ITAT Delhi Quashes Section 153C Assessments — Omnibus Satisfaction Note Without Year-Wise Incriminating Material Held Legally Unsustainable

Case Overview

Case: Antal Expo Fab Pvt. Ltd. Vs DCIT
Forum: Income Tax Appellate Tribunal, Delhi
Assessment Years: 2018-19 and 2019-20
Relevant Provision: Section 153C of the Income Tax Act, 1961

The Delhi Bench of the Income Tax Appellate Tribunal ("ITAT" or "Tribunal") recently disposed of six appeals filed by three different assessees through a single consolidated order, given that the factual matrix and legal issues arising in each appeal were substantially identical. The Tribunal designated the appeal filed by Antal Expo Fab Pvt. Ltd. for Assessment Year 2018-19 as the lead case for the purpose of adjudication.

Background and Factual Matrix

The Search and Subsequent Proceedings

A search and seizure operation was carried out under Section 132 of the Income Tax Act, 1961 on 31.10.2018 at the premises of the Hawala Traders Group, which was led and operated by one Sumit Jindal. In the course of this search, certain digital data and documents allegedly connected to the assessee companies were discovered and seized from the searched premises.

Antal Expo Fab Pvt. Ltd., a private limited company incorporated on 21.04.2017 with two directors — Pawan Kumar and Kusum Lata — was engaged in the business of cloth trading, both at the retail and wholesale levels. The company had duly filed its return of income under Section 139 of the Act on 04.09.2018, declaring a total income of ₹15,05,580/-.

Following the search, a notice under Section 153C of the Income Tax Act, 1961 was issued to the assessee on 14.07.2021. In response, the assessee filed a fresh return of income on 14.10.2021, declaring a taxable income of ₹15,08,580/-.

Assessment Proceedings and Additions Made

During the course of assessment proceedings, the Assessing Officer formed the view that the assessee had entered into non-genuine purchase transactions amounting to ₹50,95,818/- with M/s Puspdant Trading Co., an entity alleged to be managed and operated by Sumit Jindal. The Assessing Officer treated these purchases as bogus accommodation entries and added the entire sum under Section 68 of the Act. Additionally, a further sum of ₹7,643/- (calculated at 0.15% of ₹50,95,818/-) was added under Section 69C on the premise that the assessee had paid commission to avail accommodation entries.

The combined effect of these additions resulted in the total income being computed at ₹66,12,041/-, as against the declared income of ₹15,05,580/-.

The assessment order was passed on 23.03.2023 under Section 153C of the Act. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) – 24, New Delhi, which was dismissed vide order dated 08.12.2025, both on the legal grounds raised and on merits. Aggrieved, the assessee approached the ITAT.

Grounds of Appeal Raised Before the Tribunal

The assessee raised several grounds before the Tribunal, including both legal and factual challenges. The key grounds included the following: