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Judgment
PER MAHAVIR SINGH, VP:
This appeal by the Revenue is emanating from the order dated 13.2.2026 of the Ld. Commissioner of Income Tax(Appeals-25), New Delhi in Appeal No. CIT(A), Delhi-29/1137/2009-10. Assessment was framed by the DCIT/ACIT, Circle-25, New Delhi u/s 153C of the Income Tax Act, 1961 (hereinafter referred as “Act”) relevant to assessment year 2010-11.
At the threshold, it is noticed that there is delay of 22 days in this appeal. The reasons given in the condonation petition by the Revenue that time barring assessment were pending, thus, the Revenue could not pursue the filing of the appeal in taking approval from the PCIT, thus there was a delay in filing the appeal. Hence Ld. DR prayed for condonation of delay in dispute. Learned counsel for the assessee has not objected to the condonation of delay. Hence going by the reasons, we condone the delay and admit the appeal of the Revenue.
At the time of hearing, Ld. Sr. DR stated that Ld. CIT (A) erred in allowing the appeal of the assessee on the basis of the judgment of Delhi High Court in the case of in the case of PCIT versus Ojjas Medicare (P) Ltd., reported in [2024] 465 ITR 101 (Delhi) dated 3.4.2024. For this Ld. Sr. DR drew our attention towards the ground number (a), which reads as under.
a. Whether on the facts and under the circumstances of the case and in law, the Ld. CIT(A) was justified in relying upon the judgement 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 SLP filed against this decision of the Hon’ble Delhi High Court.
According to learned Sr. DR, Revenue has filed SLP against the decision of PCIT vs. Ojjus Medicare (P) ltd. in the Hon'ble Supreme Court and the judgment is awaited.
Brief facts of the case that a search and seizure proceedings under Section 132 of the Act was conducted on the business premises and residential premises of M/s Alankit Group of Cases and some of its close associates and key employees. During the course of search, some incriminating documents and evidences were recovered and seized, wherein it has facilitated acquisition of shares of several shell entities for the benefit of its group as well as its known associates and clients. As per AO, the assessee has received and providing accommodation entries and facilitating the bogus short-term loss to set off long-term capital gains to various persons through several entities managed and controlled by him and his associates. At the time of hearing, learned counsel for the assessee pointed out that this issue stands covered by the decision of the Hon'ble Delhi High Court in the case of Ojjus Medicare P Ltd. (Supra) and drew our attention to the findings of the Hon'ble Delhi High Court in the aforesaid case that how computation of six/ten years block is to be computed. Learned counsel for the assessee drew our attention to the chart filed for explaining the fact that what is the date of search, person to whom search was conducted, date of notice issued under Section 153C of the Act, date of recording of satisfaction note by the Assessing Officer of the search person and also the AO of the searched person that is assessee and handing over of seized documents and initiation of proceedings under Section 153C of the Act. The relevant details are tabulated as under :
| S.No. | Particulars | Facts of the case of the appellant |
| i. | Date of search and seizure operation | 18.10.2019 |
| ii. | Peron on whom search was conducted | Alankit Group of Companies/ entities |
| iii. | Date of notice u/s. 153C issued | 29.12.2022 |
| iv. | Date of recording of Satisfaction Note by AO of searched person | 24.06.2022 |
| v. | Date of recording of Satisfaction Note by AO of the ‘other than searched person’ / appellant | 28.12.2022 |
| vi. | Year of handing over of seized documents in the case of the appellant to the AO of the appellant/deemed year of search | FY 2022-23 relevant to AY 2023-24 |
| vii. | Assessment years for which proceedings u/s. 153C were initiated | 2010-11 to 2020-21 |
| viii. | Date of passing of the assessment order | 13.03.2024 |
Learned counsel of the assessee, in view of the aforesaid Hon'ble Delhi High Court decision, stated that the Hon’ble Court has categorically analyzed and laid down the principles how to compute 6-10 years block. He stated that the Hon'ble Delhi High Court held that block of six years would have to be identified bearing in mind the assessment year pertaining to the financial year in which search had been conducted or requisition made or satisfaction note recorded/seized documents handed over to jurisdiction AO; however, the 10 AYs’ are to be computed or reckoned from the end of the assessment year relating to such year of search/requisition. He further explained that if the Satisfaction Notes have been recorded or seized documents handed over between the period 1st April 2022 to 31 March 2023, then the relevant assessment year would be assessment year 2023-24, and accordingly assessment year 2023-24 would form the first year of block of ten AYs’ and the period of ten AYs’ year would terminate in assessment year 2014-15. Accordingly, notices issued prior to assessment year 2014-15 would fall beyond the ambit of ten AYs’ as provided in the provisions of Section 153C read with Section 153A of the Act.
