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Facts
The Revenue appealed against two orders of the CIT(A) concerning AYs 2011-12 and 2012-13. The assessee, Abhi Capital Services Limited, was engaged in trading and commission income. The case was selected for assessment proceedings under section 153C based on documents found during a search on Alankit Group on October 18, 2019.
Held
The Tribunal held that the assessment made under section 153C was time-barred. The satisfaction note for the assessee, a non-searched person, was recorded on June 24, 2022. According to legal precedents, the deemed year of search is considered to be the year of recording the satisfaction note. This meant the 10-year period for invoking section 153C would end at AY 2014-15, rendering AYs 2011-12 and 2012-13 beyond the permissible period.
Key Issues
Whether the assessment proceedings initiated under Section 153C of the Income Tax Act for AYs 2011-12 and 2012-13 were valid and within the prescribed time limits.
Sections Cited
153C, 153A, 132
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Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: MS. MADHUMITA ROY, & SHRI NAVEEN CHANDRA
The above captioned two separate appeals by the Revenue are preferred against 2 separate orders of the ld. CIT(A)-25, New Delhi dated 27.01.2025 pertaining to A.Ys 2011-12 and 2012-13 respectively.
Page 1 of 8 and 2886/DEL/2025 Dy. CIT Vs. Abhi Capital Services
Since common grievances are involved in the captioned 2 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.
Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.
First we take up the legal issue raised vide Ground No. 3 in both the appeals which goes to the root of the issue.
Briefly stated, the facts of the case are that the assessee Abhi Capital Services Limited, is a company incorporated on 16th March 1995 under Companies Act, 1956. The assessee was engaged in the business of trading in derivatives (Futures & Options) and trading of equity shares and received commission income for introduction of clients in stock market.
The assessee filed its Income Tax Return of income for the A.Y 2011-12 on 31.03.2012 declaring total income of Rs 62,750/- and the same was processed under section 143(1) of the Income-tax Act, 1961 [the Act, for short]. The case of the assessee was selected for assessment proceedings u/s 153C of the Act and notice u/s 153C r.w.s 153A of the Act was issued to the assessee for filing return for AY 2011-
Page 2 of 8 and 2886/DEL/2025 Dy. CIT Vs. Abhi Capital Services
12. The assessee had duly filed the return in response to notice issued u/s 153C for AY 2011-12 on 28.11.2022. The Assessing Officer made addition of Rs.5,15,000/- and assessed total income for AY 2011-12 at Rs.5,77,750/- raising demand of Rs. 4,14,497/-.
Aggrieved, the assessee went in appeal before the ld. CIT(A) who allowed the appeal of the assessee. Now the Revenue is aggrieved against the order of the ld. CIT(A) and has come in appeal before us.
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
Page 3 of 8 and 2886/DEL/2025 Dy. CIT Vs. Abhi Capital Services 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].
Page 4 of 8 and 2886/DEL/2025 Dy. CIT Vs. Abhi Capital Services
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 the "relevant assessment year" is to be calculated, to the date of receipt of the books of accounts,
Page 5 of 8 and 2886/DEL/2025 Dy. CIT Vs. Abhi Capital Services 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
Page 6 of 8 and 2886/DEL/2025 Dy. CIT Vs. Abhi Capital Services 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.
The order is pronounced in the open court on 16.01.2026.