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Facts
The Revenue appealed against the CIT(A)'s order which allowed the assessee's appeal. The issue was regarding the calculation of block periods for assessment under Section 153C of the Income Tax Act.
Held
The Tribunal held that the commencement date for calculating the block period under Section 153C is the date of receipt of books of account/materials by the jurisdictional Assessing Officer, not the date of search. The assessment years under consideration were found to be outside the ten-year block period.
Key Issues
Whether the block period for assessment under Section 153C should be calculated from the date of search or the date of receipt of seized materials by the jurisdictional AO?
Sections Cited
153C, 153A
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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI YOGESH KUMAR US, & SHRI NAVEEN CHANDRA
the order of the ld. CIT(A)-25, New Delhi dated 17.02.2025 for A.Ys 2010- 11 to 2013-14 respectively. to 3700/DEL/2025 [A.Y. 2010-11 to 2013-14] Chandra Vidya Investment and Finance 2. Since the underlying facts are common in all the appeals of the Revenue they were heard together and are disposed of by this common order for the sake of convenience and brevity.
The challenge in the grounds raised by the Revenue is in respect of the ld. CIT(A)’s action in holding that block periods for assessment u/s 153C of the Act have to be calculated from the date of receipt of the books of account, documents or assets seized by the Assessing Officer of the non-searched person and not from the date of initiation of search by relying upon the first proviso to section 153C of the Income- tax Act, 1961 [the Act, for short].
None appeared on behalf of the assessee in the case of Chandra Vidya Investment and Finance [Pvt] Ltd, hence the case is decided with the assistance of the Ld DR and materials on record.
Brief facts of the case are that the assessee is a part of group of Ojjus Medicare where search was taken place. The assessments made u/s 153C on the group entities was decided by the Hon'ble Jurisdictional Delhi High Court. The Assessing Officer initiated proceedings u/s 153C of the Income-tax Act, 1961 [the Act, for short] on the assessee due to search conducted at third party (Alankit Group) on 18.10.2019 during the previous year 2019-20 relevant to AY 2020-21. The Assessing Officer of the assessee recorded his satisfaction note on 24.06.2022 and issued
Page 2 of 8 to 3700/DEL/2025 [A.Y. 2010-11 to 2013-14] Chandra Vidya Investment and Finance notice u/s 153C of the Act to the assessee on 09.09.2022. Thereafter, the Assessing Officer made additions.
5. 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. DR appraised us with facts of the case and assisted us to arrive at our decision. Having heard the submissions and having perused the relevant material on record and the order of the CIT(A), we find the followings facts in the instant case. The AO of the assessee has recorded his satisfaction on 24.06.2022 and issued notice u/s 153C on 09.09.2022, and the issue for adjudication is what is the assessment year relevant to the previous year in which search is conducted or requisition is made as per the proviso of section 153C.
Consequently, it is to be determined which are the ten assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made.
This issue of the date of search for persons covered under section 153C and the calculation of ten preceding assessment years from the end of the relevant assessment year, is no longer res-integra. It has now been well settled by the Hon'ble Supreme Court in the case of CIT Vs.
Page 3 of 8 to 3700/DEL/2025 [A.Y. 2010-11 to 2013-14] Chandra Vidya Investment and Finance Jasjit Singh 458 ITR 437(SC). The relevant law laid down by the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437(SC) are read as under:
“It is evident on a plain interpretation of Section 153C (1) that the Parliamentary intent to enact the proviso 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 153C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. It is quite plausible that the AO seized of the materials….would take his own time to forward the papers and materials belonging to the third party, to the concerned AO. In that event if the date would virtually ‘relate back’ as is sought to be contended by the revenue, (to the date of seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is disproportionate.”
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 Page 4 of 8 to 3700/DEL/2025 [A.Y. 2010-11 to 2013-14] Chandra Vidya Investment and Finance 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, 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 SC 370. The submission of the revenue, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs’ would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A.”
The law as interpreted by the Hon'ble Supreme Court and the Delhi High Court as above, declares that as per provisions of section 153C of Page 5 of 8 to 3700/DEL/2025 [A.Y. 2010-11 to 2013-14] Chandra Vidya Investment and Finance the Act, the commencement date for computation of the six/ten assessment years is deemed to be the date of receipt of books of account/materials/asset, belonging/pertaining to non-searched person, by the jurisdictional Assessing Officer of the non-searched person. In other words, date of recording of the satisfaction u/s 153C in the case of the non-searched person becomes date of search in the case of non- searched person [the assessee in the present case].
In accordance with the legal dictum laid down by the Courts as above, in the instant case, when the AO of the assessee recorded his satisfaction on 24.06.2022, for issuance of notice u/s 153C dated 09.09.2022, the assessment year relevant to the previous year in which search is conducted or requisition is made, as per the proviso of section 153C, becomes AY 2023-24. The ten assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, commences from AY 2023-24 upto AY 2014-15. As a consequence, the last of the ten A.Ys for which the Assessing Officer can assume jurisdiction u/s 153C is A.Y. 2014-15.
In view of the same, we are of the considered view that the impugned A.Y 2010-11 to AY 2013-14, are therefore, out of the block of ten assessment years for which assessment u/s 153C could be made. The impugned A.Y is 2010-11 to AY 2013-14 being out of the block of ten
Page 6 of 8 to 3700/DEL/2025 [A.Y. 2010-11 to 2013-14] Chandra Vidya Investment and Finance assessment years and therefore the Assessing Officer cannot assume jurisdiction for making assessment.
In view of the discussion as above, we therefore, have no hesitation in upholding the decision of the CIT(A) and quashing the impugned assessment order having been made without legal and valid assumption of jurisdiction. Accordingly, the assessment of the A.Ys under consideration are considered as beyond the block period and hence invalid.
Since we have quashed the assessment order, we do not find it necessary to dwell into the merits of the case.
In the result, appeals of Revenue in and 3700/DEL/2025 stands dismissed.
The order is pronounced in the open court on 07.11.2025.