SRB Promoters Pvt Ltd Vs ACIT (ITAT Delhi)
Delhi ITAT Quashes Section 153C Assessments as Notices Were Time-Barred and Based on Defective Satisfaction Notes
The Delhi ITAT quashed the assessments framed under section 153C read with section 143(3) for AYs 2011-12 and 2012-13, holding that the Assessing Officer had assumed jurisdiction contrary to settled law. For AY 2011-12, the Tribunal held that in the case of a person other than the searched person, the relevant date for computing the six assessment years is the date on which the seized material is handed over and satisfaction is recorded by the jurisdictional Assessing Officer, and not the date of the original search. Since the satisfaction under section 153C was recorded on 23.03.2018, the permissible block extended only to AYs 2012-13 to 2017-18, rendering the notice for AY 2011-12 barred by limitation. Relying on the Supreme Court’s decision in CIT v. Jasjit Singh and the Delhi High Court’s ruling in PCIT v. Ojjus Medicare Pvt. Ltd., the Tribunal quashed the assessment for AY 2011-12. For AY 2012-13, the Tribunal held that the common satisfaction note recorded for multiple assessment years was legally defective, as it failed to identify the seized documents relatable to each assessment year or record year-specific satisfaction regarding escapement of income. Following Saksham Commodities v. ITO, DCIT v. Sunil Kumar Sharma (affirmed by the Supreme Court), and its earlier coordinate bench decisions, the Tribunal held that a separate and year-specific satisfaction under section 153C is mandatory. Consequently, the proceedings initiated on the basis of a consolidated and defective satisfaction note were declared void ab initio, and both assessment orders were quashed.
Cases Discussed
- Vidur Chharia vs DCIT/ACIT & Others, ITA No.209/Del/2025 & Others, order dated 13.01.2026
- Vinay Homes Pvt. Ltd. vs DCIT, ITA No.2459/Del/2025, order dated 06.02.2026
- Seema Agarwal vs DCIT, ITA No.5979/Del/2025 & Others, order dated 26.02.2026
- PCIT v. Ojjus Medicare Pvt. Ltd. (Delhi High Court), (2024) 161 taxmann.com 160
- Saksham Commodities vs ITO (Delhi High Court), [2024] 161 taxmann.com 458
- DCIT vs. Sunil Kumar Sharma (Karnataka High Court), [2024] 469 ITR 197 (Karnataka)
- CIT vs. Jasjit Singh (Supreme Court), [2023] 155 taxmann.com 155 (SC)
- ITO vs. Vikram Sujit Kumar Bhatia (Supreme Court), 2023 SCC Online SC 370
- SRS Panchratan Diamonds Pvt. Ltd. vs DCIT, ITA No.218 & 219/Del/2023, order dated 14.11.2025
- Gulshan Homes and Infrastructure P. Ltd. vs DCIT, ITA No.1595/Del/2025, dated 30.09.2025 (Delhi Tribunal)
- R. Safiullah, WP (MD) No. 4327/2021
- Oryx Fisheries Pvt. Ltd., Civil Appeal No. of 2010 (Arising out of Special Leave Petition (C) No.27615/08), decided on 29.10.2010
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned both the appeals are filed by the assessee against two separate orders, both dated 26.11.2025 passed by Ld. Commissioner of Income Tax (Appeals), Delhi-26 [“Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of different assessment orders, both dated 30.12.2018 passed u/s 153C r.w.s. 143(3) of the Act pertaining to Assessment Year 2011-12 & 2012-13 respectively.
2. Both the appeals are having common issues, therefore, both the appeals are decided by a common order for the sake of convenience. First we take ITA No. 726/De1/2026 for AY 2011-12.
ITA No. 726/DEL/2026 [Assessment Year 2011-121
3. In appeal of the assessee in ITA No.726/De1/2026 for AY 2011-12 wherein the assessee has challenged the initiation of proceedings u/s 153 of the Act on account of limitation.
4. In support to the Grounds of appeal Nos. 1 to 5 taken by the assessee, Ld. AR submits that in the instant case, the case of the assessee was taken up u/s 153C of the Act based on the documents stated to have been found and seized from the possession of the person search by holding that the same belonged to the assessee. Accordingly, satisfaction u/s 153C of the Act was recorded by the AO of the assessee after receiving the loose papers/ documents seized from the AO of the person searched on 23.03.2018. Ld.AR submits that upon the receipt of the seized material and after recording the satisfaction in the case of the assessee, notices were issued u/s 153C of the Act for AYs 2010-11 to 2015-16 on 23.03.2018. Ld. AR submits that as per the order of Hon’ble Jurisdictional High Court in the case of PCIT v. Ojjus Medicare Pvt. Ltd. reported in (2024) 161 com 160 for initiation of proceedings u/s 153C of the Act in the case of person other than the person searched, date of search should be the date when the satisfaction note was recorded by the AO such other than person. Ld. AR submits that in the instant case the satisfaction was recorded by the AO of the assessee who happened to be the person other than the person searched on 23.03.2018 thus the year of search would be AY 2018-19 and six years are to be taken from AYs 2012-13 to 201718. Since the year under appeal is AY 2011-12 thus the same is beyond the period of limitations and thus notice issued u/s 153C is invalid and consequent order passed u/s 153C of the Act be quashed.
5. On the other hand, Ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities.
6. Heard the contentions of both the parties at length and perused the material available on record. As observed herein above, the assessee is not the person searched and in his case, satisfaction was recorded on 23.03.2018 therefore, FY 2017-18 would be the year of search and accordingly, 06 preceding AYs for which proceedings u/s 153C of the Act as could be calculated from FY 2016-17 and other FYs which starts from FY 2011-12 to 2016-17 relevant to AY 2012-13 to 2017-18. This view is supported by the decision of Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh reported in [2023] 155 taxmann.com 155 (SC) and the decision of Jurisdictional Hon’ble Delhi High Court in the case of Pr. CIT vs. Ojjus Medicare Pvt. Ltd (supra) and therefore the assessment year in question being A.Y. 2011-12 falls beyond the period of six assessment years immediately preceding the assessment year relevant to previous year of search which is AY 2018-19, in the instant case.
6.1 As observed above, in the present case information was passed by the AO of the searched person to the AO of the appellant on 23.03.2018. It is trite that pursuant to search carried out u/s 132 of the Act, assessments are undertaken for six assessment years preceding the year of search and for additional assessment years (hereinafter referred to as “relevant assessment years”) beyond six assessment years but not beyond 10 assessment years from end of assessment year relevant to search year. In case of a searched person or the other person, such assessment is made u/s 153A and in case of a non-searched person, whose books of account/ documents are found during search assessment is made u/s 153C of the Act, relevant for searches conducted upto 31.03.2021 which covers the search in the instant case. The issue came up before Hon’ble Delhi High Court regarding the manner of determination of six assessment years and relevant assessment years in case of other person u/s 153C of the Act in the case of Ojjus Medicare Pvt. Ltd (supra).
6.2 In the case in hand, pursuant to the aforementioned search incriminating material was found and the AO issued notices u/s 153C to the appellant, on the basis of satisfaction note drawn by the AO of searched person on 23.03.2018 for six assessment years being AYs 2010-11 to 2015-16 after duly recording is own satisfaction on 23.03.2018. For that purpose, the AO determined assessment years to be re-opened by taking previous year 2015-16, i.e., the year of search, as the base year and accordingly, reopened assessment for the assessment year 2010-11 and onwards. Similar issue involving notices issued u/s 153C came to be challenged in writ petition before the Delhi High Court as being invalid/ barred by limitation, in the case of Ojjus Medicare (supra) on the following four broad grounds:
a. In case of other person covered u/s 153C, the date/ year of handover of seized material to the jurisdictional AO of such non-searched/ other person (and not the date/ year of search) must be taken as the base year for determination of Six assessment years / relevant assessment years;
b. Revenue is permitted to reopen upto a maximum of 10 assessment years, including the year of search/ year of handing over of seized material, reckoned from the end of the assessment year in which search was conducted or the material is handed over, and not 11 assessment years;
c. Period of limitation for initiating reassessment proceedings for assessment years 2010-11 and 2011-12 stood expired prior to the insertion of 4th proviso to section 153A by the Finance Act, 2017 w.e.f. from 1st April 2017 and consequently, reopening for the said years is not permissible;
d. Mandatory conditions provided in 4th proviso to section 153A are relevant assessment years u/s 153G.
