ITAT Holds AO Should Have Invoked Sections 147 And 148A After April 2021 Amendment:

The assessee is Waves Data Management Private Limited who filed an appeal before the ITAT Delhi against the order dated March 23, 2026, passed by the CIT(A), for Assessment Year 2014-15. The case arose from a search and seizure operation conducted under Section 132 of the Income Tax Act in the case of the Alankit Group on October 18, 2019. During the search, certain entries and documentary evidence relating to the assessee were found. Subsequently, the AO of the searched person recorded a satisfaction note on June 23, 2022, and transferred the relevant information and documents to the AO having jurisdiction over the assessee. The latter recorded his satisfaction note on August 1, 2022.

Thereafter, the AO completed the assessment under Section 153C of the Act through order dated February 20, 2024. The Tribunal considered the submissions of the assessee, the findings of the lower authorities and the judicial precedents cited before it. It observed that the satisfaction note in the assessee's case had admittedly been recorded on August 1, 2022, i.e., after the amended provisions came into effect on April 1, 2021.

Accordingly, the Tribunal held that the AO ought to have proceeded under Sections 147 and 148A of the Income Tax Act instead of invoking Section 153C. Since the assessment had been completed under Section 153C contrary to the amended statutory provisions, the assessment order was not sustainable in law and deserved to be quashed.

The Tribunal further observed that, having allowed the appeal on the legal issue, it was not necessary to adjudicate the remaining grounds relating to the merits of the additions, as they had become academic in nature. Consequently, the Tribunal allowed the assessee's appeal and quashed the assessment framed under Section 153C of the Income Tax Act.