S.153C proceedings invalid without specific, dated satisfaction that seized material bears on assessee's total income.

ORDER

PER BENCH

The captioned appeals are filed by assessee against the orders, both dated 29.03.2025 by Ld. Commissioner of Income Tax (A), Lucknow-3 [“Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order, both dated 29.12.2019 passed u/s 143(3) r.w.s. 153C of the Act pertaining to Assessment Year 2014-15 and 2013-14 respectively.

2. Both appeals filed delayed by 08 days for which an affidavit is filed explaining the circumstances for the delay. It is stated that the assessee and its counsel are placed at two different cities therefore, the appeal could not be filed with the limitation period. We find that the reasons stated is having genuine and reasonable cause thus, the delay in filing the appeal by 08 days is condoned.

3. Ld.AR for the assessee filed an application for admission of additional grounds of appeal and contended containing that these additional grounds of appeal are purely legal in nature and required no investigation, thus the same be admitted. The additional grounds of appeal are as under:-

Ground No. 12

“Because on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the validity of the proceedings under Section 153C, falling to appreciate that the Assessing Officer recorded a consolidated Satisfaction Note for multiple Assessment Years (AY 2011- n. to 16) instead of recording satisfaction for each Assessment Year separately.

Ground No. 13

Because on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in failing to appreciate that the proceedings under Section 153C are void ab initio and bad in law as the Satisfaction Note forming the basis of jurisdiction is undated and unsigned.

Ground No. 14

Because on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in failing to appreciate that the Ld. AO erred in assuming jurisdiction by mechanically recording "Twin Satisfaction" (as AO of the searched person and AO of the other person) in a single, undated document without independently applying his mind to the distinct requirements of (a) whether the documents belong to the Appellant and (b) whether they have a bearing on the total income of the Appellant for the specific six years.”

4. After perusal of the additional grounds of appeal, it is observed that these are purely legal in nature and thus by following the judgement of hon’ble Supreme Court in the case of NTPC Ltd. Vs CIT reported in 229 ITR 383 (SC) the same are admitted for adjudication.

5. Additional Ground of appeal No.13 taken for AY 2013-14 is with respect to the legality of the satisfaction note recorded for initiating the proceedings u/s 153C of the Act, copy of which is placed before us alongwith additional grounds of appeal.

6. Heard the contentions of both parties at length and perused the material available on record. From the perusal of the satisfaction note placed before us, it is observed that AO while initiating the proceedings u/s 153C had recorded his satisfaction which is undated, had not bifurcated the income year-wise and further no satisfaction with reference to “bearing on the determination of total income” have been recorded. The Hon’ble Delhi high court landmark decision in Saksham Commodities Ltd. Vs. ITO (2024) 464 ITR 1 (Delhi HC) has settled the law in the assessee’s favour and against the department that such recording of satisfaction under section 153C is not a mere mechanical exercise. The relevant observations of the hon’ble court are as under:

“48. In terms of the Second Proviso to Section 153A, all assessment or reassessment proceedings relating to the six AYs' or the "relevant assessment year" pending on the date of search are statutorily envisaged to abat