RENU SINGH,DELHI V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, DELHI, DELHI

ITA 2806/DEL/2024

AI Insights

The case involves appeals by Renu Singh and Pradeep Singh against the assessment orders passed under Section 153C of the Income Tax Act, 1961, for the Assessment Year 2019-20. The assessments were based on a 'satisfaction note' following a search and seizure operation conducted on the Pranjil Batra Group. The AO alleged that there was an underreporting of sale consideration in property transactions involving the appellants. Both the First Appellate Authority and the Tribunal found the 'satisfaction note' to be inadequate and non-specific, leading to the quashing of the assessment orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31404 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 30-10-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 31-05-2024
• Other Referred Cases: Indian National Congress vs DCIT, Agni Vishnu Feature Pvt. Ltd. vs DCIT, Sinhgad Technical Education Society vs DCIT, Sakham Commodities Ltd. Vs ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Fair market value; Document seized; Documents seized; Period of limitation; Capital Gains; Principle of natural justice; Search and seizure; Valuation report; Time period of passing order; Value adopted by valuation officer
• Section: 132; 153A; 13; 153C; 234B; 271D

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No [Assessment Year : Renu Singh Pranshu Goel, C Accountant 5A/3A Ansari Raod Darya Ganj New Delhi-110002 PAN-CHVPS2282J APPELLANT ITA No [Assessment Year : Pradeep Singh Pranshu Goel C Accountant 5A/3A Ansari Raod Darya Ganj New Delhi-110002 PAN-AOOPS5630J APPELLANT Appellant by Respondent by Date of Hearing Date of Pronouncement PER PRADIP KUMAR KEDIA The captioned appeal hereunder :- Sl.No. ITA No. Parties Name 1. 2805/Del/2024 Renu Singh 2. 2810/Del/2024 Pradeep Singh N THE INCOME TAX APPELLATE TRIBUNAL DELHI “F” BENCH: NEW DELHI SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.2806/Del/2024 Assessment Year : 2019-20] Pranshu Goel, Chartered 5A/3A Ansari Raod Darya Ganj 110002 CHVPS2282J vs ACIT Central Circle-3 Delhi RESPONDENT ITA No.2810/Del/2024 Assessment Year : 2019-20] Pranshu Goel Chartered 5A/3A Ansari Raod Darya Ganj 2 30J vs ACIT Central Circle-3 Delhi RESPONDENT Shri Pranshu Goel, CA & Shri Aditya Gupta, Adv. Shri Sumer Singh Meena, CIT DR 30.10.2024 Date of Pronouncement 25.11.2024 ORDER PRADIP KUMAR KEDIA- AM : appeals arising from the First Appellate order Ld. CIT(A) CIT(A)’s order dated Assessment order passed u/s Assessment order dated Ld.CIT(A)- 23 27.05.2024 153C 15.03.2023 Pradeep Ld.CIT(A)- 23 27.05.2024 153C 15.03.2023 SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & 3 3 Shri Sumer Singh Meena, CIT DR First Appellate orders tabulated Assessment order dated Assessment Year 15.03.2023 2019-20 15.03.2023 2019-20 2. The issues being identical in both the appeals together and are being disposed of ITA No.2806/Del/2024 [AY : 3. Grounds of appeal raised by the assessee read as under: 1. “That on the facts and circumstances of the case, assessment order passed under Section 153C of the Act as sustained by the Ld. CIT(A) is bad in law, illegal and void ab initio; 2. That without prejudice, considering the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in not rendering the notice issued under section 153C and consequent assessment bad in law as the satisfaction note recorded by the Ld. AO is invalid, bad in law and void ab initio; 3. That on the facts and circu CIT(A) grossly erred in not considering that the Ld. AO failed to dispose off the objections of the appellant against the satisfaction note vide a separate speaking order; 4. That on the facts and circumstances of CIT(A) grossly erred in not considering that the Ld. AO failed to provide the copy of the satisfaction note of the AO of the searched person to the appellant during the assessment proceedings; 5. That on the facts and circumst CIT(A) grossly erred in sustaining the order of the Ld. AO whereby impugned addition amounting to Rs. 75,08,750/ 6. That on the facts and circumstances of the case and in law the Ld. AO grossly erred in not the Ld. Valuation Officer ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh identical in both the appeals, both appeals were together and are being disposed off by a common order. AY : 2019-20]-Renu Singh: Grounds of appeal raised by the assessee read as under:- “That on the facts and circumstances of the case, assessment order passed under Section 153C of the Act as sustained by the Ld. CIT(A) is bad in law, illegal and void ab initio; That without prejudice, considering the facts and circumstances of e and in law, the Ld. CIT(A) grossly erred in not rendering the notice issued under section 153C and consequent assessment bad in law as the satisfaction note recorded by the Ld. AO is invalid, bad in law and void ab initio; That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in not considering that the Ld. AO failed to dispose off the objections of the appellant against the satisfaction note vide a separate speaking order; That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in not considering that the Ld. AO failed to provide the copy of the satisfaction note of the AO of the searched person to the appellant during the assessment proceedings; That on the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in sustaining the order of the Ld. AO whereby impugned addition amounting to Rs. 75,08,750/- was made; That on the facts and circumstances of the case and in law the Ld. AO grossly erred in not considering the valuation report furnished by the Ld. Valuation Officer -1, Income Tax Department, New Delhi; ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 2 , both appeals were heard “That on the facts and circumstances of the case, assessment order passed under Section 153C of the Act as sustained by the Ld. CIT(A) That without prejudice, considering the facts and circumstances of e and in law, the Ld. CIT(A) grossly erred in not rendering the notice issued under section 153C and consequent assessment bad in law as the satisfaction note recorded by the Ld. AO is invalid, bad mstances of the case and in law, the Ld. CIT(A) grossly erred in not considering that the Ld. AO failed to dispose off the objections of the appellant against the satisfaction the case and in law, the Ld. CIT(A) grossly erred in not considering that the Ld. AO failed to provide the copy of the satisfaction note of the AO of the searched person to the appellant during the assessment proceedings; ances of the case and in law, the Ld. CIT(A) grossly erred in sustaining the order of the Ld. AO whereby was made; That on the facts and circumstances of the case and in law the Ld. considering the valuation report furnished by 1, Income Tax Department, New Delhi; 7. That in the facts and circumstances of the case and in law, the order passed by the Ld. CIT(A) and by the Ld. AO is against the principles of natural justice, equity, judicial discipline and fair play; 8. That in the facts and circumstances of the case and in law, the Hon'ble CIT(A) grossly erred in upholding the order of Ld. AO in charging interest under Section 234B and Section 234C of the A 9. That the penalty proceedings initiated under Section 270A and 271D of the Act is incorrect, illegal and bad in law; All of the above grounds of appeal are without prejudice and notwithstanding each other. The Appellant craves leave to add, amend, the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. Any consequential relief, to which the Appellant may be entitled under the law in pursuance of the aforesaid grounds of appeal, or o may be granted.” 4. Briefly stated, the assessee filed return of income for Assessment Year 2019-20 in question on 31.08.2019, declaring total income of A search and seizure operation 1961 [“the Act”] was carried out 17.08.2020. Consequently Officer [“AO”] of the searched the third person i.e. assessee searched person. 