BLB LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX & ANR.

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W.P.(C)/8877/2024HC DelhiDLHC01037482202402 July 2024Bench: HON'BLE MR. JUSTICE RAVINDER DUDEJA,HON'BLE MR. JUSTICE YASHWANT VARMA3 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court allowed the writ petition. The Court held that the invocation of Section 153C for AY 2013-14 was invalid as it fell beyond the ten-year window prescribed by the provision. The Court relied on its previous judgment in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd. (2024 SCC OnLine Del 2439). The reasoning in Ojjus Medicare established that for non-searched persons under Section 153C, the ten-year period is reckoned from the date of receipt of books of accounts, documents, or assets by the jurisdictional AO. In this case, the satisfaction note was recorded on December 18, 2023, and AY 2013-14 was beyond the ten-year period calculated from that date. Consequently, the impugned notice dated December 19, 2023, issued under Section 153C and all consequential proceedings were quashed.

What were the facts?

The petitioner, BLB Limited, filed a writ petition before the Delhi High Court challenging a notice issued under Section 153C of the Income Tax Act, 1961, dated December 19, 2023, and subsequent consequential orders and demand notices. The petitioner argued that the assessment year in question, AY 2013-14, fell outside the ten-year window prescribed by Section 153C. The satisfaction note for invoking Section 153C was recorded by the jurisdictional Assessing Officer on December 18, 2023. The revenue was represented by the Deputy Commissioner of Income Tax and another respondent.

What were the issues?

1. Whether the notice issued under Section 153C of the Income Tax Act, 1961, for Assessment Year 2013-14 is valid when the satisfaction note was recorded on December 18, 2023, and the ten-year window prescribed by the provision has expired. Assessee's Contention: The petitioner contended that AY 2013-14 falls beyond the ten-year period stipulated under Section 153C, making the invocation of the provision impermissible. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding this issue. However, the issuance of the notice implies a belief that Section 153C was applicable.

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A

AI-generated summary — verify with the full judgment below

$~36 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 8877/2024

BLB LIMITED .... Petitioner

Through: Mr. S. Krishnan, Adv.

versus

DEPUTY COMMISSIONER OF INCOME TAX & ANR. .... Respondents Through: Mr. Indruj Singh Rai, SSC with Mr. Sanjeev Menon & Mr. Rahul Singh, JSCs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

O R D E R %

02.07.2024

1.

Allowed, subject to all just exceptions. CM APPL. 36071/2024 (Ex.) 2. The application stands disposed of.

W.P.(C) 8877/2024 3. The instant writ petition has been preferred seeking the following reliefs: “a. Issue a writ of mandamus or certiorari or any other appropriate writ or direction, quashing impugned notice under section 153-C dated 19.12.2023 issued by Respondent No.1, and all consequential orders, notices, and proceedings; b. Issue a writ of mandamus or certiorari or any other appropriate writ or direction, quashing impugned order dated 31.03.2024 passed by Respondent No.2, and all consequential notices and orders; c. Issue a writ of mandamus or certiorari or any other appropriate writ or direction, quashing impugned demand notice dated 12.04.2024, issued by Respondent No.2; d. Issue any other writ or direction, or pass any other order as This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 09:44:16

deemed fit and appropriate, in the interests of justice. e. Pass any other order or issue any other direction as deemed fit and proper in the interests of justice”

4.

The petitioner is essentially aggrieved by the invocation of Section 153C of the Income Tax Act, 1961 [“Act”] for Assessment Year [“AY”] 2013-14. Undisputedly, the Satisfaction Note was recorded by the jurisdictional Assessing Officer [“AO”] of the petitioner on 18 December 2023. Consequently, the aforenoted AY 2013-14 would fall beyond the maximum window of ten years as prescribed under the aforenoted provision. 5. The issue in any case stands answered and covered in favour of the writ petitioner in light of the judgment rendered in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd [2024 SCC OnLine Del 2439]. The relevant paragraphs of the aforesaid decision read as under:- “D. The 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 and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 09:44:16

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 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. F. While the identification and computation of the six AYs’ hinges upon the phrase “immediately preceding the assessment year relevant to the previous year” of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “from the end of the assessment year”. This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of the assessment year” while speaking of the ten year block 6. Accordingly, and for reasons assigned in our decision in Ojjus Medicare, we allow the instant writ petition and quash the impugned notice dated 19 December 2023 issued under Section 153C of the Act and all consequential proceedings arising therefrom. .”.

YASHWANT VARMA, J.

RAVINDER DUDEJA, J. JULY 2, 2024/kk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 09:44:16

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