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Facts
The appeals pertain to assessment years 2019-20 to 2021-22 and 2012-13. The primary issue revolves around the validity of proceedings initiated under section 153C of the Income Tax Act, 1961, specifically concerning the block period for such actions and the deemed date of search. The assessee argued that the assessment for AY 2012-13 was time-barred due to the extended block period calculation based on the satisfaction note date.
Held
The Tribunal held that the initiation of proceedings under section 153C for AY 2012-13 was barred by limitation. This was based on the legal interpretation that the 'deemed date of search' for calculating the block period should be derived from the date of recording the satisfaction note, not the date of the actual search conducted on another party. Applying this principle, the AY 2012-13 fell outside the permissible ten-year block period.
Key Issues
The core issue was whether the assessment proceedings under Section 153C for AY 2012-13 were initiated within the legally prescribed block period, considering the deemed date of search and the limitation period.
Sections Cited
153C, 144, 139(1), 132, 68
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Income Tax Appellate Tribunal, DELHI BENCH, C: NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH
This is a bunch of five appeals and for the reasons as stated below were heard together and are disposed of by this common order for the sake of convenience and brevity 2. ITA Nos.- 661/Del/2025 and 657/Del/2025 2.1 The two appeals (ITA No.- 661/Del/2025 and 657/Del/2025) are preferred by the respective assesses namely Sri Rajesh Gandhi and Sri Ramesh Gandhi against the respective orders both dated 28.11.2024 of the Ld. Commissioner of Income Tax (Appeal)-29 New Delhi, (hereinafter referred as Ld. CIT(A)) in Appeal Nos. CIT(A), Delhi-29 10122/2011-12 and CIT(A), Delhi-29, 10123/2011-12 and arising out of the respective assessment orders dated 03.02.2023 passed by the DCIT, CC-28, New Delhi passed u/s 153 r.w.s144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year (A.Y.) 2012-13. 2.2 The facts in ITA Nos.- 661/Del/2025 and 657/Del/2025 A.Y. 2012-13, are identical.
2.3 The case of Sri Rajesh Gandhi in for A.Y. 2012-13 is taken as a lead case.
ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi 3. Brief facts of the case: The original return of income under section 139(1) of the Act, was e-filed by the assessee on 21.08.2013 vide acknowledgment no. 755657160210813 declaring income of Rs. 1,70,410/-. The AO noted that the major source of income of the assessee was from business. Further, the AO noted that a search and seizure action u/s 132 of the Act was carried out on 14.10.2020 in the case of Sh. Manoj Kumar Singh. his close associates and few transacting parties with whom Sh. Manoj Kumar Singh had entered into unaccounted cash transactions. Further, the AO noted that parallelly a search action was carried out at the residence of Sh. Narendra Mantri at H. No. 28, 2nd Floor, Road No.
Punjabi Bagh. Delhi on 14.10.2020 who was the President (Commercial cum Chief Finance Officer) of Jindal Saw Ltd. since 2015. The AO noted that during the course of search proceedings at residence of Sh. Narendra Mantri at Road No.
Punjabi Bagh, Delhi on 14.10.2020, part payment receipt dated 21.05.2011 for purchase of property Flat Number 98. Tarun Vihar, Sector-13. Rohini, Delhi was found and seized as Annexure-A (Page number 13) and as per the said part payment receipt, the said flat was purchased by Smt. Sangita Mantri w/o Sh. Narendra Mantri from Sh. Rajesh Gandhi and Sh. Ramesh Gandhi for a total consideration of Rs. 98,00,000/-. The AO on the basis of the said seized document and for the reasons stated in the assessment
ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi order made an addition of Rs. 68,00,000/- u/s 68 of the Act in the order passed u/s 153C r.w.s. 144 of the Act in the case of the assessee.
Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). In the appellate proceedings, the assessee relied upon the decision of the Hon’ble Delhi High Court in the case of PCIT vs. PCIT Vs. Ojjus Medicare [P] Ltd 161 taxmann.com 160, and submitted that the A.Y. 2012-13 was beyond the period for any action u/s 153C of the Act, and therefore, the impugned assessment order must be quashed. However, the Ld. CIT(A) vide her order dated 28.11.2024 set aside the assessment order and referred back the matter to the file of the AO for making a fresh assessment.
Aggrieved with the said order, the assessee is in appeal before us.