5. Pursuant to the ‘satisfaction note Act, the proceedings under section issuance of notice dated 14.01.2022 under section 153C r.w.s. the Act. Based on the ‘satisfaction note course of assessment proceedings, the AO observed that the assessee has ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh That in the facts and circumstances of the case and in law, the order passed by the Ld. CIT(A) and by the Ld. AO is against the principles natural justice, equity, judicial discipline and fair play; That in the facts and circumstances of the case and in law, the Hon'ble CIT(A) grossly erred in upholding the order of Ld. AO in charging interest under Section 234B and Section 234C of the A That the penalty proceedings initiated under Section 270A and 271D of the Act is incorrect, illegal and bad in law; All of the above grounds of appeal are without prejudice and notwithstanding each other. The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. Any consequential relief, to which the Appellant may be entitled under the law in pursuance of the aforesaid grounds of appeal, or otherwise, thus the assessee filed return of income for Assessment Year on 31.08.2019, declaring total income of INR 12,20,970/ A search and seizure operations under section 132 of the Income Tax A 1961 [“the Act”] was carried out on Pranjil Batra Group of cases on Consequently, a ‘satisfaction note’ was prepared by the Assessing Officer [“AO”] of the searched person under section 153C of the Act. The AO of sessee herein also happen to be same AO as that of satisfaction note’ prepared under section under section 153C of the Act were set in motion issuance of notice dated 14.01.2022 under section 153C r.w.s. section satisfaction note’ as well as facts emerging in the course of assessment proceedings, the AO observed that the assessee has ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 3 That in the facts and circumstances of the case and in law, the order passed by the Ld. CIT(A) and by the Ld. AO is against the principles natural justice, equity, judicial discipline and fair play; That in the facts and circumstances of the case and in law, the Hon'ble CIT(A) grossly erred in upholding the order of Ld. AO in charging interest under Section 234B and Section 234C of the Act; That the penalty proceedings initiated under Section 270A and 271D All of the above grounds of appeal are without prejudice and vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of Any consequential relief, to which the Appellant may be entitled under the therwise, thus the assessee filed return of income for Assessment Year INR 12,20,970/-. of the Income Tax Act, n Pranjil Batra Group of cases on was prepared by the Assessing 153C of the Act. The AO of also happen to be same AO as that of under section 153C of the 153C of the Act were set in motion by section 153A of as well as facts emerging in the course of assessment proceedings, the AO observed that the assessee has failed to offer full value of sale consideration was accordingly material in the form of photocopy of Agreement to search in the case of Pranjil Batra Group 75,08,750/- was made to the returned income on the basis of consideration as emanating from the search. While making addition, the AO consideration of the property under Laxmi Nagar, Delhi-110092 amount of sale consideration shown to have been received by the joint owner of the property collectively at INR 1,49,15,000/ assessee alongwith other two 25%) and Shri Tarun Gupta (share of 50%). such property. The AO accordingl sale consideration having regard to the sold and consequently, additions were made which worked out to I 75,08,750/- as under reporting of Short Term Capital gain [“STCG”]. 6. Aggrieved by the additions on account of alleged consideration for the purposes preferred appeal before the relief on the additions so made by the AO. 7. Further aggrieved, assessee filed appeal befo 8. When the matter was called for adverted to the grounds of appeal and made wi of jurisdiction under section towards untenability of additions on merits. 8.1. On aspects of lack of to ‘satisfaction note’ drawn by the AO for assumption of jurisdiction u ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh e of sale consideration on sale of joint property consideration was accordingly, enhanced based on the alleged incriminating material in the form of photocopy of Agreement to Sale found in the course of search in the case of Pranjil Batra Group of cases. The addition of INR was made to the returned income on the basis of substituted as emanating from the Agreement to Sale, found in the course of search. While making addition, the AO inter-alia observed that the consideration of the property under consideration situated at 61, 110092 is found to be at INR 4,49,50,000/- as against the amount of sale consideration shown to have been received by the joint owner collectively at INR 1,49,15,000/-. The property was sold by the assessee alongwith other two persons namely, Shri Pradeep Singh Shri Tarun Gupta (share of 50%). The assessee holds 25% share in such property. The AO accordingly, carried out proportionate substitution of having regard to the percentage share held in the property and consequently, additions were made which worked out to I reporting of Short Term Capital gain [“STCG”]. by the additions on account of alleged under reporting of sale purposes of determination of capital gains, the assessee the Ld.CIT(A). The CIT(A) however, also declined any relief on the additions so made by the AO. assessee filed appeal before the Tribunal. When the matter was called for hearing, the Ld. Counsel for the assessee grounds of appeal and made wide ranging submissions on lack nder section 153C of the Act as well as placed arguments towards untenability of additions on merits. lack of jurisdiction, Ld. Counsel for the assessee referred wn by the AO for assumption of jurisdiction u ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 4 property. The sale enhanced based on the alleged incriminating found in the course of of cases. The addition of INR substituted sale found in the course of observed that the total sale 61, Vijay Block, as against the amount of sale consideration shown to have been received by the joint owners . The property was sold by the namely, Shri Pradeep Singh (share of The assessee holds 25% share in substitution of ld in the property and consequently, additions were made which worked out to INR reporting of Short Term Capital gain [“STCG”]. reporting of sale of determination of capital gains, the assessee wever, also declined any e the Tribunal. for the assessee de ranging submissions on lack 153C of the Act as well as placed arguments for the assessee referred wn by the AO for assumption of jurisdiction under section 153C of the Act and submitted that the apparently suffers from the vice of being vague, non 8.2. Besides, it was contended that alleging under reporting documents found attributable to the assessee. The AO perusal of documents/information The AO further alleged casually without showing whether information/document “belongs to or pertains to the assessee”. the ‘satisfaction note’ has been drawn combined manner for several year identifying as to whether so called documents/information attributable to any of the Assessment Year. The judicial decisions to contend that it is paramount for th nature of documents in a precise manner determination of total income for a particular Assessment Year falling within the period which can be assessed sweepingly covered seven A 22 within the ambit of assessment showing the documents which As judicially viewed by the different rulings, the AO is income under section 153C of the Act only for Assessment Year to which such seized documents relate bearing on the determination of total inc found to be germane for the purposes of assessment o year. This is the marked distinction between the provision of section 153A and 153C of the Act. Since conditions have not been clearly suffers from the vice of non ‘satisfaction note’. Such ‘satisfaction note and without making mention of specific document jurisdiction available under section ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh 153C of the Act and submitted that the ‘satisfaction note apparently suffers from the vice of being vague, non-descript and unintelligible it was contended that the AO has derived unlawful satisfaction reporting of sale consideration without identifying the attributable to the assessee. The AO has vaguely referred to perusal of documents/information involved without identifying the documents. The AO further alleged casually without showing whether the “belongs to or pertains to the assessee”. has been drawn under section 153C of the Act in a several years starting from 2015-16 to 2021 identifying as to whether so called documents/information attributable to any The Ld. Counsel for the assessee adverted to various judicial decisions to contend that it is paramount for the AO to spell out the ments in a precise manner which has a bearing on the total income for a particular Assessment Year falling within the period which can be assessed under section 153C of the Act. The AO has AYs starting from Assessment Year 2016 within the ambit of assessment under section 153C of the Act without showing the documents which is found to relate to a given Assessment Year. viewed by the different rulings, the AO is entitled 153C of the Act in the hands of non-searched person only for Assessment Year to which such seized documents relate ing on the determination of total income. The material unearthed for the purposes of assessment of a given assessment the marked distinction between the provision of section 153A and conditions have not been fulfilled; the ‘satisfaction note vice of non-application of mind as well as non satisfaction note’ drawn sweepingly to cover all AYs and without making mention of specific document does not give rise to the under section 153C of the Act. The Ld. Counsel ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 5 satisfaction note’ prepared and unintelligible. derived unlawful satisfaction sale consideration without identifying the has vaguely referred to without identifying the documents. the so called Significantly, 153C of the Act in a 16 to 2021-22 without identifying as to whether so called documents/information attributable to any for the assessee adverted to various e AO to spell out the bearing on the total income for a particular Assessment Year falling within 153C of the Act. The AO has starting from Assessment Year 2016-17 to 2021- 153C of the Act without relate to a given Assessment Year. to assess the searched person only for Assessment Year to which such seized documents relate to and has he material unearthed must be f a given assessment the marked distinction between the provision of section 153A and satisfaction note’ application of mind as well as non-speaking drawn sweepingly to cover all AYs does not give rise to the Counsel for the assessee thus, submitted that in the absenc section 153C of the Act, the jurisdiction to assess the returned income section 153C of the Act is void 9. The Ld. Counsel for the assessee drawing satisfaction for the purposes of assumption of section 153C of the Act, the assessment for Assessment Year 2019 concluded/completed under per the judgement referred by Hon’ble High Court of Delhi in the case of vs Ankush Saluja [2020] made in the absence of any incriminating documents found in the course of search. The Ld. Counsel fo objection to the impugned dated 06.12.2022. The AO order dated 08.12.2022 by a cryptic order 10. On merits, the Ld. Counsel made, are not justified for multiple reasons: [i] the Agreement to S search in the case of Pranjil Batra cannot be regarded as sacrosanct for the reason such as the Agreement to S signed by the S found in reason [ii] the valuation report obtained by the AO from the Department Valuation Officer [“DVO”] the property at INR of INR 1,49,15,00 between FMV of the property the assessee. Hence, in the light of the report of the DVO, the contents of the Agreement to S ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh submitted that in the absence of fulfillment of pre section 153C of the Act, the jurisdiction to assess the returned income void, ab-initio and a nullity in law. for the assessee next submitted that at the time of drawing satisfaction for the purposes of assumption of jurisdiction 153C of the Act, the assessment for Assessment Year 2019 concluded/completed under the normal provisions of Act. Consequently, as per the judgement referred by Hon’ble High Court of Delhi in the case of 115 taxmann.com 370 (Delhi), no addition could be made in the absence of any incriminating documents found in the course of Counsel for the assessee pointed out that the assessee raised objection to the impugned ‘satisfaction note’, prepared by the AO vide letter dated 06.12.2022. The AO, in turn, disposed off the objection vide interim by a cryptic order. Counsel for the assessee pointed out the additions made, are not justified for multiple reasons:- the Agreement to Sale dated 06.08.2018 found in the search in the case of Pranjil Batra cannot be regarded as sacrosanct for the reason such as the Agreement to S signed by the Shri Pranjil Batra. Secondly the Agre in reason was only a zerox copy; the valuation report obtained by the AO from the Department Valuation Officer [“DVO”] itself indicate the fair market value of the property at INR 1,68,59,788/- as against the transaction price of INR 1,49,15,000/-. Thus, there is a very meager difference FMV of the property and actual consideration the assessee. Hence, in the light of the report of the DVO, the contents of the Agreement to Sale towards sale ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 6 pre-requisites of section 153C of the Act, the jurisdiction to assess the returned income under submitted that at the time of jurisdiction under 153C of the Act, the assessment for Assessment Year 2019-20 stood e normal provisions of Act. Consequently, as per the judgement referred by Hon’ble High Court of Delhi in the case of Pr.CIT no addition could be made in the absence of any incriminating documents found in the course of r the assessee pointed out that the assessee raised AO vide letter disposed off the objection vide interim for the assessee pointed out the additions dated 06.08.2018 found in the course of search in the case of Pranjil Batra cannot be regarded as sacrosanct for the reason such as the Agreement to Sale was not the Agreement to Sale the valuation report obtained by the AO from the Department self indicate the fair market value of the transaction price . Thus, there is a very meager difference consideration received by the assessee. Hence, in the light of the report of the DVO, the towards sale consideration shown to be agreed and the sale consideration decaled is rather vindicated. 11. The Ld. Counsel for the assessee pointed out that such Agreements are at times, prepared to negotiate better price by the sellers from third parties. Nothing turns on such unsigned MoU. submitted that even on merits, the additions are not sustainable FMV vouched by DVO. 12. The Ld.CIT DR for the the additions made by the AO and endorsed by the Ld.CIT(A). also adverted to the ‘satisfaction note reiterated the nature of transaction under bearing on the determination has rightly assumed the jurisdiction based on such satisfaction note prima-facie reasons. The Ld.CIT DR also referred to the decision rendered by the Hon’ble Delhi High Court [2024] 160 taxmann.com 606 (Delhi) covering multiple years carries no infirmity in law. The AO is entitled to prepare a common satisfaction note covering the various Assessment Years falling within the limitation period available for assessment u of the Act. 12.1. The Ld.CIT DR also defended the action of the AO in placing reliance over the Agreement to Sale found at the premises of S submitted that on reading of understanding between the assessee, sellers and the corresponding buyer Pranjil Batra was to acquire the property at a higher 4,49,50,000/- and while registering the collusion with the purchaser have depriving the Revenue of its lawful taxes. ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh shown to be agreed at INR 4,49,50,000/- cannot be relied upon and the sale consideration decaled is rather vindicated. for the assessee pointed out that such Agreements are prepared to negotiate better price by the sellers from third parties. Nothing turns on such unsigned MoU. The Ld. Counsel for the assessee thus submitted that even on merits, the additions are not sustainable Ld.CIT DR for the Revenue on the other hand, strongly the additions made by the AO and endorsed by the Ld.CIT(A). The satisfaction note’ and submitted that the AO has broadly reiterated the nature of transaction under consideration which m determination of total income of the assessee. Therefore, the AO has rightly assumed the jurisdiction based on such satisfaction note Ld.CIT DR also referred to the decision rendered by Court in the case of Indian National Congress vs DCIT [2024] 160 taxmann.com 606 (Delhi) to contend that the ‘satisfaction note covering multiple years carries no infirmity in law. The AO is entitled to prepare a common satisfaction note covering the various Assessment Years lling within the limitation period available for assessment under section Ld.CIT DR also defended the action of the AO in placing reliance over found at the premises of Shri Pranjil Batra t on reading of Agreement to Sale, it will be evident that the understanding between the assessee, sellers and the corresponding buyer Pranjil Batra was to acquire the property at a higher consideration and while registering the Sale Agreement, the assessee i collusion with the purchaser have drastically reduced the sale of its lawful taxes. ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 7 be relied upon and the sale consideration decaled is rather vindicated.. for the assessee pointed out that such Agreements are, prepared to negotiate better price by the sellers from third parties. r the assessee thus, submitted that even on merits, the additions are not sustainable in view of on the other hand, strongly supported The Ld.CIT DR and submitted that the AO has broadly which may have total income of the assessee. Therefore, the AO has rightly assumed the jurisdiction based on such satisfaction note providing Ld.CIT DR also referred to the decision rendered by ian National Congress vs DCIT satisfaction note’ covering multiple years carries no infirmity in law. The AO is entitled to prepare a common satisfaction note covering the various Assessment Years nder section 153C Ld.CIT DR also defended the action of the AO in placing reliance over ri Pranjil Batra and , it will be evident that the understanding between the assessee, sellers and the corresponding buyer, Shri consideration of INR Sale Agreement, the assessee in drastically reduced the sale consideration 12.2. The Ld.CIT DR thus pointed out that the lack of jurisdiction as pleaded on behalf of the assessee, is totally unjustified in the facts of the present case. The satisfaction note broadly provides the nature of undisclosed income emanating from the incriminating material found in the course of search. Ld.CIT DR for the Revenue fair market value as not bearing in the instant case where the assessee and the purchaser have mutually agreed for a higher 13. In re-joinder, the Ld. aspects and submitted that Batra dated 18.12.2022 placed in the Paper Book also supports the sale consideration received by the assessee Shri Pranjil Batra, the tot transaction stands at INR 1,49,15,000/ Agreement to Sale remaining consequence, more so, when the purchase supports the veracity of actual sale 14. We have carefully considered assessment order, first appellate and relied upon and the case laws cited. 15. The controversy involved in the present case jurisdiction usurped under section 153C as alleged on behalf of the assessee; and [b] additions unjustified on merits as claimed by the assessee. 16. The assessee has made wide ranging jurisdiction assumed under section income in a concluded assessment. The assessee has contested the assumption of jurisdiction ‘satisfaction note’ prepared by the AO of the searched person as well as that of AO of the assessee to usurp jurisdiction under section 153C of the Act. ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh The Ld.CIT DR thus pointed out that the lack of jurisdiction as pleaded assessee, is totally unjustified in the facts of the present case. The satisfaction note broadly provides the nature of undisclosed income emanating from the incriminating material found in the course of search. Ld.CIT DR for the Revenue also submitted that report of DVO showing lesser as not bearing in the instant case where the assessee and the have mutually agreed for a higher consideration. Ld. Counsel for the assessee reiterated the factual ts and submitted that apart from the DVO report, affidavit of S Batra dated 18.12.2022 placed in the Paper Book also supports the sale received by the assessee. As per the affidavit of the p ri Pranjil Batra, the total sale consideration involved in the property stands at INR 1,49,15,000/- only and no more. Some remaining unsigned by the purchaser is thus when the purchaser as well as the DVO repo actual sale consideration. considered the rival submissions and perused the appellate order, documents and material referred the case laws cited. The controversy involved in the present case are two fold under section 153C as alleged on behalf of the assessee; additions unjustified on merits as claimed by the assessee. The assessee has made wide ranging submissions towards lack of nder section 153C of the Act to re-assess the returned in a concluded assessment. The assessee has contested the jurisdiction on the strength of alleged infirmities prepared by the AO of the searched person as well as that of to usurp jurisdiction under section 153C of the Act. ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 8 The Ld.CIT DR thus pointed out that the lack of jurisdiction as pleaded assessee, is totally unjustified in the facts of the present case. The satisfaction note broadly provides the nature of undisclosed income emanating from the incriminating material found in the course of search. The ed that report of DVO showing lesser as not bearing in the instant case where the assessee and the for the assessee reiterated the factual from the DVO report, affidavit of Shri Pranjil Batra dated 18.12.2022 placed in the Paper Book also supports the sale s per the affidavit of the purchaser involved in the property ome photocopy of is thus, of no as well as the DVO report the rival submissions and perused the documents and material referred to two fold:-[a] lack of under section 153C as alleged on behalf of the assessee; additions unjustified on merits as claimed by the assessee. submissions towards lack of assess the returned in a concluded assessment. The assessee has contested the alleged infirmities in the prepared by the AO of the searched person as well as that of to usurp jurisdiction under section 153C of the Act. 17. The ‘satisfaction note searched person) being assumption of jurisdiction. It would be apt recorded hereunder:- “A search was conducted in the case of Shri Pranjil Batra on 17/08/2020. During the proceedings Pranjil Batra, incriminating documents were found and seized. There are various documents/ inform acquired huge wealth and has invested bank accounts in the names of various persons and entities. Most of these persons are related to Sh. Pranjil Batra or his employees. Most of the entities are paper entities and are controlled and managed by Sh. Pranjil Batra. However, in sake of name Sh. Pranjil Batra ha relatives/employees as directors/share holders in these entities. On perusal of such documents/information it has been observed that many of such information/ documents belongs to or pertains to the assessee as per brief description given u S.No. Premise/Party/Annexure /Page No. 1. Premise of Shri Pranjil Baua. F 193 Laxmi Nagar, New Delhi Panchnama was signed on 18/08/2020. The above documents have been examined and I am, being the assessing officer of the searched person. satisfied that the information contained in documents seized during the course of search u/s 132 of the 1.T. Act, 1961 at the premises of Shri Pranjil Bat a case of a person other than the person referred to in Section 153A ie. ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh satisfaction note’ recorded by the AO of assessee germane to the determination of challenge to . It would be apt to reproduce the ‘satisfaction note’ A search was conducted in the case of Shri Pranjil Batra on 17/08/2020. proceedings of Search and Seizure action at premises of Shri Pranjil Batra, incriminating documents were found and seized. There are various documents/ information which suggests that Sh. Pranjil Batra has acquired huge wealth and has invested in various properties, d n the names of various persons and entities. Most of these persons are related to Sh. Pranjil Batra or his employees. Most of the entities are paper entities and are controlled and managed by Sh. Pranjil Batra. However, in sake of name Sh. Pranjil Batra has appointed his relatives/employees as directors/share holders in these entities. On perusal of such documents/information it has been observed that many of such information/ documents belongs to or pertains to the assessee as per brief description given under:- Premise/Party/Annexure Description of document seized Premise of Shri Pranjil Baua. F 193 Laxmi Nagar, New Sh. Pranjil Batra has entered into a transaction of sale/purchase of property with the assessee. As per incriminating documents and of sale deed agreement. has been evident that there is a huge difference in the consideration pr agreement and sale deed. Further, cash exchange is also involved in this transaction. As per incriminating documents there is a difference of Rs. 300 Lacs and cash exchange of Rs. 90 Lacs. Panchnama was signed on 18/08/2020. The above documents have been examined and I am, being the assessing officer of the searched person. satisfied that the information contained in documents seized during the course of search u/s 132 of the 1.T. Act, 1961 at the premises of Shri Pranjil Batra, pertains to the assessee, who is a case of a person other than the person referred to in Section 153A ie. ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 9 recorded by the AO of assessee (also AO of determination of challenge to to reproduce the ‘satisfaction note’ A search was conducted in the case of Shri Pranjil Batra on 17/08/2020. n at premises of Shri Pranjil Batra, incriminating documents were found and seized. There are that Sh. Pranjil Batra has in various properties, deposited in n the names of various persons and entities. Most of these persons are related to Sh. Pranjil Batra or his employees. Most of the entities are paper entities and are controlled and managed by Sh. Pranjil s appointed his relatives/employees as directors/share holders in these entities. On perusal of such documents/information it has been observed that many of such information/ documents belongs to or pertains to the assessee as per has entered into a transaction of sale/purchase of property with the assessee. As per incriminating documents and of sale deed agreement. has been evident that there is a huge difference in the consideration price as per cash exchange is also involved in this transaction. As per incriminating documents there is a difference of Rs. 300 Lacs and The above documents have been examined and I am, being the assessing officer of the searched person. satisfied that the information contained in documents seized during the course of search u/s 132 of the 1.T. Act, , pertains to the assessee, who is a case of a person other than the person referred to in Section 153A ie. Shri Pranjil Batra. Hence, the information is being sent to the assessing officer of the such other person. Further, I am satisfied within the mean of Section 153C r.w.s. 153A of the Act, that the documents have bearing on the determination of the total income of Renu Singh for the A.Y. 2015 2021-22.” 18. The AO being common to the searched person as well as the assessee. The ‘satisfaction note’ prepared in the capacity of the AO of the searched person is identical and therefore, not reproduced. 19. Section 153C of the Act pertains to the assessment if income in cases where certain documents, assess or books of accounts etc. pertains to or relates to person other than the person on whom search was conducted under section 132 of the Act or requisition section allow the AO to initiate proceedings against any other person (not the searched person) if there are indications of undisclosed income. A key component of initiating search proceedings under section 153C of ‘’satisfaction note’ to be recorded by the AO of the searched person as well as AO of the third person. The ‘satiation note’ is the first step and a foundational document to determine the validity of the assessment process against a third parties whose documents or assets etc. are found in a search. Satisfaction note is critical because it serves as a safeguard against arbitrary proceedings and ensures that the powers of section 153C of the Act is exercise judiciously. It is a formal statutory requirement without which the proceedings against other person could be considered invalid. The ‘satisfaction note’ being so critical and powers under section 153C of the Act being contingent upon such Note, the information contained therein need to the ‘satisfaction note’ is exp search and that it pertains to or relates to third person. Such material found should reliably indicate or suggest the bearing of such documen to the income in the hands of third person. The ‘satisfaction note’ should record such material to provide accountability of the AO and to justify the ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Shri Pranjil Batra. Hence, the information is being sent to the assessing officer of the such other person. Further, I am satisfied within the mean of Section 153C r.w.s. 153A of the Act, that the documents have bearing on the determination of the total income of Renu Singh for the A.Y. 2015 The AO being common to the searched person as well as the assessee. note’ prepared in the capacity of the AO of the searched person is identical and therefore, not reproduced. Section 153C of the Act pertains to the assessment if income in cases where certain documents, assess or books of accounts etc. pertains to or relates to person other than the person on whom search was conducted under section 132 of the Act or requisitioned under section 132A of the Act. This section allow the AO to initiate proceedings against any other person (not the searched person) if there are indications of undisclosed income. A key component of initiating search proceedings under section 153C of ‘’satisfaction note’ to be recorded by the AO of the searched person as well as AO of the third person. The ‘satiation note’ is the first step and a foundational document to determine the validity of the assessment process against a third arties whose documents or assets etc. are found in a search. Satisfaction note is critical because it serves as a safeguard against arbitrary proceedings and ensures that the powers of section 153C of the Act is exercise judiciously. utory requirement without which the proceedings against other person could be considered invalid. The ‘satisfaction note’ being so critical and powers under section 153C of the Act being contingent upon such Note, the information contained therein need to be actionable. This being so, the ‘satisfaction note’ is expected to identify the relevant material found in search and that it pertains to or relates to third person. Such material found should reliably indicate or suggest the bearing of such documen to the income in the hands of third person. The ‘satisfaction note’ should record such material to provide accountability of the AO and to justify the ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 10 Shri Pranjil Batra. Hence, the information is being sent to the assessing officer of the such other person. Further, I am satisfied within the meaning of Section 153C r.w.s. 153A of the Act, that the documents have bearing on the determination of the total income of Renu Singh for the A.Y. 2015-16 to The AO being common to the searched person as well as the assessee. note’ prepared in the capacity of the AO of the searched Section 153C of the Act pertains to the assessment if income in cases where certain documents, assess or books of accounts etc. pertains to or relates to person other than the person on whom search was conducted under ed under section 132A of the Act. This section allow the AO to initiate proceedings against any other person (not the searched person) if there are indications of undisclosed income. A key component of initiating search proceedings under section 153C of the Act is the ‘’satisfaction note’ to be recorded by the AO of the searched person as well as AO of the third person. The ‘satiation note’ is the first step and a foundational document to determine the validity of the assessment process against a third arties whose documents or assets etc. are found in a search. Satisfaction note is critical because it serves as a safeguard against arbitrary proceedings and ensures that the powers of section 153C of the Act is exercise judiciously. utory requirement without which the proceedings against other person could be considered invalid. The ‘satisfaction note’ being so critical and powers under section 153C of the Act being contingent upon such be actionable. This being so, to identify the relevant material found in search and that it pertains to or relates to third person. Such material found should reliably indicate or suggest the bearing of such documents/assets etc. to the income in the hands of third person. The ‘satisfaction note’ should record such material to provide accountability of the AO and to justify the initiation of proceedings against other person. In summary, such Note should set the narrative in an objective manner scrutiny of such document, if so called for. 20. The assessee contends that ‘satisfaction note’ which is the first step for assumption of jurisdiction under section 153C of the Act and p foundation for conferment of jurisdiction is plagued with infirmities. Viz: [i] the ‘satisfaction note’ has person and that of assessee collectively for the period AY 2015 to AY 2021-22 without respect of any [ii] the AO has thrown giving reference to any concrete incriminating material of a particular assessment Year; [iii] the act of the AO making sweeping averment note that documents have bearing on determination of total income of Smt.Renu Singh for AY 2015 foundation as the AO has even f documents and fu /pertained to which Assessment Year; [iv] the AO on receipt of searched person must received and ascertain precisely the specific year to which incriminating material relate determination/ascertainment is complete that the flood gate assessment would open qua those particular years. The of notice cannot be an automated function unconnected to this exercise of analysis and ascertainment by the AO judgement rendered in the case of DCIT [2023] 157 taxmann.com 2 ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh initiation of proceedings against other person. In summary, such Note should rative in an objective manner, as far as possible, to enable judicial scrutiny of such document, if so called for. The assessee contends that ‘satisfaction note’ which is the first step for assumption of jurisdiction under section 153C of the Act and p for conferment of jurisdiction is plagued with multiple the ‘satisfaction note’ has been recorded by the AO of searched person and that of assessee collectively for the period AY 2015 22 without identifying the incriminating material in any particular Assessment Year; the AO has thrown open the whole basket of six years without giving reference to any concrete incriminating material of a particular assessment Year; f the AO making sweeping averment in the satisfaction documents have bearing on determination of total income of Smt.Renu Singh for AY 2015-16 to 2020-21, is without legal foundation as the AO has even failed to name the documents and further failed to mention as to how it is related /pertained to which Assessment Year; on receipt of material/documents from the AO searched person must necessarily apply his mind on received and ascertain precisely the specific year to which incriminating material relates. It is only when this determination/ascertainment is complete that the flood gate assessment would open qua those particular years. The of notice cannot be an automated function unconnected to this exercise of analysis and ascertainment by the AO i judgement rendered in the case of Agni Vishnu Feature Pvt.Ltd. vs DCIT [2023] 157 taxmann.com 242 (Madras); ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 11 initiation of proceedings against other person. In summary, such Note should to enable judicial The assessee contends that ‘satisfaction note’ which is the first step for assumption of jurisdiction under section 153C of the Act and provides multiple legal been recorded by the AO of searched person and that of assessee collectively for the period AY 2015-16 identifying the incriminating material in hole basket of six years without giving reference to any concrete incriminating material of a in the satisfaction documents have bearing on determination of total income is without legal name the alleged mention as to how it is related material/documents from the AO of the n the material received and ascertain precisely the specific year to which . It is only when this determination/ascertainment is complete that the flood gates of an assessment would open qua those particular years. The issuance of notice cannot be an automated function unconnected to this in the light of Agni Vishnu Feature Pvt.Ltd. vs [v] the ‘satisfaction note’ do not provide any seized from the premises of Shri Pranjil Batra mentioned with regard to Annexure No., page no. of the panchnama through which the documents were seized and the basis which prompted the AO t pertains to the assessee herein. The documents, type of documents, name of parties, amount of transaction, assessment year to which such document relate to etc. is not discernible from the such information, no reasonable derive his independent satisfaction which impacts the foundational jurisdiction to assess third persons. The ‘satisfaction note’ also fails to unequivocall purchase transaction of the property. The AO has expressions i.e. purchase in the satisfaction note; [vi] the ‘satisfaction note’ do not even mention th or address of the property to which alleged documents belong to; [vii] the ‘satisfaction note’ has made an INR 90,00,000/ different figure of INR 3,00, [viii] the ‘satisfaction note’ is clearly very generic detail of the transacti 21. We find potency in, in the ‘satisfaction note’. The Hon’ble De Commodities Ltd. Vs ITO 161 taxmann.com 485 imperatives of a ‘satisfaction note’, incriminating material in respect of particular AY will not automatically confe jurisdiction to invoke section mentioned therein. The Hon’ble Delhi High Court further observed that discovery of material for a particular AY is not intended to trigger a chain ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh ion note’ do not provide any particulars seized from the premises of Shri Pranjil Batra. N mentioned with regard to Annexure No., page no. of the panchnama through which the documents were seized and the basis which prompted the AO to record satisfaction that the same pertains to the assessee herein. The basic facts such as documents, type of documents, name of parties, amount of transaction, assessment year to which such document relate to etc. is not discernible from the satisfaction note. In the absence of such information, no reasonable person instructed in law can derive his independent satisfaction which impacts the foundational jurisdiction to assess third persons. The ‘satisfaction note’ also unequivocally ascertain whether it is a sale transaction or a purchase transaction of the property. The AO has used expressions i.e. purchase and sale for the impugned transaction in the satisfaction note; the ‘satisfaction note’ do not even mention the details of co or address of the property to which alleged documents belong to; the ‘satisfaction note’ has made an allegation of cash exchange of NR 90,00,000/- but the assessment order refers to a figure of INR 3,00,35,000/-; and the ‘satisfaction note’ is clearly very generic and devoid of any basic detail of the transaction in question. the plea of assessee towards allegation of infirmities in the ‘satisfaction note’. The Hon’ble Delhi High Court in the case of Ltd. Vs ITO 161 taxmann.com 485 (Delhi) deftly expounded the imperatives of a ‘satisfaction note’, and observed that unearthing of incriminating material in respect of particular AY will not automatically confe jurisdiction to invoke section 153C of the Act in respect of all the AYs mentioned therein. The Hon’ble Delhi High Court further observed that discovery of material for a particular AY is not intended to trigger a chain ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 12 particulars of documents . Nothing is mentioned with regard to Annexure No., page no. of the panchnama through which the documents were seized and the o record satisfaction that the same basic facts such as nature of documents, type of documents, name of parties, amount of transaction, assessment year to which such document relate to satisfaction note. In the absence of rson instructed in law can derive his independent satisfaction which impacts the foundational jurisdiction to assess third persons. The ‘satisfaction note’ also ascertain whether it is a sale transaction or a used both the and sale for the impugned transaction e details of co-seller or address of the property to which alleged documents belong to; allegation of cash exchange of but the assessment order refers to an altogether devoid of any basic allegation of infirmities lhi High Court in the case of Sakham deftly expounded the observed that unearthing of incriminating material in respect of particular AY will not automatically confer 153C of the Act in respect of all the AYs mentioned therein. The Hon’ble Delhi High Court further observed that discovery of material for a particular AY is not intended to trigger a chain reaction or have a water fall ‘relevant AYs’ under section 153C Of the Act. The Hon’ble Delhi High Court underscored well settled distinction which the law recognizes between the existence of power and the exercise thereof and thus is satisfied that the material gathered can potentially impact the determination of total income, it will be abrupt exercise of powers or assessing all over again of the AYs covered in the block that co form part of block of relevant AYs. For holding so, the Hon’ble Delhi High Court relied upon the judgement the case of Sinhgad Technical Education Society Court held that ‘the assessment under section 153C could be made only for the year to which material relates to and exercise of power under section 153C of the Act in respect of other AYs would not sustain Court also noted that the AO is bound to as the material recovered relates and AYs which can then under section 153C of the Act will have to be necessarily which the assessment is likely to be influenced or impacted by the discovered. The Hon’ble Delhi High Court where material discovered in the course of search constituting incriminating material for more than one AY situation, it will be incumbent material is likely to be incriminating for more than one AY and thus warranting the action under section 153C of the Act for years in addition to those to which material may be directly relatable. Thus, of mind and recording of reasons for drawing satisfaction as contemplated under section 153C of the Act qua different AYs is paramount. The Hon’ble Delhi High Court noticeabl of the Act is clearly not intended to be of material by the Jurisdictional section 153C of the Act will have the Jurisdictional AO that the material handed over and received pursuant to a ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh a water fall effect on all the AYs which can form part of the ‘relevant AYs’ under section 153C Of the Act. The Hon’ble Delhi High Court well settled distinction which the law recognizes between the existence of power and the exercise thereof and thus, held that unless the AO is satisfied that the material gathered can potentially impact the determination abrupt exercise of powers in mechanically re over again of the AYs covered in the block that co part of block of relevant AYs. For holding so, the Hon’ble Delhi High Court relied upon the judgement delivered by the Hon’ble Supreme Court in Sinhgad Technical Education Society wherein the Hon’ble Supreme e assessment under section 153C could be made only for the year to which material relates to and exercise of power under section 153C of the Act in respect of other AYs would not sustain’. The Hon’ble Delhi High Court also noted that the AO is bound to ascertain and identify the AY to which the material recovered relates and AYs which can then be subject to action under section 153C of the Act will have to be necessarily those which the assessment is likely to be influenced or impacted by the discovered. The Hon’ble Delhi High Court went one step further to hold that where material discovered in the course of search has the potential of constituting incriminating material for more than one AYs, even in such a umbent upon the AO to duly record reasons that is likely to be incriminating for more than one AY and thus warranting the action under section 153C of the Act for years in addition to may be directly relatable. Thus, a nuanced application of mind and recording of reasons for drawing satisfaction as contemplated under section 153C of the Act qua different AYs is paramount. The Hon’ble Court noticeably held that issuance of a notice under section 153C Act is clearly not intended to be an inevitable consequence to the receipt Jurisdictional AO and that the initiation of action under section 153C of the Act will have to be founded on a formation of the Jurisdictional AO that the material handed over and received pursuant to a ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 13 effect on all the AYs which can form part of the ‘relevant AYs’ under section 153C Of the Act. The Hon’ble Delhi High Court well settled distinction which the law recognizes between the ld that unless the AO is satisfied that the material gathered can potentially impact the determination in mechanically re-opening over again of the AYs covered in the block that could possibly part of block of relevant AYs. For holding so, the Hon’ble Delhi High by the Hon’ble Supreme Court in wherein the Hon’ble Supreme e assessment under section 153C could be made only for the year to which material relates to and exercise of power under section 153C of . The Hon’ble Delhi High certain and identify the AY to which subject to action ose in respect of which the assessment is likely to be influenced or impacted by the material step further to hold that as the potential of , even in such a upon the AO to duly record reasons that is likely to be incriminating for more than one AY and thus, warranting the action under section 153C of the Act for years in addition to nuanced application of mind and recording of reasons for drawing satisfaction as contemplated under section 153C of the Act qua different AYs is paramount. The Hon’ble held that issuance of a notice under section 153C inevitable consequence to the receipt the initiation of action under rmation of opinion by the Jurisdictional AO that the material handed over and received pursuant to a search is likely to influence the determination of total income and would be relevant for the purposes 153C of the Act. 22. The observation of the Hon’ble provides vehement support to the plea taken by the assessee on aspects of jurisdiction flowing from ‘satisfaction note’ scrutiny defies most of the paramete satisfaction. While exercising the power under section 153C of the Act, neither has the AO related the material found in the course of search with a particular AY while making a consolidated details of transaction to enable an any independent opinion 153C of the Act is indeed warranted in the facts of the case. Mere drawing of perfunctory satisfaction without meeting basic ingredients of tangible & descript information and application of mind thereon has no standing in law and would not confer drastic 153C of the Act on a person other than assumed based on such lackadaisical infirmities cannot be countenanced in the assessee towards lack of jurisdiction based on cryptic and non satisfaction thus deserves to be sustained. ‘satisfaction note’ is not a bar in law the revenue, but however, need to be specified against each year covered in the satisfaction note to application of mind and initiation of action under section 153C of the Act qua such assessment years. The AO has failed to do so. issued under section 153C of the Act passed under section 153C o quashed. ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh search is likely to influence the determination of total income and would be purposes of assessment/re-assessment in terms of section he observation of the Hon’ble Delhi High Court noted above, clearly provides vehement support to the plea taken by the assessee on aspects of flowing from ‘satisfaction note’. The ‘satisfaction scrutiny defies most of the parameters expected of him while drawing satisfaction. While exercising the power under section 153C of the Act, neither has the AO related the material found in the course of search with a particular AY while making a consolidated ‘satisfaction note’ nor provided any requisite nable an independent person to ascertain an any independent opinion on facts stated in Note that invocation of section 153C of the Act is indeed warranted in the facts of the case. Mere drawing of satisfaction without meeting basic ingredients of providing descript information and application of mind thereon has no standing in law and would not confer drastic jurisdiction of assessment u/s on a person other than searched person. The such lackadaisical ‘satisfaction note’ beset infirmities cannot be countenanced in law. The objection raised on behalf the assessee towards lack of jurisdiction based on cryptic and non satisfaction thus deserves to be sustained. While recording a consolidated a bar in law per se as rightly contended the revenue, but however, in the same vain, the documents/assets searched need to be specified against each year covered in the satisfaction note to application of mind and initiation of action under section 153C of the Act qua such assessment years. The AO has failed to do so. As a corolla issued under section 153C of the Act and consequent assessment order passed under section 153C of the Act is vitiated in law and requires to be ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 14 search is likely to influence the determination of total income and would be assessment in terms of section High Court noted above, clearly provides vehement support to the plea taken by the assessee on aspects of satisfaction note’ under while drawing satisfaction. While exercising the power under section 153C of the Act, neither has the AO related the material found in the course of search with a particular d any requisite person to ascertain and form that invocation of section 153C of the Act is indeed warranted in the facts of the case. Mere drawing of a providing some descript information and application of mind thereon has no of assessment u/s . The jurisdiction eset with vital . The objection raised on behalf of the assessee towards lack of jurisdiction based on cryptic and non-descript While recording a consolidated contended on behalf of the documents/assets searched need to be specified against each year covered in the satisfaction note to depict application of mind and initiation of action under section 153C of the Act qua As a corollary, the notice consequent assessment order the Act is vitiated in law and requires to be 23. We however, also advert to the objections raised on merits of the additions made in the assessment order photographs of the Agreement to Sale dated 06.08.2018 and alleged that the total sale consideration of the property at INR 4,49,50,000/- instead of amount of assessee holds 25% share in such property. The assessee on the other hand, claims that as per the Sale Agreement, the property sold as per stands at actual sale consideration 25% shares and accordingly, declared the capital gains based on actual such sale consideration. The AO between the sale consideration is undisclosed part of the transaction. The basis of making additions is the photocopy of the Agreement to Sale alon premises of searched person any inquiry with the purchase Department referred said property section 142A of the Act. The DVO issued a Valuation total value of the property is INR 1,68,59,788/ of land was valued at INR 94,71,341/ INR 73,88,447/-. The assessee contends that the valuation report derived by the DVO after inquiry is quite assessee. The staggering differen Deed is thus unconceivable and totally contrary to the of the property. The Report cause of the assessee and cannot be brushed aside while weighi position and giving over Agreement to Sale found from the premises of searched person assessee has also placed wherein it is affirmed that the sale sacrosanct. In the light of the Sale Deed, the any inquiry by the Revenue ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh We however, also advert to the objections raised on merits of the the assessment order. On facts, the AO has r photographs of the Agreement to Sale dated 06.08.2018 and alleged that the of the property situated at Laxmi Nagar, Delhi stands instead of amount of INR 1,49,15,000/- assessee holds 25% share in such property. The assessee on the other hand, claims that as per the Sale Agreement, the property sold as per consideration at INR 1,49,15,000/- in which she ho 25% shares and accordingly, declared the capital gains based on actual such . The AO on the other hand, alleged that the difference consideration mentioned in Agreement to Sale and Sale Deed he transaction. The basis of making additions is the photocopy of the Agreement to Sale alone as stated to be found from the premises of searched person. No other documents of independent nature or any inquiry with the purchase by the AO is brought on record. Noticeably Department referred said property to the DVO for determination of FMV under section 142A of the Act. The DVO issued a Valuation Report as per which the total value of the property is INR 1,68,59,788/- approximately wherein the of land was valued at INR 94,71,341/- and the cost of building was valued at . The assessee contends that the valuation report derived by quite close to the sale consideration declared ering difference as per the Agreement to Sale and Sale Deed is thus unconceivable and totally contrary to the estimated Report of the DVO thus assumes significance for the cause of the assessee and cannot be brushed aside while weighing the factual over-riding importance to a photocopy of Agreement to Sale found from the premises of searched person. B an affidavit from the purchase, Shri Pranji wherein it is affirmed that the sale consideration noted in the Sale Deed is sacrosanct. In the light of the Sale Deed, the DVO report and in the absence of evenue on facts to support the amount mentioned in the ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 15 We however, also advert to the objections raised on merits of the . On facts, the AO has relied on some photographs of the Agreement to Sale dated 06.08.2018 and alleged that the i Nagar, Delhi stands and that the assessee holds 25% share in such property. The assessee on the other hand, claims that as per the Sale Agreement, the property sold as per ‘Sale Deed’ in which she holds 25% shares and accordingly, declared the capital gains based on actual such , alleged that the difference mentioned in Agreement to Sale and Sale Deed he transaction. The basis of making additions is the e as stated to be found from the . No other documents of independent nature or Noticeably, the for determination of FMV under as per which the approximately wherein the cost of building was valued at . The assessee contends that the valuation report derived by declared by the as per the Agreement to Sale and Sale estimated market value thus assumes significance for the ng the factual photocopy of unsigned . Besides, the an affidavit from the purchase, Shri Pranjil Batra noted in the Sale Deed is report and in the absence of to support the amount mentioned in the photocopy of the Agreement to sale assessee cannot be discredited amount unconnected to the grounds raised on merits also. 24. Judged from any angle, the action of the AO does not appear justified. The order of the Ld.CIT(A) is thus, set aside and the AO is directed to restore the position claimed by the assessee and delete the ad 25. In the result, the appeal of the assessee is allowed. ITA No.2810/Del/2024 [AY : 26. The factual matrix and the case of Renu Singh (supra) another co-owner of the property Singh (supra). Thus, the deliberations made in the case of Smt. Renu Singh in ITA No.2806/Del/2024(supra) shall apply consonance with the view expressed in ITA No.2806/Del/2024, the additions made in the hands of the assessee, Shri No.2810/Del/2024 stands deleted. 27. In the result, the appeal of the assessee is allowed. 28. In the combined result, both appeals o Singh in ITA No.2806/Del/2024 [Assessment Year 2019 Singh in ITA No.2810/Del/2024 [Assessment Year 2019 Order pronounced in the open Court on Sd/- (VIMAL KUMAR) JUDICIAL MEMBER * Amit Kumar * ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh photocopy of the Agreement to sale, the sale consideration declared discredited out rightly and substituted by whopping amount unconnected to the grounds realities. We thus, find force in the plea from any angle, the action of the AO does not appear justified. The order of the Ld.CIT(A) is thus, set aside and the AO is directed to restore the position claimed by the assessee and delete the additions made. In the result, the appeal of the assessee is allowed. AY : 2019-20]-Pradeep Singh: and the respective contentions are identical case of Renu Singh (supra). The assessee Shri Pradeep Singh is stated to be property holding 25% shares similar to Smt. Renu Singh (supra). Thus, the deliberations made in the case of Smt. Renu Singh in ITA No.2806/Del/2024(supra) shall apply mutatis mutandis. Hence, ith the view expressed in ITA No.2806/Del/2024, the additions made in the hands of the assessee, Shri Pradeep Singh in ITA No.2810/Del/2024 stands deleted. In the result, the appeal of the assessee is allowed. result, both appeals of different assessees, Smt Renu Singh in ITA No.2806/Del/2024 [Assessment Year 2019-20] and Shri pradeep Singh in ITA No.2810/Del/2024 [Assessment Year 2019-20] are allowed. Order pronounced in the open Court on 25th November, 202 Sd (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 16 declared by the and substituted by whopping find force in the plea from any angle, the action of the AO does not appear justified. The order of the Ld.CIT(A) is thus, set aside and the AO is directed to restore ditions made. contentions are identical to the Singh is stated to be holding 25% shares similar to Smt. Renu Singh (supra). Thus, the deliberations made in the case of Smt. Renu Singh in . Hence, in ith the view expressed in ITA No.2806/Del/2024, the additions radeep Singh in ITA f different assessees, Smt Renu 20] and Shri pradeep 20] are allowed. , 2024. d/- PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh ASSISTANT REGISTRAR ITAT, NEW DELHI ITA Nos.2806 & 2810/Del/2024 Renu Singh & Pradeep Singh Page | 17 ASSISTANT REGISTRAR ITAT, NEW DELHI "