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Facts
The Revenue preferred an appeal against the order of the CIT(A) who held that the assessment order passed by the AO for AY 2012-13 was bad in law. The assessment was reopened based on a search conducted on 01.09.2021, with the notice under Section 148 issued on 31.03.2023.
Held
The tribunal held that the date of recording of satisfaction note is to be construed as the date of search for determining the limitation period for initiating proceedings under Section 153C/147 of the Act, following jurisdictional High Court decisions.
Key Issues
Whether the notice issued under Section 148 of the Act for AY 2012-13 was barred by limitation, considering the date of recording of satisfaction note as the relevant date for calculating the ten-year block period.
Sections Cited
147, 143(3), 148, 149(1), 153A, 153C, 151
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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: Ms. MADHUMITA ROY & SHRI NAVEEN CHANDRA
assessee are directed against the order dated 21.08.2024 [DIN & Order No. ITBA/APL/M/250/2024-25/1067804156(1) passed by the Commissioner of Income Tax (Appeals)-23, New Delhi, arising out of the order dated 26.03.2024 passed by the Assessing Officer, ACIT, Central Circle-4, New Delhi under referred to as “the Act”) for the Assessment Year 2012-13.
2. The sole substantive issue involved for adjudication in the instant Revenue’s appeal is as to whether the Ld. CIT(A) was right in holding that the assessment order passed by the Ld. AO for the impugned assessment year 2012-13 was bad in law being beyond its jurisdiction to issue notice under Section 148 of the Act.
Facts of the case, in brief, are that consequent to the search conducted in the case of Filatex Group on 01.09.2021, case of the assessee for A.Y. 2012-13 was reopened by issuing notice under Section 148 of the Act on 31.03.2023. The AO vide assessment order dated 26.03.2024 passed under Section 147 r.w.s. 143(3) completed the assessment at Rs. 2,25,54,820/- as against the returned loss of Rs. 36,838/-. Aggrieved against it the assessee preferred appeal before the Ld. CIT(A).
Before the Ld. CIT(A) the assessee had raised following additional grounds:
“1. On the facts and circumstances of the appellant's case, notice issued by AO u/s 148 for A.Y. 2012-13 on 31st March, 2023 is bad-in-law as it is barred by limitation as present assessment year i.e. AY 2012-13 falls beyond the ten-year block period as set out under Section 149(1) read with section 153A and 1530 of the Act.
On the facts and circumstances of the appellant's case, approval under section 151 was granted in a mechanical manner and without application of mind by Sanctioning Authority inasmuch as the approval under that section was granted without considering the binding judgement of Hon'ble Jurisdictional High Court in the case of [2012] 20 taxmann.com CO No. 9/Del/2025 214 (Delhi) SSP Aviation Ltd. v. DCIT in interpreting the provisions of section 149(1)(b) read with Section 1530 and 153A of the Act for computing ten-year block period.”
The Ld. CIT(A) vide impugned order dated 21.08.2024 decided the grounds in favour of the assessee, inter alia, by holding as under:
“15. It is further seen that Hon'ble Delhi High Court in the case of Pr. CIT v Karina Airlines International Ltd ITA 690/2023 (Delhi) (Judgment pronounced on: 02 August 2024) interpreted the decision of Hon'ble Supreme Court in the case of Jasjit Singh and concluded that the date of recording of satisfaction note is key event through which, AD of non- searched person decides to proceed against such person and thus such date will replace the "date of search" for the purpose of computing ten years block. Relevant extracts are already reproduced above. Similar view is taken by Hon'ble Delhi High Court in the case of Flowmore Ltd. v. ACIT [2024] 164 taxmann.com 738 (Delhi) [27-05-2024] and Dinesh Jindal vs ACIT [2024] 164 taxmann.com 746 (Delhi). 16. the above referred decisions of the Hon'ble jurisdictional High Court has referred to the decision in the case of Ojju Medicare Pvt. Ltd. (Supra). The Hon'ble Delhi High Court in the case of Ojjus Medicare Pvt. Ltd. (Supra) has considered its earlier decision in the case of M/s. RRJ Securities Ltd. [2016] 380 ITR 612(Delhi) dated 30.10.2015 wherein the Hon'ble Court had held as under:- "the date of handing over of material, will be construed as the reference date for initiation of action u/s 153C of the Act, as against date of initiation of search, construed the reference date for initiation of action u/s 153A of the Act.
Thus, in view of the various decisions of Hon'ble Jurisdictional High Courts, the date of recording of satisfaction note is to be construed as date of search for determining the limitation for initiating proceedings u/s. 153C/147 of the Act.
The issue of computation of time limit for issue of notice u/s. 148 has been decided in many decisions on the similar lines as in section 153C. In CO No. 9/Del/2025 those decisions, the date of recording of satisfaction has been considered as the date of search for reckoning the period of 10 years block as mentioned in 149 of the Act. Some of the decisions in this case has been reproduced above.
In view of the above decisions of Hon'ble Courts, it is found that the AO of the appellant had jurisdiction to serve upon the appellant notice u/s 148 of the Act only up to the AY 2014-15 and not prior to that AY. Therefore, the assessment proceeding-initiated u/s 148 of the Act by the AO for the AY 2012-13, based on the search and seizure operation conducted on 01.09.2021 and the satisfaction recorded on 24.03.2024 is beyond the limitation period provided u/s. 149(1) r.w.s 153A and 153C for initiating proceedings u/s 148.
Hence the assessment order passed u/s 147 r.w.s 143(3) of the 1. T. Act 1961 dated 26.03.2024 by the AO in the case of appellant for the AY 2012- 13 is bad in law as the Assessing Officer did not have the jurisdiction to issue notice u/s 148 of the Act. Accordingly, the addition made by the AO is liable to be deleted.
As it is held that the Assessing Officer did not have the jurisdiction to assess the case for the A.Y 2012-13, therefore, all the other grounds raised by the appellant are academic and hence not required to be adjudicated separately. Hence, ground no. 1 and additional ground no.1 and 2 raised by the appellant is allowed.”
Aggrieved against the order of the Ld. CIT(A) the assessee is in appeal before us.
Learned AR representing the assessee reiterated the submissions made before the Ld. First Appellate Authority and submitted that the Ld. CIT(A) has arrived at its conclusion by following the ratio decidendi of the Hon’ble Jurisdictional High Court. On the other hand the Ld. Sr. DR could not controvert given up its stand.
We have heard rival submissions made on behalf of the parties and perused the materials available on record. The finding of the Ld. CIT(A) that the date of recording of satisfaction note is to be construed as date of search for determining the limitation for initiating proceedings under Section 153C/147 of the Act is based on the ratio of decisions of Hon’ble Jurisdictional High Court in the matter of PCIT Vs. Ojju Medicare Pvt. Ltd. Therefore, concurring with the order of the Ld. CIT(A) we dismiss the instant appeal preferred by the Revenue.
In view of our decision in Revenue’s appeal, the cross objection filed by the assessee has been rendered infructuous and stands dismissed accordingly. cross objection CO No. 9/Del/2025 are dismissed.
Order pronounced in open court on 25.09.2025.