SEEMA AGARWAL,NEW DELHI V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 27, NEW DELHI, NEW DELHI

ITA 5980/DEL/2025

AI Insights

The case involves Seema Agarwal, the appellant, who challenged the orders of the Commissioner of Income Tax (Appeals) confirming additions made by the Assessing Officer and the penalty imposed under Section 271AAC(1) of the Income Tax Act. The primary legal contention was the validity of the consolidated satisfaction note used to initiate assessment proceedings under Section 153C for multiple assessment years. The appellant argued that this practice violated the Supreme Court's directive requiring separate satisfaction notes for each assessment year, as established in the case of Commissioner of Income Tax (Appeals) v. Sunil Kumar Sharma. The Income Tax Appellate Tribunal, after considering various judicial precedents, including those from the Delhi and Karnataka High Courts, agreed with the appellant and quashed the assessments for the years in question.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841066 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2019-2020
• Appeal Filed On: 24-09-2025
• Other Referred Cases: Commissioner of Income Tax (Appeals) v. Sunil Kumar Sharma [2024] 165 taxmann.com 846 (SC), Shaksham Commodities Ltd. Vs. ITO 464 ITR 01 (Del.), Deputy Commissioner of Income Tax Vs. Sunil Kumar Sharma [2024] 168 taxmann.com 77 (S.C), SRS Panchratan Diamonds Private Limited vs. Deputy Commissioner of Income Tax ITA 218 & 219/Del/2013 (Delhi Tribunal), VidurChharia Vs. Deputy /Assistant Commissioner of Income Tax ITA 209/Del/2025 (Delhi Tribunal), 3D Tradex Private Limited vs. ADIT ITA 2065 to 2070/Del/2012 (Delhi Tribunal), Indian National Congress vs. DCIT reported in 463 ITR 431 (Del), CIT v. Kabul Chawla [2015] 61 taxmann.com 412/234 Taxman 300/[2016] 380 ITR 573 (Delhi)/2015 SCC OnLine Del 11555, Deputy Commissioner of Income-tax v. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka), Saksham Commodities Ltd vs ITO reported in 464 ITR 1 (Del) dated 09-04-2024, RRJ Securities, Vegetable Products reported in 88 ITR 192 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH KUMAR
• Assessee Lawyers: RAJAT JAIN; AKSHAT JAIN
• Keywords: Unexplained investment; Document seized
• Section: 132; 153A

Judgement Text

" 1 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI) BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 5979/DEL/2025 (A.Y. 2018-19) ITA No. 5980/DEL/2025 (A.Y. 2019-20) ITA No. 5981/DEL/2025 (A.Y. 2019-20) Seema Agarwal A-44, LGF, Dayanand Colony, New Delhi PAN: AECPA0813K V s Deputy Commissioner of Income Tax, Central Circle- 27, New Delhi Appellant Respondent Assessee by Sh.Rajat Jain, CA and Sh. Akshat Jain, CA Revenue by Sh. Mahesh Kumar,, CIT DR Date of Hearing 09/02/2026 Date of Pronouncement 26/02/2026 ORDER PER YOGESH KUMAR, U.S. JM: The captioned Appeals in ITA Nos. 5979/Del/2025 and 5980/Del/2205 are filed by the Assessee challenging the orders of the Commissioner of Income Tax (Appeals)-29, Delhi (“Ld. CIT(A)’ for short) dated 10/07/2025for A.Y 2018-19 and 2019-20, wherein the Ld. CIT(A) has confirmed the addition made by the Assessing Officer. Further, the Assessee has also filed Appeal against the order of the Ld. CIT(A) dated 16/07/2025 for A.Y 2019-20, wherein the Ld. CIT(A) confirmed the order of the penalty passed under Section 271 AAAC(1) of the Act. Printed from counselvise.com 2 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal 2. As the Appeals are filed by single Assessee, the same are heard together and decided in this common order. For the sake of convenience, the Grounds of Appeal for Assessment Year 2018-19 (quantum) are reproduced as under:- ITA No. 5979/DEL/2025 (A.Y. 2018-19) “1. That on the facts and in the circumstances of case, the appellate order passed by the learned Commissioner of Income Tax (Appeals) (hereinafter referred as \"CIT(A)\" by arbitrarily confirming addition of Rs. 34,00,000/-, is bad both in the eyes of law and on facts. 2. That on the facts and circumstances of the case, initiation of assessment proceedings u/s 153C of the Act for AY 2018-19 by recording consolidated satisfaction note for all assessment years 2014-15 to 2020-21 is bad in law and liable to be quashed being proceedings initiated u/s 153C is in violation of law laid down by the Hon'ble Supreme court in the case of Commissioner of Income Tax (Appeals) v. Sunil Kumar Sharma [2024] 165 taxmann.com 846 (SC) that satisfaction note has to be recorded separately for each assessment year. 3. That on the facts and in the circumstances of the case, the learned Additional Commissioner of Income tax, Central Range - 7, New Delhi erred in law for giving his approval mechanically u/s 153D of the Act without judicious application of mind and hence assessment order so passed is bad in law and is liable to be quashed. 4 That on the facts and circumstances of case, the learned CIT(A) has erred both on facts & in law in confirming addition of Rs. 34,00,000/- u/s 69 of the Act being unexplained investment in property made by AO merely on the basis of irrelevant and un-substantiated document seized from the premises of third person during the course of search action which were not in handwriting of the appellant and also no independent corroborative material brought on record which could prove alleged transaction. Printed from counselvise.com 3 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal 5 That on the facts and circumstances of case, the learned CIT(A) has erred both on facts & in law in confirming addition of Rs. 34,00,000/- u/s 69 of the Act being unexplained investment in property made by AO in arbitrary and mechanical manner by arbitrarily rejecting the explanation put forth by the appellant that no such alleged amounts in cash were paid for construction of property without bringing any cogent or substantive material on record which could prove contrary. 6. That on the facts and circumstances of case, the learned CIT(A) has erred both on facts & in law in confirming addition of Rs. 34,00,000/- u/s 69 of the Act without appreciating the fact that appellant has furnished abundant documentary evidences to prove total expenses incurred on construction of property along with its source and also without getting the valuation of said property from a Government Approved Valuer to verify/ know the correct value of construction work done even though appellant has specifically requested. 7. That the grounds of appeal are independent and without prejudice to each other. 8. The appellant craves leave to add, amend or alter any of the grounds of appeal. 3. Brief facts of the case are that, assessment orders came to be passed u/s 143(3)/153C of the Income Tax Act, 1961 ('Act' for short)for Assessment Year 2018-19 and 2019-20 on 29/03/2023 and 30/03/2023 respectively by making certain additions. Aggrieved by the said assessment orders, the Assessee preferred two appeals before the Ld. CIT(A). The Ld. CIT(A) vide order dated 10/07/2025 dismissed the Appeals. Printed from counselvise.com 4 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal 4. Though the Assessee has raised several grounds of Appeals, we have heard only on Ground No. 2 of the Assessee’s Appeals. The Ld. Assessee's Representative contended that initiation of assessment proceedings u/s 153C of the Act for Assessment Years 2018-19 and 2019-20 by recording consolidated satisfaction note for Assessment Years i.e. 2014-15 to 2020-21 are bad in law and liable to be quashed being proceedings initiated u/s 153C is in violation of law laid down by Hon'ble Supreme Court, various Hon'ble High Courts and also the ratio laid down by the Tribunal. The Ld. Counsel has also relied on the following judicial precedents and sought for setting aside the respective Assessment Orders: Sr. No. Name of case Citation 1. Shaksham Commodities Ltd. Vs. ITO 464 ITR 01 (Del.) 2. Deputy Commissioner of Income Tax Vs. Sunil Kumar Sharma [2024] 168 taxmann.com 77 (S.C) 3. Deputy Commissioner of Income Tax Vs. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (H.C-Karnataka) 4. SRS Panchratan Diamonds Private Limited vs. Deputy Commissioner of Income Tax ITA 218 & 219/Del/2013 (Delhi Tribunal) 5. VidurChharia Vs. Deputy /Assistant Commissioner of Income Tax ITA 209/Del/2025 (Delhi Tribunal) 6. 3D Tradex Private Limited vs. ADIT ITA 2065 to 2070/Del/2012 (Delhi Tribunal) 5. Per contra, the Ld. Department's Representative submitted that the assessments have been framed and additions have been made against Printed from counselvise.com 5 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal the Assessee on the merits in order to recover the actual tax due. Further submitted that the satisfaction note can be recorded for multiple Assessment Years, which cannot be found fault with. To butter his submission, the Ld. Department's Representative placed reliance on the judgments of Hon’ble Jurisdictional High Court in the case of Indian National Congress vs. DCIT reported in 463 ITR 431 (Del), thus sought for rejecting the contention of the Ld. Assessee's Representative and prayed for dismissal of Ground No. 2 of the Assessee in both the Appeals. 6. In rejoinder, the Ld. Assessee's Representative submitted that after passing of the Judgment in the case of Indian National Congress (supra), the Jurisdictional High Court has examined very same issue in the case of Shaksham Commodities Ltd. Vs. ITO (supra) vide Judgment dated 09th April, 2024 held that a consolidated satisfaction note without specific, year-wise incriminating material is fatal to jurisdiction and decided the issue in favour of the Assessee. Further, also contended that the SLP filed by the Revenue against the Judgment of Hon'ble High Court of Delhi in the case of Shaksham Commodities Ltd. vs. ITO (supra) has been dismissed, thus contended that the ratio laid down in the case of Shaksham Commodities Ltd. Vs. ITO (supra) is having binding precedent. Printed from counselvise.com 6 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal 7. Heard both the parties and perused the material available on record. We have gone through the satisfaction note u/s 153C of the Act dated 15/03/2022 placed on record by the Assessee. It is observed that a consolidated satisfaction note is recorded for assessment years 2014-15 to 2020-21, wherein neither the AO has bifurcated the amounts nor year-wise additions pertaining to the assessee were identified, based on the said consolidated satisfaction, the assessment has been framed for the year under consideration. In an identical situation, the Co-ordinate Bench of the Tribunal in the case of SRS Panchratan Diamonds Pvt. Ltd. (supra), considered the Judgments of Hon’ble Karnataka High Court in the case of Sunil Kumar Sharma (supra) and also the Judgment of Hon’ble Delhi high court in the case of Shaksham Commodities (supra), decided the issue in favour of the Assessee holding that the consolidated satisfaction note is invalid, wherein the Co-ordinate Bench of the Tribunal has also distinguished the Judgment of the Hon’ble Jurisdictional High Court in case of Indian National Congress (supra). The relevant observations of Co-ordinate Bench in the case of SRS Panchratan Diamonds Pvt. Ltd. (supra) are reproduced as under: “6. From the above, it could be seen that the Learned AO of the assessee herein had recorded Consolidated satisfaction note for assessment years 2011-12 to 2017- in one go instead of recording independent and individual satisfaction note for each assessment year which is the requirement of the law. The moot question that arises for our Printed from counselvise.com 7 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal consideration is as to whether recording of consolidated satisfaction note for various assessment years and assuming jurisdiction under section 153C of the Act would be fatal to the very assumption of jurisdiction under section 153C of the Act or not ? This issue is no longer res integra in view of the decision of the Hon’ble Karnataka High Court in the case of DCIT vs Sunil Kumar Sharma reported in 159 taxmann.com 179 (Kar). The relevant operative portion of the said order is reproduced below:- “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.” 7. It is pertinent to note that the Special Leave Petition (SLP) preferred by the revenue against this order had been dismissed by the Hon’ble Supreme Court which is reported in 165 taxmann.com 846 (SC) by observing as under:- “ORDER 1. Delay condoned. 2. Heard the learned Senior Counsel appearing for the appellants. 3. We are not inclined to interfere with the impugned judgment and order passed by the High Court of Karnataka at Bengaluru in Writ Appeal No. 831/2022 (T-IT) dated 22-01-2024/ Deputy Commissioner of Income-tax v. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka) . 4. The Special Leave Petition is dismissed. 5. Pending application(s), if any, shall stand disposed of. 8. The Learned DR before us vehemently relied on the decision of the Hon’ble Jurisdictional High Court in the case of Indian National Congress vs DCIT reported in 463 ITR 431 (Del) dated 22-03-2024 wherein it was held as under:- 24. The provision only requires the AO to be satisfied that the material collated and handed over is likely to have an impact on the total income for the relevant AY or AYs'. While an assessment would necessarily have to be made in respect of each of the relevant AY or AYs', we find ourselves unable to read Section 153A or 153C as mandating separate Satisfaction Notes being drawn for each Printed from counselvise.com 8 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal assessment year. Our conclusion in this respect stands fortified from the language of Section 153A(1)(a) which contemplates a notice being issued calling upon the person to furnish a return of income for each of the six AYs' or the relevant AY or AYs'. This too appears to suggest that while the notice could be composite and based on a common satisfaction note which encapsulates the incriminating material pertaining to the AYs' in question, it is only returns which must and mandatorily be filed separately. 25. Regard must be had to the indubitable fact that the Satisfaction Note merely forms the foundation for initiation of action and which would enable us to evaluate whether an opinion has been validly formed. As long as it rests on incriminating material which pertains to the AYs' in question, the same would qualify the requirement of Section 153C. We deem it apposite to observe that while it would be imperative for the Satisfaction Note to refer to the material pertaining to the AYs' which are sought to be reopened, a consolidated Satisfaction Note clearly does not appear to be an anathema provided it rests on material which pertains to the AYs' which are sought to be reopened. 26. We in this respect also bear in mind the lucid explanation of the procedure liable to be adopted under Sections 153A and 153C as came to be enunciated by the Court in CIT v. Kabul Chawla [2015] 61 taxmann.com 412/234 Taxman 300/[2016] 380 ITR 573 (Delhi)/2015 SCC OnLine Del 11555. \"37. On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i) Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the \"total income\" of the aforementioned six years in separate assessment orders for Printed from counselvise.com 9 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal each of the six years. In other words, there will be only one assessment order in respect of each of the six assessment years \"in which both the disclosed and the undisclosed income would be brought to tax\". (iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment \"can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material.\" (v) In the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word \"assess\" in section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word \"reassess\" to the completed assessment proceedings. (vi) In so far as the pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. (vii) Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.\" By placing reliance on the aforesaid decision of Hon’ble Delhi High Court, the Learned DR argued that recording of consolidated satisfaction note for various assessment years put together would not be fatal to the assumption of jurisdiction and framing of assessment under section 153C of the Act. 9. But we find that the Hon’ble Jurisdictional High Court in the case of Saksham Commodities Ltd vs ITO reported in 464 ITR 1 (Del) dated 09-04- 2024 (judges of equal strength) had passed an order in favour of the assessee on the very same issue. The relevant operative portion of the said order is reproduced below:- Printed from counselvise.com 10 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal “50. What we seek to emphasise is that merely because Section 153C confers jurisdiction upon the AO to commence an exercise of assessment or reassessment for the block of years which are mentioned in that provision, the same alone would not be sufficient to justify steps in that direction being taken, unless the incriminating material so found is likely to have an impact on the total income of a particular AY forming part of the six AYs' immediately preceding the AY pertaining to the search year or for the \"relevant assessment year\". 51. Ultimately Section 153C is concerned with books, documents or articles seized in the course of a search and which are found to have the potential to impact or have a bearing on an assessment which may be undergoing or which may have been completed. The words \"have a bearing on the determination of the total income of such other person\" as appearing in Section 153C would necessarily have to be conferred pre-eminence. Therefore, and unless the AO is satisfied that the material gathered could potentially impact the determination of total income, it would be unjustified in mechanically reopening or assessing all over again all the ten AYs' that could possibly form part of the block of ten years. 53. Sinhgad Technical Education Society also constitutes a binding precedent in respect of the aforesaid proposition as would be evident from the Supreme Court noticing that the material disclosed pertained only to AY 2004-05 or thereafter and that consequently the Section 153C action initiated for AYs' 2000-01 to 2003-04 would not sustain. It was this position in law as enunciated in that decision which came to be reiterated by our Court in Index Securities. 55. Take for instance a case where the material gathered in the search is contemplated to have an adverse impact on the declarations and disclosures made by an assessee pertaining only to AYs' 2016-17 and 2017-18. What we seek to emphasise is that pending assessments for those two years could validly form subject matter of action under Section 153C and pending assessments in that respect would surely abate. However, that by itself would not be sufficient to either reopen or issue notices in respect of AYs' prior to or those falling after those two AYs' and which may otherwise fall within the maximum block period of ten years merely because the statute empowers the AO to do so. Unless the material gathered and recovered is found to have relevancy to the AY which is sought to be subjected to action under Section 153C, it would be legally impermissible for the respondents to invoke those provisions. Printed from counselvise.com 11 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal Consequently, the AO would be bound to ascertain and identify the year to which the material recovered relates. The years which could be then subjected to action under Section 153C would have to necessarily be those in respect of which the assessment is likely to be influenced or impacted by the material discovered. Section 153C neither mandates nor envisages a mechanical or an en blanc exercise of power, or to put it differently, one which is uninformed by a consideration of the factors indicated above. 56. We also bear in mind the pertinent observations made in RRJ Securities when the Court held that merely because an article or thing may have been recovered in the course of a search would not mean that concluded assessments have to \"necessarily\" be reopened under Section 153C and that those assessments are not liable to be revised unless the material obtained have a bearing on the determination of the total income. This aspect was again emphasised in para 38 of RRJ Securities with the Court laying stress on the existence of material that may be reflective of undisclosed income being of vital importance. All the aforenoted judgments thus reinforce the requirement of incriminating material having an ineradicable link to the estimation of income for a particular AY. 57. It becomes pertinent to note that both Sections 153A and 153C require the assessee upon being placed on notice to furnish ROIs' for the six AYs' or the \"relevant assessment year\". All that the two provisions mandate is that notwithstanding the submission of those ROIs', the AO would frame one assessment order in respect of each of the years which were made subject matter of the notice and which would deal with both disclosed and undisclosed income. This too reinforces our view that Section 153C would apply only to such AYs' where the jurisdictional AO is satisfied and has incriminating material for those AYs' and which may be concerned with disclosed and undisclosed income. 60. Before concluding, we also deem it imperative to briefly notice certain aspects which emerge from a reading of the Satisfaction Notes themselves. As is manifest from a reading of the Satisfaction Note drawn by the jurisdictional AO of the assessee in W.P. (C) 1459/2024, after noticing the material which was recovered during the search and related to FYs' 2009-10, 2010-11 and 2011-12 [corresponding AYs' thus being AYs' 2010-11, 2011-12 and 2012-13], it has proceeded to observe that the assessments which were liable to abate or be reopened would be AYs' 2010-11 to 2020-21. A similar note appears in W.P. (C)1117/2024. Here again, after referring to the material pertaining to FY 2009-10 [and thus relating to AY 2010-11], the AO Printed from counselvise.com 12 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal proceeded to seek approval for initiating action under Section 153C in respect of AYs' 2010-11 up to 2020-21. 61. A reading of the aforesaid Satisfaction Notes would establish that jurisdictional AOs' appear to have proceeded on the premise that the moment incriminating material is unearthed in respect of a particular AY, they would have the jurisdiction and authority to invoke Section 153C in respect of all the assessment years which could otherwise form part of the \"relevant assessment year\" as defined in Section 153A. In our considered opinion, the aforesaid understanding of Section 153C is clearly erroneous and unsustainable. As explained hereinabove, the discovery of material likely to implicate the assessee and impact the assessment of total income for a particular AY is not intended to set off a chain reaction or have a waterfall effect on all AYs' which could form part of the \"relevant assessment year\". This, more so since none of the Satisfaction Notes record any reasons of how that material is likely to materially influence the computation of income for those AYs'. 62. Hypothetically speaking, it may be possible for the material recovered in the course of a search having the potential or the probability of constituting incriminating material for more than one assessment year. However, even if such a situation were assumed to arise, it would be incumbent upon the AO to duly record reasons in support of such a conclusion. The Satisfaction Notes would thus have to evidence a formation of opinion that the material is likely to be incriminating for more than a singular assessment year and thus warranting the drawl of Section 153C proceedings for years in addition to those to which the material may be directly relatable. G. CONCLUSIONS 63. On an overall consideration of the structure of Sections 153A and 153C, we thus find that a reopening or abatement would be triggered only upon the discovery of material which is likely to \"have a bearing on the determination of the total income\" and would have to be examined bearing in mind the AYs' which are likely to be impacted. It would thus be incorrect to either interpret or construe Section 153C as envisaging incriminating material pertaining to a particular AY having a cascading effect and which would warrant a mechanical and inevitable assessment or reassessment for the entire block of the \"relevant assessment year\". 64. In our considered view, abatement of the six AYs' or the \"relevant assessment year\" under Section 153C would follow the formation of Printed from counselvise.com 13 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal opinion and satisfaction being reached that the material received is likely to impact the computation of income for a particular AY or AYs' that may form part of the block of ten AYs'. Abatement would be triggered by the formation of that opinion rather than the other way around. This, in light of the discernibly distinguishable statutory regime underlying Sections 153A and 153C as explained above. While in the case of the former, a notice would inevitably be issued the moment a search is undertaken or documents requisitioned, whereas in the case of the latter, the proceedings would be liable to be commenced only upon the AO having formed the opinion that the material gathered is likely to inculpate the assessee. While in the case of a Section 153A assessment, the issue of whether additions are liable to be made based upon the material recovered is an aspect which would merit consideration in the course of the assessment proceedings, under Section 153C, the AO would have to be prima facie satisfied that the documents, data or asset recovered is likely to \"have a bearing on the determination of the total income\". It is only once an opinion in that regard is formed that the AO would be legally justified in issuing a notice under that provision and which in turn would culminate in the abatement of pending assessments or reassessments as the case may be. 65. We would thus recognize the flow of events contemplated under Section 153C being firstly the receipt of books, accounts, documents or assets by the jurisdictional AO, an evaluation and examination of their contents and an assessment of the potential impact that they may have on the total income for the six AYs' immediately preceding the AY pertaining to the year of search and the \"relevant assessment year\". It is only once the AO of the non-searched entity is satisfied that the material coming into its possession is likely to \"have a bearing on the determination of the total income\" that a notice under Section 153C would be issued. Abatement would thus be a necessary corollary of that notice. However, both the issuance of notice as well as abatement would have to necessarily be preceded by the satisfaction spoken of above being reached by the jurisdictional AO of the non-searched entity. 66. Therefore, and in our opinion, abatement of the six AYs' or the \"relevant assessment year\" would follow the formation of that opinion and satisfaction in that respect being reached. H. OPERATIVE DIRECTIONS 69. When tested in light of the aforesaid principles, we find that except for a few exceptions which were noticed in the introductory parts of this judgment, the writ petitions forming part of this batch, Printed from counselvise.com 14 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal impugn the invocation of Section 153C in respect of AYs' for which no incriminating material had been gathered or obtained. The Satisfaction Notes also fail to record any reasons as to how the material discovered and pertaining to a particular AY is likely to \"have a bearing on the determination of the total income\" for the year which is sought to be abated or reopened in terms of the impugned notices. The respondents have erroneously proceeded on the assumption that the moment any material is recovered in the course of a search or on the basis of a requisition made, they become empowered in law to assess or reassess all the six AYs' years immediately preceding the assessment correlatable to the search year or the \"relevant assessment year\" as defined in terms of Explanation 1 of Section 153A. The said approach is clearly unsustainable and contrary to the consistent line struck by the precedents noticed above.” 10. Hence respectfully applying the construction that is favourable to the assessee by taking shield from the decision of the Hon’ble Supreme Court in the case of Vegetable Products reported in 88 ITR 192 (SC), we would like to follow the decision of the Hon’ble Jurisdictional High Court supra in the case of Saksham Commodities Ltd reported in 464 ITR 1 (Del) and the decision of the Hon’ble Karnataka High Court in the case of Sunil Kumar Sharma supra and hold that recording of consolidated satisfaction note for various assessment years by the Learned AO would become fatal to the very assumption of jurisdiction and consequential framing of assessment under section 153C of the Act for the assessment years 2015-16 and 2016-17 in the instant case. Accordingly, the assessments framed under section 153C of the Act for the assessment years 2015-16 and 2016-17 are hereby quashed. 11. Since the entire assessments are quashed, the other grounds raised by the assessee need not be gone into and they are left open”. 8. It is relevant to mention that the Judgment of the Hon’ble Delhi High Court in the case of Shaksham Commodities Ltd. (supra) has been rendered subsequent to the Judgment in the case of Indian National Congress (supra). Further, as against the Judgment of the Hon’ble Jurisdictional High Court in the case of Shaksham Commodities Ltd. (supra), the Revenue filed SLP before the Hon'ble Supreme Court, which Printed from counselvise.com 15 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal has been dismissed along with other connected matters on 16/06/2025, reported in [2025] 175 taxmann.com 849 (S.C). Thus, by respectfully following the aforesaid judicial precedents, we hold that the consolidate satisfaction note recorded by the AO for various assessment years to assume the jurisdiction is invalid. Accordingly, the respective assessments framed u/s 153C of the Act for the years under consideration are hereby quashed. 9. Since, we have allowed the Assessee’s ground of appeal No.2 in both Assessment Year 2018-19 and 2019-20 and quashed the assessment orders, the other grounds of appeal become academic, thus, not adjudicated. 10. Further, as we have quashed the assessment order for Assessment Year 2019-20, the penalty imposed for the said Assessment Year u/s 271AAC(1) of the Act is also liable to be quashed. Ordered accordingly. 11. In the result, the appeals in ITA Nos. 5979/Del/2025, 5980/Del/2025 and 5981/Del/2025 of the assessee are allowed. Order pronounced in the open court on 26th February , 2026 Sd/- Sd/- (RENU JAUHRI) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:-26.02.2026 Reshma Naheed, Sr.P.S Printed from counselvise.com 16 ITA Nos. 5979, 5980 & 5981/Del/2025 Seema Agarwal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "