Shokeen Construction Co. Vs DCIT (ITAT Delhi)
Assessee filed returns for AYs 2018-19 to 2020-21. A search u/s 132 was conducted on 26.10.2020 in the cases of Sanjay Jain & Mehta Group. Two tally books were found at Sanjay Jain’s premises. AO of searched person recorded satisfaction on 16.08.2022 alleging that certain entries pertained to Assessee. AO of Assessee issued notice u/s 153C on 24.08.2022 & completed assessments u/s 153C r.w.s.143(3), making addition on alleged bogus purchases of Rs.20,34,531/- (AY 2018-19). CIT(A) upheld initiation of 153C proceedings & confirmed additions.
Before Tribunal, Assessee argued that no independent satisfaction was recorded by AO of Assessee as required u/s 153C. The satisfaction note placed by Revenue shows that para 1–2 of AO’s note are a verbatim copy of para 5–7 of the satisfaction note of AO of the person searched. Tribunal examined both satisfaction notes & recorded that AO neither identified year-wise incriminating material nor applied his own mind. Instead, he mechanically reproduced the other AO’s satisfaction.
Tribunal relied on Delhi High Court in Canyon Financial Services Ltd (399 ITR 202), Ridgeview Construction Pvt Ltd (2025) & Saksham Commodities Ltd (464 ITR 1) wherein carbon-copy satisfaction notes were held invalid. Tribunal also relied on its own coordinate bench in Rajiv Aggarwal Vs ACIT holding that AO must analyse seized material & record year-specific satisfaction before issuing notice u/s 153C.
