ACIT, DELHI vs. J.S.P. CONSTRUCTIONS, NEW DELHI

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ITA 3368/DEL/2026Status: DisposedITAT Delhi27 July 20268 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, ruling that the assessment year 2013-14 was outside the ten-year block period for assessment under section 153C. This was because the reckoning of the block period should be based on the date of receipt of seized material by the jurisdictional AO of the non-searched person, not the date of the search.

What were the facts?

The Revenue appealed against the annulment of an assessment under section 153C. The assessment was based on seized material from a search in the Alankit Group, and the satisfaction note for the assessee was recorded on 24.06.2022.

What were the issues?

Whether the assessment year 2013-14 was within the ten-year block period for assessment under section 153C, considering the date of recording of satisfaction by the jurisdictional AO of the non-searched person.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI

For Appellant: Shri Atishaya, C.A. and Shri Vaibhav, C.A
For Respondent: Shri Zafarul Haque Tanweer, CIT-D.R
Hearing: 27.07.2026Pronounced: 27.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3368/Del/2026 (Assessment Year : 2013) ACIT Vs. JSP Constructions Civic Centre, Minto Road E-27, Ground Floor, New Delhi – 110 002 Geetanjali Enclave, Malviya Nagar, New Delhi PAN No. AACFJ 9831 E (APPELLANT) (RESPONDENT) Assessee by Shri Atishaya, C.A. and Shri Vaibhav, C.A. Revenue by Shri Zafarul Haque Tanweer, CIT-D.R. Date of hearing: 27.07.2026 Date of Pronouncement: 27.07.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : The instant appeal filed by the Revenue is directed against the order dated 18.06.2025 passed by the ld. Commissioner of Income-tax (Appeals)-3, Noida [hereinafter referred to as the ‘Ld. CIT(A)’] arising from the assessment order under section 153C of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] dated 23.03.2024 passed by the DCIT, Central Circle, Ghaziabad for the Assessment Year 2013.

ITA No. 3368/DEL/2026 [A.Y 2013] ACIT vs. JSP Constructions 2. Revenue filed the following grounds of appeal as under: “1. Whether, on the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in annulling the assessment under section 153C by treating alleged deficiencies in the satisfaction note as fatal to jurisdiction, without appreciating that the statute requires recording of satisfaction in substance and does not prescribe any particular form or degree of elaboration. 2. Whether the Ld. CIT(A) erred in law in concluding that no incriminating material existed for the purposes of section l53C by evaluating the seized digital material on parameters relevant for final adjudication, rather than examining whether such material prima facie pertained to or related to the assessee and had a bearing on the determination of income, as contemplated under the Act. 3. Whether the Ld. CIT(A) erred in law in importing strict evidentiary requirements of the Indian Evidence Act. including section 65B. at the stage of assumption of jurisdiction under the Income tax Act, ignoring the settled legal position that income-tax proceedings are civil in nature and governed by the principle of preponderance of probabilities. 4. Whether the Ld. CIT(A) erred in law and on facts in holding the assessment to be barred by limitation under section 153C solely on account of uncertainty regarding the chronology of recording of satisfaction, without appreciating that such uncertainty was fact- dependent and required verification or clarification rather than warranting outright annulment of the assessment. 5. Whether the Ld. CIT(A) exceeded appellate jurisdiction by annulling the assessment in entirety on debatable and fact-dependent jurisdictional grounds, without calling for a remand report, without seeking clarification from the Assessing Officer, and without considering whether the alleged defects, even if assumed, were curable in nature' 6. Whether the Ld. CIT(A) erred in law in annulling a high-value assessment without adjudicating the additions on merits or examining whether the seized material, taken cumulatively, disclosed issues requiring examination during assessment proceedings.” 3. Brief facts of the case are that the assessment in the present case was completed under section 153C read with section 143(3) of the Act for Assessment Year 2013-14 pursuant to a search conducted in the case of the Alankit Group. During the course of search and post-search proceedings, certain documents and digital data in the form of excel

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ITA No. 3368/DEL/2026 [A.Y 2013] ACIT vs. JSP Constructions sheets, tally backups and related records were found and seized. On examination of the seized material, satisfaction was recorded to the effect that the seized material pertained to or related to the assessee, JSP Constructions, and had a bearing on the determination of its total income. Consequent thereto, proceedings under section 153C were initiated and assessment was framed making additions based on the seized material. 4. Aggrieved, assessee was in appeal before the learned CIT(A). In appeal, the learned CIT(A) vide order dated 18.06.2025, annulled the assessment on jurisdictional grounds. 5. Aggrieved the Revenue is in appeal before us. 6. Before us, the ld. counsel for the assessee vehemently stated that as the satisfaction, in the case of the assessee, was recorded on 24.06.2022, the assessment year relevant to the previous year in which search is conducted or requisition is made, as per the first proviso of section 153C, becomes A.Y. 2023-24. The ten assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, begins from A.Ys. 2023-24. The ld AR vehemently argued that the impugned A.Y 2013-14, is therefore, out of the block of ten assessment years for which assessment could be made and therefore the Assessing Officer cannot assume jurisdiction for making assessment u/s 153C of the Act. Page 3 of 9

