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Facts
A search and seizure operation led to the discovery of documents pertaining to the assessees, Ashok Kumar and Lekhraj, who were non-searched persons. Consequently, assessment proceedings under Section 153C of the Income Tax Act were initiated for various assessment years. The Assessing Officer made additions to their income, and the CIT(A) dismissed their appeals ex-parte. The assessees then appealed to the ITAT, primarily challenging the jurisdiction and limitation period of these assessments.
Held
The Tribunal held that the impugned assessment years (2010-11, 2011-12, 2012-13) fell outside the permissible block period for assessments under Section 153C, as the satisfaction notes were recorded in FY 2021-22 (corresponding to AY 2022-23), establishing a block period from AY 2013-14 onwards. Relying on Supreme Court and Delhi High Court precedents, the Tribunal confirmed that for non-searched persons, the relevant date for determining the limitation period is when documents are handed over to the jurisdictional AO or satisfaction is recorded, not the original search date. Therefore, the assessments were time-barred and beyond jurisdiction.
Key Issues
The key legal issue was the correct determination of the limitation period and jurisdictional validity for assessment proceedings initiated under Section 153C of the Income Tax Act against non-searched persons, specifically regarding the 'relevant date' for reckoning the block of assessment years.
Sections Cited
153C, 132, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCHES ‘C’: NEW DELHI.
Before: SHRI SATBEER SINGH GODARA & SHRIS.RIFAUR RAHMAN
(APPELLANT) (RESPONDENT) ASSESSEE BY : Ms. Monika Ghai, Advocate Shri Sharad Agarwal, Advocate REVENUE BY : Shri Dayainder Singh Sidhu, CIT DR Date of Hearing : 25.09.2025 Date of Order : 22.12.2025 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :
The assessees, Ashok Kumar and Lekhraj, have filed appeals against the order of the Learned Commissioner of Income-tax (Appeals)-31, New Delhi [“Ld. CIT(A)”, for short] dated 29.03.2025 and 12.03.2025 for the Assessment Years 2010-11 to 2012-13 and 2012-13 respectively.
Since the issues are common and the appeals are connected, hence the same are heard together and are being disposed off by this common order. First we take up the assessee’s appeals in the case of Ashok Kumar.
Brief facts of the case are which are similar in all the three assessment years, for the sake of brevity we are taking facts from AY 2010-11, a search and seizure operation in Navin Mahipal Group of cases was conducted on 16.10.2019. Further searches were also conducted at the premises of Shri Mahesh Nagar and Shri Robert Vadra on 04.03.2020. During the course of search proceedings u/s 132 of the Income-tax Act, 1961 (for short ‘the Act’) at the premises of Shri Navin Mahipal, a number of documents containing information pertained to Shri Ashok Kumar, assessee, were found and seized. Hence proceedings u/s 153C of the Act for AYs 2010-11 to 2019-20 were issued and a notice u/s 153C dated 31.03.2022 was issued to the assessee for the year under consideration. Thereafter, proceedings of the assessee were started u/s 153C of the Act. During assessment proceedings u/s 153C, assessee filed to 3194/Del/2025 his ITR amounting to Rs.1,33,110/- for AY 2010-11 and submitted all the required details and submissions. The Assessing Officer completed the assessment after making aggregate addition of Rs.90,00,000/- for AY 2010-11.
Aggrieved against the above order, assessee preferred an appeal before the ld. CIT (A) and ld. CIT (A) dismissed the appeal of the assessee ex- parte on the ground that the assessee is not interested in pursuing the appeal.
Aggrieved against the above order, assessee is in appeal before us taking legal grounds vide ground no.2 & 3 which read as under :- “2. That having regard to the facts and circumstances of the case, the ld. Commissioner of Income Tax (Appeals) [‘ld. CIT (A)] has erred in law and on facts in confirming the action of the ld. Assessing Officer [ld. AO] in assuming jurisdiction u/s 153C of the Income Tax Act, 1961 for framing the assessment for the impugned assessment year, without satisfying the mandatory jurisdictional conditions prescribed under the said provision, rendering the entire assessment bad in law and liable to be quashed.
3. That having regard to the facts and circumstances of the case, ld. CIT (A) has erred in law and on facts in confirming the action of ld. AO in framing the impugned assessment order u/s 153C r.w.s. 143(3) is bad in law and against the facts and circumstances of the case.”
At the outset, ld. AR of the assessee submitted that the satisfaction note was recorded on 20.10.2021 i.e. in FY 2021-22 (corresponding to AY 2022-23), accordingly the permissible block of ten Assessment Years 2013-14 to 2022-23. He submitted that thus AYs 2010-11, 2011-12 and 2012-13, impugned assessment years in the present appeals before us, to 3194/Del/2025 clearly fall outside the prescribed block period and no proceedings for these years can be sustained in law. In this regard, he submitted a chart as under :- FY in which the Corresponding Preceding six AYs Block of 10 AYs material is handed AY over to the AO 2019-20 2020-21 2014-15 to 2019-20 2011-12 to 2020-21 2020-21 2021-22 2015-16 to 2020-21 2012-13 to 2021-22 2021-22 2022-23 2016-17 to 2021-22 2013-14 to 2022-23 2022-23 2023-24 2017-18 to 2022-23 2014-15 to 2023-24 2023-24 2024-25 2018-19 to 2023-24 2015-16 to 2024-25 Further, he submitted that this issue is squarely covered by the judgment of Hon’ble Delhi High Court in PCIT vs. Ojjus Medicare (P) Ltd. (2022) 465 ITR 101 (Del.). Accordingly, he pleaded that the impugned assessments are barred by limitation and the appeals may be allowed..
On the other hand, ld. DR of the Revenue relied on the findings of the AO but could not controvert the aforesaid decisions relied on by the assessee and ld. CIT(A).
Considered the rival submissions and material available on record. We observed that the assessment years 2010-11, 2011-12 and 2012-13 under consideration clearly falls outside the scope of application of section 153C of the Act, for the reason that the date of search for the unsearched parties are the date on which the documents were handed over to the Assessing Officer of such other person or from the date on which the to 3194/Del/2025 satisfaction was recorded. Therefore, the contention of the assessee is found to be correct on this count. Further we observed that the impugned assessment order is beyond the limitation prescribed under section 153C of the Act, and therefore, the jurisdiction assumed by the Assessing Officer is not tenable in the light of legal positions in view of the decisions of Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh (2023) 155 taxmann.com 155 and Hon’ble Delhi High Court in the case of PCIT vs. Ojjus Medicare (P.) Ltd. For the sake of brevity, we reproduce the Head Note of the aforesaid decisions :- “CIT vs Jasjit Singh-[2023| 155 taxmann.com 155 (SC) From Headnote "On appeal, Tribunal held that period for which assessee were required to file returns, commenced only from date when materials were forwarded to their jurisdictional Assessing officers - High Court upheld said order" PCIT Vs Ojjus Medicare (P.) Ltd- [2024] 161 taxmann.com 160 (Delhi)
From Headnote “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" to 3194/Del/2025 9. Respectfully following the aforesaid decisions, we are inclined to uphold that any addition or proceedings for AYs 2010-11 to 2012-13 are beyond jurisdiction and accordingly all the impugned assessment orders are quashed. Hence, the ground nos.2 & 3 raised by the assessee are allowed.
Since we have quashed the assessment order on the jurisdictional issue, the other grounds raised by the assessee were not adjudicated at this stage and the same are kept open.
11. In the result, all the three appeals filed by the assessee, Ashok Kumar, are allowed.
12. In respect of appeal filed by the assessee, Lekhraj, we observed that the facts are exactly similar to the above appeals and in this case, the satisfaction note was recorded on 28.09.2021 i.e. in FY 2021-22 (corresponding to AY 2022-23), accordingly the permissible block of ten Assessment Years 2013-14 to 2022-23. We observed that thus Assessment Year 2012-13, impugned assessment year in the present appeal before us, clearly falls outside the prescribed block period and no proceedings for this year can be sustained in law. We observed that the assessment year 2012-13 under consideration clearly falls outside the scope of application of section 153C of the Act, for the reason that the date of search for the unsearched parties are the date on which the documents were handed over to the Assessing Officer of such other to 3194/Del/2025 person or from the date on which the satisfaction was recorded. Therefore, the contention of the assessee is found to be correct on this count. Further we observed that the impugned assessment order is beyond the limitation prescribed under section 153C of the Act, and therefore, the jurisdiction assumed by the Assessing Officer is not tenable in the light of aforesaid legal positions in view of the decision of Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh (supra) and Hon’ble Delhi High Court in the case of PCIT vs. Ojjus Medicare (P.) Ltd. (supra).
Respectfully following the aforesaid decisions, we are inclined to uphold that any addition or proceedings for AY 2012-13 are beyond jurisdiction and accordingly all the impugned assessment orders are quashed. Hence, the legal grounds raised
by the assessee are allowed. Since we have quashed the assessment order on the jurisdictional issue, the other grounds raised by the assessee were not adjudicated at this stage and the same are kept open.