ACIT, CENTRAL CIRCLE-2(3), PUNE, PUNE V. SUBHASH JIVRAJ JAIN, PUNE

ITA 1690/PUN/2024

AI Insights

The case involves an appeal by the Revenue against the order of the Ld. CIT(A), Pune, which had deleted the additions made by the Assessing Officer in the hands of the assessee, Subhash Jivraj Jain, for the assessment year 2017-18. The additions were made based on documents seized during a search operation under section 132 of the Income Tax Act, 1961, in the case of Yuvraj Dhamale group. The primary legal issue was the validity of the satisfaction note issued under section 153C for initiating proceedings against the assessee, which was found to be a consolidated note covering multiple assessment years. The Tribunal's decision relied heavily on the precedents set by the Karnataka High Court and the Supreme Court regarding the necessity of year-specific satisfaction notes under section 153C.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711739 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Other Referred Cases: Bharat M. Jain and others vs. ACIT, DCIT vs. Sunil Kumar Sharma, Shri Rajendra Rameshlal Gugale vs. PCIT, Indian National Congress vs. DCIT, CIT vs. Thana Electricity Supply Ltd., M/s. A.P. Electrical Equipment Corporation vs. The Tahsildar & Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH SRIVASTVA
• Assessee Lawyers: NIKHIL S PATHAK
• Keywords: Set aside; Business expenditure; Corroborative evidences; Document seized; Documents seized; Search and seizure; Loose papers; Tangible material
• Section: 143(3); 142(1); 132; 153A; 131

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER ITA No.1690/PUN/2024 Assessment year : 2017-18 ACIT, Central Circle 2(3), Pune Vs. Subhash Jivraj Jain S.No.270, Flat No.502, Manhattan Pallod Farm, Baner, Pune – 411042 PAN: AAYPJ2289E (Appellant) (Respondent) CO No.29/PUN/2025 Assessment Year : 2017-18 Subhash Jivraj Jain S.No.270, Flat No.502, Manhattan Pallod Farm, Baner, Pune – 411042 Vs. ACIT, Central Circle 2(3), Pune PAN: AAYPJ2289E (Appellant) (Respondent) Assessee by : Shri Nikhil S Pathak Department by : Shri Akhilesh Srivastva, Addl.CIT Date of hearing : 23-06-2025 Date of pronouncement : 21-07-2025 O R D E R PER BENCH: This appeal filed by the Revenue is directed against the order dated 01.05.2024 of the Ld. CIT(A), Pune-12 relating to assessment year 2017-18. The assessee has filed the Cross Objection against the appeal filed by the Revenue. For the sake of convenience, the appeal filed by the Revenue and the Cross Objection Printed from counselvise.com 2 ITA No.1690/PUN/2024 CO No.29/PUN/2025 filed by the assessee were heard together and are being disposed of by this common order. 2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income for the impugned assessment year on 27.10.2017 declaring Nil income. A search action u/s 132 of the Act was carried out in the Yuvraj Dhamale group of cases on 26.09.2017. During the course of search action, various incriminating documents were found and seized which also include certain documents which contain information relating to the assessee. In response to the notice u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), the assessee filed his return of income on 26.05.2021 declaring Nil income. The Assessing Officer thereafter issued statutory notices u/s 143(2) and 142(1) of the Act in response to which there was no response from the side of the assessee. Therefore, the Assessing Officer issued a summon u/s 131 of the Act on 07.12.2021 requiring physical attendance of the assessee along with requisite submissions by 10.12.2021. Through this summon, the assessee was also provided an opportunity to inspect the seized material relevant for his case. Since there was no proper compliance from the side of the assesse, the Assessing Officer proceeded to complete the assessment on the basis of material available on record. 3. The Assessing Officer noted that during the course of search and seizure action u/s 132 of the Act in the case of Yuvraj Dhamale Group on 26.09.2017, the residential premises of Shri Pravin Gawali being one of the directors in M/s. Printed from counselvise.com 3 ITA No.1690/PUN/2024 CO No.29/PUN/2025 Wellbuild Merchants Pvt. Ltd. and a trusted person of Shri Yuvraj Dhamale at 35/10, Shivajirao Kadam Nagar, Ambegaon Pathar, Nr. Raje Chowk, Pune was covered. From the residence of Shri Pravin Gawali, certain loose papers were found and seized as serial numbers 36, 37 and 38 of Bundle No.55, containing name of the investors, invested amount, interest and total amount. The statement of Shri Pravin Gawali was recorded on oath on 26.09.2017. During the course of search proceedings Shri Gawali, in reply to query raised about these seized papers, had stated that though these pages were found from his residence, but these entries belong to Yuvraj Dhamale and he only can explain the entries. Shri Yuvraj Dhamale in his statement recorded on oath during the search proceeding on 29.09.2017 has accepted that the pages found at the residence of Shri Pravin Gawali belong to him and the entries mentioned therein were being maintained by his employees as per his directions. He explained that these pages contain details of investment made by the investors whose names are reflecting there and these investments have been made both in cheque and cash. During the course of search proceedings Shri Yuvraj Dhamale had submitted the details of cash received from the investors as per Annexure-4 being part of his statement and has stated that though 23 investors appear in the Annexure but actually they are from certain families and groups. On analyzing the details the Assessing Officer noted that the assessee Subhash Jain and Ajit Jain have invested various amounts on which interest has been received, the details of which are as under: Sr. No. Name Investment Amount Interest Total Amount 1 Shri Subhash Jain 1,49,89,395/- 31,06,879/- 1,80,96,274/- 2 Shri Ajit Jain 1,49,89,395/- 31,24,752/- 1,81,14,147/- Printed from counselvise.com 4 ITA No.1690/PUN/2024 CO No.29/PUN/2025 4. However, during the course of post search enquiry Shri Yuvraj Dhamale and M/s. Welbuild Merchants Pvt. Ltd. claimed that the investment entries as mentioned on the page are recorded in the books of account while interest portion is not recorded. It was further stated that the investment as mentioned on the page is received by two entities namely M/s. Welbuild Merchants Pvt. Ltd. and M/s GM Rajdhan Buildcon. Further, these investments were recorded as ‘unsecured loan’ in the books of M/s. Wellbuild Merchants Pvt. Ltd. and as “partner’s capital” in the books of M/s. GM Rajdhan Buildcon. He noted that subsequently M/s. Wellbuild Merchant Pvt. Ltd. and Shri Yuvraj Dhamale have approached before the Settlement Commission and claimed that the entire amount as mentioned on pages 36 to 38 of Bundle No.55 seized from the residence of Shri Pravin Gawali has been received by cheque. Rejecting the various explanations given by the assessee and observing that the assessee has received interest of Rs.2,11,00,000/- in assessment year 2017-18. The Assessing Officer made substantive addition of Rs.1,05,50,000/- in the hands of assessee as ‘income from other sources’ and also another addition of Rs.1,05,50,000/- on protective basis by observing as under: “09. To sum up the things, the seized documents vide Page Nos.38 of Bundle No.55 found at the Pravin Gawali residence contains the names of (1) Subhash Jain and (2) Ajit Jain. As mentioned in the preceding paras Shri. Yuvraj Dhamale had submitted the details of investments made by the parties mentioned on these pages in the project \"Rajgruhi Residency” developed by M/s. Wellbuild Merchants Pvt Ltd. as per Annexure-4 (being part of his statement) and had stated that though 23 investors appear in the Annexure, they actually are from certain families and groups. The said proposition was also accepted by the Hon'ble ITSC in the order passed u/s. 245D(4) of the Act. Accordingly, as per Annexure-4, the above Assessees are grouped headed by Shri. Subhash Jain. 9.1 Further, the supportive documents seized vide Page No.9 of Bundle No.11 and Page No.17 of Bundle No.1 from the residential premise of Shri. Umakant Kuwar, Page No. 12 & 14 of Bundle No.5 seized from Camp office and Page No. 27 of Bundle No.14 seized from residence of Shri. Pravin Gawali, all have the Printed from counselvise.com 5 ITA No.1690/PUN/2024 CO No.29/PUN/2025 noting in the name of Shri. Subhash Jain. Even, in his statement recorded during the Search proceedings and in the Statement of Fact (SOF) submitted before the ITSC, Shri Yuvraj