Loading judgment…

SOUTHERN AGRIFURANE INDUSTRIES PVT. LTD.,CHENNAI vs ACIT, CENTRAL CIRCLE-2(2),, CHENNAI | BharatTax

SOUTHERN AGRIFURANE INDUSTRIES PVT. LTD.,CHENNAI vs. ACIT, CENTRAL CIRCLE-2(2),, CHENNAI

ITA 1236/CHNY/2025Status: DisposedITAT Chennai21 November 2025AY 2016-17Bench: SHRI ABY T. VARKEY (Judicial Member), SHRI AMITABH SHUKLA (Accountant Member)1 pages

AI SummaryDismissed

Facts

A search u/s 132 of the Income Tax Act was conducted on the assessee. Subsequently, notices u/s 148 were issued for AYs 2013-14 to 2016-17. The assessee contended that these notices were barred by limitation. The CIT(A) allowed the assessee's contention, quashing the reassessment orders.

Held

The Tribunal held that the notices issued u/s 148 were beyond the prescribed time limit as per the first proviso to Section 149(1)(b) of the Act, particularly concerning search cases. Therefore, the AO lacked the jurisdiction to issue these notices.

Key Issues

Whether the reassessment notices issued u/s 148 for AYs 2013-14 to 2016-17 were barred by limitation under the first proviso to Section 149(1)(b) of the Act, considering the search conducted u/s 132 of the Act?

Sections Cited

147, 148, 149, 153A, 153C, 132, 143(3), 148A, 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA

For Respondent: Mr. Bipin, CIT, Mr. N. Arjun Raj, Advocate

Hearing: 08.10.2025Pronounced: 21.11.2025

आदेश / O R D E R

PER ABY T. VARKEY ABY T. VARKEY, JM: These appeals preferred by the assessee and the Revenue are These appeals preferred by the assessee and the Revenue are These appeals preferred by the assessee and the Revenue are against the order of the against the order of the Learned Commissioner of Income Tax (Appeals) Commissioner of Income Tax (Appeals)- 19, (hereinafter referred to as ‘Ld.CIT(A)‘), Chennai, dated (hereinafter referred to as ‘Ld.CIT(A)‘), Chennai, dated (hereinafter referred to as ‘Ld.CIT(A)‘), Chennai, dated 12.02.2025 & 20.02.2025 for the Assessment Year Assessment Years (hereinafter referred to as ‘AY‘) (hereinafter referred to as ‘AY‘)

2013-14 to 2016-17 u/s. 250 of the 17 u/s. 250 of the Income Tax Act, 1961 (hereinafter Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘). referred to as ‘the Act‘).

Briefly stated the facts of the case are that, the assessee is a Briefly stated the facts of the case are that, the assessee is a Briefly stated the facts of the case are that, the assessee is a private limited company which company which company which is engaged in the business of is engaged in the business of is engaged in the business of manufacturing and sale of Indian made foreign liquor. A search u/s 132 of manufacturing and sale of Indian made foreign liquor. A search u/s 132 of manufacturing and sale of Indian made foreign liquor. A search u/s 132 of the Act was conducted upon the assessee on 15 the Act was conducted upon the assessee on 15-06-2022, in the course of 2022, in the course of which several material viz., books of accounts, documents & elect which several material viz., books of accounts, documents & elect which several material viz., books of accounts, documents & electronic data, loose sheets, note books etc. was found and seized. According to data, loose sheets, note books etc. was found and seized. According to data, loose sheets, note books etc. was found and seized. According to the Revenue, the seized material inter alia contained details of the Revenue, the seized material inter alia contained details of the Revenue, the seized material inter alia contained details of suppression of income by the assessee by debiting bogus purchases from suppression of income by the assessee by debiting bogus purchases from suppression of income by the assessee by debiting bogus purchases from vendors of old liquor bottles and transport vendors of old liquor bottles and transportation & logistics services. ation & logistics services.

3. Before the Ld. CIT(A), the assessee had Before the Ld. CIT(A), the assessee had inter alia challenged the validity of the initiation of reassessment proceedings u/s 147 of the Act validity of the initiation of reassessment proceedings u/s 147 of the Act validity of the initiation of reassessment proceedings u/s 147 of the Act for the impugned AYs 2013 for the impugned AYs 2013-14 to 2016-17 which was allowed by the Ld. 17 which was allowed by the Ld. CIT(A) and accordingly the re CIT(A) and accordingly the re-assessment orders passed u/s 147/143(3) passed u/s 147/143(3) of the Act was quashed. Being aggrieved by the appellate order(s) of the of the Act was quashed. Being aggrieved by the appellate order(s) of the of the Act was quashed. Being aggrieved by the appellate order(s) of the Ld. CIT(A), the Revenue is now in appeal before us. The assessee in their Ld. CIT(A), the Revenue is now in appeal before us. The assessee in their Ld. CIT(A), the Revenue is now in appeal before us. The assessee in their appeal(s) is noted to have assailed the Ld. CIT(A)’s order on other legal appeal(s) is noted to have assailed the Ld. CIT(A)’s order on other legal appeal(s) is noted to have assailed the Ld. CIT(A)’s order on other legal issues and the merits of the addition(s) as well. Since the legal issue he merits of the addition(s) as well. Since the legal issue he merits of the addition(s) as well. Since the legal issue which was adjudicated by the Ld. CIT(A) which was adjudicated by the Ld. CIT(A) strikes at the root of the strikes at the root of the jurisdiction of the AO to have issued notice u/s.148 of the Act jurisdiction of the AO to have issued notice u/s.148 of the Act jurisdiction of the AO to have issued notice u/s.148 of the Act for the impugned AYs 2013-14 to 2016 14 to 2016-17, with the consent of both 17, with the consent of both the parties, we consider it fit to decide this legal issue first. we consider it fit to decide this legal issue first. , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 4 ::

6.3.5 On examinatio On examination of the assessment order it can be seen that n of the assessment order it can be seen that the AO purportedly relying on the provisions of the Act, as amended by the AO purportedly relying on the provisions of the Act, as amended by the AO purportedly relying on the provisions of the Act, as amended by the Finance Act, 2021 has issued a notice u/s 148 of the Act for the AY the Finance Act, 2021 has issued a notice u/s 148 of the Act for the AY the Finance Act, 2021 has issued a notice u/s 148 of the Act for the AY 2013-14. The provisions of the Finance Act 2021 came into effect fr 14. The provisions of the Finance Act 2021 came into effect fr 14. The provisions of the Finance Act 2021 came into effect from 01.04.2021. Pursuant to the amendment the time limit for issuance of 01.04.2021. Pursuant to the amendment the time limit for issuance of 01.04.2021. Pursuant to the amendment the time limit for issuance of notice u/s 148 of the Act in cases where search proceedings are initiated notice u/s 148 of the Act in cases where search proceedings are initiated notice u/s 148 of the Act in cases where search proceedings are initiated under the provisions of section 132 of the Act is governed by the section under the provisions of section 132 of the Act is governed by the section under the provisions of section 132 of the Act is governed by the section 149 of the Act. As discussed supra, 149 of the Act. As discussed supra, the First Proviso to Section 149 of the First Proviso to Section 149 of the Act provides that “no notice u/s 148 of the Act shall be issued at any the Act provides that “no notice u/s 148 of the Act shall be issued at any the Act provides that “no notice u/s 148 of the Act shall be issued at any time in a case for the relevant assessment year beginning on or before time in a case for the relevant assessment year beginning on or before time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice u/s 148 or section 153A or section 1st day of April, 2021, if a notice u/s 148 or section 153A or section 1st day of April, 2021, if a notice u/s 148 or section 153A or section 153C could not have been issued at that time on account of being C could not have been issued at that time on account of being C could not have been issued at that time on account of being , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt beyond the time limit specified under the provisions of clause (b) of sub beyond the time limit specified under the provisions of clause (b) of sub beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section or section 153A or section 153C, as the case section (1) of this section or section 153A or section 153C, as the case section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the co may be, as they stood immediately before the commencement of the mmencement of the Finance Act, 2021. Therefore, for the AY 2013 Finance Act, 2021. Therefore, for the AY 2013-14, since the notice under 14, since the notice under section 148 of the Income Tax Act was issued following the search section 148 of the Income Tax Act was issued following the search section 148 of the Income Tax Act was issued following the search proceedings (i.e., on 15.06.2022), the timeline specified under section proceedings (i.e., on 15.06.2022), the timeline specified under section proceedings (i.e., on 15.06.2022), the timeline specified under section 153A of the Act, as it exis 153A of the Act, as it existed prior to 01.04.2021, would clearly apply. ted prior to 01.04.2021, would clearly apply.

6.3.17 The existence of a 'jurisdictional fact' is the The existence of a 'jurisdictional fact' is the sine qua non sine qua non for the exercise of power. In its absence, the power cannot be exercised the exercise of power. In its absence, the power cannot be exercised the exercise of power. In its absence, the power cannot be exercised lawfully. When the jurisdictional fact is established, the AO is empowered ully. When the jurisdictional fact is established, the AO is empowered ully. When the jurisdictional fact is established, the AO is empowered to proceed with the case and make decisions in accordance with the to proceed with the case and make decisions in accordance with the to proceed with the case and make decisions in accordance with the provisions of law. In this context, the provisions of law. In this context, the fulfillment of the preconditions set of the preconditions set forth u/s 148 r.w.s 153A of the Act is co forth u/s 148 r.w.s 153A of the Act is considered a 'jurisdictional fact 'jurisdictional fact.' The AO is required to carefully examine and ascertain whether these The AO is required to carefully examine and ascertain whether these The AO is required to carefully examine and ascertain whether these specific conditions are satisfied before proceeding. Only after deciding on specific conditions are satisfied before proceeding. Only after deciding on specific conditions are satisfied before proceeding. Only after deciding on this issue, and recording a clear finding regarding the presence or this issue, and recording a clear finding regarding the presence or this issue, and recording a clear finding regarding the presence or absence of these conditions, can the AO issue a notice u/s 148 for the these conditions, can the AO issue a notice u/s 148 for the these conditions, can the AO issue a notice u/s 148 for the relevant assessment year. Only upon satisfying this crucial prerequisite relevant assessment year. Only upon satisfying this crucial prerequisite relevant assessment year. Only upon satisfying this crucial prerequisite can the AO lawfully proceed to assess the income of the assessee for the can the AO lawfully proceed to assess the income of the assessee for the can the AO lawfully proceed to assess the income of the assessee for the 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt relevant year, as the presence of the jurisdictio as the presence of the jurisdictional fact is indispensable nal fact is indispensable for validly initiating the assessment process u/s 147 of the Act for validly initiating the assessment process u/s 147 of the Act for validly initiating the assessment process u/s 147 of the Act

6.3.18 Such conclusion of satisfaction must manifest itself in writing. Such conclusion of satisfaction must manifest itself in writing. Such conclusion of satisfaction must manifest itself in writing. The AO issuing the notice must be able to justify himself that his action The AO issuing the notice must be able to justify himself that his action The AO issuing the notice must be able to justify himself that his action is valid because al is valid because all conditions mentioned in the section 148 r.w.s 153A of l conditions mentioned in the section 148 r.w.s 153A of the Act are fulfilled. This is all the more so because the Act are fulfilled. This is all the more so because issuing of a notice issuing of a notice for the 'relevant assessment year or years' 'relevant assessment year or years' is not a ritualistic formality ritualistic formality; rather it sets in motion the process which can cu rather it sets in motion the process which can culminate into imposition lminate into imposition of a civil liability and may even invite criminal prosecution for tax evasion of a civil liability and may even invite criminal prosecution for tax evasion of a civil liability and may even invite criminal prosecution for tax evasion on the assessee. It is the vested right of an assessee to examine on the assessee. It is the vested right of an assessee to examine on the assessee. It is the vested right of an assessee to examine whether the conditions precedent to issue of notice are satisfied or not so whether the conditions precedent to issue of notice are satisfied or not so whether the conditions precedent to issue of notice are satisfied or not so that he may, in a situation where according to his knowledge and belief in a situation where according to his knowledge and belief in a situation where according to his knowledge and belief the condition precedent to issue of notice are not satisfied, challenge the the condition precedent to issue of notice are not satisfied, challenge the the condition precedent to issue of notice are not satisfied, challenge the notice issued before appropriate judicial forum as regards its legal notice issued before appropriate judicial forum as regards its legal notice issued before appropriate judicial forum as regards its legal validity. This is possible only if the satisfaction validity. This is possible only if the satisfaction is properly recorded by is properly recorded by the AO before a notice is issued u/s 148 r.w.s 153A of the Act and the AO before a notice is issued u/s 148 r.w.s 153A of the Act and the AO before a notice is issued u/s 148 r.w.s 153A of the Act and provided to the assessee to enable him to rebut the satisfaction of the provided to the assessee to enable him to rebut the satisfaction of the provided to the assessee to enable him to rebut the satisfaction of the AO.