6.3. The Hon’ble Delhi High Court in the case of Ojjus Medicare (supra) adjudicated the aforesaid issues by holding as under:
a. As per legal fiction contained in first proviso to section 153C, date of receipt of seized books/ material by the jurisdictional AO of the other person is the commencement date for determination of Six assessment years /relevant assessment years. In holding so, the High Court followed the decision of the Supreme Court in CIT vs. Jasjit Singh: 2023 SCC Online SC 1265 and ITO vs. Vikram Sujit Kumar Bhatia: 2023 SCC Online SC 370.
b. Taking note of the language employed in Explanation 1 to section 153A, the hon’ble Court held that 10 years period have to be reckoned “from the end of the assessment year” i.e. in case of searched person from end of the assessment year of search and in case of other person from end of the assessment year of handover of seized books/ material. The High Court observed that decision in R. Safiullah: WP (MD) No. 4327/2021 expounds the correct legal position.
c. AO is required to record reasons/ satisfaction regarding satisfaction of jurisdictional preconditions stated in 4th proviso to section 153A, viz. the escaped income is represented in the form of an identified asset which is likely to exceed Rs. 50 Lakhs; the satisfaction should be based on the assessment of material gathered during search and should be reflective of fair assessment of the quantum of income likely to have escaped assessment. Importantly, the satisfaction cannot be based on mere ipse-dixitl speculation/ conjecture, and the reasons in support of the satisfaction should ex-facie borne out from the satisfaction note itself. The qualifying criteria for satisfaction of precondition of Rs. 50 Lakhs as provided in 4th proviso has to be met cumulatively or in aggregate for all the relevant 4 assessment years.
d. Amendment brought in by the Finance Act, 2017 w.e.f. 1st April 2017 has retroactive application since: (a) 4th proviso is applicable to all searches conducted between 1st April 2017 to 31st March 2021; and (b) sections 153A/ 153C supersedes the provisions for reassessment otherwise appearing in the Act.
6.4. In nutshell, Hon’ble Delhi High Court held that (a) for other (non-searched) person, date of handover of seized material is the trigger point for computing period of Six assessment years and/ or block of 10 years; and (b) law only permits AO to reopen maximum of 10 years, including the year of search/ handing over documents, and not 11 years as contended by the Revenue.
6.5. Although in the instant case, it does not emanate from the record as to when the seized material was handed over to the AO of the assessee however, it is seen that satisfaction note for issue of notice u/s 153C was recorded by the AO of the assessee on 23.03.2018. Therefore, the date 23.03.2018 may be taken as the date on which the material was handed over to the AO. That is to say that the material was handed over to the AO in FY 2017-18. Thus, on the facts of this case where FY 2017-18 is the year in which the material was handed over to the AO of the assessee, the AO could have reopened the cases for AYs 2012-13 to 20117-18 u/s 153C of the Act.
6.6. In view of the foregoing discussion, we are of the considered view that the AO of the assessee was not justified in initiating the proceedings u/s 153C of the Act for AY 2011-12 in the case of the assessee. Thus, by respectfully following the judgement of Hon’le Supreme Court in the case of Jasjit Singh (supra) and of Hon’ble Delhi High Court in the case of Ojjus Medicare (supra), we hold that the notice issued u/s 153C of the Act for AY 2011-12 is invalid and consequent assessment order passed by the AO is hereby quashed. Accordingly, Ground of appeal Nos. 1 to 5 raised by the assessee are allowed.
7. Since we have already allowed legal Grounds of appeal Nos. 1 to 5 raised by the assessee, the remaining Grounds of appeal became academic hence, not adjudicated.
8. In the result, appeal of the assessee is allowed.
ITA No. 727/DEL/2026 [Assessment Year 2012-131
9. Now we take assessee’s appeal in ITA No.727/De1/2026 for AY 2012-13.
10. In Grounds of appeal Nos. 1 to 4 assessee has challenged the validity of initiating the proceedings u/s 153C of the Act based on the common satisfaction recorded for various AYs.
