JCIT (OSD) Vs Narendra Aggarwal (ITAT Delhi)
No Incriminating Material, Wrong Year & Consolidated Satisfaction – Delhi ITAT Upholds Quashing of 153C Assessment Despite Earlier 263 Proceedings
Delhi ITAT, Delhi Bench ‘E’, in JCIT (OSD) Vs Narendra Aggarwal (ITA No.1017/Del/2025; AY 2015-16; order dated 19-12-2025), dismissed the Revenue’s appeal and upheld the CIT(A)’s order quashing the assessment framed u/s 153C r.w.s. 143(3). The Tribunal held that assumption of jurisdiction itself was invalid on multiple, independent grounds.
The Tribunal noted that AY 2015-16 was a completed/unabated assessment year, as the original assessment u/s 143(3) dated 27-12-2017 had attained finality and the PCIT’s revision u/s 263 was already quashed by ITAT and affirmed by Delhi High Court. Merely because 263 proceedings were once initiated could not convert an unabated year into an abated one. In the absence of any incriminating material pertaining to AY 2015-16, no proceedings u/s 153C could be sustained, following PCIT vs Abhisar Buildwell, UK Paints (SC) and Kabul Chawla.
The Tribunal further found that the alleged incriminating material (Apple phone chats/cash transactions), as per the satisfaction note itself, related to December 2015 i.e. AY 2016-17, and therefore had no bearing on determination of total income for AY 2015-16, squarely attracting Singhad Technical Education Society (SC) and Saksham Commodities (Delhi HC). Invocation of 153C for a wrong year was thus held to be impermissible.
Crucially, the Tribunal also held that the satisfaction note was a consolidated/common satisfaction for multiple AYs, which vitiates the entire proceedings, in light of the Supreme Court ruling in Sunil Kumar Sharma (SC). It reiterated that year-wise satisfaction is mandatory and consolidated satisfaction notes are fatal to jurisdiction.
Applying the settled principle that 153C jurisdiction for a non-searched person hinges on incriminating material having a live nexus with the relevant AY, the Tribunal found the CIT(A)’s order to be well-reasoned and free from infirmity. Accordingly, the Revenue appeal was dismissed in full, and the addition of ₹4.65 crore u/s 68 on alleged penny-stock transactions did not survive on merits, having fallen with the jurisdiction itself
FULL TEXT OF THE ORDER OF ITAT DELHI