The AO is also entitled to issue notice u/s 148 The AO is also entitled to issue notice u/s 148 of the Act beyond three (3) of the Act beyond three (3) years but not more than ten (10) years from the end of the relevant years but not more than ten (10) years from the end of the relevant years but not more than ten (10) years from the end of the relevant assessment year, but for that, he is required to demonstrate that he has assessment year, but for that, he is required to demonstrate that he has assessment year, but for that, he is required to demonstrate that he has in his possession books of accounts or documents or evidence which in his possession books of accounts or documents or evidence which in his possession books of accounts or documents or evidence which reveal that income represented in form of asset or expenditure or any epresented in form of asset or expenditure or any epresented in form of asset or expenditure or any entry in books of accounts, has escaped assessment, whose likely entry in books of accounts, has escaped assessment, whose likely entry in books of accounts, has escaped assessment, whose likely quantum is Rs.50 lacs or more [Section 149(1)(b)]. We now come to the quantum is Rs.50 lacs or more [Section 149(1)(b)]. We now come to the quantum is Rs.50 lacs or more [Section 149(1)(b)]. We now come to the proviso to Section 149(1)(b) of the Act, which is of utmost relevance t proviso to Section 149(1)(b) of the Act, which is of utmost relevance t proviso to Section 149(1)(b) of the Act, which is of utmost relevance to the present case. The ingredients of the proviso The ingredients of the proviso can be broken down for be broken down for analysis as follows: (i) no notice under section 148 of the new regime can analysis as follows: (i) no notice under section 148 of the new regime can analysis as follows: (i) no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 be issued at any time for an assessment year beginning on or before 1 be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at t April 2021; (ii) if it is barred at the time when the notice is sought to be he time when the notice is sought to be issued because of the "time limits specified under the provisions of" "time limits specified under the provisions of" "time limits specified under the provisions of"148, 153A, 153C of the old regime. ld regime. Hence, in terms of the proviso, the powers Hence, in terms of the proviso, the powers of AO is curtailed to issue of AO is curtailed to issue notice under Section 148 of the new regim ection 148 of the new regime for AY 2021-2022 and earlier years earlier years only if the time limit for issuance of such only if the time limit for issuance of such notice continued to exist under section 149(1)(b) notice continued to exist under section 149(1)(b), 153A(1)(b) or 153C , 153A(1)(b) or 153C of the old regime. It is well settled in law that, n It is well settled in law that, notices have to be judged otices have to be judged according to the law existing on the date the notice is issued. existing on the date the notice is issued. existing on the date the notice is issued. Under the 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt new regime, time limit of ten (10) years has been prescribed subject to new regime, time limit of ten (10) years has been prescribed subject to new regime, time limit of ten (10) years has been prescribed subject to fulfillment of conditions laid down in Section 149(1)(b) of the Act. fulfillment of conditions laid down in Section 149(1)(b) of the Act. fulfillment of conditions laid down in Section 149(1)(b) of the Act.

However, the first proviso to Section 149(1)(b) ensures that, However, the first proviso to Section 149(1)(b) ensures that, However, the first proviso to Section 149(1)(b) ensures that, the time limit prescribed in the new regime shall apply prospectively i.e. from AY limit prescribed in the new regime shall apply prospectively i.e. from AY limit prescribed in the new regime shall apply prospectively i.e. from AY 2021-22 and onwards and that, the AYs prior to the introduction of new 22 and onwards and that, the AYs prior to the introduction of new 22 and onwards and that, the AYs prior to the introduction of new regime by Finance Act, 2021 shall continue to be governed by the time regime by Finance Act, 2021 shall continue to be governed by the time regime by Finance Act, 2021 shall continue to be governed by the time limits under the old 148 regime limits under the old 148 regime or Section 153A/153C of the Act [which or Section 153A/153C of the Act [which has since merged and/or be substituted in a single all has since merged and/or be substituted in a single all-encompassed new encompassed new 148/148A regime]. Hence, in order to reopen any AY prior to AY 2021 148/148A regime]. Hence, in order to reopen any AY prior to AY 2021 148/148A regime]. Hence, in order to reopen any AY prior to AY 2021-22, the AO is required to first ascertain as to, whether the relevant AY could the AO is required to first ascertain as to, whether the relevant AY could the AO is required to first ascertain as to, whether the relevant AY could have been reopened in light of the time limit laid down in the old have been reopened in light of the time limit laid down in the old have been reopened in light of the time limit laid down in the old 148/149(1)(b) regime [non 148/149(1)(b) regime [non-search cases] or whether the relevant AY search cases] or whether the relevant AY could have been reopened in terms of the time lines contained in could have been reopened in terms of the time lines contained in could have been reopened in terms of the time lines contained in erstwhile Section 153A(1)(b) or 153C of the Act [search erstwhile Section 153A(1)(b) or 153C of the Act [search erstwhile Section 153A(1)(b) or 153C of the Act [search cases]. If the answer to the aforesaid question is in affirmative viz., the AO can validly answer to the aforesaid question is in affirmative viz., the AO can validly answer to the aforesaid question is in affirmative viz., the AO can validly reopen the relevant assessment year [AY 2021 reopen the relevant assessment year [AY 2021-22 and earlier years] 22 and earlier years] under the old regime at the time of issuance of notice under the new at the time of issuance of notice under the new at the time of issuance of notice under the new regime, that, the AO is legal regime, that, the AO is legally empowered to reopen such relevant ly empowered to reopen such relevant assessment year under the new 148 regime, in terms of proviso to assessment year under the new 148 regime, in terms of proviso to assessment year under the new 148 regime, in terms of proviso to Section 149(1)(b) of the Act. Section 149(1)(b) of the Act. , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 13 ::

It was accordingly held that, It was accordingly held that, a notice under Section 148 of the new a notice under Section 148 of the new regime cannot be issued regime cannot be issued, if the period of six years[as provided in [as provided in erstwhile 149(1)(b) of the Act] 9(1)(b) of the Act] from the end of the relevant assessment from the end of the relevant assessment year [AY 2021-22 and earlier year(s)] 22 and earlier year(s)] has expired at the time of issuance has expired at the time of issuance of the notice. The Hon’ble Supreme Court thus held that, The Hon’ble Supreme Court thus held that, The Hon’ble Supreme Court thus held that, the new time limit of ten years prescribed under section 149(1)(b limit of ten years prescribed under section 149(1)(b) of the new regime of the new regime applies prospectively. This was explained by the Hon’ble Apex Court by applies prospectively. This was explained by the Hon’ble Apex Court by applies prospectively. This was explained by the Hon’ble Apex Court by way of an illustration, viz., way of an illustration, viz., For example, for the assessment For example, for the assessment year 2012- 2013, the ten year period would have expired on 31 March 2023, while 2013, the ten year period would have expired on 31 March 2023, while 2013, the ten year period would have expired on 31 March 2023, while the six year period expi the six year period expired on 31 March 2019. Without the proviso to red on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the Section 149(1)(b) of the new regime, the Revenue could have had the Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012 power to reopen assessments for the year 2012-2013 if the escaped 2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits assessment amounted to Rupees fifty lakhs or more. The proviso limits assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests rospective operation of Section 149(1)(b) to protect the interests rospective operation of Section 149(1)(b) to protect the interests of the assesses. , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 14 ::

11. The Legislature is noted to have explained the above amendment in The Legislature is noted to have explained the above amendment in The Legislature is noted to have explained the above amendment in the Memorandum to Finance Bill, 2022. It w the Memorandum to Finance Bill, 2022. It was inter alia stated that, i as inter alia stated that, in cases where search is initiated under section 132 of the Act orbooks of cases where search is initiated under section 132 of the Act orbooks of cases where search is initiated under section 132 of the Act orbooks of 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt account, other documents or any assets are requisitioned under section account, other documents or any assets are requisitioned under section account, other documents or any assets are requisitioned under section 132Aof the Act, on or after 1st April, 2021, 132Aof the Act, on or after 1st April, 2021, the assessment or assessment or reassessment is now to be to be made under sections 143 or 144 or 147 of the sections 143 or 144 or 147 of the Act after the Finance Act, 2021. Act after the Finance Act, 2021. According to the Legislature, there were According to the Legislature, there were inadvertent drafting errors inadvertent drafting errors in Section 149 and that to align align the provisions with the intent of the section the section, the proviso was amended to provide that, to provide that, no notice under section 148 shall be issued at any time in a case for the under section 148 shall be issued at any time in a case for the under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if assessment year beginning on or before 1st day of April, 2021, if assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 section 148[non-search matters] or section 153A or or section 153A or section 153C[search related matters after 01.04.2021] related matters after 01.04.2021] could not have could not have been issued at that time on account of being beyond the time limit time on account of being beyond the time limit time on account of being beyond the time limit specified under the provisions of specified under the provisions of clause (b) of sub-section (1) of section section (1) of section 149 or section 153A or section 153C, as 149 or section 153A or section 153C, as the case may be, as they the case may be, as they stood immediately before the commencement of the immediately before the commencement of the Finance Act, 2021. Finance Act, 2021.

12. Hence, in light of the judgment of Hon’ble Supreme Court in Hence, in light of the judgment of Hon’ble Supreme Court in Hence, in light of the judgment of Hon’ble Supreme Court in UOI Vs Rajeev Bansal (supra) Vs Rajeev Bansal (supra) and having regard to the above amendment and having regard to the above amendment made by Finance Act, 2022, the position which emerges made by Finance Act, 2022, the position which emerges is that, ordinarily is that, ordinarily the AYs prior to AY 2021 the AYs prior to AY 2021-22 can be reopened under the new 148 regime, 22 can be reopened under the new 148 regime, only if such AY [in non [in non-search matters] was otherwise capable of being was otherwise capable of being reopened under the old regime reopened under the old regime [six years as laid down in erstwhile [six years as laid down in erstwhile Section 149(1)(b)], at the s , at the stage of issuance of notice. However, in cases tage of issuance of notice. However, in cases , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt where search has been conducted on or after 1st April 2021 or where where search has been conducted on or after 1 April 2021 or where document or information has been found & seized in the course of search document or information has been found & seized in the course of search document or information has been found & seized in the course of search which relates to the assessee [third party], the which relates to the assessee [third party], the assessment or assessment or reassessment which was earlier required to be made u/s 153A/153C of which was earlier required to be made u/s 153A/153C of which was earlier required to be made u/s 153A/153C of the Act, is now required to be required to be made under Section 143 or 144 or 147 of Section 143 or 144 or 147 of the Act. The timelines for search related cases qua AYs prior to AY 2021 the Act. The timelines for search related cases qua AYs prior to AY 2021 the Act. The timelines for search related cases qua AYs prior to AY 2021- 22, would be governed by first proviso to Section 1 22, would be governed by first proviso to Section 149(1)(b) of the Act 49(1)(b) of the Act and therefore the notice for reopening the assessment u/s 148 of the Act and therefore the notice for reopening the assessment u/s 148 of the Act and therefore the notice for reopening the assessment u/s 148 of the Act can be issued, only if such AY could have otherwise been validly reopened can be issued, only if such AY could have otherwise been validly reopened can be issued, only if such AY could have otherwise been validly reopened in terms of Section 153A/153C of the Act in terms of Section 153A/153C of the Act [as it stood prior to introduction [as it stood prior to introduction of Finance Act, 2021], at the time of issuance of notice under the new , at the time of issuance of notice under the new , at the time of issuance of notice under the new regime.

However, as because the relevant AY involved is AY 2013 However, as because the relevant AY involved is AY 2013-14 viz., prior to 14 viz., prior to AY 2021-22; we are required to test the time limit for reopening of the 22; we are required to test the time limit for reopening of the 22; we are required to test the time limit for reopening of the 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt relevant AY 2013-14 on 14 on the tenets of the first proviso to Section first proviso to Section 149(1)(b) of the new regime ) of the new regime, at the stage of issuance of notice under of issuance of notice under section 148 of the new regime section 148 of the new regime i.e. 30.03.2023. Having regard to the legal i.e. 30.03.2023. Having regard to the legal principles as discussed in preceding paragraphs, it is first required to be principles as discussed in preceding paragraphs, it is first required to be principles as discussed in preceding paragraphs, it is first required to be ascertained whether AY 2013 ascertained whether AY 2013-14 could have been reopened under the old en reopened under the old provisions of Section 153A of the Act on the date of issuance of notice i.e. provisions of Section 153A of the Act on the date of issuance of notice i.e. provisions of Section 153A of the Act on the date of issuance of notice i.e. 30.03.2023 and only if the answer is in affirmative that, the AO could 30.03.2023 and only if the answer is in affirmative that, the AO could 30.03.2023 and only if the answer is in affirmative that, the AO could have validly issued notice u/s 148 of the Act under the new regime. For have validly issued notice u/s 148 of the Act under the new regime. For have validly issued notice u/s 148 of the Act under the new regime. For this, let us now have a look at the relevant provisions of Section 153A of us now have a look at the relevant provisions of Section 153A of us now have a look at the relevant provisions of Section 153A of the Act, which reads as under: the Act, which reads as under:-

Hence, the block of six AYs ck of six AYs is to be identified commencing from the AY to be identified commencing from the AY "immediately preceding the assessment year relevant to the previous "immediately preceding the assessment year relevant to the previous "immediately preceding the assessment year relevant to the previous year" in which the search may have been conducted. in which the search may have been conducted. In the present case, In the present case, as the search occurred on 15.06.2022 i.e., between 1st April 2022 to 31 pril 2022 to 31st as the search occurred on 15.06.2022 i.e., between 1 March 2023; FY 2022- -23 relevant to AY 2023-24 would constitute the 24 would constitute the 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt previous year of search and the six AYs as envisaged are those which previous year of search and the six AYs as envisaged are those which previous year of search and the six AYs as envisaged are those which immediately precede the AY so identified with reference to the date of immediately precede the AY so identified with reference to the date of immediately precede the AY so identified with reference to the date of search. Consequently, and recko Consequently, and reckoned backward, the six AYs would be, AYs backward, the six AYs would be, AYs 2022-23, 2021-22, 2020 22, 2020-21, 2019-20, 2018-19 & 2017 19 & 2017-18. It is important to bear in mind that, t important to bear in mind that, the Finance Act, 2017 stretched the he Finance Act, 2017 stretched the search assessment to an additional four AYs sment to an additional four AYs with the introduction of the with the introduction of the concept of "relevant assessment year" "relevant assessment year", which was defined by Explanation which was defined by Explanation 1 to Section 153A(1) as being the period which would fall beyond 1 to Section 153A(1) as being the period which would fall beyond 1 to Section 153A(1) as being the period which would fall beyond "six assessment years but not later than ten assessment years from the end assessment years but not later than ten assessment years from the end assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year" of the assessment year relevant to the previous year" in which search was n which search was conducted. Accordingly, the ten AYs Accordingly, the ten AYs would have to be computed from the computed from the end of the AY relevant to the FY in which the search end of the AY relevant to the FY in which the search was conducted or was conducted or requisition made [AY 2023 [AY 2023-24, in the present case]. It is seen that, 24, in the present case]. It is seen that, Explanation 1 to Section 15 Explanation 1 to Section 153A(1) requires computation of the 10 requires computation of the 10-year block period from the end of the relevant AY in which search was block period from the end of the relevant AY in which search was block period from the end of the relevant AY in which search was conducted whereas the 6 conducted whereas the 6-year block period for the purposes of Section year block period for the purposes of Section 153A(1)(b) comprises of the six relevant AYs 153A(1)(b) comprises of the six relevant AYs ‘preceding’ ‘preceding’ the year of search. To put it simply, the year of search is considered as year ‘0’ for put it simply, the year of search is considered as year ‘0’ for put it simply, the year of search is considered as year ‘0’ for ascertaining the six AYs to be reopened in terms of Section 153A(1)(b) of ascertaining the six AYs to be reopened in terms of Section 153A(1)(b) of ascertaining the six AYs to be reopened in terms of Section 153A(1)(b) of the Act. However, having regard to the language used in the Act. However, having regard to the language used in Explanation 1 to Explanation 1 to Section 153A(1), since the 10 , since the 10-year block period is to be computed from iod is to be computed from the end of the relevant AY in which search was conducted, the year of the end of the relevant AY in which search was conducted, the year of the end of the relevant AY in which search was conducted, the year of ITA Nos.1163, 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 ITA Nos. 1231, 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt search [AY 2023-24 in present case] is considered to be year ‘1’ and 24 in present case] is considered to be year ‘1’ and 24 in present case] is considered to be year ‘1’ and accordingly the 10-year block period is ascertained. year block period is ascertained. In the context of the In the context of the present case therefore, it is manifest that, AY 2023 erefore, it is manifest that, AY 2023-24 would form the 24 would form the first year of the block of ten AYs and the maximum period of ten AYs' first year of the block of ten AYs and the maximum period of ten AYs' first year of the block of ten AYs and the maximum period of ten AYs' shall terminate in AY 2014 shall terminate in AY 2014-15. We are therefore in agreement with the are therefore in agreement with the Ld. CIT(A)’s computation of Ld. CIT(A)’s computation of ten-year block period in terms o block period in terms of Section 153A of the Act, which for the sake of convenience, is set out herein 153A of the Act, which for the sake of convenience, is set out herein 153A of the Act, which for the sake of convenience, is set out herein- below:-

10. In the case on hand, th 10. In the case on hand, the statute has prescribed one mode of e statute has prescribed one mode of computing the six years and another mode for computing the ten years. computing the six years and another mode for computing the ten years. computing the six years and another mode for computing the ten years. Section 153A(1)(b) states that the assessing officer shall assess or Section 153A(1)(b) states that the assessing officer shall assess or Section 153A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the reassess the total income of six years immediately preceding the reassess the total income of six years immediately preceding the assessment year assessment year relevant to the previous year in which search is relevant to the previous year in which search is conducted. Applying this yardstick, the conducted. Applying this yardstick, the six years would go up to 2013 six years would go up to 2013- 14. The search assessment year, namely, 2019 14. The search assessment year, namely, 2019-20 has to be excluded. 20 has to be excluded. This is because, the statute talks of the six years preceding the se This is because, the statute talks of the six years preceding the se This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the assessment year. But, while computing the ten assessment years, the assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year. In other starting point has to be the end of the search assessment year. In other starting point has to be the end of the search assessment year. In other words, search assessment year has to be including in the latter case. It words, search assessment year has to be including in the latter case. It words, search assessment year has to be including in the latter case. It , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt is not for me to fathom the wisdom of is not for me to fathom the wisdom of the parliament. I cannot assume the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to that the amendment introduced by the Finance Act, 2017 intended to that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided bring in four more years over and above the six years already provided bring in four more years over and above the six years already provided within the scope of the provision. When the law has prescribed a within the scope of the provision. When the law has prescribed a within the scope of the provision. When the law has prescribed a particular length, i particular length, it is not for the court to stretch it. Plasticity is the new t is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It mantra in neuroscience, thanks to the teachings of Norman Doidge. It mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be implies that contrary to settled wisdom, even brain structure can be implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxi changed. But not so when it comes to a provision in a taxi changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically that is free of ambiguity. Such a provision cannot be elastically that is free of ambiguity. Such a provision cannot be elastically construed.

16. Following the above decision (supra), in the present case, as the AY Following the above decision (supra), in the present case, as the AY Following the above decision (supra), in the present case, as the AY relevant to the year of search in AY 2023 relevant to the year of search in AY 2023-24, the period of 24, the period of the ten AYs, when computed from the end of AY 2023 puted from the end of AY 2023-24 would terminate upon AY 24 would terminate upon AY 2014-15, so according to us, AY 2013 ccording to us, AY 2013-14 would clearly fall outside the clearly fall outside the block period of ten AYs and therefore the AO could block period of ten AYs and therefore the AO could not have legally not have legally reopened the same under section 153A(1)(b) read with Explanation (1) to ened the same under section 153A(1)(b) read with Explanation (1) to ened the same under section 153A(1)(b) read with Explanation (1) to fourth proviso of Section 153A of the Act, at the time of fourth proviso of Section 153A of the Act, at the time of issuance of notice issuance of notice u/s 148 of the Act under the new regime i.e. 30.03.2023. Hence, we find u/s 148 of the Act under the new regime i.e. 30.03.2023. Hence, we find u/s 148 of the Act under the new regime i.e. 30.03.2023. Hence, we find that, the Ld. CIT(A) had rightly held that, the AY 2013 that, the Ld. CIT(A) had rightly held that, the AY 2013-14 fell beyond the 14 fell beyond the time line of 10 years from the end of relevant AY 2023 time line of 10 years from the end of relevant AY 2023-24, as prescribed 24, as prescribed in Section 153A of the Act and therefore held that the AO lacked the f the Act and therefore held that the AO lacked the f the Act and therefore held that the AO lacked the jurisdiction to reopen AY 2013 jurisdiction to reopen AY 2013-14 under the new regime, in terms of the 14 under the new regime, in terms of the 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt restrictive covenant set out in first proviso to Section 149(1)(b) of the restrictive covenant set out in first proviso to Section 149(1)(b) of the restrictive covenant set out in first proviso to Section 149(1)(b) of the Act.

17. Our above view is Our above view is noted to be supported by the Hon’ble Delhi High on’ble Delhi High Court in the case of KAD Housing Pvt Ltd KAD Housing Pvt Ltd v. DCIT (supra) DCIT (supra) wherein it was held that, an action of reassessment which comes to be initiated in an action of reassessment which comes to be initiated in an action of reassessment which comes to be initiated in relation to a search undertaken on or after 01 April 2021 would have to relation to a search undertaken on or after 01 April 2021 would have to relation to a search undertaken on or after 01 April 2021 would have to meet the foundational test meet the foundational tests as specified in the first proviso to Section roviso to Section 149(1) of the Act. The Court held that, The Court held that, a reassessment action would thus reassessment action would thus have to not only satisfy the time frames constructed in terms of Section have to not only satisfy the time frames constructed in terms of Section have to not only satisfy the time frames constructed in terms of Section 149, but in a relevant case concerned with a search, also those 149, but in a relevant case concerned with a search, also those 149, but in a relevant case concerned with a search, also those which would be applicable by virtue of the provisions of Section 153A and 153C would be applicable by virtue of the provisions of Section 153A and 153C would be applicable by virtue of the provisions of Section 153A and 153C of the Act. In the decided case, the search was conducted on 11.10.2023 of the Act. In the decided case, the search was conducted on 11.10.2023 of the Act. In the decided case, the search was conducted on 11.10.2023 and the seized material / information relating to the assessee was handed and the seized material / information relating to the assessee was handed and the seized material / information relating to the assessee was handed over on 16.08.2024. Having reg over on 16.08.2024. Having regard to the provisions of Section 153C of ard to the provisions of Section 153C of the Act, the deemed date of search was 16.08.2024, i.e. AY 2025 the Act, the deemed date of search was 16.08.2024, i.e. AY 2025 the Act, the deemed date of search was 16.08.2024, i.e. AY 2025-26. The Hon’ble High Court, having regard to the Hon’ble High Court, having regard to the manner in which the period of manner in which the period of six or ten years is required to be reckoned in respect of reopening of t six or ten years is required to be reckoned in respect of reopening of t six or ten years is required to be reckoned in respect of reopening of the assessment as contemplated contemplated contemplated under under under Section Section Section 153A(1) 153A(1) 153A(1) read read read with with with Explanation (1) to fourth proviso of Section 153A Explanation (1) to fourth proviso of Section 153A of the Act of the Act, held that, the assessment in respect of the AY 2015 assessment in respect of the AY 2015-16 falls beyond the period o 16 falls beyond the period of ten years as stipulated in terms of the first prov ten years as stipulated in terms of the first proviso to Section 149 Section 149(1)(b) , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt read with Section 153C of the Act read with Section 153C of the Act and therefore quashed the notice so and therefore quashed the notice so issued by the AO u/s 148 of the Act under the new regime issued by the AO u/s 148 of the Act under the new regime issued by the AO u/s 148 of the Act under the new regime. The findings of the Hon’ble High Court, which are relevant in the present case, is as of the Hon’ble High Court, which are relevant in the present case, is as of the Hon’ble High Court, which are relevant in the present case, is as under:-

"D. The First Proviso to Section 153C introduces a legal fiction on the "D. The First Proviso to Section 153C introduces a legal fiction on the "D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the basis of which the commencement date for computation of 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 the ten year block is deemed to be the date of receipt of books of 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 accounts by the jurisdictional AO. The identification of the starting block 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 for the purposes of computation of the six and the ten year period is for the purposes of computation of the six and the ten year period is governed by the First Proviso t governed by the First Proviso to Section 153C, which significantly shifts o Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point the reference point spoken of in Section 153A(1), while defining the point 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 from which the period of the "relevant assessment year" is to be 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 calculated, to the date of receipt of the books of accounts, documents or 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 assets seized by the jurisdictional AO of the non searched person. The assets seized by the jurisdictional AO of the non searched person. The shift of the relevant date in the case of a non shift of the relevant date in the case of a non-searched person being searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no regulated by the First Proviso of Section 153C(1) is an issue which is no regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritat longer res integra and stands authoritatively settled by virtue of the ively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decisions of this Court in SSP Aviation and RRJ Securities as well as 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 decision of the Supreme Court in Jasjit Singh. The aforesaid legal position decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods submission of the respondents, therefore, that the block periods submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can would have to be reckoned with reference to the date of search can would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. neither be countenanced nor accepted.

F. While the identification and computation of the six AYs' hinges upon F. While the identification and computation of the six AYs' hinges upon F. While the identification and computation of the six AYs' hinges upon the phrase "immediately preceding the assessment year relevant to the the phrase "immediately preceding the assessment year relevant to the the phrase "immediately preceding the assessment year relevant to the previous year" of search, the ten year period would have to be reckoned revious year" of search, the ten year period would have to be reckoned revious 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, from the 31st day of March of the AY relevant to the year of search. This, 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 since undisputedly, Explanation 1 of Section 153A requires us to reckon it since undisputedly, Explanation 1 of Section 153A requires us to reckon it "from the end of the assessment yea "from the end of the assessment year". This distinction would have to r". This distinction would have to necessarily be acknowledged in light of the statute having consciously necessarily be acknowledged in light of the statute having consciously necessarily be acknowledged in light of the statute having consciously , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt adopted the phraseology "immediately preceding" when it be in relation adopted the phraseology "immediately preceding" when it be in relation adopted the phraseology "immediately preceding" when it be in relation to the six year period and employing the expression "from the end of the to the six year period and employing the expression "from the end of the to the six year period and employing the expression "from the end of the assessment year" while speaking of the ten year block." ment year" while speaking of the ten year block."

"8. Undisputedly, and in terms of Section 153C(3) of the Act, any search "8. Undisputedly, and in terms of Section 153C(3) of the Act, any search "8. Undisputedly, and in terms of Section 153C(3) of the Act, any search if conducted after 01 April 2021, would cease to be regulated by that if conducted after 01 April 2021, would cease to be regulated by that if conducted after 01 April 2021, would cease to be regulated by that provision. Sub-section (3), in that sense, embodies a s section (3), in that sense, embodies a s section (3), in that sense, embodies a sunset clause insofar as the applicability of Section 153C is concerned. The First insofar as the applicability of Section 153C is concerned. The First insofar as the applicability of Section 153C is concerned. The First Proviso to Section 149(1), however, bids us to go back in a point of Proviso to Section 149(1), however, bids us to go back in a point of Proviso to Section 149(1), however, bids us to go back in a point of time, and to examine whether a reopening would sustain bearing in time, and to examine whether a reopening would sustain bearing in time, and to examine whether a reopening would sustain bearing in mind the timeframes as they stood embod mind the timeframes as they stood embodied in Section 149(1)(b) or ied in Section 149(1)(b) or Section 153A and 153C, as the case may be. The First Proviso Section 153A and 153C, as the case may be. The First Proviso Section 153A and 153C, as the case may be. The First Proviso essentially requires us to undertake that consideration bearing in mind essentially requires us to undertake that consideration bearing in mind essentially requires us to undertake that consideration bearing in mind the timeframes which stood specified in Sections 149, 153A and 153C as the timeframes which stood specified in Sections 149, 153A and 153C as the timeframes which stood specified in Sections 149, 153A and 153C as they stood prior to the they stood prior to the commencement of Finance Act, 2021. commencement of Finance Act, 2021.

19. We also gainfully refer to the decision of the Hon’ble Delhi High We also gainfully refer to the decision of the Hon’ble Delhi High We also gainfully refer to the decision of the Hon’ble Delhi High Court in Filatex India Ltd. v. Dy. CIT [WP(C) No. 12148 of 2023] Filatex India Ltd. v. Dy. CIT [WP(C) No. 12148 of 2023] Filatex India Ltd. v. Dy. CIT [WP(C) No. 12148 of 2023] which we find is squarely applicable in the given facts of the assessee which we find is squarely applicable in the given facts of the assessee which we find is squarely applicable in the given facts of the assessee before us. In this case, before us. In this case, the search action under Section 132 of the Act action under Section 132 of the Act was conducted on 01.09.2021 was conducted on 01.09.2021 and therefore the assessment year and therefore the assessment year relevant to the year of search was AY 2022 relevant to the year of search was AY 2022-23. Having regard to the 23. Having regard to the first proviso appended to the Section 149(1) of the Act, in addition to proviso appended to the Section 149(1) of the Act, in addition to proviso appended to the Section 149(1) of the Act, in addition to Section 153A(1)(b) and Explanation 1 appended thereto, it was noted that, the Explanation 1 appended thereto, it was noted that, the Explanation 1 appended thereto, it was noted that, the period of ten years from the end of the assessment year in which search period of ten years from the end of the assessment year in which search period of ten years from the end of the assessment year in which search was conducted ended with AY 2013 was conducted ended with AY 2013-14 and therefore the notice issued 14 and therefore the notice issued u/s 148 of the Act dated 13.03.2023 to u/s 148 of the Act dated 13.03.2023 to reopen AY 2012-13 was held to be 13 was held to be barred by limitation in terms of first proviso to Section 149(1)(b) of the barred by limitation in terms of first proviso to Section 149(1)(b) of the barred by limitation in terms of first proviso to Section 149(1)(b) of the Act. The relevant findings of the Hon’ble High Court are as follows: Act. The relevant findings of the Hon’ble High Court are as follows: Act. The relevant findings of the Hon’ble High Court are as follows:-

"D. The First Proviso to Section 153C introduces a legal fiction on the "D. The First Proviso to Section 153C introduces a legal fiction on the "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 basis of which the commencement date for computation of the six year basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date or the ten year block is deemed to be the date of receipt of books of of receipt of books of accounts by the jurisdictional AO. The identification of the starting block accounts by the jurisdictional AO. The identification of the starting block 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 for the purposes of computation of the six and the ten year period is for the purposes of computation of the six and the ten year period is 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt governed by the First Proviso to Section 153C, which significantly shifts governed by the First Proviso to Section 153C, which significantly shifts governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the e point spoken of in Section 153A(1), while defining the e point spoken of in Section 153A(1), while defining the point from which the period of the "relevant assessment year" is to be point from which the period of the "relevant assessment year" is to be 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 calculated, to the date of receipt of the books of accounts, documents or calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non assets seized by the jurisdictional AO of the non-searched person. The ched person. The shift of the relevant date in the case of a non shift of the relevant date in the case of a non-searched person being searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no regulated by the First Proviso of Section 153C(1) is an issue which is no 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 longer res integra and stands authoritatively settled by virtue of the longer res integra and stands authoritatively settled by virtue of the decisions of this Court decisions of this Court in SSP Aviation and RRJ Securities as well as the in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal decision of the Supreme Court in Jasjit Singh. The aforesaid legal decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram position also stood reiterated by the Supreme Court in Vikram position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that Sujitkumar Bhatia. The submission of the respondents, therefore, that Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date ck periods would have to be reckoned with reference to the date ck periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. of search can neither be countenanced nor accepted.

Section 149(1)(b) of the Act, the AO could not have reopened beyond the Section 149(1)(b) of the Act, the AO could not have reopened beyond the Section 149(1)(b) of the Act, the AO could not have reopened beyond the period of six (6) years, which immediately preceded the year of search period of six (6) years, which immediately preceded the year of search period of six (6) years, which immediately preceded the year of search viz., AY 2023-24, in the present case. It was the appellant’s case that, 24, in the present case. It was the appellant’s case that, 24, in the present case. It was the appellant’s case that, AYs 2014-15 to 2016-17 fell beyond t 17 fell beyond the six-year block period prescribed year block period prescribed in Section 153A(1)(b) of the Act and that in order to go beyond the in Section 153A(1)(b) of the Act and that in order to go beyond the in Section 153A(1)(b) of the Act and that in order to go beyond the ordinary six (6) year period and reopen the ordinary six (6) year period and reopen the ‘relevant assessment year’ ‘relevant assessment year’ as defined in Explanation (1) to Section 153A of the Act, the AO was defined in Explanation (1) to Section 153A of the Act, the AO was defined in Explanation (1) to Section 153A of the Act, the AO was required to demonstrate that the conditions laid down in fourth proviso to demonstrate that the conditions laid down in fourth proviso to demonstrate that the conditions laid down in fourth proviso to Section 153A of the Act was fulfilled, at the stage of issuance of notice Section 153A of the Act was fulfilled, at the stage of issuance of notice Section 153A of the Act was fulfilled, at the stage of issuance of notice under the new 148 regime. The assessee claimed that, the AO was unable under the new 148 regime. The assessee claimed that, the AO was unable under the new 148 regime. The assessee claimed that, the AO was unable to demonstrate that any income represented in fo to demonstrate that any income represented in form of ‘asset’ had rm of ‘asset’ had escaped assessment in AYs 2014 escaped assessment in AYs 2014-15 to 2016-17 and therefore in terms of 17 and therefore in terms of the bar laid down in the first proviso to Section 149(1)(b) of the Act, it the bar laid down in the first proviso to Section 149(1)(b) of the Act, it the bar laid down in the first proviso to Section 149(1)(b) of the Act, it was contended that, the AO could not have legally reopened the was contended that, the AO could not have legally reopened the was contended that, the AO could not have legally reopened the impugned AYs 2014-15 to 2017 15 to 2017-18 under the new 148 regime. It is seen 18 under the new 148 regime. It is seen that, the Ld. CIT(A) after examining the provisions of new 148 regime that, the Ld. CIT(A) after examining the provisions of new 148 regime that, the Ld. CIT(A) after examining the provisions of new 148 regime and the first proviso to Section 149(1)(b) of the Act acceded to this legal and the first proviso to Section 149(1)(b) of the Act acceded to this legal and the first proviso to Section 149(1)(b) of the Act acceded to this legal plea of the assessee and held the notice(s) issued u/s 148 of the Act plea of the assessee and held the notice(s) issued u/s 148 of the Act plea of the assessee and held the notice(s) issued u/s 148 of the Act dated 04-08-2023 for AY 2014 2023 for AY 2014-15 and dated 07-08-2023 for AYs 2015 2023 for AYs 2015-16 to 2016-17 to be barred by limitation. Aggrieved by such order, the 17 to be barred by limitation. Aggrieved by such order, the 17 to be barred by limitation. Aggrieved by such order, the Revenue is in appeal before us. Revenue is in appeal before us. , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 32 ::

