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Facts
A search operation was conducted, leading to the issuance of a notice u/s 153C to the assessee for AY 2009-10. The Assessing Officer recorded satisfaction notes on 09.07.2021 and 14.07.2021, and the notice u/s 153C was issued on 14.07.2021.
Held
The Tribunal held that based on the judgment of the Hon'ble Delhi High Court, proceedings u/s 153C can be initiated up to 10 years from the year of satisfaction. Since the satisfaction was recorded in 2021, the notice could only be issued up to AY 2013-14. Therefore, the initiation of proceedings for AY 2009-10 was barred by limitation.
Key Issues
Whether the initiation of proceedings u/s 153C for AY 2009-10 was barred by limitation given the date of search and satisfaction note.
Sections Cited
153A, 153C, 132
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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI SATBEER SINGH GODARA, & SHRI NAVEEN CHANDRA
This appeal by the Revenue is directed against the order of the ld.
CIT(A)-23, New Delhi dated 14.01.2025 pertaining to A.Y 2009-10.
The grievances raised by the Revenue read as under:
“1. The Ld. CIT(A) has erred in deleting the entire addition of Rs. 7,92,00,000/-made by Assessing Officer on account of Page 1 of 4 disallowance of fictitious loss claimed by the assessee on sale of shares without considering the merit of the case.
2. Whether on the facts and circumstances of the case, Ld. CIT(A) have erred in holding that assessment year 2009-10 could not have been covered for a search operation conducted on 29.05.2018 in view of explanation 1 to section 153A/153C of the Income tax Act, 1961.
3. The assessee craves to add or amend any/all the grounds of appeal before or during the hearing of the appeal.”
None appeared on behalf of the assessee. We decided to proceed ex-parte. The ld. DR was heard at length. Case records carefully perused.
At the very outset, we find that a search and seizure was conducted u/s 132 in the case of M/s Ritika Pvt. Ltd and related entities of RPL Group on 29.05.2018. Certain documents were found pertaining to the assessee. The Assessing Officer of the searched person as well as the assessee were the same. Satisfaction note in the case of the searched person was recorded by the AO on 09.07.2021 and the Satisfaction note in the case of the assessee was also recorded by the same AO on 14.07.2021. On the basis of satisfaction note dated 14.07.2021, notice u/s 153C was issued on 14.07.2021. The issue before us is whether the AY 2009-10, in the case of the assessee, could have Page 2 of 4 Explanation 1 to section 153A/153C of the Act and where satisfaction note u/s 153C was recorded on 14.07.2021.
It is no longer res-intergra, in the light of the judgment of the Hon'ble Delhi High Court in the case of Ojjus Medicare Pvt. Ltd that the proceeding u/s 153C can be initiated upto a maximum period of 10 years, calculated from the year in which the books of accounts are handed over to the AO of the third party upon satisfaction recorded u/s 153C of the Act. In the instant case, the satisfaction has been recorded on 14.07.2021 as AO of the searched party as well as AO of the third party. In such factual matrix, the period of 10 years is to be computed from the AY 2022-23, the year in which the satisfaction u/s 153C was recorded, and hence the notice u/s 153C can be issued only upto AY 2013-14. In that view of the matter therefore, we are of the considered view that the initiation of proceeding u/s 153C for the AY 2009-10 is barred by limitation. The impugned A.Y is beyond 10 years and hence the assessment made is illegal and without going into the merits of the case, the assessment made is accordingly, quashed. The grounds are dismissed
Order pronounced in open court on 26.08.2025.