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Facts
The Revenue is in appeal against the order of the CIT(A) who deleted additions made by the AO under Section 153C of the Income Tax Act for A.Y. 2011-12. The assessee had initially filed a return declaring Nil income, and later filed a revised return also declaring Nil income.
Held
The Tribunal held that the computation of the block period under Sections 153C and 153A, as interpreted by the Hon'ble Delhi High Court in the case of Ojjus Medicare Pvt. Ltd., aligns with the legislative intent. The notices issued to the assessee were quashed by the High Court in a related case.
Key Issues
Whether the block period for assessment under Section 153C of the Income Tax Act was correctly computed with reference to the date of receipt of seized documents by the AO, as per the High Court's ruling.
Sections Cited
153C, 68, 69A, 153A, 139(1)
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Income Tax Appellate Tribunal, DELHI BENCH “C”, DELHI
Before: SH. SUDHIR KUMAR & SH. MANISH AGARWAL
Date of hearing: 18/08/2025 Date of Pronouncement: 27/08/2025 ORDER
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi-25 [hereinafter referred to as “CIT(A)”] vide order dated 23.12.2024 pertaining to A.Y. 2011-12 arising out the assessment order dated 01.03.2024 u/s.153C of the Income-tax Act, 1961, (in short ‘the Act’).
The Revenue has raised the following grounds in appeal:-
1. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs 75,00,000/- made u/s 68 of the Income Tax Act
2. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs. 60,00,000/-made u/s 69A of the Income Tax Act.
3. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs. 4,05,000/-made on account of unaccounted commission (@3% of Rs. 1,35,00,000/-).
4. Whether the computation of the block period under Sections 1530 and 153A of the Income Tax Act, as interpreted by the Hon'ble High Court in the case of Ojjus Medicare Pvt. Ltd., aligns with the legislative intent and procedural flexibility outlined in CBDT Circular No 2/2018 dated 15 February 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.
3. The assessee filed its original return of income under Section 139(1) of the Act on 27.09.2011, declaring income as Nil. In response to a notice issued under section 153C, the assessee filed a return on 08.12.2022, again declaring Nil income. After considering the submissions made by the assessee the AO complied the assessment after making the addition of Rs.13905000/-. Aggrieved by the order of the AO the assessee is in appeal before NFAC who vide order dated 23.12.2024 allowed the appeal. Being aggrieved by the order of the Ld. NFAC the revenue is in appeal before Tribunal.
The Ld. Sr. DR has relied upon the order of the AO and prayed for upheld the order of the Ld. AO.
The Ld. AR submitted that the matter is squarely covered from the judgment of Hon’ble Delhi High Court in the case of Pr. Commissioner of income Tax -1 v. Ojjus Medicare Pvt. Ltd. [2024 SCC OnLine Del 2439]. The Ld. AR also submitted that notices issued to the assessee have been quashed by Hon’ble High Court in the case of W.P.(C) 2088/2024 & CM APPL. 8676/2024 Vikas Associates Pvt. Ltd. Vs. ITO. The relevant portion of the above judgment is reproduced as under :- “119. We thus record our conclusions as follows: "D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten har 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 nonsearched 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 and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted.
E. 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. F. While the identification and computation of the six AY’s hinges upon the phrase “immediately preceding the assessment year relevant to the previous year” of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “from the end of the assessment year”. This distinction would have to necessarily be acknowledge in the light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of the assessment year” while speaking of the ten year block.”
Respectfully following the judgment of Hon’ble Delhi High Court the appeal of the revenue is dismissed.
Order pronounced in the open court on 27.08.2025.