Dhamale had stated that, he had handed over the money to a single representative of each group so as to avoid dealings with the multiple persons and the resultant confusion arising out of it. Further, both these brothers have made investments either in M/s. Wellbuild Merchants Pvt Ltd, M/s. Rajdhan Buildoon or directly with Shri. Yuvraj Dhamale through cheques only thereby justifying their claim on the aforesaid amount received in the hands of Shri. Subhash Jain. 9.2 Therefore, it can be fairly concluded that, these group members (1) Subhash Jain and (2) Ajit Jain have received their returns on investments in cash from Dhamale Group through the hands of Shri. Subhash Jain. This further backs the statement of Shri. Yuvraj Dhamale that this group/family was represented by Shri. Subhash Jain. 10. On perusal of the seized documents and the order of ITSC it can be fairly concluded that, the total returns on investment received in this group is of Rs.2,45,00,000/- [Rs.34,00,000/- in A.Y. 2016-17 and Rs.2,11,00,000/- in A.Y. 2017-18] whereas their investments are as reflected in the table below and therefore A.Y. wise additions are as proposed below: Α.Υ. 2016-17 Sr. No. Name of the Assessee Amount of Investment as per seized documents (in Rs.) % of Total (Appro.) Returns on investment as per the evidences found. Total 1 Subhash Jain 1,49,89,295 50 17,00,000/- 34,00,000/- 2 Ajit Jain 1,49,89,395 50 17,00,000/- 2,99,78,790 100 34,00,000/- 34,00,000/- Α.Υ. 2017-18 Sr. No. Name of the Assessee Amount of Investment as per seized documents (in Rs.) % of Total (Appro.) Returns on investment as per the evidences found. Total 1 Subhash Jain 1,49,89,295 50 1,05,50,000/- 2,11,00,000/- 2 Ajit Jain 1,49,89,395 50 1,05,50,000/- 2,99,78,790 100 2,11,00,000/- 2,11,00,000/- 11. Hence, out of the total interest earned in cash of Rs.2,11,00,000/- in A.Y. 2017-18, Substantive addition of Rs.1,05,50,000/- is hereby made in the hands of Shri. Subhash Jivraj Jain as income from other sources. However, if the appellate Printed from counselvise.com 6 ITA No.1690/PUN/2024 CO No.29/PUN/2025 authorities decide that, the interest received in cash by Shri. Ramesh Ghanshyam Shah from the Yuvraj Dhamale group on behalf of other persons i.e.. Ajit Jain has not been passed on to him as mentioned in the table above, then so as to protect the interest of revenue, Protective Addition of Rs.1,05,50,000/- is hereby made in the hands of Shri. Subhash Jivraj Jain. 12. Thus, in the absence of any supporting evidences as well as any satisfactory explanation furnished thereto, the amount i.e., Rs.1,05,50,000/- is treated to be the income of Assessee under head 'income from other source’ for A.Y. 2017-18. [Protective Addition of Rs.1,05,50,000/- as income from other sources]” 5. In appeal, the Ld. CIT(A) following his order for assessment year 2016-17 deleted the addition. A perusal of the order for assessment year 2016-17 shows that the Ld. CIT(A) deleted similar addition for assessment year 2016-17 by relying on the decision of the Pune Bench of the Tribunal in the case of Bharat M. Jain and others vs. ACIT vide ITA Nos.898 to 905/PUN/2022, order dated 05.10.2023. The relevant observations of the Ld. CIT(A) read as under: “6.4 I have considered the facts of the case and the submission made by the appellant. During the appellate proceedings, the appellant stated in his submission that the copy of the breakup of cash expenditure allowed by the ITSC in the case of Yuvraj Dhamale Group, based on which the AO made additions in the hands of the appellant, was not a seized material. Instead, it was prepared during the proceedings of third party before the Hon'ble ITSC. This indicates that the AO made additions in the appellant's hands, based on third-party proceedings in which the appellant had no role or participation. Consequently, the alleged payment of interest in cash to the appellant is not based on seized material but is based on the submission of Yuvraj Dhamale group in third-party proceedings before another authority. Therefore, the purported cash expenditure sanctioned by the Income Tax Settlement Commission (ITSC) in the case of Yuvraj Dhamale Group, upon which the AO made additions in the hands of the appellant, is unjustified. The appellant also contended that the AO is not justified in making additions solely based on documents seized from the premises of a third party Yuvraj Dhamale Group. The entries contained in the bundle 1, 5, 11 and 14 does not mention any purpose of payment or the nature of transaction mentioned so as to make addition adversely in the hands of the appellant. 