Sunwhite Realty Private Limited Vs DCIT (ITAT Delhi)
The appeal arose from an assessment framed under Section 153C read with Section 143(3) of the Income-tax Act, 1961 for Assessment Year 2016-17. The assessee challenged the jurisdiction assumed under Section 153C, contending that the assessment had been initiated on the basis of a consolidated satisfaction note. The assessee relied upon an earlier decision of a Coordinate Bench involving an identical satisfaction note arising from the same search proceedings, where such satisfaction had been held to be legally defective. The Revenue contended that the satisfaction note sufficiently disclosed the material facts and that the use of a consolidated approval did not invalidate the assessment passed on merits.
The Tribunal observed that the assessment order itself reproduced a satisfaction note covering Assessment Years 2011-12 to 2017-18. It noted that the same satisfaction note had already been examined by a Coordinate Bench in another case arising from the same search proceedings, where it was held not to have been recorded in accordance with law, thereby vitiating the assumption of jurisdiction under Section 153C.
The Tribunal referred to the findings of the earlier Coordinate Bench, which had held that the satisfaction note merely referred to certain documents and an Excel sheet without specifying which entries pertained to the assessee. It also did not identify which seized documents belonged to or pertained to the assessee, omitted any assessment year-wise reference, and recorded a common satisfaction note for multiple assessment years from 2011-12 to 2017-18. The earlier Bench concluded that the satisfaction note was defective.
