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Facts
A search and seizure operation was conducted on 14.09.2017. The assessee's case is that assessment proceedings initiated under section 153C for AYs 2008-09 to 2010-11 are time-barred. This is based on the deemed date of search being 19.03.2020, the date of recording satisfaction by the Assessing Officer of the non-searched person.
Held
The Tribunal held that for proceedings under section 153C, the date of recording satisfaction in the case of the non-searched person is considered the date of search. Based on this, the deemed year of search for the assessee was FY 2019-20, making the assessment years 2008-09 to 2010-11 beyond the ten-year block.
Key Issues
Whether assessment proceedings under Section 153C for Assessment Years 2008-09 to 2010-11 are barred by limitation due to the deemed date of search being beyond the prescribed period.
Sections Cited
153C, 143(3), 132
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Income Tax Appellate Tribunal, DELHI BENCH, H: NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH
Since common grievances are involved in the captioned three appeals and pertain to same assessee, they were heard together and are disposed of by this common order for the sake of convenience and brevity.
3.Brief facts of the case: The assessee is a company engaged in housing and infrastructure development. A search and seizure operation under section 132 of the Income-tax Act, 1961 was conducted on 14.09.2017 in the case of Dalal Group of cases. The assessee has raised a legal ground in all the above three appeals as to whether proceedings under section 153C for Assessment Year 2008-09 to Assessment year 2010-11 are illegal, bad in law, without jurisdiction, being barred by the limitation of time, in view of the deemed date of search being 19.03.2020, i.e., the date of recording of satisfaction by the Assessing Officer of the non-searched person. The said amended ground no. 1 of the appeal is reproduced as under:
"That on the facts and circumstances of the case and the provisions of the law, the Assessing officer and CIT Appeals erred in law as the proceedings initiated u/s 153C are illegal, bad in law, without jurisdiction and as such the Assessment Order passed in consequence thereof is also become illegal, bad in law, without jurisdiction in view of the fact, that the assessment proceeding are barred by the limitation of time.”
Before us, the ld. counsel for the assessee submitted stated that assessment made for A. Ys 2008-09, 2009-10 and 2010-11 are time barred assessment. The ld.
ITA No.- 3113 to 3115/Del/2025 counsel for the assessee pointed out that in this case, search and seizure u/s 132 of the Act was conducted in the case of Dalal Group of cases on 14.09.2017 wherein some documents were found pertaining to the assessee for which satisfaction note was drawn by the Assessing Officer of the searched person on 26.12.2019 for initiating proceedings u/s 153C of the Act in the case of the assessee i.e. Sri Sat Sahib Housing and Infrastructure Development Company. Further, the AO having jurisdiction over the assessee recorded his satisfaction on 19.03.2020 for initiating proceedings u/s 153C of the Act for A.Y. 2008-09 to 2018-19.
On the basis of the fact that satisfaction note was recorded on 19.03.2020 by the AO of the assessee, the ld. counsel for the assessee stated that the deemed year of search in the assessee’s case would become A.Y 2020-21 and 10 years counting backwards would come to only upto A.Y 2011-12. Accordingly, for the purposes of section 153C of the Act, the Assessing Officer will not have jurisdiction for A.Ys 2008-09 to 2010-11 in the case of the assessee. 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 Delhi (HC). The ld. counsel for the assessee prayed for quashing the assessment made u/s 153C of the Act for the A.Ys under consideration.
The ld. CIT(DR) relied upon the orders of the authorities below.
ITA No.- 3113 to 3115/Del/2025 7. 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.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] which is 19.03.2020 in this case. 7.1 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. 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 5 ITA No.- 3113 to 3115/Del/2025 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 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 6 ITA No.- 3113 to 3115/Del/2025 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.”
7.2 As noted above, the respective satisfaction notes for initiating the proceedings u/s 153C of the Act in the case of the assessee for A.Ys. 2008-09, 2009- 10 and 2010-11 was recorded on 19.03.2020, by the AO of the assessee 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 F.Y. 2019-20 relevant to A.Y. 2020-21. The 10 years (i.e. 1+6+3) years calculation from A.Y. 2020-21 backward comes to AY 2011-12 only. Accordingly, for the purpose of ITA No.- 3113 to 3115/Del/2025 section 153C of the Act, the Assessing Officer will not have the jurisdiction for AYs 2008-09, 2009-10 and 2010-11 in the case of the assessee as the same are beyond the block of ten A.Ys which starts from A.Y 2011-12.
7.3 Therefore, in view of the legal position, we hold that the respective assessment orders all dated 21.05.2021 passed u/s 153C r.w.s. 143(3) of the Act in the case of the assessee for A.Ys. 2008-09, 2009-10 and 2010-11 are barred by limitation and are accordingly quashed. Since we have quashed the assessment orders, the other grounds of appeals in all the three appeals are left open in this case.
In the result, all the captioned appeals of the assessee in to 3115/Del/2025 are allowed. Order pronounced in the open court on 28th January, 2026.