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Facts
The Revenue appealed against the CIT(A)'s order regarding Assessment Year 2010-11. The core issue was whether the ten-year period for reckoning the assessment for search cases under Section 153A of the Income Tax Act was correctly calculated.
Held
The Tribunal held that the assessment framed under Section 153A for AY 2010-11 was barred by the limitation period. The ten-year block period should be reckoned from the end of the AY relevant to the financial year in which the search was conducted, as per Explanation 1 to Section 153A.
Key Issues
Whether the assessment for AY 2010-11, based on a search conducted in 2019, was barred by the ten-year limitation period prescribed under Section 153A of the Income Tax Act.
Sections Cited
153A, 153C, 132, 153
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Income Tax Appellate Tribunal, DELHI BENCH “F”NEW DELHI
Before: SHRIPAWAN SINGHAND SHRIBRAJESH KUMAR SINGH
आदेश /O R D E R
PER PAWAN SINGH, JUDICIAL MEMBER
This appeal by the Revenue is directed against the order of the CIT(A)-25, New Delhi dated 14.02.2025 for the AY 2010-11. The Revenue has raised 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 holding that the ten- year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search and not from the AY immediately preceding the year of search, even when Para 80 of CBDT’s Circular No.2/2018 dated 15 February 2018 clarifies the intent of the Legislature while introducing the amendment in Finance Act 2017 by stating that the expression “relevant assessment year” as appearing in section 153A is envisaged to mean the four assessment years in addition to the preceding six AYs which are calculated from AY before the year of search?
2. Whether on the facts and 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 the decision of the Hon’ble Delhi High Court and judgment in the case of KanhaiyaLalBothra vs. Union of India through its Secretary & Ors. is relied on the Ojjus case (supra) itself?
3. Whether on the facts and under the circumstances of the case and in law, the Ld. CIT(A) erred in not considering the fact that the identification of “relevant assessment year” must be construed and interpreted harmoniously since it could not have been the intent of the Legislature to provide two separate yard sticks for the purposes of computing the block assessment periods of 6AYs and 10AYs, under sections 153A and 153C?
4. 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 Madras High Court in the case of A R Safiullah vs. CIT (W.P. No. 4327 of 2021) and Hon’ble Calcutta High Court in the case of R.B. Jewellers Pvt. Ltd. vs. Union of India (W.P. No.438 of 2021), even when the interpretation taken by the Hon’ble Courts in this case is against the intent of the Legislature, as clarified in the CBDT’s Circular No.2/2018 dated 15.02.2018?
5. That the order of the CIT(A) is perverse, erroneous and is not tenable on facts and in law.
6. That the grounds of appeal are without prejudice to each other.
7. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.”
Rival submissions of the parties have been heard and record perused. At the outset of hearing, the Ld. Authorized Representative (AR) of the assessee submits that grounds of appeal raised by Revenue are covered by the decision of Delhi Tribunal in case of DCIT Vs Ankit Agarwal in for AY 2010-11 dated 07.11.2025, wherein the bench of Tribunal relied upon the decision of Jurisdictional High Court in the case of PCIT vs. Ojjus Medicare Pvt. Ltd. (2024) (465 ITR 101) (Del.). The Ld. AR of the assessee while explaining the facts of the case submits that a search action under section 132 was carried out on 18.10.2019 on assessee group wherein the assessee as well as assessee - Ankit Aggarwal was also covered. Pursuant to search action notice under section 153A was issued for AY 2010-11 to 2020-21. The assessment was completed under section 153A dated 24.05.2022. The AO made various additions in the assessment order. Aggrieved by the order of AO, the assessee filed appeal before CIT(A) raising the legal issue as well as on merit that assessment for AY 2010-11 is time barred, being beyond 10 years. The Ld. CIT(A) in para 10.9 of his order worked out from the time period of 10 preceding year from the date of search and held that AY 2010-11 is beyond the period of 10 years. Similar view was taken in assesses group cases in DCIT vs. Ankit Agarwal (supra).
3. On the other hand, the Ld. CIT DR for the Revenue supported the order of AO. The ld CIT-DR for the revenue submits that even assuming the AY 2010-11 falls under 11 year, in cases where the escaped income is discovered only upon search and its concealment is part of ongoing scheme complex book entries, circular transaction and layered cash flow as found in the seized material, it is in consistent of legislative scheme to pierce such structuring and to uphold search assessment where tax evasion emerges regardless the technical limitations.
We have considered the rival submission of both the parties and have gone through the orders of authorities below. We have also deliberated on various case laws relied by Ld. AR of the assessee. We find that on similar grounds of appeal, the coordinate bench of this Tribunal in DCIT vs. Ankit Agarwal (supra) in group case, on similar set of fact on similar ground of appeal passed the following order:
“8. We find that the above issue is squarely covered by the judgement rendered by the Hon'ble High Court of Delhi in favor of Assessee' in the case of Ojjus Medicare Pvt. Limited and (F)] 2024:DHC:2629-DB and KanhaiyaLalBothra V. Union of India. W.P.(C) 13968/20196.
In the facts of the present case where the search was conducted on 18.10.2019, the relevant assessment year in accordance with Explanation 1 of section 153A, would become AY 2020-21. The computation of ten Assessment years for initiating proceedings u/s 153A of the Act would be AY 2020-21; Α.Υ. 2019- 20; Α.Υ. 2018-19; Α.Υ. 2017- 18; Α.Υ. 2016-17; Α.Υ. 2015-16; Α.Υ. 2014-15; Α.Υ. 2013-14; Α.Υ. 2012-13; and Α.Υ. 2011-12. Accordingly, the impugned A.Y is 2010-11 is therefore, out of block of ten assessment years and therefore the Assessing Officer cannot assume jurisdiction for making assessment as the same is barred by the limitation.
The Hon'ble Delhi High Court has elaborated the legal dictum on the issue in the case of Ojjus Medicare Pvt Ltd [2024] [supra] wherein it has held as under:
“85. 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 AYs' 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. ******* 89. 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'.”
The decision of Ojjus Medicare (supra) was followed by the Hon’ble Delhi High Court in the case of KanhaiyaLalBothra (supra), where the court decided the issue in favor of the taxpayer and quashed the notice issued under Section 153A of the Act, as the notice was beyond the prescribed limitation period of ten assessment years.
In view of the binding judicial precedents as elucidated above, we are of the view that the Assessing Officer has committed a fundamental jurisdictional error and the impugned notice under Section 153A of the Act as well as the consequential assessment order, is vitiated by noncompliance with the statutory prerequisites and established principles of law. Accordingly, the notice issued under Section 153A of the Act, as well as the consequent assessment order is quashed as being barred by limitation. The grounds are dismissed.
In the result, appeal of Revenue in is dismissed.”
Considering the aforesaid factual and legal position, we find that assessment framed pursuant to notice under section 153A dated 24.05.2022 for AY 2010-11 is barred by time period prescribed under section 153 of the Income Tax Act. In the result, the grounds of appeal raised by the Revenue are dismissed on primary submissions of the ld AR of the assessee. Further considering the facts that we have dismissed the appeal of revenue on legal issue, therefore adjudication on merit have become academic.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 28.11.2025