Aditi Infrabuild & Services Ltd. Vs DCIT (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal (ITAT), Delhi, arose from the order of the Commissioner of Income Tax (Appeals)-30 dated 16 December 2023 for the assessment year 2019-20. The assessment had been completed under Section 153C read with Section 143(3) of the Income-tax Act following a search conducted on Sanjay Jain & Mehta Group on 26 October 2020. During the search, two sets of Tally data were seized from the premises of Sanjay Jain. Based on the information received from the Assessing Officer of the searched person, proceedings under Section 153C were initiated against the assessee after recording a satisfaction note. The assessment ultimately determined the assessee’s total income at ₹3,99,01,662, and the Commissioner (Appeals) dismissed the assessee’s appeal.
Before the Tribunal, the assessee challenged the validity of the notice issued under Section 153C, the jurisdiction of the Assessing Officer, the legality of the satisfaction note, the addition of ₹3,99,01,662 towards disallowance of purchases under Section 37, the validity of the assessment order for want of DIN, and compliance with Section 153D.
The principal contention of the assessee was that the proceedings under Section 153C had been initiated solely on the basis of entries contained in Tally books seized from a third party, Sanjay Jain. According to the assessee, although the Assessing Officer recorded that the seized documents pertained to the assessee, the satisfaction note failed to record the statutory requirement that the seized material “have a bearing on the determination of the total income of such other person” as required under Section 153C. The assessee relied upon the judgment of the Delhi High Court in Saksham Commodities Ltd., which interpreted the scope and mandatory requirements of Section 153C.
