SIGNATUREGLOBAL INDIA LTD,DELHI V. DCIT, CENTRAL CIRCLE-4, DELHI

ITA 1302/DEL/2025

AI Insights

The case involves Signatureglobal India Ltd., which appealed against the orders of the CIT(A)-23, Delhi, pertaining to the assessment years 2015-16 and 2016-17. The appeals were primarily based on the legal grounds that the notices issued under section 153C by the Assessing Officer (AO) were bad in law, barred by limitation, and without jurisdiction. The Tribunal examined the procedural validity of the notices and the satisfaction notes recorded by the AO, which were found to be generic and lacking specific details required for each assessment year. The Tribunal's decision was influenced by precedents from the Supreme Court and other High Courts, which emphasized the need for specific and detailed satisfaction notes for each assessment year when invoking section 153C.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706095 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: CIT vs. Jasjit Singh, DCIT vs. Sunil Kumar Sharma, CIT(A) vs. Sunil Kumar Sharma, Rajendra Rameshlal Gugale vs. PCIT (Central), Pune, Super Bazar Stores Pvt. Ltd. vs. ACIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONIKA SINGH
• Assessee Lawyers: AMIT GOEL
• Keywords: Set aside; Document seized; Documents seized; Search and seizure
• Section: 143(3); 132; 153A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “F” BENCH: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No. 1301 & 1302/Del/2025 [Assessment Years : 2015-16 & 2016-17] SIGNATUREGLOBAL INDIA LTD., 1304, 13TH FLOOR, DR. GOPAL BHAWAN, 28, BARAKHAMBA ROAD, NEW DELHI – 110 0001 PAN-AACCR3807M vs DCIT, CENTRAL CIRCLE-4, DELHI APPELLANT RESPONDENT Appellant by Shri Amit Goel, CA & Shri Pranav Yadav, Adv. Respondent by Ms. Monika Singh, CIT(DR) Date of Hearing 03.07.2025 Date of Pronouncement 03.07.2025 ORDER PER SHAMIM YAHYA, AM : These captioned appeals have been filed against the respective orders of the Ld. CIT(A)-23, Delhi both dated 22.02.2025 pertaining to assessment years 2015- 16 & 2016-17 respectively. Assessee has raised as many as 08 grounds in each appeal, however, he only argued the common legal grounds raised in both the appeals, which are reproduced as under:- “1. On the facts and circumstances of the case and in law, the notice u/s. 153C issued by the AO is bad in law, barred by limitation and without jurisdiction and, therefore, the said notice alongwith the assessment order passed on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so. Page | 2 2. On the facts and circumstances of the case and in law, the notice u/s. 153C issued by the AO is illegal and without jurisdiction. The AO has not complied with the provisions of section 153C and other allied provisions for issuance of such notice. Accordingly, the notice u/s. 153C alongwith the assessment order on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the satisfaction note(s) recorded u/s. 153C of the Act are bad in law and without jurisdiction and, accordingly, the assessment proceedings initiated on the foundation of such satisfaction note(s) and also the consequent assessment order passed are liable to be quashed.” Assessment Year 2015-16 2. The brief facts of the case related to assessment year 2015-16 are that a search and seizure operation action u/s. 132 of the Act, was carried out on M/s SMC Global Securities Limited and its related entities (SMC Group) on 20.07.2018. During the assessment proceedings and on perusal of seized data / documents in the case of SMC Group, certain documents / information have been found which pertains to assessee. After analyzing the documents notice u/s. 153C was issued. In response to the notice u/s. 153C of the Act, the assessee has filed the return of income on 18.11.2021 declaring a loss of Rs. 2,72,614/-. Assessment proceedings were completed u/s. 153C of the Act by assessing the income at Rs. 61,27,390/- by making additions of Rs. 35,00,000/- u/s. 68 and Rs. 29,00,000/- u/s. 69A of the Act. Against the above action of the AO, Assessee preferred the appeal before the Ld. CIT(A), who vide his impugned order dated 22.02.2025 dismissed the appeal of the assessee. Aggrieved, assessee is in appeal before us. 3. At the time of hearing, Ld. Counsel for the assessee submitted that notice issued u/s. 153C by the AO is without jurisdiction and barred by limitation, as the date of search in the case of SMC Global Securities Ltd. was 20.07.2018 and the date of Satisfaction note recorded in the case of assessee was 10.06.2021 (FY 2021- 22 i.e. AY 2022-23) and the 6 years could have been taken up for assessment u/s. 153C are AY 2016-17 to AY 2021-22. Therefore, the notice u/s. 153C for AY 2015-16 could not have been issued by the AO, as the same is barred by limitation. It was further submitted that the instant issue is no longer res integra, as it is Page | 3 covered by the judgement of the Hon’ble Supreme Court of India in the case of CIT vs. Jasjit Singh 2023 (10) TMI 572 (SC). 