6.5 In this regard, the appellant has relied upon the latest decision of jurisdictional Hon'ble ITAT Pune in the case of Bharat M. Jain and others vs ACIT, vide ITS Nos. 898 to 905/PUN/2022 dated 05.10.2023, which is on identical facts and same alleged incriminating documents found from the search action of Dhamale group wherein Hon'ble ITAT has allowed appellant's appeal and deleted similar additions. The Hon'ble ITAT held in favor of the appellants as under: Printed from counselvise.com 7 ITA No.1690/PUN/2024 CO No.29/PUN/2025 \"15. As discussed above, as it was also argued by the id. AR, the assessments made in the hands of the assessee regarding alleged payment of interest in cash was based on the seized documents found during the course of search basing on which Shri Yuvraj Dhamale claimed interest expenditure in Income Tax Settlement Commission, we find the AO considering the proceedings before the Income Tax Settlement Commission made addition in the hands of the assessee on account of interest payment in cash, In view of the same, we directed the ld. DR to furnish a copy of order of the Income Tax Settlement Commission regarding M/s Wellbuild Merchants Pvt. Ltd of the Dhamale Group, ld. DR furnished the same which is on record by way of covering letter dated 15/01/2021. On an examination of the same, we note that the said Dhamale Group representing 04 applicants filed applications u/sec 245C before the ITSC. In turn, the ITSC sought reports from PCIT as required u/sec, 245D (28) of the Act and also under Rule 9 of the Income Tax Settlement Commission Procedure Rule 1997. Since the AO mainly relied on the case of M/s. Wellbuild Merchants Pvt. Ltd., we shall examine mainly the case of M/s. Wellbuild Merchants Pvt. Ltd. On perusal of the statement of CIT-DR representing Pr. CIT before the Income Tax Settlement Commission is at page No.23 of the said order argued taking reference to Question No. 68 of the said Shri Yuvraj Dhamale that the cash expenses out of which already claimed and allowed at the time of search action were claimed on estimation basis without any supporting evidence or documents. He submitted the claim of cash expenses is a pure imaginary figure without any basis and argued to reject the claim in the case of M/s. Wellbuild Merchants Pvt. Ltd.. which is evident from para A (i) at page 23.24 & 25 of the said order. Further, taking reference to seized documents pages 36 to 38 of bundle 55 concerning the assessee before us as referred by the AO in his order, we note that the CIT-DR argued that the applicant furnished a common reply regarding evidences of cash receipts in seized documents pages 36 to 38 of bundle 55 stating that entry pertain to cash loan/repayment Further, he vehemently argued that the claim of interest payment of Rs.7,80,00,000/- out of Rs.8,00,62,029/- is not verifiable in the absence of mention of its payment and also in absence of conformity of nature of funds which is evident from para 5A(ii) of Page No. 25 of Income Tax Settlement Commission order. However, the assessee therein got relief of Rs.7,80,00,000/- towards business expenditure. Therefore, in our opinion, that the information by way of a seized hose papers in the case of third party cannot be said to be tangible material without a further enquiry falling which the addition made in the hands of the assessee fails and, is not justified. Thus, the order of CIT(A) in confirming the order of AO is not maintainable and set aside. Thus, the ground's raised by the assessee are allowed.\" 6.6 I have considered the facts of the case, the assessment order, submissions made by the appellant along with judicial pronouncements relied upon by the appellant. In view of the binding jurisdictional Hon'ble ITAT Pune's order vide ITS Nos. 898 to 905/PUN/2022 dated 05.10.2023 (supra) wherein it is held that the information by way of seized loose papers in the case of third party cannot be Printed from counselvise.com 8 ITA No.1690/PUN/2024 CO No.29/PUN/2025 said to be tangible material without a further enquiry failing which the addition made in the hands of the assessee fails and is not justified. Thus, the addition of Rs.34,00,000/- (substantive addition of Rs.17,00,000/- and protective addition of Rs.17,00,000/-) made by the AO is reversed and AO is directed to delete the impugned addition. The grounds no. 3 & 4 raised by the appellant are hereby allowed.” 