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Facts
The Revenue appealed the CIT(A)'s order that AY 2010-11 was beyond the block period for assessment u/s 153A. The assessee was searched on 18.10.2019, and a notice u/s 153A was issued on 02.09.2021 for AY 2010-11.
Held
The Tribunal held that the issue is squarely covered by the Delhi High Court judgment in Ojjus Medicare Pvt. Limited, which stated that the ten-year block period is reckoned from the end of the AY relevant to the FY of search. Therefore, AY 2010-11 was outside the permissible block period.
Key Issues
Whether AY 2010-11 falls within the ten-year block period for issuing notice u/s 153A, considering the search date and the interpretation of Explanation 1 to Section 153A.
Sections Cited
153A, 132, 153C
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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI YOGESH KUMAR US, & SHRI NAVEEN CHANDRA
This appeal by the assessee is directed against the order of the ld.
CIT(A)-25, New Delhi dated 11.02.2025 pertaining to A.Y 2010-11.
The challenge in the grounds raised by the Revenue is in respect of the ld. CIT(A)’s action in holding that AY 2010-11 is beyond the block periods for assessment u/s 153A of the Act of the Income-tax Act, 1961 [the Act, for short]. Page 1 of 6 section 153A, the instant AY 2010-11 is covered under the block period of 10 years.
On the other hand, defending the CIT(A) order, the ld AR of the assessee submitted that the genesis of the present revenue appeal relates to search and seizure proceedings conducted under Section 132 of the Income Tax Act, 1961 ('the Act') in the case of Alankit Group on 18.10.2019. The ld AR submitted that pursuant to the search, a notice dated 02.09.2021 under Section 153A of the Act was issued to the assessee for AY 2010-11 which later on culminated into the assessment order passed under Section 153A of the Act.
The ld AR stated that the CIT(A) allowed the appeal following the judgment rendered by jurisdictional High Court in the case of The Pr.
Commissioner of Income Tax Central-1 v. Ojjus Medicare Pvt. Limited and Kanhaiya Lal Bothra V. Union of India Through Its Secretary & Ors. The ld AR submitted that pertinently, the judgement rendered by Hon'ble High Court in Ojjus Medicare derives its genesis from the search conducted on Alankit Group on 18.10.2019 and the Assessee is also a searched person herein.
We have heard the rival submissions and have perused the relevant material on record. Brief facts of the case are that the assessee was Page 2 of 6 Group. The Assessing Officer of the assessee issued notice u/s 153A of the Act to the assessee on 02.09.2021 for AY 2010-11. Thereafter, the Assessing Officer made additions.
The core legal issue that arises for adjudication pertains to the legality and validity of the notice issued under Section 153A of the Act, for the Assessment Year 2010-11. The Revenue has challenged the findings of the CIT(A) that the notice u/s 153A is barred by limitation being beyond the statutory time frame prescribed under the Act, and thereby exceeding the maximum permissible limit of ten years from the relevant assessment year.
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 Kanhaiya Lal Bothra 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-
Page 3 of 6 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'.”
Page 4 of 6 hon’ble Delhi High Court in the case of Kanhaiya Lal Bothra (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 non- compliance 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. dismissed.
Order pronounced in open court on 07.11.2025.