4. Ld. CIT(DR) did not controvert the aforesaid proposition made by the Ld. AR. 5. We have heard both the parties and perused the records. We find that date of search in the case of SMC Global Securities Ltd. was 20.07.2018 and the date of satisfaction note recorded in the case of the appellant was 10.06.2021. The AO has issued notice u/s. 153C for 7 years from AY 2013-14 to AY 2019-20 based on date of search. However, it is now settled law that for initiating the proceedings u/s. 153C the date has to be reckoned from the date of recording of satisfaction note. The date of recording of satisfaction note in the present case is 10.06.2021 (FY 2021-22 i.e. AY 2022-23) and the 6 years which could have been taken up for assessment u/s. 153C are AY 2016-17 to AY 2021-22. To support the aforesaid view, the following table is germane to reproduce :- Sl. No. A.Y. Section 1 2022-23 143(3) 2 2021-22 153C 3 2020-21 153C 4 2019-20 153C 5 2018-19 153C 6 2017-18 153C 7 2016-17 153C 5.1 Accordingly, the notice u/s. 153C for AY 2015-16 could not have been issued by the AO and the same is barred by limitation. The issue is no longer res integra, as it is covered by Apex Court decision in the case of CIT vs. Jasjit Singh (2023). Accordingly, applying the ratio of aforesaid judgment to the assessee’s case the initiation of proceedings u/s. 153C for AY 2015-16 is without Page | 4 jurisdiction and barred by limitation. Thus, the proceedings initiated, and assessment order passed u/s. 153C for the year under consideration is also liable to be quashed as null and void. We hold and direct accordingly. Resultantly, the appeal of the assessee pertaining to assessment year 2015-16 stands allowed. Assessment Year 2016-17 6. The brief facts related to assessment year 2016-17 are that a search and seizure operation action u/s. 132 of the Act, was carried out on M/s SMC Global Securities Limited and its related entities (SMC Group) on 20.07.2018. During course the assessment proceedings and on perusal of seized data / documents in the case of SMC Group, certain documents / information have been found which pertains to assessee. After analyzing the documents notice u/s. 153C was issued. In response to the notice u/s. 153C of the Act, the assessee has filed the return of income on 18.11.2021 declaring a loss of Rs. 14,20,024/--. Assessment proceedings were completed u/s. 153C of the Act assessing the income at Rs. 61,27,390/- by making addition of Rs. 1,75,000/- u/s. 68 and Rs. 50,00,000/- u/s. 69A of the Act. Against the above action of the AO, Assessee preferred the appeal before the Ld. CIT(A), who vide his impugned order dated 22.02.2025 dismissed the appeal of the assessee. Aggrieved, assessee is in appeal before us. 7. At the time of hearing, Ld. Counsel for the assessee submitted that the satisfaction note(s) recorded u/s. 153C of the Act are bad in law and without jurisdiction and, accordingly, the assessment proceedings initiated on the foundation of such satisfaction note(s) and also the consequent assessment order passed are liable to be quashed due to the fact that the satisfaction note recorded is a consolidated satisfaction note for 7 years; there is no description/analysis of seized material based on which satisfaction has been recorded; there is no year wise analysis of seized material, there is no year wise satisfaction that seized material is having a bearing on the determination of income. To support his view, he relied upon various case laws including the following :- Page | 5 - DCIT vs. Sunil Kumar Sharma, 2024 (2) TMI 116 – Karnataka High Court. - CIT(A) vs, Sunil Kumar Sharma, 2024 (8) TMI 1086 – SC Order. 8. Even otherwise, he submitted on merits, that the addition made by the AO is not sustainable under the law. Because, the original assessment in the case of the assessee was completed u/s 143(3) vide assessment order dated 31.12.2018 (i.e. after the date of search in the case of SMC Global Securities Ltd.) and in the assessment order, addition in respect of loans from Multiplex Fincap Pvt. Ltd. was made. Against the addition made, the assessee filed appeal before CIT(A) who vide order dated 12.09.2019 deleted the additions made by the AO. Against the CIT(A) order, the revenue filed appeal before Hon'ble ITAT and Hon' ble ITAT vide order dated 07.02.2025 dismissed the appeal of the revenue. Moreover, the assessment of Multiplex Fincap Pvt. Ltd. (in respect of which the AO has made the addition) for A. Y. 2016-17 was also completed u/s 143(3) vide assessment order dated 14.12.2018 (i.e. after the date of search in the case of SMC Global Securities Ltd.) and no adverse inference was drawn in respect of loan given by them to the assessee company. 8.1 Ld. DR did not controvert the aforesaid proposition made by the Assessee’s AR on the aforesaid legal ground. 9. We have heard both the parties and perused the records. We find that the challenge to the assumption of jurisdiction under s. 153C of the Act hinges the legal infirmities in recording the ‘satisfaction note’ by the AO which is claimed to be foundation for assumption of jurisdiction under s. 153C of the Act. 9.1 The ‘satisfaction note’ recorded by the AO of the assessee being germane to the determination of challenge to the assumption of jurisdiction, is reproduced hereunder:- “10.06.2021 Reasons for satisfaction required for initiating the proceedings u/s 153C of the Income Tax Act, 1961 in the case of M/s Signatureglobal India Pvt. Ltd. Page | 6 (PAN: AACCR3807M), having registered address located at 1308-1311, 13th Floor, 28, Dr. Gopal Das Bhawan, Barakhamba Road, New Delhi - 110002 (for the A. Ys. 2013-14 to 2018-19 & 2019-20) A search & seizure operation action u/s 132 of the Income Tax Act, 1961 was carried out in the cases of M/s SMC Global Securities Ltd. and relates entities of group cases on 20.07.2018. During the course of assessment proceeding and on the perusal of seized data/documents in the case of M/s SMC Global Securities Ltd., certain documents as appended below have been found to be related to M/s Signatureglobal India Pvt. Ltd. (PAN: AACCR3807M), having registered address located at 1308-1311, 13th Floor, 28, Dr. Gopal Das Bhawan, Barakhamba Road, New Delhi - 110002 from the following premises: Sl.No. Warrant in the name of Warrant for the premise Date of Execution of warrant 1 SMC Global Securities Ltd. 1308-1311, 13th Floor, 28, Dr. Gopal Das Bhawan, Barakhamba Road, New Delhi -110002 (Office Signatureglobal Securities Pvt. Ltd. & Signatureglobal (India) Pvt. Ltd. 21.07.2018 After going through the contents of seized digital data ie. email backup of Sh. Pradeep Aggarwal, Ravi Aggarwal and others during the course of assessment proceedings in the case of M/s SMC Global Securities Limited (PAN: AAAC30581H) inventorized by the Income Tax Search Party AW-24 as Anacre A-5 belongs to M/s Signatureglobal India Pvt. Lid. (PAN: AACCR3807M) and accordingly, the Assessing Officer of M/s SMC Global Securities Limited has recorded his satisfaction in the capacity of the 10 of the searched person. The description of the incriminating seized material is as follows: Annexure No. Brief description of documents Person to whom the documents belongs. Party AW- 24, Annexure A-5 Email dated 24.08.2015 between Dhananjay Shukla and Sh. Ganesh Dutt Sharma taken from the email back up of Sh. Pradeep Aggarwal, Ravi Aggarwal and others. The said email was also marked to Sh. Pradeep Aggarwal and Sh. Praveen M/s Signatureglobal India Pvt. Ltd. Page | 7 Aggarwal having subject of the mail “diff. in account”. In the said email, there were 5 excel sheets attached viz. CR47_FINCAP_240815, CR47- DEMO-240815, CH12_FINCAP-240815, CH12_DEMO_240815 and REPORT_210815-F shows various transactions made in cash alongwith date of transactions were recorded. 2. After going through the contents of seized documents (in the form of digital data) which were seized by the Income Tax Search Party AW-24 as Annexure A-5 from the premises of searched person i.e. M/s SMC Global Securities Limited which were transferred by the A.O. of searched person and from the satisfaction recorded by the A.O. of searched person i.e. M/s SMC Global Securities Limited and on the basis of incriminating material, I am satisfied that the above seized incriminating material (in the form of digital data) are pertaining to the assessee i.c. M/s Signatureglobal India Pvt. Ltd. (PAN: AACCR3807M) and these seized documents have bearing on determination of total income of the assessee for the relevant assessment years referred to in sub section (1) of the section 153A of the Act and that it is a fit case for initiating proceedings u/s 153C of the Act, in the case of M/s Signatureglobal India Pvt. Ltd. (PAN: AACCR3807M) for the A.Y. 2013-14 to 2018-19 & A.Y. 2019-20. Sd/- (K.R. Sharma) Assistant Commissioner of Income Tax, Central Circle-4, New Delhi” 9.2 We note that as per the assessment order, Search & Seizure Operation u/s 132 was conducted on 10/07/2018 in SMC Global Securities Ltd. Satisfaction note u/s 153C is stated to be recorded in the case of the assessee on 10/06/2021. The proceedings initiated u/s 153C is bad in law and without jurisdiction due to the fact that the satisfaction note recorded is a consolidated satisfaction note for 7 years; there is no description/analysis of seized material based on which satisfaction has been recorded; there is no year wise analysis of seized material; there is no year wise satisfaction that seized material is having a bearing on the determination of income. However, the AO, should have recorded a separate satisfaction for each Page | 8 year falling in the block period of six years and for which he has to issue separate notice u/s 153C for each year falling in the block period of six years, after obtaining separate approval u/s. 153D for each year falling in the block period of six years. But in the instant case, the AO has recorded a consolidated satisfaction note for A.Y. 2013-14 to A.Y. 2019-20. Thus, the assessment proceeding-initiated u/s 153C in this case is bad in law and without jurisdiction. That the powers of the Assessing Officer under Section 153C cannot be invoked in a light, whimsical and arbitrary manner and without complying with the basic pre-requisites specified under Section 153C of the Act. The object underlying the provisions of Section 153C is not to give unbridled power to the Assessing Officer to proceed cogent material seized at the time of search. The satisfaction note is the foundation of assumption of jurisdiction u/s 153C. In the absence of valid satisfaction, jurisdiction u/s 153C of the Act cannot be assumed. The validity of the satisfaction note is required to be evaluated on the basis of the contents of such satisfaction note alone and it is not permissible to virtually expand the scope of the contents of the satisfaction note at a later stage by improving or supplementing the same. Our aforesaid contention, supports the decision 22.01.2024 of the Hon'ble Karnataka High Court in the case of DCIT vs. Sunil Kumar Sharma & Others (2024) (2) TMI 116 wherein, it has been held as under:- “53. Further, satisfaction note is required to be recorded under Section 153C of the IT Act for each Assessment Year and in the impugned proceedings, a consolidated satisfaction note has been recorded for different Assessment Years, which also vitiates the entire assessment proceedings. In view of all these findings, it is said that the appeals do not have any substance for seeking intervention as sought for by the appellant / Revenue.” 9.3 We further note that the aforesaid decision of Hon’ble Karnataka High Court has been affirmed by the Apex Court in CIT Vs. Sunil Kumar Sharma & Others (2024)(8) TMI 1086- Supreme Court vide order dated 20.08.2024. The head note of Apex Court decision reads as under:- Page | 9 “Validity of proceedings u/s 153C - whether the assessee should be treated as a \"Searched Person\" or \"Other Person\"? - Whether 'Loose Sheets' and 'Diary' have any evidentiary value? - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court of Karnataka at Bengaluru in Writ Appeal [2024 (2) TMI 116 - KARNATAKA HIGH COURT] held notices issued u/s 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal. As satisfaction note is required to be recorded u/s 153C 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. As per the Panchanama provided herein, it is deemed appropriate to conclude that the notice provided u/s 153C is bad in law. Special Leave Petition is dismissed.” 9.4 We further note that in the case of Rajendra Rameshlal Gugale vs. PCIT (Central), Pune, 2025 (1) TMI 240 - ITAT Pune while referring the decision of the Apex Court in the case of DCIT vs. Sunil Kumar Sharma (Supra) held as under: - “Since in the instant case a consolidated satisfaction note has been prepared for assessment years 2012-13 to 2018-19, therefore, the consolidation satisfaction note being not in accordance with law, therefore, the entire assessment proceedings is liable to be quashed. We hold accordingly and quash the assessment.” Page | 10 9.5 We further find that in the very recent case of Super Bazar Stores Pvt. Ltd. vs. ACIT 2025 (4) TMI 1130 – the Coordinate Bench of ITAT, Delhi has dealt the exactly similar and identical issue of scope of ‘satisfaction note’ recorded by the AO and decided the issue in favour of the assessee by holding as under:- “8. The challenge to the assumption of jurisdiction under s. 153C of the Act hinges around legal infirmities in recording the ‘satisfaction note’ by the AO which is claimed to be foundation for assumption of jurisdiction under s. 153C of the Act. 9. The ‘satisfaction note’ recorded by the AO of the assessee being germane to the determination of challenge to the assumption of jurisdiction, is reproduced hereunder:- 29.09.2017- “The Assessing Officer of M/s. Superior Agro Private Limited has handed over certain documents related to M/s. Super Bazar Stores Private Limited currently being assessed with this office. The description of the documents handed over are as under:- Sl.No. Seized from the premise Annexure Description 1. C-35/6, Industrial Area, Lawrence Road, Delhi Hard Disk Named image [Inventorized as Annexure-A-65 (Hard Disk2 Nos.)] Provisional Trading and Loss account of M/s. Super Bazaar Stores Private Limited showing an expense of Rs.6,98,93,276/- on account of Future Trading. 2. C-35/6, Industrial Area, Lawrence Road, Delhi Hard Disk Named image [Inventorized as Annexure-A-65 (Hard Disk2 Nos.)] Containing sales details, invoices, bank account statement, and various cheques issued and other trading details of M/s. Super Bazar Stores Private Limited 3. C-35/6, Industrial Area, Lawrence Road, Delhi Hard Disk Named image [Inventorized as Annexure-A-65 (Hard Disk2 Nos.)] Profit and Loss account for M/s. Super Bazaar Stores Private Limited showing a net profit of Rs.1,80,83,810/- 4. C-35/6, Industrial Area, Lawrence Road, Delhi Hard Disk Named image [Inventorized as Annexure-A-65 (Hard Disk2 Nos.)] Various invoices, client statements raised by M/s. Super Bazaar Stoeres Private Limited. Stock details. Page | 11 The above said documents contain the information of income/investment/expenditure made by the assessee M/s. Super Bazar Stores Private Limited. After examining the documents, I am satisfied within the meaning of Section 153C r.w.s. 153A of the Act that these documents have bearing on the determination of the total income of M/s. Super Bazar Stores Pvt.Ltd. for the A.Ys 2010-11 to 2015-16.” 10. Section 153C of the Act pertains to the assessment of income in the hands of person other than searched person, in cases where certain documents, assets or books of accounts etc. found to be pertained to or related to such third person (other than the person on whom search was conducted under s. 132 of the Act or requisitioned under s. 132A of the Act). This section allows the AO of other person to initiate proceedings against such other person/third person (not the searched person) if there are indications of undisclosed income. A key component of initiating search proceedings under s. 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 ‘satisfaction note’ is the first step and a foundational document to determine the validity of the assessment process against a third person whose documents or assets etc. are found in a search. ‘Satisfaction note’ is critical because it serves as a valuable safeguard against arbitrary proceedings and ensures that the powers under s. 153C of the Act are exercised 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 s. 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 such 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 specify 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, as far as possible, to enable judicial scrutiny of such document, if so called for. 11. The assessee contends that ‘satisfaction note’ which is the first step for assumption of jurisdiction under s. 153C of the Act and provides foundation for conferment of jurisdiction is plagued with multiple legal infirmities. Viz: [i] the ‘satisfaction note’ has been recorded by the AO of assessee collectively for the period AYs 2010-11 to AY 2015-16 without identifying the incriminating material in respect of any particular Assessment Year. Besides, the assessee company itself has come into existence by Certificate of incorporation dated 03.01.2013 and therefore, the company was not in existence in AY 2010-11 to AY 2012-13 covered in the ‘satisfaction note’; [ii] the AO has thrown upon whole basket of six months without giving reference to any concrete incriminating material of a particular Assessment Year and without taking note of commencement of activities of assessee; [iii] the act of the AO making sweeping averment in the ‘satisfaction note’ that documents in the form of hard disks have bearing on determination of total income of Super Bazar Stores Pvt. Ltd. for AYs 2010-11 to 2015-16, is without legal foundation and without application of mind, as the AO has even failed to name the alleged documents and further failed to mention as to how it is related/pertained to a given AY covered in the ‘satisfaction note’; Page | 12 [iv] the AO on receipt of material/documents from the AO of the searched person must necessarily apply his mind on the material received and ascertain precisely the specific year to which incriminating material relates. 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 exercise of analysis and ascertainment by the AO in the light of judgement rendered in the case of Agni Vishnu Feature Pvt.Ltd. vs DCIT [2023] 157 taxmann.com 242 (Madras). In the instant case, non- application of mind on material supplied to AO is obvious as the company itself was not in existence for sizable period covered in proceedings under s. 153C of the Act; [v] the ‘satisfaction note’ is clearly very generic and devoid of any basic detail of the transaction in question. 12. We find ostensible potency in the plea of assessee towards allegation of legal infirmities in the ‘satisfaction note’. The Hon’ble Delhi High Court in the case of Sakham Commodities 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 confer 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 reaction or have 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 underscored 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 of total income, it will be abrupt exercise of powers in mechanically re-opening or assessing all over again of the AYs covered in the block that could possibly form 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 the case of Sinhgad Technical Education Society wherein the Hon’ble Supreme 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’. 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 relevant AYs which can then be subject to action under section 153C of the Act will have to be necessarily those in respect of which the assessment is likely to be influenced or impacted by the material 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 situation, it will be incumbent upon the AO to duly record reasons that 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, 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 Delhi High Court noticeably held that issuance of a notice under section 153C of the Act is clearly not intended to be an inevitable consequence to the receipt of material by the Jurisdictional AO and that the initiation of action under section 153C of the Act will have to be founded on a formation of opinion by the Jurisdictional AO that the material handed over and Page | 13 received pursuant to a search is likely to influence the determination of total income and would be relevant for the purposes of assessment/re-assessment in terms of section 153C of the Act. 13. The observation of the Hon’ble Delhi High Court noted above, clearly provides vehement support to the plea taken by the assessee on aspects of jurisdiction flowing from ‘satisfaction note’. The ‘satisfaction note’ under 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’ for several years nor provided any requisite details of transaction to enable an independent person to ascertain and form 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. The AO has not even bothered to relate the so-called documents etc. with the AYs covered. The assessee company was non-existent in AY 2010-11; AY 2011-12; AY 2012-13, which were also covered under s. 153C in a non-chalant manner. Mere drawing of a perfunctory satisfaction without meeting basic ingredients of providing some tangible & descript information and application of mind thereon has no standing in law and would not confer drastic jurisdiction of assessment u/s 153C of the Act on a person other than searched person. The jurisdiction assumed based on such lackadaisical ‘satisfaction note’ beset with vital infirmities cannot be countenanced in law. The objections raised on behalf of the assessee towards lack of jurisdiction based on a cryptic and non-descript satisfaction thus deserves to be sustained. While recording a consolidated ‘satisfaction note’ is not a bar in law per se as rightly contended on behalf of 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 depict application of mind and initiation of action under section 153C of the Act qua such assessment years. The AO has apparently failed to do so in the present case. As a corollary, the notice 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 quashed. 14. In this view of the matter, the jurisdiction assumed under s. 153C based on vague and non-descript ‘satisfaction note’ is vitiated at the threshold. The consequence assessment order passed under s 153C thus has no force of law. The first appellate order passed on nonest assessment order is thus set aside and the AO is directed to restore the position claimed by the assessee and delete the additions made.” 9.6 In the background of the aforesaid discussions and respectfully following the above-said binding precedents, we note that 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’ for several years nor provided any requisite details of transaction to enable an Page | 14 independent person to ascertain and form 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 a perfunctory satisfaction without meeting basic ingredients of providing some tangible & descript information and application of mind thereon has no standing in law and would not confer drastic jurisdiction of assessment u/s 153C of the Act on a person other than searched person. The jurisdiction assumed based on such lackadaisical ‘satisfaction note’ beset with vital infirmities cannot be countenanced in law. The objections raised on behalf of the assessee towards lack of jurisdiction based on a cryptic and non-descript satisfaction thus deserves to be sustained. While recording a consolidated ‘satisfaction note’ is not a bar in law per se as rightly contended on behalf of 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 depict application of mind and initiation of action under section 153C of the Act qua such assessment years. The AO has apparently failed to do so in the present case. As a corollary, the notice issued under section 153C of the Act and consequent assessment order passed under section 153C of the Act is vitiated in law and thus deserves to be quashed. In this view of the matter, the jurisdiction assumed under section 153C of the Act based on vague and non-descript ‘satisfaction note’ is vitiated at the threshold. The consequence assessment order passed under section 153C thus has no force of law. Therefore, the Ld. First Appellate’s Order r passed on nonest assessment order is thus set aside. Page | 15 We hold and direct accordingly. Resultantly, the appeal pertaining to assessment year 2016-17 is also allowed in the aforesaid very terms. 10. In the result, both the assesee’s appeals pertaining to assessment year 2015-16 & 2016-17 stand allowed. Order pronounced in the Open Court on 3rd July, 2025. Sd/- Sd/- (SUDHIR PAREEK) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent. 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "