SHUBHAM AGGARWAL vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 27 & ORS.

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W.P.(C)/2651/2024HC DelhiDLHC01008273202405 April 2024Bench: HON'BLE MR. JUSTICE YASHWANT VARMA,HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV2 pages
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What did the High Court hold?

The High Court allowed the writ petition. The Court held that the impugned notice under Section 153C of the Income Tax Act, 1961, dated May 12, 2023, relating to AY 2014-15, is ex facie beyond the maximum window of ten years as prescribed. The Court relied on its previous judgment in Principal Commissioner of Income Tax Central – 1 v. Ojjus Medicare Private Limited, which clarified that for a non-searched person under Section 153C, the ten-year period is reckoned from the 31st day of March of the assessment year relevant to the year of search, as per Explanation 1 of Section 153A. The Court quashed the impugned notice for AY 2014-15. The ratio decidendi is that the ten-year period for Section 153C assessments, for non-searched persons, commences from the end of the assessment year relevant to the year of search, not the date of search itself.

What were the facts?

The petitioner, Shubham Aggarwal, filed a writ petition challenging a notice issued under Section 153C of the Income Tax Act, 1961. The notice was dated May 12, 2023, and pertained to Assessment Year (AY) 2014-15. The petitioner contended that the notice was issued beyond the prescribed time limit. The respondents, Assistant Commissioner of Income Tax, Central Circle 27 & Ors., did not provide an appearance. The High Court of Delhi was seized of the matter.

What were the issues?

1. Whether the notice issued under Section 153C of the Income Tax Act, 1961, dated May 12, 2023, for AY 2014-15, is barred by limitation, considering the ten-year window prescribed by the Act? (Question of law) Assessee's Contention: The notice is ex facie beyond the maximum window of ten years as prescribed by the Act. The petitioner relies on the judgment in Principal Commissioner of Income Tax Central – 1 v. Ojjus Medicare Private Limited. Revenue's Contention: No appearance was given by the respondents, hence no contentions were recorded.

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A

AI-generated summary — verify with the full judgment below

$~62 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2651/2024 &CM APPL. 10885/2024 (stay)

SHUBHAM AGGARWAL

..... Petitioner

Through: Mr. Kunal Tandon and Mr.

Saurabh Dev and Mr. Karan

Singh, Advs.

Versus

ASSISTANT COMMISSIONER OF INCOME TAX

CENTRAL CIRCLE 27 & ORS.

..... Respondents

Through: Appearance not given

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR

KAURAV

O R D E R %

05.04.2024

1.

Bearing in mind the undisputed fact that the impugned notice under Section 153C of the Income Tax Act, 1961 [“Act”] is dated 12 May 2023 and relates to Assessment Year [“AY”] 2014-15, it is ex facie evident that it would fall beyond the maximum window of ten years as prescribed. 2. 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 Central – 1 v. Ojjus Medicare Private Limited[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 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 04/07/2025 at 01:06:44

nonsearched 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 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."

3.

Accordingly, and for reasons assigned in our decision in OjjusMedicaare Private Limited, we allow the instant writ petition and quash the impugned notice under Section 153C of the Act dated 12 May 2023 in so far as it pertains to AY 2014-15.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. APRIL 03, 2024/P

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 04/07/2025 at 01:06:44

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