Before us, the Ld. AR submitted that the proceedings under section 153C for Assessment Year 2012-13 was illegal, bad in law, without jurisdiction, being barred by the limitation of time, in view of the notice u/s 153C of the Act issued on 27.05.2022. The Ld. AR submitted that no copy of any satisfaction note was given to the assessee which in fact according to the assessee does not exist and it was also not mentioned in the impugned assessment order. According to the assessee, the ten assessment years would have to be computed from 31.03.2023 with the said date indubitably constituting the end of the assessment year relevant to the previous year 5
ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi of the search. The Ld. AR submitted that viewed in the light of the decision of the Hon’ble Delhi High Court in the case of PCIT Vs. Ojjus Medicare [P] Ltd (supra). the block period of ten assessment years would be from A.Y. 2014-15 to A.Y. 2023- 24 and accordingly, for the purposes of section 153C of the Act, the Assessing Officer will not have jurisdiction for A.Y. 2012-13. In this regard, the submission filed by the assessee is reproduced as under:
“ PCIT vs Ojjus Medicare (P) Ltd [2024] 465 ITR 101 (Delhi) [DoD: 03/04/2024] The notice u/s 153C was issued on 27/05/2022 for the AY 2012-13, the FY: 01/04/2022 to 31/03/2023, the relevant the AY 2023-24, However, no copy of any satisfaction note has been given which in fact does not even exist as also not mentioned in the impugned assessment order also. The ten AYs' would have to be computed from 31/03/2023 with the said date indubitably constituting the end of the AY relevant to the previous year of search. Viewed in light of the above, the block period of 10 AYs' would be as follows as per para no. 90 of the judgment in Ojjus:
Computation of the ten-year No. of Years block period as provided u/s 153C r.w.s. 153A of the Act AY 2023-24 1 AY 2022-23 2 AY 2021-22 3 AY 2020-21 4 AY 2019-20 5 AY 2018-19 6 AY 2017-18 7 AY 2016-17 8 AY 2015-16 9 AY 2014-15 10
ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi 7. The ld. CIT(DR) relied upon the orders of the authorities below.
We have heard the rival submissions and have perused the relevant material on record. The assessee has challenged the validity of the assessment order framed u/s 153C of the Act for the reason that the impugned A.Y 2012-13 being beyond the block of ten A.Ys, as per provisions of the Act. It is a settled proposition of law that as per provisions of section 153C of the Act, for taking action u/s 153C of the Act, date of search in the case of the other person, would be date of receiving books of account or documents or assets belonging to the other person and seized in the course of search of the searched person. In this case, since no satisfaction note was brought on record by the Revenue, we therefore, consider the date of issue of notice u/s 153C of the Act i.e. 27.05.2022 as to be the date of recording of satisfaction by the AO in the case of the assessee and therefore, the relevant financial year for the deemed search will be F.Y. 2022-23, and the relevant assessment year will be A.Y. 2023-24 in the case of the assessee and the block period of ten years will be A.Y. 2023-24 to A.Y. 2014-15 in the case of the present assessee. 8.1 On similar facts, the Co-ordinate Bench of the Tribunal in the case of Dy. Commissioner of Income Tax vs. Abhi Capital Services Ltd., in ITA No. – 2885/Del/2025 and 2886/Del/2025 for A.Y. 2011-12 and 2012-13 vide order dated 16.01.2026 quashed similar assessment proceedings u/s 153C of the Act, for A.Y.
ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi 2011-12 and 2012-13 being beyond the period of ten assessment years, wherein the satisfaction was recorded by the AO having jurisdiction over the said assessee on 24.06.2022. The relevant extract of the said order is reproduced as under:
“ 8. Before us, the ld. counsel for the assessee vehemently stated that assessment made for A.Ys 2011-12 and 2012-13 is a time barred assessment. The ld. counsel for the assessee pointed out that in this case, search and seizure u/s 132 of the Act was undertaken on Alankit Group on 18.10.2019 wherein some documents were found pertaining to the assessee for which satisfaction note was drawn by the Assessing Officer on 24.06.2022.
On the basis of the fact that satisfaction note was recorded on 24.06.2022, the ld. counsel for the assessee stated that the deemed year of search in the assessee’s case would become A.Y 2023-24 and 10 years counting backwards would come to only upto A.Y 2014-15. Accordingly, for the purposes of section 153C of the Act, the Assessing Officer will not have jurisdiction for A.Ys 2010-11 to A.Y 2013-14. The ld. counsel for the assessee relied upon the decision in the case of Jasjit Singh (2023) 155 taxmann.com 155(SC) and PCIT Vs. Ojjus Medicare [P] Ltd 161 taxmann.com 160. The ld. counsel for the assessee prayed for quashing the assessment made u/s 153C of the Act for the A.Ys under consideration.
Per contra, the ld. DR stated that the ld. CIT(A) has based his order without seeking remand report on the issue of satisfaction note.
We have heard the rival submissions and have perused the relevant material on record. Challenge is to the validity of the assessment order framed u/s 153C of the Act for the reason that the impugned A.Ys are beyond the block of six/ten A.Ys, as per provisions of the Act. It is a settled proposition of law that as per provisions of section 153C of the Act, for taking action u/s 153C of the Act, date of search in the case of the other person, would be date of receiving books of account or documents or assets belonging to the other person and seized in the course of search of the searched person. In other words, date of recording of the satisfaction in the case of the non-searched person qua the searched person, becomes date of search in the case of other person [the assessee in the present case].
The above proposition of law has been well settled by the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437. Relevant findings read as under: “9. It is evident on a plain interpretation of Section 153C( I) that the Parliamentary intent to enact the provision was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(l)] is confined in its application to the question of abatement….. which is without merit.”