We have gone through the facts of the present case as noted above and also the decision of the Hon’ble Delhi High Court in the case of Ojjus Medicare Pvt. Ltd (supra), wherein, Hon'ble High Court, after discussing statutory provisions, held as under:-
“F. IDENTIFICATION OF THE COMMENCEMENT POINT FOR THE PURPOSES OF COMPUTATION OF THE SIX AND TEN YEAR BLOCK
75.The First Proviso to section 153C significantly shifts the reference point which is spoken of in section 153A(1) while defining the point from which the period of six AYs' is to be calculated, and which stipulates it to be the date of search or requisition, to the date of receipt of books of account, documents or assets seized or requisitioned by the jurisdictional AO of the non-searched person. The Proviso, thus by virtue of a deeming legal fiction, shifts the commencement point from the date of initiation of search or making of requisition to the date of receipt of books, documents or assets by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person thus being governed and regulated by the First Proviso of section 153C(1) is, however, an issue which is no longer res integra
80.The aforesaid discussion thus renders a determinative quietus to the identification of the starting post from which the block of six AYs' or the "relevant assessment year" would have to be calculated. The contention of the respondents that the said block periods would have to be reckoned with reference to the date of search thus can neither be countenanced nor possibly accepted. That submission is clearly addressed contrary to a long and consistent line of precedents which have held to the contrary and which unequivocally accepted the point of commencement for the purposes of identifying the six or the "relevant assessment year" to be etched from the date of handover of documents, assets or things to the AO of the non-searched party.
84.As would be evident from the above, although the decisions in Sarwar Agency and RRJ Securities were cited, the learned Judge chose to observe that the section 153C(1) Proviso would only be liable to be construed as relevant for the purposes of abatement. We find ourselves unable to sustain that line of reasoning since both Sarwar Agency as well as RRJ Securities have struck a line which is in consonance with the view taken in SSP Aviation and which has since come to be affirmed by the Supreme Court in Jasjit Singh. In any case, the law as enunciated in RKM Powergen would not sustain bearing in mind the express enunciation of the legal position by the Supreme Court as is manifest from a reading of paragraph 9 of Jasjit Singh.
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 often 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.
11.1Further, it is seen that in the aforesaid judgment, the Hon’ble High Court has noted the relevant facts which are as under:
1.Date of search and seizure operation: 18.10.2019
2.Date of issue of notice u/s 153C: 22.03.2022
3.Assessment years for which notice u/s 153C was issued: 2010-11 to 2020-21
4.Date of passing of the assessment order: 25.03.2023
11.2On the aforesaid facts, the Hon’ble High Court has further computed which of the six assessment years/ten assessment years would be form part of the block period. The relevant finding of the Hon’ble High Court in the judgement delivered in Ojjus Medicare (P.) Ltd (supra) in respect thereof is reproduced hereunder:
G. COMPUTATION OF THE SIX AND TEN YEAR BLOCK IN THE PRESENT BATCH OF WRIT PETITIONS
86.In the present batch, List I pertains to writ petitions which have Satisfaction Notes recorded or section 153C notices issued between the period 01 April 2021 to 31 March 2022. Undisputedly, the First Proviso to section 153C, and which has been consistently recognized to also embody the commencement point for reckoning the six or the ten AYs', shifts the relevant date from the date of initiation of search or a requisition made to the date of receipt of books of account or documents and assets seized by the Jurisdictional AO of the non-searched person. Consequently, the block of six or ten AYs' would have to be reckoned bearing the aforesaid date in mind. Although in the present batch of writ petitions, the date of actual handing over has not been explicitly mentioned in a majority of the writ petitions, learned counsels for respective sides had addressed submissions based on the assumption that it would be the date of issuance of the Satisfaction Note by the AO of the non-searched person and in the case of non-availability of such a note, the date of issuance of the section 153C notices which would be pertinent for the purposes of the First Proviso to section 153C.
87.Assuming, therefore, that the handover of material gathered in the course of the search and pertaining to the non-searched person occurred between 01 April 2021 to 31 March 2022, the same would essentially constitute FY 2021-22 as being the previous year of search for the purposes of the non-searched entity. As a necessary corollary, the relevant AY would become AY 2022-23. AY 2022-23 would thus constitute the starting point for the purposes of identifying the six years which are spoken of in section 153C. The six AYs' are envisaged to be those which immediately precede the AY so identified with reference to the previous year of search. It would thus lead us to conclude that it would be the six AYs' immediately preceding AY 2022-23 which could have formed the basis for initiation of action under section 153C. Consequently, and reckoned backward, the six relevant AYs' would be: -
Computation of the six-year block period as provided under section No. of years 153C of the Act AY 2021-22 1 AY 2020-21 2 AY 2019-20 3 AY 2018-19 4 AY 2017-18 5 AY2016-17 6 Consequently, AY 2021-22 would become the first of the six preceding AYs’ and would as per the table set out hereinabove terminate at AY 2016-17.