ITA No. 3368/DEL/2026 [A.Y 2013] ACIT vs. JSP Constructions The ld. counsel for the assessee also strongly relied upon the latest decision of the Hon'ble Delhi High Court in the case of Ojjus Medicare Pvt Ltd & Others [2024] 161 taxmann.com 160 (Delhi) order dated 03.04.2024.

7.

We have heard the rival submissions and have perused the relevant material on record. We find that this issue of the date of search for persons covered under section 153C, is no longer res-integra and is now been well settled by the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437(SC). The relevant law laid down by the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437(SC) are read as under: “It is evident on a plain interpretation of Section 153C (1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153C was enacted. The revenue argued that the proviso [to Section 153(c)(l)] is confined in its application to the question of abatement. It is quite plausible that the AO seized of the materials….would take his own time to forward the papers and materials belonging to the third party, to the concerned AO. In that event if the date would virtually ‘relate back’ as is sought to be contended by the revenue, (to the date of seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is disproportionate.”

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ITA No. 3368/DEL/2026 [A.Y 2013] ACIT vs. JSP Constructions 8. The Hon'ble Delhi High Court has further elaborated the legal dictum in the case of Ojjus Medicare Pvt Ltd [2024] [supra] wherein it has held as under:

“First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten-year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “relevant assessment year” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non- searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation Ltd v. Dy.CIT (2012) 346 ITR 177 ( Delhi)( HC) and CIT v. RRJ Securities Ltd 2015 SCC Online Del 13085 as well as the decision of the Supreme Court in CIT v Jasjit Singh 2023 SCC Online SC1265. The aforesaid legal position also stood reiterated by the Supreme Court in ITO v. Vikram Sujitkumar Bhatia 2023 SCC Online SC 370. The submission of the revenue, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs’ would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or Page 5 of 9

ITA No. 3368/DEL/2026 [A.Y 2013] ACIT vs. JSP Constructions the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A.” 9. The law as interpreted by the Hon'ble Supreme Court and the Delhi High Court as above, declares that as per first proviso of section 153C of the Act, the commencement date for computation of the six/ten assessment years is deemed to be the date of receipt of books of account/materials/asset, belonging/pertaining to non-searched person, by the jurisdictional Assessing Officer of the non-searched person.

10.

We find that in the instant case, search action was initiated on Alankit Group on 18.10.2019. It is an unrebutted fact that the AO of the assessee, i.e., the non-searched person, initiated the proceedings u/s 153C for the AY 2013-14, by recording the satisfaction note on 24.06.2022. As the satisfaction note was recorded by the AO of the assessee i.e., non-searched person, on 24.06.2022, the assessment year relevant to the previous year in which search is conducted or requisition is made, as per the first proviso of section 153C, becomes A.Y. 2023-24. The ten assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, begins from A.Ys. 2023-24. Accordingly, counting backwards, the impugned A.Y 2013-14, is out of Page 6 of 9

ITA No. 3368/DEL/2026 [A.Y 2013] ACIT vs. JSP Constructions the block of ten assessment years for which assessment could be made as follows: Computation of the ten-year block period as provided under section 153C read with section 153A of the Act 1st year AY 2023-24 2nd Year AY 2022-23 3rd year AY2021-22 4th year AY2020-21 5th year AY2019-20 6th year AY2018-19 7th year AY2017-18 8th year AY2016-17 9th year AY2015-16 10th year AY2014-15

In light of the decision of the Hon'ble Supreme Court and Delhi High Court [supra], the impugned A.Y 2013-14 would, therefore, fall beyond the period of ten assessment years as reckoned with reference to the date of recording of satisfaction by the assessing officer of the non- searched person. We therefore, have no hesitation in upholding the decision of the CIT(A) and quashing the impugned assessment order having been made without legal and valid assumption of jurisdiction. The ground is dismissed.

11.

In the result, appeal of Revenue in ITA No. 3368/DEL/2026 is dismissed.

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ITA No. 3368/DEL/2026 [A.Y 2013] ACIT vs. JSP Constructions Order pronounced in the open court on 27.07.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 03.08.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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