22. The Ld. CIT, DR appearing before us, contended that, under The Ld. CIT, DR appearing before us, contended that, under The Ld. CIT, DR appearing before us, contended that, under Section 149(1)(b) of the Act, the Act, the AO was empowered to reopen any assessment AO was empowered to reopen any assessment year for a period exceeding three years but not beyond year for a period exceeding three years but not beyond year for a period exceeding three years but not beyond ten years from the end of such assessment year. According to her, the notice(s) dated the end of such assessment year. According to her, the notice(s) dated the end of such assessment year. According to her, the notice(s) dated 30-03-2023 issued u/s 148 of the Act for AYs 2014 2023 issued u/s 148 of the Act for AYs 2014-15 to 2016 15 to 2016-17 was well within the timeline set out in Section 149(1)(b) of the Act and well within the timeline set out in Section 149(1)(b) of the Act and well within the timeline set out in Section 149(1)(b) of the Act and therefore she submitted that the order of the Ld. CIT(A) holding these therefore she submitted that the order of the Ld. CIT(A) holding these therefore she submitted that the order of the Ld. CIT(A) holding these notice(s) to be barred by limitation was unsustainable. Referring to the notice(s) to be barred by limitation was unsustainable. Referring to the notice(s) to be barred by limitation was unsustainable. Referring to the first proviso to Section 149(1) of the first proviso to Section 149(1) of the Act, she pointed out that, in cases Act, she pointed out that, in cases where an assessee is subjected to search u/s 132 of the Act, the proviso where an assessee is subjected to search u/s 132 of the Act, the proviso where an assessee is subjected to search u/s 132 of the Act, the proviso provides that, the notice under Section 148 of the Act notice under Section 148 of the Act can be can be issued only if such a notice could have could have otherwise be issued under Section Section 153A of the Act at that material time. According to her, in cases of search, prior to the at material time. According to her, in cases of search, prior to the at material time. According to her, in cases of search, prior to the Finance Act, 2021, the Revenue was permitted to reopen up Finance Act, 2021, the Revenue was permitted to reopen up Finance Act, 2021, the Revenue was permitted to reopen up to ten years from the end of the relevant assessment year in which search was from the end of the relevant assessment year in which search was from the end of the relevant assessment year in which search was conducted. She therefore submitted tha conducted. She therefore submitted that, AYs 2014-15 to 2016 15 to 2016-17 fell within the 10 year block period as defined in Explanation (1) to Section within the 10 year block period as defined in Explanation (1) to Section within the 10 year block period as defined in Explanation (1) to Section 153A of the Act and accordingly claimed that the AO had validly reopened 153A of the Act and accordingly claimed that the AO had validly reopened 153A of the Act and accordingly claimed that the AO had validly reopened the assessment under the new 148 regime, in terms of proviso to Section the assessment under the new 148 regime, in terms of proviso to Section the assessment under the new 148 regime, in terms of proviso to Section 149(1)(b) of the Act. , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 33 ::

23.

Per contra, the Ld. AR vehemently opposed the contention of the Per contra, the Ld. AR vehemently opposed the contention of the Per contra, the Ld. AR vehemently opposed the contention of the Revenue and he argued that, Revenue and he argued that, in terms of the fourth proviso to Section in terms of the fourth proviso to Section 153A(1) of the Act, no notice for the relevant assessment year or years 153A(1) of the Act, no notice for the relevant assessment year or years 153A(1) of the Act, no notice for the relevant assessment year or years could be issued unless the AO h could be issued unless the AO had in his possession books of account or ad in his possession books of account or other documents or evidence which revealed that income represented in other documents or evidence which revealed that income represented in other documents or evidence which revealed that income represented in the form of an asset has escaped assessment. the form of an asset has escaped assessment. According to him therefore, According to him therefore, the extended period of limitation beyond the six years preceding the the extended period of limitation beyond the six years preceding the the extended period of limitation beyond the six years preceding the assessment year relevant to previous year in which a search was essment year relevant to previous year in which a search was essment year relevant to previous year in which a search was conducted, would be applicable only in cases where the AO had evidence, conducted, would be applicable only in cases where the AO had evidence, conducted, would be applicable only in cases where the AO had evidence, which discloses that the escaped income was represented by an asset. He which discloses that the escaped income was represented by an asset. He which discloses that the escaped income was represented by an asset. He contended that, in the present case, the income whi contended that, in the present case, the income which is alleged to have ch is alleged to have escaped assessment is on account of an expenditure escaped assessment is on account of an expenditure[purchases] [purchases], which the AO had subsequently subsequently disallowed and not on account of any disallowed and not on account of any income represent in form of an represent in form of an ‘asset’ and therefore he contended that, the and therefore he contended that, the maximum period for which rea maximum period for which reassessment could be initiated by issuing a ssessment could be initiated by issuing a notice under Section 153A of the Act was for a period of six years e under Section 153A of the Act was for a period of six years e under Section 153A of the Act was for a period of six years preceding the year of search and not beyond, because the condition preceding the year of search and not beyond, because the condition preceding the year of search and not beyond, because the condition precedent in fourth proviso had not been fulfilled. In support of the precedent in fourth proviso had not been fulfilled. In support of the precedent in fourth proviso had not been fulfilled. In support of the appellate order of Ld. CIT(A), the Ld. AR relied upon the decision of order of Ld. CIT(A), the Ld. AR relied upon the decision of order of Ld. CIT(A), the Ld. AR relied upon the decision of Hon’ble Delhi High Court in the case of Hon’ble Delhi High Court in the case of Smart Chip Pvt Ltd Vs ACIT Smart Chip Pvt Ltd Vs ACIT (467 ITR 389). , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 34 ::

As held by us above, ordinarily the AYs pri As held by us above, ordinarily the AYs prior to AY 2021 or to AY 2021-22 can be reopened under the new 148 regime, only if such AY reopened under the new 148 regime, only if such AY reopened under the new 148 regime, only if such AY [in non-search matters] was otherwise capable of being reopened under the old regime was otherwise capable of being reopened under the old regime was otherwise capable of being reopened under the old regime [six years as laid down in erstwhile Section 149(1)(b)] [six years as laid down in erstwhile Section 149(1)(b)], at the stage of , at the stage of issuance of notice. How issuance of notice. However, in cases where search has been conducted ever, in cases where search has been conducted on or after 1st April 2021 or where document or information has been April 2021 or where document or information has been April 2021 or where document or information has been found & seized in the course of search which relates to the assessee [third found & seized in the course of search which relates to the assessee [third found & seized in the course of search which relates to the assessee [third party], the assessment or reassessment assessment or reassessment which was earlier require which was earlier required to be made u/s 153A/153C of the Act, made u/s 153A/153C of the Act, is now required to be required to be made under Section 143 or 144 or 147 of the Act. As a consequence, the timelines for Section 143 or 144 or 147 of the Act. As a consequence, the timelines for Section 143 or 144 or 147 of the Act. As a consequence, the timelines for search related cases qua AYs prior to AY 2021 search related cases qua AYs prior to AY 2021-22, would be governed by 22, would be governed by first proviso to Section 149(1)(b) of t first proviso to Section 149(1)(b) of the Act and therefore the notice for he Act and therefore the notice for reopening the assessment u/s 148 of the Act can be issued, only if such reopening the assessment u/s 148 of the Act can be issued, only if such reopening the assessment u/s 148 of the Act can be issued, only if such AY could have otherwise been validly reopened in terms of Section AY could have otherwise been validly reopened in terms of Section AY could have otherwise been validly reopened in terms of Section 153A/153C of the Act 153A/153C of the Act [as it stood prior to introduction of Finance Act, [as it stood prior to introduction of Finance Act, 2021], at the time of issuance of notice under the new regime. the time of issuance of notice under the new regime. the time of issuance of notice under the new regime.

25.

In the present case before us, search was conducted upon the In the present case before us, search was conducted upon the In the present case before us, search was conducted upon the assessee on 15-06-2022 and therefore in terms of the second proviso to 2022 and therefore in terms of the second proviso to 2022 and therefore in terms of the second proviso to Section 149 of the Act, the income of the assessee is required to Section 149 of the Act, the income of the assessee is required to Section 149 of the Act, the income of the assessee is required to be assessed or reassessed in accordance with the new 148 regime, as assessed or reassessed in accordance with the new 148 regime, as assessed or reassessed in accordance with the new 148 regime, as 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt introduced by Finance Act, 2021. The timelines for reopening the introduced by Finance Act, 2021. The timelines for reopening the introduced by Finance Act, 2021. The timelines for reopening the assessment of AYs 2014 assessment of AYs 2014-15 to 2016-17 impugned before us, being prior 17 impugned before us, being prior to AY 2021-22, is required to be tested on 22, is required to be tested on the tenets of the of the first proviso to Section 149(1)(b) of the new regime to Section 149(1)(b) of the new regime, at the stage of issuance of notice of issuance of notice under section 148 of the new regime under section 148 of the new regime i.e. 30.03.2023. Having regard to i.e. 30.03.2023. Having regard to the legal principles, as already discussed elaborately while adjudicating the legal principles, as already discussed elaborately while adjudicating the legal principles, as already discussed elaborately while adjudicating the Revenue’s appeal for AY 2013 the Revenue’s appeal for AY 2013-14, we are required to first ascertain 14, we are required to first ascertain whether AYs 2014-15 to 2016 15 to 2016-17 could have been reopened under the old 17 could have been reopened under the old provisions of Section 153A of the Act on the date of issuance of notice i.e. sions of Section 153A of the Act on the date of issuance of notice i.e. sions of Section 153A of the Act on the date of issuance of notice i.e. 30.03.2023 and only if the answer is in affirmative that, the AO could 30.03.2023 and only if the answer is in affirmative that, the AO could 30.03.2023 and only if the answer is in affirmative that, the AO could have validly issued notice u/s 148 of the Act under the new regime. have validly issued notice u/s 148 of the Act under the new regime. have validly issued notice u/s 148 of the Act under the new regime.

26.

As noted earlier, Section 153A of the Act Section 153A of the Act lays down the manner and lays down the manner and procedure for reopening procedure for reopening the assessments in cases of search in cases of search. Section 153A(1) of the Act provides that, Act provides that, the assessments can be reopened for a the assessments can be reopened for a block of six years preceding the assessment year relevant to the previous block of six years preceding the assessment year relevant to the previous block of six years preceding the assessment year relevant to the previous year in which search under Section 132 of the Act is conducted or arch under Section 132 of the Act is conducted or arch under Section 132 of the Act is conducted or requisition is made under Section 132A of the Act as well as the relevant requisition is made under Section 132A of the Act as well as the relevant requisition is made under Section 132A of the Act as well as the relevant assessment year or years. assessment year or years. As is apparent from the plain language of As is apparent from the plain language of Section 153A(1) of the Act, the AO has the jurisdiction to issue Section 153A(1) of the Act, the AO has the jurisdiction to issue Section 153A(1) of the Act, the AO has the jurisdiction to issue a notice in respect of each of the assessment years falling within six assessment respect of each of the assessment years falling within six assessment respect of each of the assessment years falling within six assessment years as well as for the relevant year or years as referred to in Clause (b) years as well as for the relevant year or years as referred to in Clause (b) years as well as for the relevant year or years as referred to in Clause (b) , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt of Section 153A(1) of the Act. of Section 153A(1) of the Act. In the present case, having regard to the In the present case, having regard to the year of search i.e. AY 2023 2023-24, the six year block period is AYs 2017 24, the six year block period is AYs 2017-18 to 2022-23. However, the fourth proviso to Section 153A(1) of the Act However, the fourth proviso to Section 153A(1) of the Act However, the fourth proviso to Section 153A(1) of the Act proscribes issuance of any notice for assessment or reassessment in proscribes issuance of any notice for assessment or reassessment in proscribes issuance of any notice for assessment or reassessment in respect of a relevant assessment year unless the conditions as stipu respect of a relevant assessment year unless the conditions as stipu respect of a relevant assessment year unless the conditions as stipulated in the fourth proviso are satisfied. It is seen that, e fourth proviso are satisfied. It is seen that, the expression he expression "relevant assessment year" is defined under Explanation 1 to sub is defined under Explanation 1 to sub is defined under Explanation 1 to sub-section (i) of Section 153A of the Act to mean a year that falls beyond the period of six Section 153A of the Act to mean a year that falls beyond the period of six Section 153A of the Act to mean a year that falls beyond the period of six assessment years preceding assessment years preceding the assessment year relevant to the previous the assessment year relevant to the previous year in which search is conducted or requisition is made, but not later year in which search is conducted or requisition is made, but not later year in which search is conducted or requisition is made, but not later than ten assessment years from the end of the assessment year relevant than ten assessment years from the end of the assessment year relevant than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is to the previous year in which search is conducted or requisition is to the previous year in which search is conducted or requisition is made.

