Rajan Verma Vs DCIT (ITAT Delhi)
No Satisfaction Note, No 153C Assessment: Delhi ITAT Quashes Orders for AYs 2018-19 to 2020-21
Delhi ITAT ‘E’ Bench in Rajan Verma vs DCIT, Central Circle-30, New Delhi (ITA Nos.966, 967 & 968/Del/2025; AYs 2018-19, 2019-20 & 2020-21; order dated 23-12-2025) quashed the assessments framed u/s 153C, holding that the mandatory satisfaction note was not recorded by the AO who ultimately framed the assessments, vitiating the proceedings at the threshold.
Revenue contended that since the AO of the “searched person” and the “other person” was the same, a separate satisfaction was not required, relying on Super Malls Pvt Ltd (SC) and Ganpati Fincap (Del HC). ITAT rejected this plea on facts, noting that on the date of recording satisfaction, the AOs were different: the satisfaction was recorded by DCIT, Central Circle-30 as AO of the searched person, while jurisdiction over the assessee then lay with DCIT, Circle-61(1). Jurisdiction was transferred u/s 127 only later.
The Tribunal held that where the AO framing the 153C assessment has not himself recorded the requisite satisfaction, the proceedings are void ab initio. Following the Delhi High Court decision in Saksham Commodities Ltd and the ITAT ruling in Anil Chowdhary, ITAT ruled that the Revenue’s reliance on cases applicable only when the same AO holds jurisdiction contemporaneously was misplaced.
Accordingly, ITAT quashed the assessments for all three years on the jurisdictional defect alone, without entering into merits.
Key takeaway: Recording of satisfaction u/s 153C is a jurisdictional sine qua non. If the AO who frames the assessment has not recorded it, the assessment cannot survive, irrespective of seized material or merits
FULL TEXT OF THE ORDER OF ITAT DELHI
