Rachita Sahgal Vs ACIT (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT) Delhi has quashed tax additions totaling ₹42.94 lakh each against a couple, Rachita Sahgal and Vivek Sahgal, citing an invalid “satisfaction” recorded under Section 153C of the Income Tax Act, 1961. The ruling, delivered on February 7, 2025, highlights a critical distinction between seized material “belonging” to an assessee and merely “pertaining” or “relating” to them.
The case originated from a search action conducted on January 3, 2018, against the M/s Navneet Dawar group. During this search, the department reportedly found and seized incriminating material that indicated “on-money” payments in property transactions allegedly involving the Sahgal couple. This led to identical additions of ₹42,94,000 in each of their assessments for the assessment year 2018-19, under Section 153C.
The ITAT noted that the Assessing Officer (AO) had recorded “satisfaction” that the seized documents “belonged” to the assessees. However, the Tribunal emphasized that as per the amended Section 153C(1)(b) of the Act, effective from June 1, 2015, seized material, other than specific items like money or bullion mentioned in clause (a), must “pertain” or “relate” to a person other than the searched person for Section 153C to be validly invoked against them.
