Consolidated Satisfaction is Improper Satisfaction, Lack Merit: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), New Delhi bench, broadly held that consolidated satisfaction during the assessment proceedings amounts to improper satisfaction as it lacks merit and proper application of mind.

Eight appeals from Assessment Years 2013-14 to 2020-21 were filed by the assessee and consolidated for the sake of convenience since they were interconnected and were common. On 18.10.2019 a search operation was carried out and based on the information and documents seized, the Assessing Officer (AO) recorded satisfaction under Section 15C of the Income Tax Act, 1961 (the Act). The facts clearly state that the Assessing Officer had jurisdiction over the searched persons as well as the assessee.

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The counsel for the assessee submitted that they do not want to press the DIN-related grounds raised but rather called attention to the satisfaction note recorded by the AO where there was no mention of the seized material found and whether the searched persons have any relation to the material and/or on the income of the assessee. The said satisfaction was consolidated which has further been argued to have been declared favouring the assessee by the High Courts and even the ITAT.

The opposing counsel stated that Section 153D merely has an administrative approach requirement for procedure and that has no effect on the assessment proceedings.

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The tribunal relied on PCIT Central v. Siddharth Gupta, PCIT v. Shiv Kumar Nayyar and Sakshi Agarwal v. DCIT to hold the view that consolidated or improper satisfaction are grounds to allow an appeal. Further, that all assessment years must be examined and only after the proper application of mind can the AO give approval/satisfaction note. The appeals from Assessment Years 2013-14 to 2020-21 have been allowed partly by the bench of Rifaur Rahman (Accountant Member) and Sudhir Kumar (Judicial Member).

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