is held that approval has to reflect application of mind. The decision which ld. DR has relied in Smt. Yamini Kapoor (supra) is not applicable as in that case an additional ground was raised and the Coordinate Bench has not entered into the issue about the approval being granted in accordance with law and had dismissed the additional ground.

In the light of aforesaid facts and circumstances and the discussion we are inclined to allow the corresponding ground. The assumption of jurisdiction and the consequent assessment order are void-ab-initio. The appeal is allowed and the assessment order is quashed.