Hence, in our considered view, in order to reopen any assessment year Hence, in our considered view, in order to reopen any assessment year Hence, in our considered view, in order to reopen any assessment year which is beyond the six year block period contemplated in Section which is beyond the six year block period contemplated in Section which is beyond the six year block period contemplated in Section 153A(1)(b) and within the ten year block period from the end of the AY in 153A(1)(b) and within the ten year block period from the end of the AY in 153A(1)(b) and within the ten year block period from the end of the AY in which search was conducted, the AO is r which search was conducted, the AO is required to satisfy the condition equired to satisfy the condition precedent in fourth proviso to Section 153A of the Act and show that, he precedent in fourth proviso to Section 153A of the Act and show that, he precedent in fourth proviso to Section 153A of the Act and show that, he has in his possession books of account or other documents or evidence has in his possession books of account or other documents or evidence has in his possession books of account or other documents or evidence which reveals that the income, represented in the form of that the income, represented in the form of that the income, represented in the form of ‘asset’, which has escaped assessment amounts to or is likely to amount to fifty lakh aped assessment amounts to or is likely to amount to fifty lakh aped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year. As per Explanation (2) to in the relevant assessment year. As per Explanation (2) to in the relevant assessment year. As per Explanation (2) to Section 153A of the Act, Section 153A of the Act, the term "asset" shall include immovable the term "asset" shall include immovable , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt property being land or building or both, shares and property being land or building or both, shares and securities, loans and securities, loans and advances, deposits in bank account. advances, deposits in bank account.

“….13. Thus, the information in the seized materials and other 13. Thus, the information in the seized materials and other 13. Thus, the information in the seized materials and other evidences available with the evidences available with the undersigned, unambiguously evidenced that undersigned, unambiguously evidenced that the assessee had booked bogus old bottle purchase expenses with the the assessee had booked bogus old bottle purchase expenses with the the assessee had booked bogus old bottle purchase expenses with the connivance connivance connivance of of of the the the five five five old old old bottle bottle bottle vendors vendors vendors thereby thereby thereby generating generating generating unaccounted cash which clearly suggests that income represented in the unaccounted cash which clearly suggests that income represented in the unaccounted cash which clearly suggests that income represented in the form of asset has escaped assessment, and exceeds more than Rs. has escaped assessment, and exceeds more than Rs. has escaped assessment, and exceeds more than Rs. 50,00,000 for A.Y 14 50,00,000 for A.Y 14-15. Hence, this case falls under the purview of 15. Hence, this case falls under the purview of section 149(1)(b). In view of the above, there is information and section 149(1)(b). In view of the above, there is information and section 149(1)(b). In view of the above, there is information and evidence which suggests that income represented in the form of asset, evidence which suggests that income represented in the form of asset, evidence which suggests that income represented in the form of asset, has escaped assessment and which exceeds more than Rs. 50,00,000/ as escaped assessment and which exceeds more than Rs. 50,00,000/ as escaped assessment and which exceeds more than Rs. 50,00,000/- and hence, notice u/s 148 is required to be issued in this case. and hence, notice u/s 148 is required to be issued in this case. and hence, notice u/s 148 is required to be issued in this case.”

AO has not pointed out as to how such inflation of expenses resulted in pointed out as to how such inflation of expenses resulted in pointed out as to how such inflation of expenses resulted in acquisition of any ‘asset’. It is observed that, even in the reassessment acquisition of any ‘asset’. It is observed that, even in the reassessment acquisition of any ‘asset’. It is observed that, even in the reassessment order(s) passed u/s 147/143(3) of the Act, the AO has disallowed the order(s) passed u/s 147/143(3) of the Act, the AO has disallowed the order(s) passed u/s 147/143(3) of the Act, the AO has disallowed the expenses debited on account of purchases made from expenses debited on account of purchases made from vendors and he had vendors and he had not brought on record any material to not brought on record any material to establish that such expenses had establish that such expenses had resulted in the acquisition of any asset resulted in the acquisition of any asset by the assessee. We therefore are by the assessee. We therefore are of the considered view that, the condition of the considered view that, the condition stipulated in the fourth proviso stipulated in the fourth proviso to Section 153A(1) of the Act (1) of the Act was not fulfilled by the AO. Hence, in was not fulfilled by the AO. Hence, in absence of there being any income represented in form of ‘asset’ escaping absence of there being any income represented in form of ‘asset’ escaping absence of there being any income represented in form of ‘asset’ escaping tax in the impugned AYs 2014 tax in the impugned AYs 2014-15 to 2016-17, the period of limitation for the period of limitation for issuing a notice under Section 153A of the Act, in the issuing a notice under Section 153A of the Act, in the given facts of this given facts of this case, would necessarily have to be confined to a period of six assessment case, would necessarily have to be confined to a period of six assessment case, would necessarily have to be confined to a period of six assessment years immediately preceding the assessment year relevant to the years immediately preceding the assessment year relevant to the years immediately preceding the assessment year relevant to the previous year in which the search under Section 132 of the Act was previous year in which the search under Section 132 of the Act was previous year in which the search under Section 132 of the Act was conducted. In our opinion there In our opinion therefore, since AYs 2014-15 to 2016 15 to 2016-17 fall beyond the six year block period and the condition precedent in fourth beyond the six year block period and the condition precedent in fourth beyond the six year block period and the condition precedent in fourth proviso to Section 153A is not met, the AO could not have reopened the proviso to Section 153A is not met, the AO could not have reopened the proviso to Section 153A is not met, the AO could not have reopened the impugned AYs in light of the embargo set out in the first proviso to impugned AYs in light of the embargo set out in the first proviso to impugned AYs in light of the embargo set out in the first proviso to Section 149(1)(b) read with Section 153A (1)(b) read with Section 153A of the Act of the Act. We thus countenance the following findings rendered by the Ld. CIT(A) holding the countenance the following findings rendered by the Ld. CIT(A) holding the countenance the following findings rendered by the Ld. CIT(A) holding the AO’s action of initiation of reassessment proceedings u/s 148 of the Act AO’s action of initiation of reassessment proceedings u/s 148 of the Act AO’s action of initiation of reassessment proceedings u/s 148 of the Act , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt for AYs 2014-15 to 2016 15 to 2016-17 to be impermissible in law, by holding as , by holding as under:-

6.3.19 At this juncture, it is appropriate to analyse At this juncture, it is appropriate to analyse the Explanation 2 the Explanation 2 to section 153A of the Act which describes the inclusions in the term to section 153A of the Act which describes the inclusions in the term to section 153A of the Act which describes the inclusions in the term Asset in the Act. The undersigned is of the view that an asset represents Asset in the Act. The undersigned is of the view that an asset represents Asset in the Act. The undersigned is of the view that an asset represents an economic resource, either immovable or movable, having value, such an economic resource, either immovable or movable, having value, such an economic resource, either immovable or movable, having value, such as immovable property vi as immovable property viz., land or building, investment held in shares z., land or building, investment held in shares and securities, loans & advances given and deposits in bank account. and securities, loans & advances given and deposits in bank account. and securities, loans & advances given and deposits in bank account. Whereas, ‘Liability’ includes items such as share capital, reserves, loans Whereas, ‘Liability’ includes items such as share capital, reserves, loans Whereas, ‘Liability’ includes items such as share capital, reserves, loans obtained (secured as well as unsecured) etc. which cannot be obtained (secured as well as unsecured) etc. which cannot be obtained (secured as well as unsecured) etc. which cannot be characterized or classified as ‘Asset’. Therefore, items of ‘expenses’ or racterized or classified as ‘Asset’. Therefore, items of ‘expenses’ or racterized or classified as ‘Asset’. Therefore, items of ‘expenses’ or revenues in form of ‘sales’ / ‘turnover’ does not constitute ‘asset’. revenues in form of ‘sales’ / ‘turnover’ does not constitute ‘asset’. revenues in form of ‘sales’ / ‘turnover’ does not constitute ‘asset’.

“A reading of the fourth proviso to section 153A of the Act and A reading of the fourth proviso to section 153A of the Act and A reading of the fourth proviso to section 153A of the Act and Explanation (2) to fourth proviso to section 153A of the Act which Explanation (2) to fourth proviso to section 153A of the Act which Explanation (2) to fourth proviso to section 153A of the Act which defines 'Asset for the purpose of fourth proviso to section 153A of the defines 'Asset for the purpose of fourth proviso to section 153A of the defines 'Asset for the purpose of fourth proviso to section 153A of the Act, clarify the intention of the Parliament to permit Act, clarify the intention of the Parliament to permit the AO to enlarge the AO to enlarge the assessment u/s. 153A after search u/s. 132 of the Act beyond six the assessment u/s. 153A after search u/s. 132 of the Act beyond six the assessment u/s. 153A after search u/s. 132 of the Act beyond six assessment years to ten assessment years preceding the searched assessment years to ten assessment years preceding the searched assessment years to ten assessment years preceding the searched assessment year, provided assessment year, provided the AO has in his possession the essential the AO has in his possession the essential jurisdictional fact i.e. "undisclos jurisdictional fact i.e. "undisclosed/unaccounted asset" valued Rs 50 ed/unaccounted asset" valued Rs 50 lakhs or more of the assessee discovered during search pertaining to 7th lakhs or more of the assessee discovered during search pertaining to 7th lakhs or more of the assessee discovered during search pertaining to 7th to 10th Assessment Year preceding the searched assessment year to 10th Assessment Year preceding the searched assessment year to 10th Assessment Year preceding the searched assessment year. Since the Parliament has used the expression 'income in the form of Since the Parliament has used the expression 'income in the form of Since the Parliament has used the expression 'income in the form of asset' and the d asset' and the definition of asset has been spelled out in the fourth efinition of asset has been spelled out in the fourth proviso, this itself necessarily implies the liability/items falling in the left proviso, this itself necessarily implies the liability/items falling in the left proviso, this itself necessarily implies the liability/items falling in the left side of the Balance Sheet stands excluded. For this view of ours, we rely side of the Balance Sheet stands excluded. For this view of ours, we rely side of the Balance Sheet stands excluded. For this view of ours, we rely on the legal Maxim for interpretation " on the legal Maxim for interpretation "Expressio Unius Est Exlcusio o Unius Est Exlcusio Alterius" which principle states that, express mention of one is the " which principle states that, express mention of one is the " which principle states that, express mention of one is the exclusion of other and this maxim has been accepted by the Hon'ble exclusion of other and this maxim has been accepted by the Hon'ble exclusion of other and this maxim has been accepted by the Hon'ble Supreme Court in Supreme Court in GVK Industries Ltd. Vs. ITO [197 Taxman 337] GVK Industries Ltd. Vs. ITO [197 Taxman 337] (Constitution bench of 5 Supreme Cour (Constitution bench of 5 Supreme Court Judges). By express mention of t Judges). By express mention of 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 40 ::

6.3.27 Further Further, it is appropriate to rely upon the decision of the , it is appropriate to rely upon the decision of the Hon’ble High Court of Bombay in the case of n’ble High Court of Bombay in the case of Ashok Commercial Ashok Commercial enterprises Vs. ACIT in [2023] 154 taxmann.com 144 (Bombay) enterprises Vs. ACIT in [2023] 154 taxmann.com 144 (Bombay) enterprises Vs. ACIT in [2023] 154 taxmann.com 144 (Bombay) wherein the Hon’ble high Court held that “ the Hon’ble high Court held that “A plain reading of section 153A(1)(b) A plain reading of section 153A(1)(b) shows that Commissioner having jurisdiction under the sai shows that Commissioner having jurisdiction under the sai shows that Commissioner having jurisdiction under the said section is empowered to assess or reassess the total income of six years empowered to assess or reassess the total income of six years empowered to assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous immediately preceding the assessment year relevant to the previous immediately preceding the assessment year relevant to the previous year in which the search was conducted and for the relevant assessment year in which the search was conducted and for the relevant assessment year in which the search was conducted and for the relevant assessment year or years. Explanation 1 below section year or years. Explanation 1 below section 153A of the Act defines the 153A of the Act defines the expression relevant assessment. In order to make an assessment for expression relevant assessment. In order to make an assessment for expression relevant assessment. In order to make an assessment for assessment year which falls beyond six assessment years but not later assessment year which falls beyond six assessment years but not later assessment year which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year than ten assessment years from the end of the assessment year than ten assessment years from the end of the assessment year relevant to the previous year relevant to the previous year, in which the search was conducted, the , in which the search was conducted, the 4th proviso to section 153(A)(1) sets out certain further conditions 4th proviso to section 153(A)(1) sets out certain further conditions 4th proviso to section 153(A)(1) sets out certain further conditions which are required to be fulfilled before a notice can be issued for the which are required to be fulfilled before a notice can be issued for the which are required to be fulfilled before a notice can be issued for the 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt relevant assessment years. Clause (a) of the4th proviso requires that relevant assessment years. Clause (a) of the4th proviso requires that relevant assessment years. Clause (a) of the4th proviso requires that the Assessing Officer must have in his possession books, documents or Assessing Officer must have in his possession books, documents or Assessing Officer must have in his possession books, documents or evidence which reveal reveal that income represented in the form of an that income represented in the form of an asset which has escaped assessment amounts to or is likely to amount to which has escaped assessment amounts to or is likely to amount to which has escaped assessment amounts to or is likely to amount to rupees fifty lakhs rupees fifty lakhs or more. Explanation 2 to section 153A(1) sets out an 153A(1) sets out an expanded definition of the word "asset" for the purposes of the 4th expanded definition of the word "asset" for the purposes of the 4th expanded definition of the word "asset" for the purposes of the 4th proviso.

6.3.28 Besides, the jurisdictional tribunal in the case of Besides, the jurisdictional tribunal in the case of Besides, the jurisdictional tribunal in the case of M/s. KAG India Private Limited Vs. DCIT Central circle India Private Limited Vs. DCIT Central circle-2(1), Chennai in Chennai in No.669/Chny/2023 dated 10.07.2024 by relying upon the decision by relying upon the decision of the decision of Hon’ble Guwahati High Court in the case of of the decision of Hon’ble Guwahati High Court in the case of of the decision of Hon’ble Guwahati High Court in the case of Goldstone Cements Ltd. (ITA No.10 of 2022 & ors. Dated 29 Cements Ltd. (ITA No.10 of 2022 & ors. Dated 29-09-2023) 2023) held that “it is quite clear the impugned AY fall beyond 6 years from relevant is quite clear the impugned AY fall beyond 6 years from relevant is quite clear the impugned AY fall beyond 6 years from relevant assessment year (AY 2021 ssessment year (AY 2021-22) from the end of the previous year (2020 22) from the end of the previous year (2020- 21) in which the search was conducted on the assessee (26 21) in which the search was conducted on the assessee (26 21) in which the search was conducted on the assessee (26-02-2021). In such a situation, the Ld. AO would be subjected to further conditions In such a situation, the Ld. AO would be subjected to further conditions In such a situation, the Ld. AO would be subjected to further conditions as stipulated in fourth proviso to Sec.153A(1). as stipulated in fourth proviso to Sec.153A(1). These conditions are (a) These conditions are (a) that certain income has escaped assessment; (b) the fact of income that certain income has escaped assessment; (b) the fact of income that certain income has escaped assessment; (b) the fact of income escaping assessment is evident from the books of accounts, other escaping assessment is evident from the books of accounts, other escaping assessment is evident from the books of accounts, other documents or evidences found in the course of search which are in the documents or evidences found in the course of search which are in the documents or evidences found in the course of search which are in the possession of the assessing possession of the assessing officer; (c) that the escaped income pertains officer; (c) that the escaped income pertains to the relevant assessment year or years; (d) that the income escaping to the relevant assessment year or years; (d) that the income escaping to the relevant assessment year or years; (d) that the income escaping assessment is represented by undisclosed specified asset; (e) that the assessment is represented by undisclosed specified asset; (e) that the assessment is represented by undisclosed specified asset; (e) that the undisclosed specified asset was acquired with the income of the rele undisclosed specified asset was acquired with the income of the rele undisclosed specified asset was acquired with the income of the relevant assessment year or years; (f) that the quantum of income escaping assessment year or years; (f) that the quantum of income escaping assessment year or years; (f) that the quantum of income escaping assessment is Rs.50 Lacs or more in the aggregate for the relevant assessment is Rs.50 Lacs or more in the aggregate for the relevant assessment is Rs.50 Lacs or more in the aggregate for the relevant assessment years. One of the prime condition is that income should be assessment years. One of the prime condition is that income should be assessment years. One of the prime condition is that income should be represented in the form of asset which has escap represented in the form of asset which has escaped assessment. As per ed assessment. As per Explanation-2, asset includes immovable property being land and 2, asset includes immovable property being land and 2, asset includes immovable property being land and building or both, share and securities, loans and advances, deposits in building or both, share and securities, loans and advances, deposits in building or both, share and securities, loans and advances, deposits in bank accounts.

29.

We find that the above view expressed We find that the above view expressed by the Ld. CIT(A) is squarely by the Ld. CIT(A) is squarely supported by the decision rendered by the Hon’ble Delhi High Court in the supported by the decision rendered by the Hon’ble Delhi High Court in the supported by the decision rendered by the Hon’ble Delhi High Court in the case of Smart Chip Pvt Ltd Vs ACIT (supra) Smart Chip Pvt Ltd Vs ACIT (supra) involving identical facts involving identical facts and circumstances as involved in the present case. In the decided case, and circumstances as involved in the present case. In the decided case, and circumstances as involved in the present case. In the decided case, search was conducted upon the assessee on 21 conducted upon the assessee on 21-03-2023, consequent to 2023, consequent to which the AO issued reopening notice u/s 148 of the Act on 21 which the AO issued reopening notice u/s 148 of the Act on 21 which the AO issued reopening notice u/s 148 of the Act on 21-03-2024 for AY 2016-17. The assessee challenged the validity of the notice by 17. The assessee challenged the validity of the notice by 17. The assessee challenged the validity of the notice by filing writ petition before the Hon’ble High Court contendi filing writ petition before the Hon’ble High Court contendi filing writ petition before the Hon’ble High Court contending it to be barred by limitation. The assessee argued before the Hon’ble High Court barred by limitation. The assessee argued before the Hon’ble High Court barred by limitation. The assessee argued before the Hon’ble High Court that, in terms of first proviso to Section 149(1)(b) of the Act, the AO that, in terms of first proviso to Section 149(1)(b) of the Act, the AO that, in terms of first proviso to Section 149(1)(b) of the Act, the AO could have reopened AY 2016 could have reopened AY 2016-17 only if such AY could have been 17 only if such AY could have been reopened in terms of Section 153A of reopened in terms of Section 153A of the Act, as it stood prior to the Act, as it stood prior to introduction of the new 148 regime by Finance Act, 2021. It was pointed introduction of the new 148 regime by Finance Act, 2021. It was pointed introduction of the new 148 regime by Finance Act, 2021. It was pointed out that, ordinarily the AO could have reopened six AYs preceding the AY out that, ordinarily the AO could have reopened six AYs preceding the AY out that, ordinarily the AO could have reopened six AYs preceding the AY in which search was conducted i.e. AYs 2017 in which search was conducted i.e. AYs 2017-18 to 2022 18 to 2022-23 which preceded AY 2023-24 being the year of search and that AY 2016 24 being the year of search and that AY 2016 24 being the year of search and that AY 2016-17 fell beyond the period of six years. The assessee contended that, if the AO beyond the period of six years. The assessee contended that, if the AO beyond the period of six years. The assessee contended that, if the AO sought to reopen AY 2016 sought to reopen AY 2016-17 in terms of fourth proviso to Section 153A 17 in terms of fourth proviso to Section 153A of the Act read with Explanation (1) to Section 153A of the A of the Act read with Explanation (1) to Section 153A of the A of the Act read with Explanation (1) to Section 153A of the Act, then it was incumbent for the AO to show that the condition precedent in fourth was incumbent for the AO to show that the condition precedent in fourth was incumbent for the AO to show that the condition precedent in fourth proviso to Section 153A of the Act was met viz., the AO is able to proviso to Section 153A of the Act was met viz., the AO is able to proviso to Section 153A of the Act was met viz., the AO is able to demonstrate that income represented in form of ‘asset’ exceeding Rs.50 demonstrate that income represented in form of ‘asset’ exceeding Rs.50 demonstrate that income represented in form of ‘asset’ exceeding Rs.50 , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt lacs had escaped assessment in AY lacs had escaped assessment in AY 2016-17. Upholding the plea of the 17. Upholding the plea of the assessee, the Hon’ble High Court noted that, the AO had not met this assessee, the Hon’ble High Court noted that, the AO had not met this assessee, the Hon’ble High Court noted that, the AO had not met this criteria set out in fourth proviso to Section 153A of the Act prior to criteria set out in fourth proviso to Section 153A of the Act prior to criteria set out in fourth proviso to Section 153A of the Act prior to issuance of notice u/s 148 of the Act for AY 2016 issuance of notice u/s 148 of the Act for AY 2016-17, which fell beyond 17, which fell beyond the six year block period, under the new 148 regime. The Hon’ble High ear block period, under the new 148 regime. The Hon’ble High ear block period, under the new 148 regime. The Hon’ble High Court observed that, the AO had sought to Court observed that, the AO had sought to disallow expenses disallow expenses doubting its genuineness and that the same did not qualify as income represented in genuineness and that the same did not qualify as income represented in genuineness and that the same did not qualify as income represented in form of ‘asset’ which had escaped tax. Hence, since form of ‘asset’ which had escaped tax. Hence, since the AO was unable to the AO was unable to show that such expenses had resulted in the acquisition of any asset, such expenses had resulted in the acquisition of any asset, such expenses had resulted in the acquisition of any asset, it was held that, the conditions stipulated in the fourth proviso to Section the conditions stipulated in the fourth proviso to Section the conditions stipulated in the fourth proviso to Section 153A(1) of the Act was not met and thus the impugned notice issued u/s was not met and thus the impugned notice issued u/s was not met and thus the impugned notice issued u/s 148 of the Act for AY 2016 or AY 2016-17 was held to be barred by limitation, by 17 was held to be barred by limitation, by virtue of the embargo set out in first proviso to Section 149(1)(b) read virtue of the embargo set out in first proviso to Section 149(1)(b) read virtue of the embargo set out in first proviso to Section 149(1)(b) read with Section 153A of the Act. The relevant findings of the Hon’ble High with Section 153A of the Act. The relevant findings of the Hon’ble High with Section 153A of the Act. The relevant findings of the Hon’ble High Court which are applicable with equal force in the presen Court which are applicable with equal force in the presen Court which are applicable with equal force in the present case, are as follows:-

"49. The first proviso to Section 149(1)(b) requires the determination "49. The first proviso to Section 149(1)(b) requires the determination "49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149 of whether the time limit prescribed under section 149 of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021 old regime continues to exist for the assessment year 2021 old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime before. Resultantly, a notice under Section 148 of the new regime before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the cannot be issued if the period of six years from the end of the cannot be issued if the period of six years from the end of the relevant assessment year has expired at the relevant assessment year has expired at the time of issuance of the time of issuance of the notice. This also ensures that the new time limit of ten years notice. This also ensures that the new time limit of ten years notice. This also ensures that the new time limit of ten years prescribed under section 149(1)(b) of the new regime applies prescribed under section 149(1)(b) of the new regime applies prescribed under section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012 prospectively. For example, for the assessment year 2012 prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 ten year period would have expired on 31 March 2023, while the six March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section year period expired on 31 March 2019. Without the proviso to Section year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power 149(1)(b) of the new regime, the Revenue could have had the power 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012 to reopen assessments for the year 2012-2013 if the escaped 2013 if the escaped assessment amounted to Rupees fifty assessment amounted to Rupees fifty lakhs or more. The proviso lakhs or more. The proviso limits the retrospective operation of Section149(1)(b) to protect the limits the retrospective operation of Section149(1)(b) to protect the limits the retrospective operation of Section149(1)(b) to protect the interests of the assesses. interests of the assesses.