88.Section 153A replicates the basis on which the six AYs' are to be identified and computed with the solitary distinction being that in the case of the searched person, the six AYs' are liable to be computed from the AY pertaining to the FY in which the search was conducted. The starting point for the purposes of identifying the six AYs' in the case of section 153A would thus turn upon the year of search as opposed to the handover of material which is spoken of in the First Proviso to section 153C. If one were to therefore assume that a search took place on a person between 01 April 2021 to 31 March 2022, the pertinent AY would become AY 2022-23 and the corresponding six AYs' would be as follows: -
Computation of the six-year block period as
provided under section 153C of the Act
No. of
years
AY 2021-22 1 AY 2020-21 2 AY 2019-20 3 AY 2018-19 4
AY2017-18 5 AY2016-17 6 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 AV 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'.
90.Viewed in that light, and while keeping the period of 01 April 2021 to 31 March 2022 as the constant, the relevant AY would be AY 2022-23. The ten AYs' would have to be computed from 31 March 2023 with the said date indubitably constituting the end of the AY relevant to the previous year of search. Viewed in light of the above, the block period of 10 AYs' would be as follows: -
Computation of the ten-year block period as provided under section 153C read with section 153A of the Act No. of years AY 2022-23 1 AY 2021-22 2 AY 2020-21 3 AY 2019-20 4 AY2018-19 5 AY2017-18 6 AY 2016-17 7 AY 2015-16 8
AY2014-15 9 AY2013-14 10 94.Similarly, and in light of what has been held by us hereinabove, the relevant block of ten AYs’ when computed for the period 01 April 2022 - 31 March 2023, and where the Satisfaction Note was drawn by the AO of the non-searched person between those two dates, would be as under: -
Computation of the ten-year block period as provided under section 153C read with section 153A of the Act No. of years AY 2023-24 1 AY 2022-23 2 AY 2021-22 3 AY 2020-21 4 AY 2019-20 5 AY 2018-19 6 AY 2017-18 7 AY 2016-17 8 9 10 AY 2015-16 9 AY2014-15 10 96.To recall, the petitions forming part of List I pertain to AYs' 2010-11, 2011-12 and 2012-13. So far as the aforenoted writ petitions are concerned, undisputedly AY 2010-11, 2011-12 and 2012-13 fall beyond the maximum period of ten AYs'. Since the ten AYs', when computed from the end of AY 2022-23 would terminate upon AY 2013-14, AYs' 2010-11, 2011-12 and 2012-13 would clearly fall outside the block period of ten AYs' and cannot legally or justifiably be reopened under section 153C read with section 153A of the Act.
97.Proceeding then to List II, we find that the petitions placed in that list pertain to cases where the hand over occurred in FYs 2022-23 and 2023-24. Consequently, the relevant AYs’ would be AY 2023-24 and AY 2024-25 respectively. In light of the principles enunciated by us and which explain how the period of six and ten AYs’ is liable to be computed, the reopening of assessments pertaining to AYs’ 2010-11, 2011- 12, 2012-13 and 2013-14 would clearly fall beyond the ambit of ten AYs’ as provided under Section 153C read with Section 153A. We note in this behalf that all of the writ petitions forming part of List II pertain to the afore-noted AYs' 2010-11, 2011-12, 2012- 13 and 2013-14.”
In view of aforesaid table at para 5 of this order, we noted that in the case of the assessee the date of handing over of documents seized during the search at third party from the AO of the searched person is 24.6.2022 being the satisfaction note was recorded by the AO of the searched person, therefore, the same shall be construed the date of search as per the provision of section 153C(1) and as per Explanation 1 of Section 153A of the Act the 10 assessment years period is to be computed from the end of the assessment year relevant to the previous year in which the search is conducted which would be as under:-
| S.No. | Assessment year |
| 1. | 2014-15 |
| 2. | 2015-16 |
| 3. | 2016-17 |
| 4. | 2017-18 |
| 5. | 2018-19 |
| 6. | 2019-20 |
| 7. | 2020-21 |
| 8. | 2021-22 |
| 9. | 2022-23 |
| 10. | 2023-24 |
Therefore, assessment years 2010-11 to 2013-14 are outside the purview of section 153C of the Act and therefore, assessment framed u/s. 153C of the Act for the assessment year 2010-11 is barred by limitation and liable to be quashed.
Also based on the decision of the Hon’ble Delhi High Court in the case of Ojjus Medicare P Ltd. (Supra) and facts in the instant case, in our view, the period of ten AYs’ would commence being counted with effect from AY 2023-24 which by backward counting, would terminate in assessment year 2014-15. In view of the above, we are of the view that Ld. CIT(A) has rightly held that assessment year 2010-11 has clearly barred by limitation and assessment framed under Section 153C of the Act was accordingly quashed, thus we uphold the order of the Ld. CIT(A) on the issue in dispute and accordingly, reject the grounds raised by the Revenue.
In the result, Revenue’s appeal stands dismissed.