DCIT, CENTRAL CIRCLE-28, NEW DELHI, NEW DELHI vs. GOLDLINE INTERNATIONAL FINVEST LIMITED, DELHI

Inspite of issue of notice none appeared on behalf of the respondent assessee nor any adjournment was moved. Since the issue in appeal is settled by the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Ojjus Medicare Pvt. Ltd., these appeals are disposed of on hearing the Ld. DR .

We observe that the assessments for the A.Y’s 2011-12 and 2012-13 were completed u/s. 153C r.w.s. 153A of the Act by the AO by making certain additions which were challenged before the Ld. CIT(A). The assessee also raised various technical and legal grounds and the Ld. CIT(A) quashed the assessments on one of the legal grounds following the decision of Hon’ble jurisdictional High Court in the case of PCIT Vs. Ojjus Medicare Pvt. Ltd. holding that these assessments i.e. A.Y. 2011-12 and 2012-13 are out of the block of six assessments years by observing as under :-

The aforesaid discussion thus renders a determinative quietus to the identification of the starting post from which the block of six AYs' or the "relevant assessment year" would have to be calculated. The contention of the respondents that the said block periods would have to be reckoned with reference to the date of search thus can neither be countenanced nor possibly accepted. That submission is clearly addressed contrary to a long and consistent line of precedents which have held to the contrary and which unequivocally accepted the point of commencement for the purposes of identifying the six or the "relevant assessment year" to be etched from the date of handover of documents, assets or things to the AO of the non-searched party.

As would be evident from the above, although the decisions in Sarwar Agency and RRJ Securities were cited, the leamed Judge chose to observe that the section 153C(1) Proviso would only be liable to be construed as relevant for the purposes of abatement. We find ourselves unable to sustain that line of reasoning since both Sarwar Agency as well as RRJ Securities have struck a line which is in consonance with the view taken in SSP Aviation and which has since come to be affirmed by the Supreme Court in Jasjit Singh. In any case, the law as enunciated in RKM Powergen would not sustain bearing in mind the express enunciation of the legal position by the Supreme Court as is manifest from a reading of paragraph 9 of Jasjit Singh.

That then takes us to the principal question of identifying the point of origin for the purposes of computation of the six AYs' and the "relevant assessment year" as defined. by section 153A. As is manifest from a plain reading of section 153C, the six AYs' are ordained to be those which immediately precede the AY relevant to the previous year in which the search may have been conducted or requisition made. The block of six AYs' would thus have to be identified bearing in mind the AY pertaining to the FY in which the search had been conducted or requisition made. The aforesaid AY would thus constitute the anchor point for the purposes of identification of the six AYs'. The statute envisages a similar process to be adopted for the purposes of computation of the "relevant assessment year" and where applicable constructs a block of ten AYs'. The significant difference between the two however is that while the six AYs' hinge Upon the phrase "immediately preceding" the AY pertaining to the search year, the ten AVs' are liable to be computed or reckoned from the end of the AY relevant to the year of search. In our considered opinion, the petitioners have correctly identified the aforesaid distinction as being crucial and determinative for the purposes of reckoning the six and the ten AY block period.

Date of search and seizure operation: 18.10.2019 2. Date of issue of notice u/s 153C: 22.03.2022 3. Assessment years for which notice u/s 153C was issued: 2010-11 to 2020- 21 4. Date of passing of the order of assessment: 25.03.2023 8.6 That on the aforesaid facts, the Hon'ble High Court has further computed which of the six assessment years/ten assessment years would form part of the block period. The relevant finding of the Hon'ble High Court in the case of Ojjus Medicare (P.) Ltd (supra) in respect thereof is reproduced hereunder. G. COMPUTATION OF THE SIX AND TEN YEAR BLOCK IN THE PRESENT BATCH OF WRIT PETITIONS 86. In the present batch, List I pertains to writ petitions which have Satisfaction Notes recorded or section 153C notices issued between the period 01 April 2021 to 31 March 2022. Undisputedly, the First Proviso to section 153C, and which has been consistently recognized to also embody the commencement point for reckoning the six or the ten AYs', shifts the relevant date from the date of initiation of search or a requisition made to the date of receipt of books of account or documents and assets seized by the jurisdictional AO of the non-searched person. Consequently, the block of six or ten AYs' would have to be reckoned bearing the aforesaid date in mind. Although in the present batch of writ petitions, the date of actual handing over has not been explicitly mentioned in a majority of the writ petitions, learned counsels for respective sides had addressed submissions based on the assumption that it would be the date of issuance of the Satisfaction Note by the AO of the non-searched person and in the case of non availability of such a note, the date of issuance of the section 153C notices which would be pertinent for the purposes of the First Proviso to section 153C.

