Nirvaja Enterprises Private Limited Vs ACIT (ITAT Delhi)
Search action in Himanshu Verma group led AO to treat Assessee company as one of 200 alleged shell entities & initiate proceedings u/s 153C for AYs 2012-13 to 2018-19 on the basis of a single consolidated satisfaction note. AO made additions treating bank credits as accommodation entries & estimated commission income @4% plus further addition @1%, which were upheld by CIT(A).
ITAT quashed entire proceedings holding that mandatory jurisdictional conditions of section 153C were not satisfied. Tribunal noted that satisfaction note neither identified year-wise incriminating material, nor recorded that seized material “pertained to the assessee” and “had bearing on determination of total income” for each AY. A blanket satisfaction covering multiple years, based largely on third-party statement & bank entries already recorded in books, was held invalid. Relying on SC rulings in Sunil Kumar Sharma and Saksham Commodities Ltd., Tribunal held that section 153C cannot be invoked mechanically for all block years without specific incriminating material relatable to each year. Consequently, initiation of proceedings u/s 153C being bad in law, entire assessments for both years were quashed, without going into merits of additions.
FULL TEXT OF THE ORDER OF ITAT DELHI
These two appeals are filed by the Assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-25, New Delhi, (‘the CIT(A)’ in short) both are dated 16.09.2025 passed u/s 250 of the Income Tax Act, 1961 in Appeals No. 10428/2016-17 and 10228/2017-18 against the assessment orders passed u/s 143(3) of the Act for Assessment Years 2017-18 and 2018-19 respectively.
