Deepak Builders and Engineers India Ltd. Vs DCIT (ITAT Delhi)
The cross appeals before the Income Tax Appellate Tribunal (ITAT), Delhi, arose from the order of the Commissioner of Income Tax (Appeals)-30 dated 20 December 2024 for the assessment year 2020-21, relating to proceedings initiated under Section 153C read with Section 143(3) of the Income-tax Act. The Tribunal first addressed the legal issue concerning the validity of the proceedings initiated under Section 153C and the assessment framed on 26 March 2023. It considered whether the proceedings were supported by a legally valid satisfaction note recorded by the Assessing Officer.
The satisfaction note recorded by the Assessing Officer stated that a search under Section 132 had been conducted on Sanjay Jain, an alleged entry operator, on 28 October 2020. According to the note, the search revealed a network involving bogus billing, cash transactions, shell entities, digital records, WhatsApp chats, and bank accounts allegedly used for providing accommodation entries. It also referred to seizure of approximately ₹62 crore in cash from the premises of beneficiaries during search proceedings and stated that Sanjay Jain was involved in arranging cash against RTGS transactions in addition to issuing bogus bills.
The satisfaction note further recorded that two sets of Tally books were seized during the search, including one containing details of cash receipts and expenditure. Based on the seized data, a list of beneficiaries was prepared. The assessee was included in that list with alleged transactions of ₹9,79,66,801 for the financial year 2019-20. The note also referred to statements recorded from Sanjay Jain under Sections 132(4) and 131, in which he allegedly accepted the quantum of entries reflected in the list.