6. While adjudicating the appeal for assessment year 2017-18, the Ld. CIT(A) had observed as under: “11.1 Vide these grounds of appeal, the appellant contended that the AO has erred in making addition of Rs.1,05,50,000/- on account of alleged cash receipt from the builder in connection with the providing of the funds is without any evidence found with the appellant and therefore the additions so made be deleted. The appellant also contended that the additions made on protective basis of Rs.1,05,50,000/- is also not in accordance with the provisions of the Act and the facts and circumstances prevailing in the case. The additions so made be deleted. These grounds raised by the appellant are identical to the grounds no.3 to 4 for A.Y. 2016-17 and the facts mentioned for these grounds are also similar. Therefore, the findings given for the grounds no.3 to 4 for A.Υ. 2016-17 would apply mutatis mutandis to these grounds raised by the appellant. Accordingly, considering the findings given for the grounds No.3 to 4 for A.Y. 2016-17 above, thus, grounds no.3 & 4 raised by the appellant are hereby allowed.” 7. Aggrieved with such order of the Ld. CIT(A) the Revenue is in appeal by raising the following grounds: 1) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing the appeal of the assessee relying upon the decision of Hon'ble ITAT, Pune in ITA Nos.898 to 905/PUN/2022 dated 05/10/2023 in the case of Bharat M. Jain/Mahaveer M. Jain/Anand T. Jain/Chirag G. Jain Vs ACIT wherein it was held that information by way of seized loose papers in case of third party cannot be said to be tangible material without a further enquiry, by ignoring the provisions of section 153C of the Income Tax Act, 1961. 2) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the fact that addition was made on account of cash interest received by the assessee from Yuvraj Dhamale Group after detailed analysis of all the incriminating seized material, statements recorded u/s 132(4) of the Act in said group which clearly mention the name of the assessee and the cash transactions he had entered into and the assessee failed to submit any submission or denial in respect of the incriminating material relevant to his case inspite of sufficient opportunities granted to him. Printed from counselvise.com 9 ITA No.1690/PUN/2024 CO No.29/PUN/2025 3) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the fact that that Hon'ble Income Tax Settlement Commission (ITSC) had accepted that the said interest expenses in cash were incurred by the Yuvraj Dhamale Group. 4) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing the appeal of the assessee without appreciating that the principle of law declared by the Hon'ble Supreme Court in the case of Sumati Dayal v. CIT [1995] 214 ITR 801 that the true nature of transaction have to be ascertained in the light of surrounding circumstances. 8. The assessee in his CO has raised the following grounds: 1] The respondent submits that in the instant case a consolidated satisfaction note has been prepared for A.Y. 2012-13 to 2018-19 and as the consolidated satisfaction note is not in accordance with the provisions of the law, the asst. order passed u/s 153C r.w.s. 143(3) be declared null and void. 2] The respondent submits that the learned A.O. had no jurisdiction to issue notice u/s 153C to the assessee since the conditions mentioned therein have not been fulfilled and accordingly, the notice issued u/s 153C and the consequential asst. order passed u/s 153C r.w.s. 143(3) be declared null and void. 3] The respondent submits that in the present case, no addition has been made in respect of the seized paper referred in the satisfaction note and accordingly, the asst. order passed u/s 153C r.w.s. 143(3) be declared null and void. 4] The respondent craves leave to add, alter, amend or delete any of the above cross objections. 9. The Ld. Counsel for the assessee at the outset referring to the satisfaction note by the JCIT (OSD), Central Circle 2(3), Pune on 30.04.2021, copy of which is placed at pages 1 to 2 of the paper book submitted that the Assessing Officer has passed a consolidated satisfaction note for various assessment years. 10. Referring to the decision of the Hon’ble Karnataka High Court in the case of DCIT v. Sunil Kumar Sharma reported in 159 taxmann.com 179 (Kar.), he Printed from counselvise.com 10 ITA No.1690/PUN/2024 CO No.29/PUN/2025 submitted that the satisfaction u/s 153C ought to be on a year-to-year basis and absence of year-by-year satisfaction vitiates the proceedings. 11. Referring to the decision of the Coordinate Bench of the Tribunal in the case of Shri Rajendra Rameshlal Gugale vs. PCIT vide ITA No.1676/PUN/2024, for assessment year 2017-18, order dated 30.12.2024, he submitted that the Tribunal in the said decision has held that the assessment framed u/s 153C of the Act is void being not in accordance with law on account of combined satisfaction note for assessment years 2012-13 to 2018-19. He submitted that the Revenue challenged the order of the Hon’ble Karnataka High Court in the case of DCIT vs. Sunil Kumar Sharma (supra) and the Hon'ble Supreme Court dismissed the SLP filed by the Revenue. 12. So far as the merit of the case is concerned, the Ld. Counsel for the assessee heavily relied on the order of the Ld. CIT(A). 13. The Ld. DR on the other hand heavily relied on the order of the Assessing Officer. 14. So far as the argument of the Ld. Counsel for the assessee that the Assessing Officer has passed a consolidated satisfaction note for which the assessment has to be quashed is concerned, he submitted that practicality and administrative burden has to be kept in mind. He submitted that issuing separate satisfaction notes for Printed from counselvise.com 11 ITA No.1690/PUN/2024 CO No.29/PUN/2025 each assessment year especially when dealing with a single search operation that reveals material relevant to multiple years creates an undue administrative burden on the tax authorities. It is more efficient and practical to consolidate the satisfaction regarding the relevance of seized material across all affected assessment years if the underlying search is common. Further, the spirit of section 153C is to assessee income that has escaped assessment based on seized material. If the material clearly relates to multiple years, focusing excessively on the form of the satisfaction note rather than the substance of the satisfaction can hinder the legitimate collection of taxes. Further, there is no explicit prohibition in the statute for such common satisfaction note. 15. Referring to the decision of the Hon’ble Delhi High Court in the case of Indian National Congress vs. DCIT (2024) 463 ITR 431 (Del), he submitted that the Hon’ble High Court in the said decision has held that satisfaction note merely forms foundation for initiation of action which would enable to evaluate whether an opinion has been validly formed and as long as it rests on incriminating material, which pertains to assessment years in question, same would qualify requirement of section 153C. 16. As regards the issue of reliance on the decision favourable to the assessee when two conflicting decisions on the same issue are available is concerned, he submitted that the Hon’ble jurisdictional High Court in the case of CIT vs. Thana Electricity Supply Ltd., reported in 206 ITR 727 (Bom) has held that it is Printed from counselvise.com 12 ITA No.1690/PUN/2024 CO No.29/PUN/2025 satisfaction of the Court interpreting the law, in that the language of the taxing provision is ambiguous or reasonably capable of more meanings than one which is material. If the court does not think so, the fact that two different opinions have been expressed by the parties or accepted by some Tribunal or High Court by itself will not be sufficient to attract the principle of beneficiary interpretation. 17. Referring to the decision of the Hon'ble Supreme Court in the case of M/s. A.P. Electrical Equipment Corporation vs. The Tahsildar & Ors. etc. vide Civil Appeal Nos.4526-4527 of 2024, judgment dated 27.02.2025, he submitted that the Hon'ble Supreme Court in the said decision has held that if two decisions of this Court appear inconsistent with each other, the High Courts are not to follow one and overlook the other, but should try to reconcile and respect them both and follow the decision whose facts appear more in accord with those of the case at hand. He accordingly submitted that on the issue of combined satisfaction also, assessments cannot be quashed. 18. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of both sides. We have also considered the various decisions cited before us by both sides. We find the Assessing Officer in the instant case, on the basis of information obtained that certain documents / loose papers pertaining to or information contained in papers / documents related to the assesse Subhash Jivraj Jain were found during the course of search on 26.09.2017 in the case of Yuvraj Printed from counselvise.com 13 ITA No.1690/PUN/2024 CO No.29/PUN/2025 Dhamale group of cases, issued notice u/s 153C of the Act on the basis of satisfaction note dated 30.04.2021. We find the Assessing Officer completed the assessment determining the total income of Rs.201,38,624/- by making addition of Rs.2,11,00,000/- the details of which are already given in the preceding paragraphs. We find the Ld. CIT(A) deleted the addition, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that 153C proceedings are not valid on account of combined satisfaction note issued for different assessment years and therefore the CO filed by the assessee should be allowed. 19. A perusal of the satisfaction note issued by the Assessing Officer dated 30.04.2021, copy of which is placed at pages 1 and 2 of the paper book shows that the Assessing Officer has recorded the satisfaction note as under: “Satisfaction note for initiating proceedings u/s 153C of the IT Act, 1961 in case of Shri Subhash Jivraj Jain A. The search and seizure action u/s 132 of act was conducted in case of Shri Yuvraj Sitaram Dhamale and M/s Wellbuild Merchants Pvt Ltd at residential premise of at residential premise of Shri Pravin Gawali at 35/10, Shivajirao Kadam nagar, Ambegaon pathar, near Raje chowk, Pune. During the search proceedings, several incriminating materials and documents were seized. While examining the documents and seized material at the time of finalizing the assessment in case of Shri Yuvraj Sitaram Dhamale and M/s Wellbuild Merchants Pvt Ltd, it was noted that the certain documents/loose papers pertain to or the information contained in papers/documents related to Assessee i.e. Shri Subhash Jivraj Jain. B. A satisfaction note was drawn by the AO during the proceeding's u/s 153A in case of Shri Yuvraj Sitaram Dhamale and M/s Wellbuild Merchants Pvt Ltd that Information contained in documents/papers/ materials relates to Shri Subhash Jivraj Jain. The details of seized documents are as below: The loose papers containing noting regarding the investment, interest and total amount against the name of some persons has been seized as per page no 38 Printed from counselvise.com 14 ITA No.1690/PUN/2024 CO No.29/PUN/2025 to 40 of Bundle no 55. As per entry on page no 38, Shri Subhash Jivraj Jain has given loan (directly or indirectly through his partnership firm M/s GM Rajdhan buildcon) of Rs.1,49,89,395/- in cheque and received interest of Rs.31,06,879/- in cash from M/s Wellbuild Merchants Pvt Ltd. C. On examination of the seized material and the facts of the case, I am satisfied that entries on page no.38 of Bundle no-55 seized during the course of search proceedings in case of Shri Yuvraj Sitaram Dhamale and M/s Wellbuild Merchants Pvt Ltd at residential premise of at residential premise of Shri Pravin Gawali at 35/10, Shivajirao Kadam nagar, Ambegaon pathar, near Raje chowk, Pune relates to Assessee and it has a bearing on determination of total income in case of Assessee for six assessment years immediately preceding the AY 2018-19 and for AY 2018-19. Hence, in view of the provision of section 153C of the Income Tax Act, 1961 it is necessary to initiate proceedings u/s 153C rws 153A of the Income Tax Act, 1961 for A. Yrs 2012-13 tο Α.