11. Before us, ld.AR relied a copy of the satisfaction note recorded by the AO of the assessee i.e. person other than the person searched. As per ld. AR, from the perusal of satisfaction note, it could be seen that no year-wise satisfaction was recorded nor any reference was made of year-wise break-up of the income nor any reference was made of any incriminating material based on which the satisfaction was recorded for escapement of income for each individual assessment year. Ld.AR submits in terms of the judgment of Hon’ble Jurisdictional High Court in the case of Saksham Commodities vs ITO reported in [20241161 com 458 and judgement of Hon’ble Karnataka High Court in the case of DCIT vs Sunil Kumar Sharma reported in [20241 469 ITR 197 (Karnataka) wherein such satisfaction note is held as defective and therefore the consequent assessment order passed u/s 153C be quashed. He further placed reliance on the judgments of Co-ordinate Bench of Delhi Tribunal in following cases:-
(i) Vidur Chharia vs DCIT/ACIT & Others in ITA No.209/De1/2025 & Others order dated 13.01.2026;
(ii) Vinay Homes Pvt.Ltd. vs DCIT in ITA No.2459/De1/2025 order dated 06.02.2026;
(iii) Seema Agarwal vs DCIT in ITA No.5979/Del/2025 & Others order dated 26.02.2026; and
(iv) SRS Panchratan Diamonds Pvt.Ltd. vs DCIT in ITA No.218 & 219/De1/2023 order dated 14.11.2025
12. On the other hand, Ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submits that primary requirements are regarding the satisfaction which has been done therefore it cannot be held that the satisfaction was defective.
13. Heard the parties and perused the material available on record. Before going further, first we examine the satisfaction note recorded in the case of the assessee before initiation of proceedings u/s 153C of the Act, which is reproduced as under:
14. On perusal of the satisfaction note recorded by the AO of the assessee, it is observed that in the satisfaction note a table is given referring to the Annexure A6 total pages 1-116 however, nowhere in the “Satisfaction Note”, it is stated that which paper appearing at which page belonged to the assessee and relates to which assessment year nor any amount is stated therein. It is further observed that AO has referred tabulated certain pages at pages 5 to 16 of the assessment order however in the said table, the AO has referred certain more annexures other than Annexure-6 referred in the satisfaction note. Further at pages 18-21 of the assessment order, AO has reproduced certain pages of Annexure A-6 which are the related to the transaction between the assessee and M/s Mysore Finlease Pvt. Ltd which are duly recorded in the books of accounts of the assessee and were carried out through banking channels and thus they could not be held as unexplained credits. The Co-ordinate Bench of ITAT Delhi, under identical circumstances in the case of Gulshan Homes and Infrastructure P. Ltd. vs DCIT in ITA No.1595/DeU2025 dated 30.09.2025 [Delhi Trib.] by following the judgement of Hon’ble Karnataka High Court in the case of Sunil Kumar Sharma (supra) and further of the Jurisdictional High Court in the case of Saksham Commodities vs ITO [20241 161 taxmann.com 458 (Delhi) has held that the jurisdiction assumed u/s 153C is defective and quashed the order. The relevant observations of the Co-ordinate Bench are reproduced as under:-
“16. Now let us come to the satisfaction note recorded by the Learned AO of the assessee herein. The Learned AO of the assessee herein recorded satisfaction note on 15-12-2022 assuming jurisdiction under section 153C of the Act which is enclosed in Pages 5 to 15 of the Paper Book It is pertinent to note that the Learned AO of the assessee had recorded single and consolidated satisfaction note for Assessment Years 2015-16 to 2021-22. For the sake of convenience, the last paragraph of the satisfaction note dated 15-12-2022 recorded by the Learned AO of the assessee herein is reproduced below:-
“The above satisfaction notes recorded as the AO of the person searched has been placed on record. As AO of the person other than the searched person, I have also examined the above referred seized material and the contents of the same. After examining the entries in these documents, I am satisfied that these documents pertain to M/s Gulshan Homes and Infrastructure Pvt. Ltd. and entries appearing therein have a bearing on the determination of the income of M/s Gulshan Homes and Infrastructure Pvt. Ltd. In view of the same, I am satisfied that it is a fit case for initiating proceeding under Section 153C r.w.s. Section 153A of the I.T Act, 1961 for the assessment years 2015-16 to 2021-22.”
17. From the above, it could be seen that the Learned AO of the assessee herein had recorded consolidated satisfaction note for the Assessment Years 2015-16 to 2021-22. Whether recording of consolidated satisfaction note for various assessment years would prove fatal to the assumption of jurisdiction of the Learned AO and consequential framing of assessments under section 153C of the Act was subject matter of consideration by the Hon ‘ble Karnataka High Court in the case of DCIT vs Sunil Kumar Sharma reported in 159 taxmann.com 179 (Karnataka) dated 22-1-2024, wherein it was held as under:-
“53. Further, satisfaction note is required to be recorded under section 153C of the IT Act for each Assessment Year and in the impugned proceedings, a consolidated satisfaction note has been recorded for different Assessment Years, which also vitiates the entire assessment proceedings. In view of all these findings, it is said that the appeals do not have any substance for seeking intervention as sought for by the appellant/Revenue.