10.

The aforesaid observations in Rajeev Bansal (supra) were made in 10. The aforesaid observations in Rajeev Bansal (supra) were made in 10. The aforesaid observations in Rajeev Bansal (supra) were made in the context of time limits for issuing notice under Section 148 of the Act the context of time limits for issuing notice under Section 148 of the Act the context of time limits for issuing notice under Section 148 of the Act under the provisions as were in force prior to 3 under the provisions as were in force prior to 31.03.2021, as imputed by 1.03.2021, as imputed by virtue of the first proviso to Section 149(1) of the Act. This principle virtue of the first proviso to Section 149(1) of the Act. This principle virtue of the first proviso to Section 149(1) of the Act. This principle would be equally applicable for proscribing the issuance of a notice would be equally applicable for proscribing the issuance of a notice would be equally applicable for proscribing the issuance of a notice under Section 148 of the Act, if the proceedings for reassessment could under Section 148 of the Act, if the proceedings for reassessment could under Section 148 of the Act, if the proceedings for reassessment could , 1256, 1257 & 1259/Chny/2025 1163, 1256, 1257 & 1259/Chny/2025 & 1232, 1234 & 1236/Chny/2025 1232, 1234 & 1236/Chny/2025 (AYs 2013 s 2013-14 to 2016-17) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt not be initiated under the provisions of Section 153A or 153C of the Act, under the provisions of Section 153A or 153C of the Act, under the provisions of Section 153A or 153C of the Act, or under Section 153A or Section 153C of the Act as referred to in the or under Section 153A or Section 153C of the Act as referred to in the or under Section 153A or Section 153C of the Act as referred to in the first proviso to Section 149(1) of the Act. There is no cavil that the first proviso to Section 149(1) of the Act. There is no cavil that the first proviso to Section 149(1) of the Act. There is no cavil that the impugned notice would be unsustainable if such a notice c impugned notice would be unsustainable if such a notice c impugned notice would be unsustainable if such a notice could not be issued under the provision of Section 153A of the Act as was applicable issued under the provision of Section 153A of the Act as was applicable issued under the provision of Section 153A of the Act as was applicable in respect of a search conducted prior to 31.03.2021. It thus requires us in respect of a search conducted prior to 31.03.2021. It thus requires us in respect of a search conducted prior to 31.03.2021. It thus requires us to determine the period of limitation within which a notice under Section to determine the period of limitation within which a notice under Section to determine the period of limitation within which a notice under Section 153A could be issued in 153A could be issued in respect of AY 2016-17.

15.

Mr. Maratha's contention that the extended period of limitation 15. Mr. Maratha's contention that the extended period of limitation 15. Mr. Maratha's contention that the extended period of limitation under Section 153A of the Act would be applicable for the purpose of the under Section 153A of the Act would be applicable for the purpose of the under Section 153A of the Act would be applicable for the purpose of the proviso to Section 149( proviso to Section 149(1) of the Act notwithstanding that the conditions, 1) of the Act notwithstanding that the conditions, as stipulated in the fourth proviso to Section 153A of the Act are not as stipulated in the fourth proviso to Section 153A of the Act are not as stipulated in the fourth proviso to Section 153A of the Act are not satisfied, is unmerited. Once, we accept that a notice under Section 148 satisfied, is unmerited. Once, we accept that a notice under Section 148 satisfied, is unmerited. Once, we accept that a notice under Section 148 of the Act cannot be issued if such a notice could not be iss of the Act cannot be issued if such a notice could not be iss of the Act cannot be issued if such a notice could not be issued under Section 153A of the Act; it would be necessary to determine the period Section 153A of the Act; it would be necessary to determine the period Section 153A of the Act; it would be necessary to determine the period of limitation for issuance of a notice under Section 153A of the Act. of limitation for issuance of a notice under Section 153A of the Act. of limitation for issuance of a notice under Section 153A of the Act. Since a block of six assessment years and a further period not Since a block of six assessment years and a further period not Since a block of six assessment years and a further period not exceeding the block of ten assessment year exceeding the block of ten assessment years is contemplated under s is contemplated under Section 153A of the Act, it follows that it would be necessary to Section 153A of the Act, it follows that it would be necessary to Section 153A of the Act, it follows that it would be necessary to determine whether the extended period of ten years is applicable in the determine whether the extended period of ten years is applicable in the determine whether the extended period of ten years is applicable in the facts of the present case. This necessitates considering the reasons as facts of the present case. This necessitates considering the reasons as facts of the present case. This necessitates considering the reasons as recorded for issuance recorded for issuance of the impugned notice. The relevant extract of of the impugned notice. The relevant extract of the reasons for reopening the reassessment, as furnished to the the reasons for reopening the reassessment, as furnished to the the reasons for reopening the reassessment, as furnished to the petitioner, is set out below: petitioner, is set out below:

On perusal of the above, it can be noted that gold items worth On perusal of the above, it can be noted that gold items worth On perusal of the above, it can be noted that gold items worth Rs.2,42,646/were being purchased in FY 2015 Rs.2,42,646/were being purchased in FY 2015-16. Further, it con 16. Further, it con be noticed that Smart Chip has been regularly incurring expenses for the noticed that Smart Chip has been regularly incurring expenses for the noticed that Smart Chip has been regularly incurring expenses for the personal benefit of directors and key managerial personnel for personal benefit of directors and key managerial personnel for personal benefit of directors and key managerial personnel for example purchase of iPhones, Sarees, Purfume, Hotel bills, credit example purchase of iPhones, Sarees, Purfume, Hotel bills, credit example purchase of iPhones, Sarees, Purfume, Hotel bills, credit card payments, etc. Further, it has also been observe card payments, etc. Further, it has also been observe card payments, etc. Further, it has also been observed that the company is also regularly incurring expenses for alcohols for officers, company is also regularly incurring expenses for alcohols for officers, company is also regularly incurring expenses for alcohols for officers, IPL tickets for bank officials, travel bills of government officers for IPL tickets for bank officials, travel bills of government officers for IPL tickets for bank officials, travel bills of government officers for availing favours from them. These expenses incurred to illegally availing favours from them. These expenses incurred to illegally availing favours from them. These expenses incurred to illegally obtain undue favours are in infracti obtain undue favours are in infraction of law and cannot be allowed on of law and cannot be allowed as deduction. Furthermore, such personal expenses cannot also be as deduction. Furthermore, such personal expenses cannot also be as deduction. Furthermore, such personal expenses cannot also be said to have been incurred wholly and exclusively for the purpose of said to have been incurred wholly and exclusively for the purpose of said to have been incurred wholly and exclusively for the purpose of business and needs to be examined. business and needs to be examined.

Further, the above observations in the seized Memo were also Further, the above observations in the seized Memo were also Further, the above observations in the seized Memo were also corroborated with detailed analysis in the Memo including list of corroborated with detailed analysis in the Memo including list of corroborated with detailed analysis in the Memo including list of shareholders as on 31.03.2016, Sanjeev Kumar Jain pro shareholders as on 31.03.2016, Sanjeev Kumar Jain pro shareholders as on 31.03.2016, Sanjeev Kumar Jain profile, extracts of Memorandum of Association of Vihaan Infrasystems Ltd. signed in of Memorandum of Association of Vihaan Infrasystems Ltd. signed in of Memorandum of Association of Vihaan Infrasystems Ltd. signed in 2004, Archived version of Vihaan Infrasystems Ltd. website, Linkedln 2004, Archived version of Vihaan Infrasystems Ltd. website, Linkedln 2004, Archived version of Vihaan Infrasystems Ltd. website, Linkedln profile of Vihaan Infrasystems Ltd., consent form signed by Smart profile of Vihaan Infrasystems Ltd., consent form signed by Smart profile of Vihaan Infrasystems Ltd., consent form signed by Smart Chip's landlord providing permission to Chip's landlord providing permission to Vihaan Infrasystems Ltd. to Vihaan Infrasystems Ltd. to use their office space and Vihan noted as related party, links of use their office space and Vihan noted as related party, links of use their office space and Vihan noted as related party, links of Vihaan Infrasystems Ltd. with Aadharshila and Smart Chip, related Vihaan Infrasystems Ltd. with Aadharshila and Smart Chip, related Vihaan Infrasystems Ltd. with Aadharshila and Smart Chip, related party disclosures in the other companies of Mr. Sanjeev Shriya party disclosures in the other companies of Mr. Sanjeev Shriya party disclosures in the other companies of Mr. Sanjeev Shriya (Goldrock Investment) showing Vi (Goldrock Investment) showing Vihaan Infrasystems Ltd. as related haan Infrasystems Ltd. as related party in its Annual report for FY 20 16 party in its Annual report for FY 20 16-17, domain name verification 17, domain name verification of Vihaan Infrasystems Ltd. wherein Smart Chip shown as registrant of Vihaan Infrasystems Ltd. wherein Smart Chip shown as registrant of Vihaan Infrasystems Ltd. wherein Smart Chip shown as registrant organization, proofs that Smart Chip's address noted as address of organization, proofs that Smart Chip's address noted as address of organization, proofs that Smart Chip's address noted as address of Vihaan Infrasystems Vihaan Infrasystems Ltd. on Government's website, MCA etc, analysis Ltd. on Government's website, MCA etc, analysis of invoices raised by Vihaan Infrasystems Ltd., physical verification of of invoices raised by Vihaan Infrasystems Ltd., physical verification of of invoices raised by Vihaan Infrasystems Ltd., physical verification of premises of Vihaan lnfrasystems Ltd., and various other analysis. premises of Vihaan lnfrasystems Ltd., and various other analysis. premises of Vihaan lnfrasystems Ltd., and various other analysis.

16.

It is apparent from the above that the AO believed that the It is apparent from the above that the AO believed that the It is apparent from the above that the AO believed that the petitioner's income had escaped assessment for AY 2016 petitioner's income had escaped assessment for AY 2016 petitioner's income had escaped assessment for AY 2016-17 on essentially three grounds. First, that the petitioner had deducted essentially three grounds. First, that the petitioner had deducted essentially three grounds. First, that the petitioner had deducted expenses relating to amounts paid to certain persons who had not fil expenses relating to amounts paid to certain persons who had not fil expenses relating to amounts paid to certain persons who had not filed their income tax returns and the AO thus doubted the genuineness of their income tax returns and the AO thus doubted the genuineness of their income tax returns and the AO thus doubted the genuineness of the said transactions. Second, that the petitioner had booked expenses, the said transactions. Second, that the petitioner had booked expenses, the said transactions. Second, that the petitioner had booked expenses, which according to the AO, were personal expenses of its directors and which according to the AO, were personal expenses of its directors and which according to the AO, were personal expenses of its directors and had not been incurred wholly and exclusive had not been incurred wholly and exclusively for the purpose of the ly for the purpose of the petitioner's business. And third, that the petitioner had paid certain petitioner's business. And third, that the petitioner had paid certain petitioner's business. And third, that the petitioner had paid certain amounts as expenses for availing contractual manpower services and amounts as expenses for availing contractual manpower services and amounts as expenses for availing contractual manpower services and the AO doubted the genuineness of the said payments. the AO doubted the genuineness of the said payments.