Υ. 2018-19. Sd/- (Swapnil Sharadrao Patil) Joint Commissioner of Income Tax (OSD), Date: 30/04/2021 Central Circle 2(3), Pune Place: Pune” 20. Thus, it is seen that the Assessing Officer has passed a combined satisfaction note for various assessment years. We find the Hon’ble Karnataka High Court in the case of DCIT v. Sunil Kumar Sharma (supra) has held that satisfaction note is required to be recorded u/s 153C of the IT Act, 1961 for each assessment year and hence, a consolidated satisfaction note recorded for different assessment years would vitiate the entire assessment proceedings. The relevant observations of Hon’ble High Court read 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.” Printed from counselvise.com 15 ITA No.1690/PUN/2024 CO No.29/PUN/2025 21. We find when the Revenue challenged the above order of the Hon’ble Karnataka High Court in the case of DCIT vs. Sunil Kumar Sharma (supra), the Hon’ble Supreme Court in SLP (Civil) Diary No.21526 of 2024 vide order dated 20th August, 2024 dismissed the SLP filed by the Revenue. 22. We find following the above decision, the Co-ordinate Bench of the Tribunal in the case of Shri Rajendra Rameshlal Gugale vs. PCIT vide ITA No.1676/PUN/2024 for assessment year 2017-18, order dated 30.12.2024 has quashed the assessment proceedings by observing as under: “8.7. Since in the instant case a consolidated satisfaction note has been prepared for assessment years 2012-2013 to 2018-2019, therefore, the consolidation satisfaction note being not in accordance with law, therefore, the entire assessment proceedings is liable to be quashed. We hold accordingly and quash the assessment.” 23. So far as the decision of the Hon’ble Delhi High Court in the case of Indian National Congress vs. DCIT (supra) relied on by Ld. DR is concerned, we find no doubt there is a favourable decision in favour of the Revenue on the issue of combined satisfaction. However, it has been held in various decisions that when there are two views possible on an issue and there is no decision of the jurisdictional High Court on that issue, then the view which is favourable to the assessee has to be adopted. We find the Hon'ble Supreme Court in the case of CIT vs. Naga Hills Tea Co. Ltd. (1973) 89 ITR 236 (SC) at page 240 has observed as under: “If a provision of a taxing statute can be reasonably interpreted in two ways, that interpretation which is favourable to the assessee, has got to be accepted. This is a well-accepted view of law.” Printed from counselvise.com 16 ITA No.1690/PUN/2024 CO No.29/PUN/2025 24. Further, the Hon'ble Supreme Court recently in the case of M/s. A.P. Electrical Equipment Corporation vs. The Tahsildar & Ors. (supra) has held that if two decisions of this Court appear inconsistent with each other, the High Courts are not to follow one and overlook the other, but should try to reconcile and follow that decision whose facts appear more in accord with those of the case at hand. Following the above principle and considering the fact that the Hon'ble Supreme Court has dismissed the SLP filed by the Revenue in the case of DCIT vs. Sunil Kumar Sharma (supra), therefore, we follow the decision of the Hon’ble Karnataka High Court in the case of DCIT vs. Sunil Kumar Sharma (supra) and hold that the satisfaction note is required to be recorded u/s 153C for each assessment year and a consolidated satisfaction note recorded for different assessment years would vitiate the entire assessment proceedings. Since in the instant case a consolidated satisfaction note has been prepared for assessment years 2012-13 to 2018-19, therefore, such consolidated satisfaction note being not in accordance with law, the entire assessment proceedings are liable to be quashed. We hold and direct accordingly. 25. Since we have quashed the assessment proceedings on this legal ground raised by the assessee in his CO on account of combined satisfaction note, therefore, the grounds raised by the Revenue challenging the order of the Ld. CIT(A) in deleting the addition become academic in nature and therefore, the same are not being adjudicated. Accordingly the appeal filed by the Revenue is dismissed and the CO filed by the assessee is allowed. Printed from counselvise.com 17 ITA No.1690/PUN/2024 CO No.29/PUN/2025 26. In the result, the appeal filed by the Revenue is dismissed and the CO filed by the assessee is allowed. Order pronounced in the open Court on 21s July, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 21st July, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 14.07.2025 Sr. PS/PS 2 Draft placed before author 17.07.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "