ITAT Quashes Section 153C Assessment for Lack of Proper Satisfaction Note holding it as a Mechanical Satisfaction Note

The Income Tax Appellate Tribunal ITAT (Delhi) held that the satisfaction note recorded in the assessee’s case was legally unsustainable as it failed to disclose any incriminating material or demonstrate its relevance to the determination of income.

The assessee, Ms. Kiran Agarwal, filed her return of income for Assessment Year 2019-20 declaring income of Rs. 7.88 lakh. Subsequently, search and seizure operations were conducted in the Alankit Group on 18 October 2019. Based on the search, the Revenue alleged that the group was providing accommodation entries and initiated proceedings against the assessee under Section 153C.

The assessee approached the ITAT challenging the validity of the jurisdiction assumed under Section 153C.

The Tribunal examined that the satisfaction note was completely silent on the incriminating evidence relied upon and reflected no independent application of mind by the Assessing Officer. The Tribunal held that the satisfaction note recorded in the assessee’s case was legally unsustainable as it failed to disclose any incriminating material or demonstrate its relevance to the determination of income

Accordingly, the Tribunal allowed the assessee’s appeal and quashed the assessment order passed under Section 153C read with Section 153A, holding that the very assumption of jurisdiction was invalid in law. As a result, the impugned assessment ITAT Quashes Section 153C Assessment for Lack of Proper Satisfaction Note holding it as a  Mechanical Satisfaction Note ITAT Quashes Section 153C Assessment for Lack of Proper Satisfaction Note holding it as a  Mechanical Satisfaction Note ITAT Quashes Section 153C Assessment for Lack of Proper Satisfaction Note holding it as a  Mechanical Satisfaction Note