The initiation of proceedings under Section 153C of the Income Tax Act, 1961 is rendered bad in law if the satisfaction note is not recorded with due diligence and promptness, as an inordinate delay of several years from the date of search violates the statutory intent of immediate action.

आदेश /O R D E R

PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1. These are a batch of two appeals pertaining to the same Assessee. Since the issues are interconnected and common in both the cases, hence, these two appeals are being disposed of through a single order.

2. These appeals arise from two different orders passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”) by Ld. CIT(A)-24, New Delhi vide separate orders both dated 30.05.2025. Briefly in this case, a search and seizure operation was conducted on 07.12.2018 on the H.S. Impacts Group and M/s Dengen Products India LLP cases. Several documents were seized during the course of search action which allegedly pointed towards certain cash based loan committees run by Shri Prateek Chitkara and Shri Harpreet Singh Talwar. The Ld. AO issued a notice u/s 153C for both the years [AYs 2017-18 & 2018-19], on 04.11.2022. It is also a fact that a notice u/s 148 of the Act was issued on 30.06.2021 for AY 2017-18 and 01.04.2022 for AY 2018-19. It has been brought on record that for quite some time proceedings u/s 153C & 147 of the Act were running parallel to each other. The Ld. AO has made several additional through the respective assessment orders.

2.1 The assesse has raised additional grounds of appeal for both the years vide their application dated 15.12.2025 as under: -

“That while filing the above appeal the under noted ground of appeal could not be included in the ground of appeal as attached/accompanied to the Memorandum of Appeal, namely:-

01. That the Ld. AO has initiated proceedings u/s 148 of the Income Tax Act, 1961 for the instant assessment year and correspondingly initiated proceedings u/s 153C of the Income Tax Act, 1961 and the proceedings u/s 148 are not being dropped after issuance of notice u/s 153C renders the entire proceedings bad in law and the same deserves to be quashed.

02. That the satisfaction has been recorded after the elapse of 4 years from the date search i.e. 04.11.2022 whereas the search has been conducted on 07.12.2018, the notice as well as the entire proceedings assessment framed are without jurisdiction, which is void ab initio, bad in law and should be quashed.

03. That there being no incrementing material found during search and the assessment proceedings are initiated purely on the basis of statement of some person render the entire proceedings bad in law and deserves to be quashed. Saksam Commodity (Delhi HC).

The above ground of appeal is purely legal ground and goes to the root of the matter.”

The Ld. AR requested that the additional grounds of appeal challenging the assumption of jurisdiction by the Ld. AO may be decided before proceeding ahead with any decision on merits. Regarding the first additional ground tendered by the Ld.,AR, regarding the running of two parallel proceedings, the Ld. AR argued that the same was not permissible under law and relied on the case of Shri Karshni Metals Pvt. Limited in ITA No.5079/Del/2019, order dated 27.08.2024. Through this coordinate bench case it has been directed that proceedings u/s 147 of the Act and 153C of the Act cannot go together and in this particular case the proceedings u/s 147 of the Act were quashed. Secondly, regarding the ground of delay in recording satisfaction after almost four years from the date of search, reliance was placed on the case of Parag Rameshbhai Gathani [180 taxmann.com 662] (Guj.). The Ld. AR argued that the AO does not have unfettered powers in terms of the time taken for recording satisfac