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Facts
The Revenue filed an appeal against the order of the CIT(A) which deleted an addition of Rs. 50,00,000/- made by the AO for AY 2014-15. The CIT(A) held that the assessment proceedings initiated under Section 153C of the Income Tax Act were without jurisdiction for the said AY.
Held
The Tribunal upheld the order of the CIT(A), finding that the assessment proceedings under Section 153C for AY 2014-15 were initiated without jurisdiction. The jurisdiction for such proceedings was limited to AY 2016-17 and prior, based on the search and seizure operation.
Key Issues
Whether assessment proceedings under Section 153C of the Income Tax Act for AY 2014-15 were legally valid when the jurisdiction was limited to AY 2016-17 and prior?
Sections Cited
250, 153C, 143(3), 68, 153C(1)
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Income Tax Appellate Tribunal, DELHI BENCH “B”NEW DELHI
Before: SHRIMAHAVIR SINGH, HON’BLE & SHRISANJAY AWASTHI
आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
In this case the ITAT Registry has reported a delay of 16 days in filing of the said appeal. This delay has been requested to be condoned as under:
“2. In this regard, it is submitted that the order of Ld. CIT(A) in the case of M/s Gopal Hitech Infra Developers (AAECG2030K) for AY 2014-15 was received in the office of Pr. CIT, Central-3 on 08.04.2025 and authorization for filing of appeal before the Hon’ble ITAT was received in this office on 11.07.2025 (copy enclosed). The date of limitation for filing of appeal before Hon’ble ITAT was 06.06.2025.
In this regard, it is submitted that the undersigned was busy in time barring scrutiny, judicial, audit and other time barring matters. The under mentioned charge has heavy workload due to lots of pendency of time barring assessment, judicial and other matters. Therefore, it is requested that the delay in filing of 1
appeal before the Hon’ble ITAT in this case may kindly be condoned. The undersigned will be more cautious and this act will not be repeated in future.” 1.1 Considering the contents of the letter dated 16.07.2025 by the Revenue, as extracted above, the delay is hereby condoned and the appeal is admitted for adjudication.
This appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 20.03.2025, passed by Ld. CIT(A)-30, New Delhi. In this case, the Ld. AO has passed an order u/s 153C r.w.s. 143(3) of the Act (dated 30.03.2023). Through this order an amount of Rs.50,00,000/- has been added u/s 68 of the Act on account of receipt of such an amount from an alleged paper company in the disguise of a loan.
2.1 Aggrieved with this order the assessee approached the Ld. CIT(A) where he could succeed on the ground that no assessment was legally possible for AY 2014-15 (being the year under consideration). Since the finding of the Ld. CIT(A) would be relevant for deciding the present matter, the same may be extracted for reference:
“7.3 Thus, it is settled proposition that the date of handling over of the seized material by the AO of the searched person shall be the reference date for the issuance of notice u/s 153C and to assess or reassess the total income of the other person for the 6 previous years preceding the previous year in the such seized material is handed over to the AO of the such other person (“appellant” in the present case). In view of above jurisprudence, the additional ground of appellant is accepted. 7.4 Now coming back to the present case of the appellant, the following dates are relevant for the reference:
S.No. Particulars Date 1. Date of third party search 23.07.2019 [Kuldeep Bishnoi Group] 2. Date of recording of Satisfaction 26.03.2022 note by the AO of the searched person and third person (AO is same in both the cases) 3. Date of notice u/s 153C 29.03.2022 7.5 Considering the above stated factual matrix, the reference date of search and seizure operation in case of appellant being other person as per 1st proviso to the sub section 1 to the Section 153C of the I.T. Act, 1961 shall be 29.03.2022 and hence previous year of search and seizure operation shall be 2021-22. Considering the previous year 2021-22 as a search year, the preceding 6 previous years shall be as below: S.No. Previous Year Assessment Year 1. 2021-22 2022-23 2. 2020-21 2021-22 3. 2019-20 2020-21 4. 2018-19 2019-20 5. 2017-18 2018-19 6. 2016-17 2017-18 7. 2015-16 2016-17 7.6 Thus, it is found legally valid that the AO of the appellant had jurisdiction to serve upon the appellant notice u/s 153C of the I.T. Act, 1961 only upto the AY 2016-17 and not prior to that AY. Therefore, the assessment proceedings initiated u/s 153C of the I.T. Act, 1961 by the AO for the AY 2014-15, based on the search and seizure operation conducted on Kuldeep Bishnoi Group is against the clear mandate of legislature and against the ratio laid down by the Hon’ble Apex Court in the case of CIT vs. Jasjit Singh (supra) and of Hon’ble Delhi High Court in the case of Ojjus Medicare Pvt. Ltd. (supra). Hence, the proceeding u/s 153C of the I.T. Act, 1961 for the AY 2014-15 initiated and completed under the instant case of the appellant is found without jurisdiction. 7.7 Hence the assessment order passed u/s 153C r.w.s. 143(3) of the I.T. Act, 1961 dated 30.03.2023 by the AO in the case of appellant for the AY 2014-15 is bad in law and therefore, the total addition made by the AO in the said assessment order for Rs.50,00,000/- is deleted.”
2.2 The Revenue, being aggrieved with this order has approached the ITAT with the following grounds of appeal:
1. “Whether on the facts and under the circumstances of the case and in law, the Ld. CIT(A) was justified in relying upon the judgment of Hon’ble Delhi High Court in the case of PCIT, Central-1, Delhi vs. Ojjus Medicare Pvt. Ltd. (ITA No.52 of 2024), even when the Revenue has filed a SLP against this decision of the Hon’ble Delhi High Court? 2. Whether on the facts and under the circumstances of the case and in law, the Ld. CIT(A) was justified in holding that block periods for assessment u/s 153C(1) of Income tax Act, 1961, have to be calculated six years prior to the AY in which satisfaction note was recorded by concerned Assessing Officer or seized material pertaining to the non-searched person was handed over to the AO even when section 153C(1) of the Act clearly mentions that calculation of block period has to be done from the year of search?
3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in relying on the judgment of Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh (2023 SCC Online SC 1265) even though the facts of the instant case are different from that of Jasjit Singh case and RRJ Securities case, since the decisions rendered by the Court in Jasjit Singh as well as in RRJ Securities had dealt with a pre-2017 position (i.e. for search conducted before 1st April, 2017) and hence are clearly distinguishable? 3. Before us the Ld. DR heavily relied on the order of the Ld. AO and also pointed out that the case of Ojjus Medicare Pvt. Ltd. [465 ITR 101 (Del)] had not been accepted by the Revenue and an SLP had been filed before the Hon’ble Supreme Court. The Ld. DR also took pains to distinguish the other cases relied on by the Ld. CIT(A) while granting relief to the assessee.
3.1 The Ld. AR, on the other hand, relied on the impugned order and also the cases cited therein.
We have carefully perused the orders of the authorities below and have gone through the case laws mentioned in the impugned order. As has been mentioned earlier that the Ld. CIT(A) has relied on case of CIT vs. Jusjit Singh reported in 458 TR 437 (SC) and case of Ojjus Medicare Pvt. Ltd. (supra). The extracted portion of the CIT(A)’s order makes it clear that no assessment was possible prior to AY 2016-17 in the present case and hence the proceedings for AY 2014-15 cannot be valid in the eyes of law.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 09.12.2025