The Hon'ble Delhi High Court has further elaborated the legal dictum in the case of Ojjus Medicare Pvt Ltd [2024] [supra] wherein it has held as under: "First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten-year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the "relevant assessment year" is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation Ltd v. Dy.CIT (2012) 346 ITR 177 ( Delhi)( HC) and CIT v. RRJ Securities Ltd 2015 SCC Online Del 13085 as well as the decision of the Supreme Court in CIT v Jasjit Singh 2023 SCC Online SC1265. The aforesaid legal position also stood reiterated by the Supreme Court in ITO v. Vikram Sujitkumar Bhatia 2023 SCC Online Supreme Court.
In view of the settled law as deliberated above, we find that the satisfaction note for the non-searched person i.e., the assessee, was recorded on 24.06.2022 and therefore on the basis of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh [supra], the deemed year of search for the assessee will be FY 2022- 23 relevant to AY 2023-24. The 10 years (i.e. 1+6+3) years calculation from AY 2023-24 backward comes to AY 2014-15 only. Accordingly, for the purpose of section 153C of the Act, the Assessing Officer will not have the jurisdiction for AYs 2011-12 and 2012- 13 in the case of the assessee as the same are beyond the block of ten A.Ys which starts from A.Y 2013-14.
Considering the facts of the case in totality, in light of the decision of the Hon'ble Supreme Court [supra], we have no hesitation in quashing the impugned assessment order for AY 2011-12 and 2012-13. Since we have quashed the assessment order, we do not find it necessary to dwell into the merits of the case.
In the result, both the captioned appeals of the Revenue in and 2886/DEL/2025 stand dismissed.”
8.2 As noted above, the deemed date of recording of satisfaction note by the AO having jurisdiction in the case of the assessee for initiating the proceedings u/s 153C
ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi of the Act, for A.Y. 2012-13 is considered as 27.05.2022, and therefore, on the basis of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh (2023) 458 ITR 437 (SC) (also reported as 295 Taxman 612 (SC) / 334 ITR 937 (SC), and the decision of the Hon’ble Delhi High Court in the case of PCIT Vs. Ojjus Medicare [P] Ltd (supra), the deemed year of search for the assessee will be F.Y. 2022-23 relevant to A.Y. 2023-24. The 10 years (i.e. 1+6+3) years calculation from A.Y. 2023-24 backward comes to AY 2014-15 only. Accordingly, for the purpose of section 153C of the Act, the Assessing Officer will not have the jurisdiction for A.Y. 2012-13 in the case of the assessee as the same is beyond the block of ten A.Ys which starts from A.Y 2014-15.
8.3 Therefore, in view of the above legal position, we hold that the assessment order dated 03.02.2023 passed u/s 153C r.w.s. 144 of the Act in the case of the assessee for A.Y. 2012-13 is barred by limitation and is accordingly quashed. Since we have quashed the assessment order, the grounds of appeal in the appeal are left open in this case.
In the result, appeal of the assessee in is allowed. ITA No. – 657/Del/2025 Sri Ramesh Gandhi for A.Y. 2012-13
The facts and the legal issue in ITA No.- 657/Del/2025 (A.Y. 2012-13) is exactly identical to facts and the legal issue in ITA No.- 661/Del/2025 (A.Y.- 2012- 10
ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi 13). Therefore, our decision given in to the case in ITA No.- 661/Del/2025 shall apply in mutatis mutandis to ITA No.- 657/Del/2025.
.- 662/Del/2025 to 664/Del/2025
The facts in ITA Nos.- 662/Del/2025 to 664/Del/2025 A.Ys. 2019-20 to 2021- 22, in the case of Sri Rajesh Gandhi are identical except for the amount of the additions made in respective assessment orders.
All the three appeals (ITA Nos.- 662/Del/2025 to 664/Del/2025) are preferred by the assessee against the respective orders all dated 27.11.2024 of the Ld. Commissioner of Income Tax (Appeal)-29 New Delhi, (hereinafter referred as Ld. CIT(A)) in Appeal Nos. CIT(A), Delhi-29 (10622/ 2018-19, 10577/2019-20, and 10032/2020-21 arising out of the respective orders dated 02.02.2023, 31.01.2023 and 26.12.2022 passed by the ACIT/DCIT, CC-28, New Delhi passed u/s 153 r.w.s144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AYs: 2019-20, 2020-21 and 2021-22.
On hearing both the sides we find from the contention of ld. Counsel that by the impugned orders ld. CIT(A) had set aside and remitted back the assessment to the AO for making afresh assessment and subsequently, effect giving assessment orders have been passed wherein no addition or disallowance to the prejudice of the ITA No- 661/Del/2025 and other appeals Rajesh Gandhi and Ramesh Gandhi assessee is made rendering these appeals infructuous. Accordingly, ordered and the appeals are dismissed.
All three appeals (ITA Nos.- 662/Del/2025 to 664/Del/2025) are dismissed.
To sum up, the appeals filed by the assessee in ITA No. (657/Del/2025 and 661/Del/2025 for A.Y. 2012-13) are allowed and appeals filed in ITA Nos. (662/Del/2025 to 664/Del/2025 for A.Y. 2019-20 to 2021-22) are dismissed. Order pronounced in the open court on 29th January, 2026.