17.1. We find that the Special Leave Petition filed by the revenue before the Hon ‘ble Supreme Court against the aforesaid judgement was dismissed which is reported in 165 taxmann.com 846 (SC). The relevant portion of the Head Notes and the order of Hon ‘ble Apex Court is reproduced hereunder:-
“Section 153C, read with sections 132 153 and 153A, of the Income-tax Act, 1961 – Search and seizure – Assessment of any other persons (General principles) – Assessment years 2012-13 to 2018-19 – High Court held that satisfaction note is required to be recorded under section 153C for each assessment year and where a consolidated satisfaction note had been recorded for different assessment years, it would vitiate entire assessment proceedings – Whether SLP filed against impugned order of High Court was to be dismissed – Held, yes [Para 31 [In favour of assessed
ORDER
1. Delay condoned.
2. Heard the learned Senior Counsel appearing for the appellants.
3. We are not inclined to interfere with the impugned judgment and order passed by the High Court of Karnataka at Bengaluru in Writ Appeal No. 831/2022 (T-IT) dated 22-01-2024/Deputy Commissioner of Income-tax v. Sunil Kumar Sharma [20241159 com 179 (Karnataka) .
4. The Special Leave Petition is dismissed.
5. Pending application(s), if any, shall stand disposed of
18. The Learned AR before us vehemently argued that the satisfaction note prepared by the AO of the assessee is still more audacious. The imaged messages are reproduced therein and legible copy is reproduced in para 4.2 to para 4.7 of the assessment order and the name of the assessee nowhere figures in these messages. As shown in para 4.2, the impugned images were found from the mobile phone of Shri Parveen Jain received from his son, Shri Vaibhav Jain and it shows nine names, Sita Gupta to Sanjeev Gupta- but name of the assessee is not there at all. Identical is the situation in para 4.4 of the assessment order. The Learned AR stated that it is beyond any sane comprehension that when name of the assessee is not even mentioned in the alleged seized documents, how could, the AO of the searched person, be satisfied that the alleged seized material belonged to the assessee or the alleged information pertained to the assessee. The reasons to rope in the assessee are contained in para 4.5 to para 4.10 of the assessment order. The sheets bearing the names of nine parties therein and definitely not of the assessee, was analysed by the revenue to come to the conclusion that the items denoted with `C’ were cash entries and with ‘B’ were bank entries. The revenue proceeded to examine the bank entries and certain individuals were found and traced on Insights and other Income-tax Database who were supposedly paying the impugned amount. Now, on examination of the matter related to Ms Sita Gupta, first out of the nine entries, the AO claimed to have detected that she had received interest from Gulshan Homes and Infrastructure Pvt Ltd -the assessee herein. The Investigation Unit thereafter and not the AO of the assessee, collected details etc. from the assessee company and as is mentioned in the para 4.15 of the assessment order, the total amount of the alleged cash receipt/ interest was interpolated which did not at all figure in the impugned seized WhatsApp chat. Noteworthy, the name of the assessee was not at all appearing in any seized material. The ld. Counsel further elaborated that the revenue has relied on a WhatsApp chat between Mr Praveen Jain and Mr Sanjeev Gupta as is mentioned in para 4.1 of the assessment order, where Mr Praveen Jain was requesting Mr Sanjeev Gupta to arrange 1/- for some Gulshan ji and not at all for the assessee company. This even does not say what is 1/- or whether it was arranged or not. It also does not at all mention whether it was cheque amount or cash amount. It is also not known whether the same was to be given only to which Gulshan ji (as the name of the assessee is conspicuously absent therein and no presumption at all could be derived that it belonging to the assessee) as loan in cash or for some property to be purchased by Mr Sanjeev Gupta from the assessee or from some other entity belonging to the group of Shri Gulshan Nagpal, if at all, it was he. However, on confrontation by the revenue officer, Mr Sanjeev Gupta categorically stated that he did not know whether it was bank or cash.
