Atoll Vyapaar (P) Ltd. Vs DCIT (ITAT Delhi)
In Atoll Vyapaar (P) Ltd. Vs DCIT, the Income Tax Appellate Tribunal (ITAT), Delhi dealt with seven appeals concerning assessment years 2013–14 to 2020–21 arising from proceedings initiated under Section 153C read with Section 143(3) of the Income-tax Act, 1961. The primary issue raised by the assessee was the validity of these proceedings on the ground of improper satisfaction recorded by the Assessing Officer.
The case originated from a search conducted on another entity, during which certain materials were allegedly found relating to the assessee. Based on this, the jurisdictional Assessing Officer recorded a common satisfaction note dated 24.12.2021 for initiating proceedings under Section 153C. However, upon examination, the Tribunal found that the satisfaction note did not specify that the seized material had any “bearing” on the determination of the assessee’s total income for the relevant assessment years.
The Revenue argued that it was not mandatory to explicitly use the term “bearing” in the satisfaction note. The Tribunal rejected this contention, relying on the judgment of the Delhi High Court in Saksham Commodities Ltd. vs. ITO (2024), which held that the satisfaction note must clearly establish that the seized material has a bearing on the determination of taxable income.
