Loading judgment…
Facts
The assessment was framed under Section 153C of the Income Tax Act, 1961, based on search and seizure proceedings. The assessee received a notice under Section 153C on 15.11.2022. The assessee filed a return declaring the same income as in its Section 139(1) return. The Assessing Officer completed the assessment with an income of Rs. 32,02,640 against the returned income of Rs. 1,12,640.
Held
The Tribunal held that the notice under Section 153C for Assessment Year 2013-14 was issued beyond the ten-year block period, making the assessment proceedings void ab initio and beyond limitation. The satisfaction notes were recorded on 26.10.2022 and 10.11.2022, which fell in FY 2022-23.
Key Issues
Whether the notice issued under Section 153C for AY 2013-14 is barred by limitation as it falls outside the ten-year block period.
Sections Cited
153C, 153A, 132, 139(1), 149
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, DELHI BENCH “G’’ : NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI KRINWANT SAHAY
ORDER PER MAHAVIR SINGH, VP: This appeal filed by the Assessee arising out of the order of the Ld. Commissioner of Income Tax (Appeals-25), New Delhi (in short “CIT(A)”) dated 17.4.2025. Assessment was framed by the AO, CC-25, New Delhi u/s. 153C of the Income Tax Act, 1961 (hereinafter referred as “Act”) vide order dated 31.3.2024 relevant to assessment year 2013-14. In this appeal, the assessee has raised as many as six grounds of appeal challenging findings of CIT(A) on merits as well as on legal issues. But he only argued the legal ground no. 2 which reads as under:-
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact that the AO has erred in law in assuming jurisdiction under Section 153C read with Section 153A vide notice 1 under section 153C in view of the prevailing facts and circumstance of the case. Thus, the entire assessment proceedings are bad in law and void-ab-initio.”
2. The brief facts of the case are that assessment in the case of assessee is made u/s. 153C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). A search and seizure proceedings u/s. 132 of the Act was carried out in the case of searched party (Alankit Group) on 18.10.2019. Subsequently, AO of the searched party, on the basis of certain alleged incriminating documents pertaining to the assessee recorded its own satisfaction vide Satisfaction Note dated 26.10.2022. Thereafter, the AO of the assessee on being satisfied recorded its own satisfaction vide Satisfaction Note dated 10.11.2022. During the assessment proceedings notice u/s. 153C was issue don 15.11.2022 by the AO to which the assessee filed its return of income declaring the same income as returned in its return u/s. 139(1) of the Act. Later, the case of the assessee was completed by AO Circle 25, New Delhi vide order dated 31.3.2024 at an assessed income for Rs. 32,02,640/- against the returned income for Rs. 1,12,640/-. Against the assessment, assessee preferred the appeal before the Ld. CIT(A) who vide his order dated 17.4.2025 dismissed the appeal of the assessee. Aggrieved, assessee is in appeal before us.
3. At the time of hearing, ld. AR for the assessee has submitted that the notice u/s. 153C dated 15.11.2022 for the year under consideration is barred by limitation making the entire proceedings void ab initio in view of the facts that the satisfaction recorded by the AO of the assessee and the AO of the searched party was on 26.10.2022 and 10.11.2022 respectively i.e. FY 2022-23; that the period for issuance of notice u/s. 153C in the instant case shall be calculated in accordance to provisions of Section 149 of the Act. It was further submitted that while the identification and computation of the six assessment years hinges upon the phrase “immediately preceding the assessment year relevant to the “previous year” of 2 search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “ from the end of the assessment year”. This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six-year period and employing the expression “from the end of the assessment year” while speaking of the ten-year block”. He further submitted that the period under the scope of assessment u/s. 153C vide notice dated 15.11.2022 shall only be limited from AY 2023-24 to 2014-15. Hence, it is evident that the year under consideration i.e. AY 2013-14 falls beyond the ten-year block period as set out under section 153C read with Section 153A of the Act. Consequently, the impugned notices shall render unsustainable. As a result, the AY 2013-14 is barred by limitation and outside the scope of Section 153C of the Act and therefore, makes the entire proceedings void ab inito and unlawful. To support the aforesaid contention, he relied upon the following decisions: - PCIT (Central-1) vs. Ojjus Medicare P ltd. [2024] 161 taxmann.com 160 (Delhi); [2024] 465 ITR 101 (Delhi) 3.4.2024 - Hon’ble Delhi High Court. - Capital Impex (P) Ltd. vs. ACIT [2025] 174 taxmann.com 596 (Delhi) [2.5.2025]. - Evergreen Infrasolutions P Ltd. vs. ACIT [2025] 175 taxmann.com 391 (Delhi)/ [2025] 305 Taxman 497 (Delhi) [29.5.2025). - Synod Farms and Infra Developers P Ltd. vs. CCIT, Central Delhi [2025] 172 taxmann.com 723 (Delhi) [20.3.2025]. - Dinesh Jindal vs. ACIT [2024] 164 taxmann.com 746 (Delhi)/[2024] 469 ITR 32 (Delhi) [27.5.2024].
Ld. DR relied upon the orders of the authorities below.
We have heard the rival contentions, perused and considered the records alongwith the decisions on which the ld. Counsel for the assessee has placed reliance. The assessee by way of its ground no. 2 of appeal has assailed validity of assessment order as the same is stated to be barred by limitation. In this case, a search and seizure proceedings u/s. 132 of the Act was carried out in the case of searched party (Alankit Group) on 18.10.2019. Subsequently, AO of the searched party, on the basis of certain alleged incriminating documents pertaining to the assessee recorded its own satisfaction vide Satisfaction Note dated 26.10.2022. Thereafter, the AO of the assessee on being satisfied recorded its own satisfaction vide Satisfaction Note dated 10.11.2022. During the assessment proceedings notice u/s. 153C was issued on 15.11.2022 by the AO to which the assessee filed its return of income declaring the same income as returned in its return u/s. 139(1) of the Act. Later, the case of the assessee was completed by AO Circle 25, New Delhi vide order dated 31.3.2024 at an assessed income for Rs. 32,02,640/- against the returned income for Rs. 1,12,640/-. The contention of the assessee is notice u/s. 153C dated 15.11.2022 for the year under consideration is barred by limitation making the entire proceedings void ab inito due to the fact that the satisfaction recorded by the AO of the assessee and the AO of the searched party was on 26.10.2022 and 10.11.2022 respectively, i.e. FY 2022-23. It is noted that the period for issuance of notice u/s. 153C in the instant case shall be calculated in accordance to provisions of Section 149 of the Act. The assessment year 2013-14 clearly falls beyond the period of six years. Hence, assessment is barred by limitation. Even, if period under the scope of assessment u/s. 153C vide notice dated 15.11.2022 shall only be limited from assessment year 2023-24 to assessment year 2014-15 in the following manner:- S.No. Previous year Assessment year 4 1 1.4.2022 to 31.3.2023 2023-24 2 1.4.2021 to 31.3.2022 2022-23 3 1.4.2020 to 31.3.2021 2021-22 4 1.4.2019 to 31.3.2020 2020-21 5 1.4.2018 to 31.3.2019 2019-20 6 1.4.2017 to 31.3.2018 2018-19 7 1.4.2016 to 31.3.2017 2017-18 8 1.4.2015 to 31.3.2016 2016-17 9 1.4.2014 to 31.3.2015 2015-16 10 1.4.2013 to 31.3.2014 2014-15 5.1 A bare perusal of the aforesaid table, it is abundantly clear that the year under consideration i.e. AY 2013-14 fall beyond the ten year block period as set out under Section 153C read with Section 153A of the Act. Therefore, the impugned notices shall render unsustainable. This view is supported by the judgement of Hon’ble Jurisdictional High Court in the case of Ojjus Medicare (supra), the headnote reads as under:
“Section 153C of the Income-tax Act, 1961 - Search and seizure - Assessment of any or person (Block assessment) - Assessment years 2010-11 to 2013-14 - Whether first proviso to section 153C, and which has been consistently recognized to also embody commencement point for reckoning six or ten assessment years’, shifts relevant date from date of initiation of search or a requisition made to date of receipt of books of account or documents and assets seized by jurisdictional Assessing Officer of non-searched person - Held, yes Whether furthermore where date of handing over of documents was not available, date of issuance of satisfaction Note by Assessing Officer under section 153C would be pertinent for purpose of First Proviso to section 153C - Held, yes - Whether significant difference between computation of relevant assessment year for identification of six assessment years and to construct a block of ten assessment years is that while six assessment years’ hinge upon phrase “immediately preceding” assessment year pertaining to search 5