19. The Learned AR then submitted that after receipt of the material from the AO of the searched person, the Learned AO of the assessee was required to be satisfied that the material sent by the AO of the searched person (cloned data of Shri Parveen JaM’s mobile vide seized document reference Annexure A-5) or any information therein ever belonged/ pertained to the assessee herein. As against this patent position of law, the AO of the assessee has used data from the Appraisal report (para 2 of assessment order) as below in his satisfaction note:
i. Para 4- Upon this co-relation, various individuals were found and traced on Insight portal and other Income Tax database.
ii. Para 5- Sita Gupta was found to have received interest from Gulshan Homes along with TDS … …
iii. Para 8- From the TDS analysis above, it is clear that the amount of interest paid to Shikha is in 7 …
iv. Para 9—further, additional evidences in the form of WhatsApp conversation between Sanjiv Gupta and Parveen Jain …
iv. Para 10– Therefore, summons were issued to Gulshan Homes on 18/08/2021 (a date definitely prior to the satisfaction note of the AO of the searched person) to provide ledger account and interest payment details to parties against whom any bank account was reflected … … …The response received from Gulshan Home establishes the bank account transactions….
vi Para 11- Upon examining of various ledger accounts submitted on behalf of Gulshan Homes, the initial point of providing loan….
vii Para 12 is sufficient proof that this satisfaction note is copy of Appraisal report It is mentioned that ‘additionally AO may consider calculating the cash interest amount paid as addition in the hands of Gulshan…’ and ‘the monthly interest and date of payment of principle amount is mentioned above for the perusal of AO’.
viii—Para13- it is clear that the sheet found is summary of undisclosed investments facilitated of various clients by Parveen in Gulshan Homes and he himself has invested through wife Seema Jain and person known as Mama.. ix. Para 14 — Further, Sh. Gulshan NaRpal was called on 16/09/2021 (a date definitely prior to the satisfaction note of of the searched person) for personal examination u/s 131(1A)…
(emphasis supplied by us)
20. The Learned AR submitted that that the Learned AO of the assessee was only required to be satisfied vis-a vis the seized material handed over by the AO of the searched person without any reference to any other information or document even if in his possession received from any source. The satisfaction note based upon the appraisal report, data on Insight Portal regarding TDS of third parties, statements of Shri Gulshan Nagpal etc and therefore, is legally untenable and void ab initio. Moreover, this is not a satisfaction note to initiate any proceedings under section 153C of the Act but conclusions regarding undisclosed income drawn in a firm language. The Hon ‘ble Supreme Court in Oryx Fisheries Pvt Ltd in Civil Appeal No. of 2010 (Arising out of Special Leave Petition (C) No.27615/08) on 29-10-2010 has held that:-
“28. It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge- sheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show cause notice gets vitiated by unfairness and bias and the subsequent proceeding become an idle ceremony.
29. the stage of show cause notice itself. Such a close mind is inconsistent with the scheme of Rule 43 which is set out below. The aforesaid rule has been framed in exercise of the power conferred under Section 33 of The Marine Products Export Development Authority Act, 1972 and as such that Rule is statutory in nature.
31. It is of course true that the show cause notice cannot be read hyper-technically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show cause notice does not commence a fair procedure especially when it is issued in a quasi- judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence.” The ld. Counsel stated further that in fact, in the present case, the assessment order is substantially repetition of the satisfaction note. Gravamen of the above is that the AO was unable to arrive at the requisite satisfaction, solely based upon the seized material received but relied upon the external material which makes the entire proceedings bad in law ab initio.”
21. In view of the aforesaid observations and respectfully following the various judicial precedents relied upon hereinabove, we hold that the Learned AO had invalidly assumed jurisdiction under section 153C of the Act for more than one reason as detailed supra and hence the entire search assessment is hereby declared as void ab initio. Accordingly, the Ground Nos. 1,2,3,4,5,8 & 9 raised by the assessee are allowed. “
15. As observed above, the facts of the present case are identical to the facts of the aforesaid case thus by respectfully following the same, we hold that the AO has assumed the jurisdiction in the case of the assessee on the basis of invalid and defective satisfaction note and, therefore, the proceedings initiated us/ 153C of the Act based on such defective satisfaction note is invalid and the consequent order passed is hereby quashed. Accordingly, Ground of appeal No.1 to 4 raised by the assessee is allowed.
16. Since we have already allowed Grounds of appeal Nos. 1 to 4 raised by the assessee, the other remaining Grounds of appeal became academic hence, not adjudicated.
17. In the result, appeal of the assessee is allowed.
18. In the final result, both appeals of the assessee in ITA No.726 & 727/De1/2026 for Assessment Years 2011-12 & 2012-13 respectively, are allowed.
Order pronounced in the open court on 24.07.2026.