Assuming, therefore, that the handover of material gathered in the course of the search and pertaining to the non-searched person occurred between 01 April 2021 to 31 March 2022, the same would essentially constitute FY 2021-22 as being the previous year of search for the purposes of the non-searched entity. As a necessary corollary, the relevant AY would become AY 2022-23. AY 2022-23 would thus constitute the starting point for the purposes of identifying the six years which are spoken of in section 153C. The six AYs' are envisaged to be those which immediately precede the AY so identified with reference to the previous year of search. It would thus lead us to conclude that it would be the six AYs' immediately preceding AY 2022-23 which could have formed the basis for initiation of action under section 153C. Consequently, and reckoned backward, the six relevant AYs' would be:-

Section 153A replicates the basis on which the six AYs' are to be identified and computed with the solitary distinction being that in the case of the searched person, the six AYs' are liable to be computed from the AY pertaining to the FY in which the search was conducted. The starting point for the purposes of identifying the six AYs' in the case of section 153A would thus tum upon the year of search as opposed to the handover of material which is spoken of in the First Proviso to section 153C. If one were to therefore assume that a search took place on a person between 01 April 2021 to 31 March 2022, the pertinent AY would become AY 2022-23 and the corresponding six AYs' would be as follows:-

That takes us then to the issue of identifying the "relevant assessment year" for the purposes of computing the ten year block. Explanation 1 to section 153A specifies the manner in which the entire ten AY period is to be computed. While the computation of six AYs' follows the position as enunciated and identified above, Explanation 1 prescribes that the ten AYs' would have to be computed from the end of the AY relevant to the FY in which the search was conducted or requisition made. The ten AY period consequently is to be reckoned from the end of the AY pertaining to the previous year in which the search was conducted as distinct from the preceding year which is spoken of in the case of the six relevant AYs'. 94. Similarly, and in light of what has been held by us hereinabove, the relevant block of ten AYs' when computed for the period 01 April 2022-31 March 2023, and where the Satisfaction Note was drawn by the AO of the non-searched person between those two dates, would be as under- …. …..

Proceeding then to List II, we find that the petitions placed in that list pertain to cases where the hand over occurred in FYs 2022-23 and 2023-24. Consequently, the relevant AYs' would be AY 2023-24 and AY 2024- 25 respectively. In light of the principles enunciated by us and which explain how the period of six and ten AYs' is liable to be computed, the reopening of assessments pertaining to AYs' 2010-11, 2011-12, 2012-13 and 2013-14 would clearly fall beyond the ambit of ten AYs' as provided under Section 153C read with Section 153A. We note in this behalf that all of the writ petitions forming part of List Il pertain to the aforenoted AYs' 2010-11, 2011-12, 2012-13 and 2013- 14... 8.7 From the aforesaid judgment of the Hon'ble jurisdictional High Court, it is seen that the Hon'ble High Court has held that the block of six AYs' would have to be identified bearing in mind the AY pertaining to the FY in which the search had been conducted or requisition made, however the ten AYs' are to be computed or reckoned from the end of the AY relevant to the year of search. Accordingly, it has been held that if the Page | 8 Satisfaction Notes had been recorded or section 153C notices had been issued between the period 01 April 2022 to 31 March 2023, then the relevant AY would be AY 2023-24 and accordingly AY 2023-24 would form the first year of the block of ten AYs' and the period of ten AYs' would terminate in AY 2014- 15, and accordingly notices issued for assessment years prior to AY 2014-15 would fall beyond the ambit of ten AYs' as provided under section 153C read with section 153A of the Act. 8.8 It would thus be seen that facts of the present case are identical to the facts considered in the case of Ojjus Medicare (P.) Ltd (Supra), wherein it has been held that if the notice under section 153C has been issued between the period 01 April 2022 to 31 March 2023, then the relevant AY would be AY 2023-24 and accordingly AY 2023-24 would form the first year of the block of ten AYs' and the period of ten AYs' would, by backward counting, terminate in AY 2014-15. Accordingly. respectfully following the aforesaid judgment of the Hon'ble jurisdictional High Court in the case of Ojjus Medicare (P.) Ltd (supra), it is held that the notice issued on 25.06.2022 for the instant assessment year, AY 2011-12, would fall beyond the ambit of ten AYs' as provided under section 153C read with section 153A of the Act, and hence, the impugned assessment order dated 14.02.2024 passed u/s 153C of the Act in pursuance of such notice would not survive, having no legs to stand, being beyond the period of 10 years. 8.9 Since the appeal filed by the appellant is allowed on this legal ground, any discussion on the remaining grounds would be rendered academic in nature, and hence they are not being adjudicated.

In the result the appeal filed by the appellant is allowed.”

On careful perusal of the order of the Ld. CIT(A) we observe that the assessments were quashed by the Ld. CIT(A) for the A.Y.2011-12 holding that the assessment year 2011-12 would fall beyond the ambit of ten assessments years as provided u/s.153C r.w.s. 153A of the Act, in view of the decision of Hon’ble Jurisdictional High Court Ojjus Medicare Private Limited. We do not see any infirmity in the order passed by the Ld. CIT(A) in holding that the impugned assessment order dated 14.02.2024 passed u/s.153C would not survive. Rejecting the grounds raised