RAJBIR SINGH MAKHNI vs. ASSISTANT COMMISSIONER OF INCOME TAX

PDF · subscribers
W.P.(C)/6970/2023HC DelhiDLHC01019857202310 May 2024Bench: HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV,HON'BLE MR. JUSTICE YASHWANT VARMA4 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court allowed the writ petitions and quashed the impugned notices dated December 28, 2021, issued under Section 153C of the Income Tax Act, 1961, along with all consequential proceedings. The Court found that the Assessment Years (AYs) 2010-11, 2011-12, and 2012-13 fell beyond the ten-year window prescribed by Section 153C, given that the Satisfaction Note was dated December 24, 2021. The Court relied on its previous decision in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd. The reasoning reiterated that for Section 153C assessments concerning non-searched persons, the commencement date for computing the six or ten-year block is the date of receipt of books of accounts, documents, or assets by the jurisdictional AO, not the date of the search. The Court emphasized that the First Proviso to Section 153C shifts the reference point for calculating the 'relevant assessment year' to the date of receipt of seized items by the jurisdictional AO of the non-searched person. The ten-year period is to be reckoned from the 31st day of March of the AY relevant to the year of receipt of seized materials.

What were the facts?

The petitioner, Rajbir Singh Makhni, filed three writ petitions challenging notices dated December 28, 2021, issued under Section 153C of the Income Tax Act, 1961. These notices pertained to Assessment Years (AYs) 2010-11, 2011-12, and 2012-13. The core of the challenge lies in the fact that the Satisfaction Note recorded by the jurisdictional Assessing Officer (AO) was dated December 24, 2021. The petitioner argued that these AYs fall outside the ten-year window prescribed by Section 153C, as the commencement date for computation should be linked to the date of receipt of seized materials by the jurisdictional AO, not the date of search.

What were the issues?

1. Whether the notices issued under Section 153C of the Income Tax Act, 1961, for AYs 2010-11, 2011-12, and 2012-13 are valid, given that the Satisfaction Note was dated December 24, 2021, and the notices were issued on December 28, 2021. 2. Whether the ten-year period prescribed under Section 153C of the Income Tax Act, 1961, for issuing notices should be reckoned from the date of search or the date of receipt of seized books of accounts, documents, or assets by the jurisdictional AO. Assessee's Contentions: The petitioner contended that the AYs in question fall beyond the ten-year window stipulated in Section 153C. They relied on the principle that the computation of the ten-year period under Section 153C should commence from the date the jurisdictional AO receives the seized materials, not the date of the search itself. This interpretation is supported by judicial precedents that clarify the starting point for calculating the 'relevant assessment year' in cases of non-searched persons. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions.

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

W.P.(C) 6970/2023
W.P.(C) 6977/2023
W.P.(C) 7747/2023

Read from the judgment's own cause title. This page is filed under one of them.

$~49, 50 & 56 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6970/2023

RAJBIR SINGH MAKHNI

..... Petitioner

Through: Mr. Ajay Vohra, Sr.SC with

Mr. Rohit Jain, Mr. Aniket D.

Agrawal, Mr. Deepesh Jain

and Mr. Samarth Chaudhari,

Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent

Through: Mr. Anurag Ojha, Sr.SC with

Ms. Hemlata Rawat and Mr.

Virendra Kumar Saksena,

Jr.SCs.

50 + W.P.(C) 6977/2023

RAJBIR SINGH MAKHNI

..... Petitioner

Through: Mr. Ajay Vohra, Sr.SC with

Mr. Rohit Jain, Mr. Aniket D.

Agrawal, Mr. Deepesh Jain

and Mr. Samarth Chaudhari,

Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent

Through: Mr. Anurag Ojha, Sr.SC with

Ms. Hemlata Rawat and Mr.

Virendra Kumar Saksena,

Jr.SCs. 56 + W.P.(C) 7747/2023

RAJBIR SINGH MAKHNI

..... Petitioner

Through: Mr. Ajay Vohra, Sr.SC with 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 15/05/2024 at 12:00:47

Mr. Rohit Jain, Mr. Aniket D.

Agrawal, Mr. Deepesh Jain

and Mr. Samarth Chaudhari,

Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent

Through: Mr. Anurag Ojha, Sr.SC with

Ms. Hemlata Rawat and Mr.

Virendra Kumar Saksena,

Jr.SCs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

O R D E R %

10.05.2024

1.

These writ petitions have been preferred against the impugned notices dated 28 December 2021 issued under Section 153C of the Income Tax Act, 1961 [“Act”] for Assessment Years’ [“AYs’”] 2010- 11 [W.P.(C) 6977/2023], 2011-12 [W.P.(C) 6970/2023], 2012-13 [W.P.(C) 7747/2023] and all consequential proceedings. 2. Bearing in mind the undisputed fact that the Satisfaction Note recorded by the jurisdictional Assessing Officer [“AO”] of the petitioner was dated 24 December 2021, it is ex facie evident that the aforenoted AYs’ would fall beyond the maximum window of ten years as prescribed under the aforenoted provision. 3. 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 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 15/05/2024 at 12:00:47

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 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.” 4. Accordingly, and for reasons assigned in our decision in Ojjus 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 15/05/2024 at 12:00:47

Medicare, we allow the instant writ petitions and quash the impugned notices dated 28 December 2021 issued under Section 153C of the Act and all consequential proceedings arising therefrom.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. MAY 10, 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 15/05/2024 at 12:00:47

More judgments on Section 153C

All 9,619 judgments and leading authorities on Section 153C →

Recent GST High Court judgments

Search GST case law →