DCIT vs Ravi Renewable Pvt. Ltd

PER M. BALAGANESH, A. M.:

The instant batch of appeals involve the single assessee herein in ITA No. 9180, 9179 and 9178/Del/2025 for AYs 2011-12, 2013-14 and 2017-18 arise against Commissioner of Income Tax (Appeals)-3, Noida orders dated 04.09.2025 (for AYs 2011-12, 2013-14 and 2017-18) respectively against the order of assessment passed u/s 153C of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) by DCIT, Central Circle, Ghaziabad (hereinafter referred to as ‘ld. AO’). Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.

At the outset, the ld AR submitted an argument in support of challenging the assumption of jurisdiction u/s 153C of the Act for the year under consideration by stating that the year under consideration fall outside the prescribed block period and accordingly no assessment could be validly framed thereon. This is a preliminary issue going to the root of the matter and hence, we proceed to take up the same first for adjudication.

We have heard the rival submissions and perused the material available on record. The search in the case of Alankit group of cases was carried out u/s 132 of the Act on 18.10.2019. Consolidated Satisfaction note in the case of the assessee herein was recorded by the ld AO of the assessee on 03.08.2023 for initiation of proceedings u/s 153C of the Act in the hands of the assessee for the assessment years i.e. AYs 2011-12, 2013-14 and from AYs 2014-15 to 2020-21. The Hon’ble Supreme Court in the case of CIT vs Jasjit Singh reported in 458 ITR 437 (SC) had held that to initiate the proceedings u/s 153C of the Act and the time limit of six assessment years is to be computed with reference to the date of recording of satisfaction by the AO of the assessee . The date of recording of satisfaction by the AO of the assessee for initiating proceedings u/s 153C of the Act shall have to be construed as the date of search qua the section 153C assessee. The Hon’ble Madras High Court in the case of AR Safiullah Vs. ACIT in CMP (MD) Nos. 3513, 3515 and 3516 of 2021 dated 24.03.2021 had categorically held that the Explanation 1 to Section 153A of the Act clearly provide for the manner of computation of 10 assessment years. Later the very same view was also endorsed by Hon’ble Jurisdictional Delhi High Court in the case of PCIT Vs. Ojjus Medicare Pvt. Ltd reported in 161 taxmann.com 160 (Del HC). The assessee argued that the ld AO could not have initiated proceedings u/s 153C of the Act for AYs 2011-12 and 2013-14 as it was beyond the period of 10 years by placing reliance on the aforesaid decisions. The ld CIT(A) by placing reliance on the decision of the Hon’ble Jurisdictional Delhi High Court in the case of Ojjus Medicare referred supra, held that the ld AO could have reopened the case of the assessee only for AYs 2015-16 to 2024-25 only and that the case of the AYs 2011-12 and 2013-14 falls outside the block period of 10 years from the end of the Assessment Year relevant to the previous year in which search was conducted. Similar view was also endorsed by Hon’ble Calcutta High Court in the case of R.B. Jewellers Pvt. Ltd Vs. Union of India in WPO No. 438 of 2021 dated 28.12.2023.

The ld DR before us filed his written submissions stating that the decision of Hon’ble Jurisdictional Delhi High Court in the case of Ojjus Medicare Pvt Ltd is challenged by the revenue by way of Special Leave Petition before the Hon’ble Supreme Court. But we find that the said decision of Hon’ble Jurisdictional Delhi High Court has not been stayed by the Hon’ble Supreme Court. Hence we are inclined to follow the decision of the Hon’ble Jurisdictional Delhi High Court. We find that the ld DR through his written submissions is only trying to impress upon the bench by bringing on record how the 6 years or 10 years reckoning need to be understood by relying on the principles of interpretation of statutes, but when the same issue had already been considered and addressed by the Hon’ble Jurisdictional Delhi High Court, there is no reason for this Tribunal to diverge from the views of the higher forum. Hence we hold that the written submissions of the ld DR does not advance the case of the revenue on this issue.

The ld CIT(A) duly appreciated the contentions of the assessee and by following the aforesaid decisions of the Hon’ble High Court including the Hon’ble Jurisdictional High Court held that the assessment order framed for AYs 2011-12 and 2013-14 as bad in law, as it was beyond the period of 10 years. Since, the decision has been rendered by following the decisions of the various High Courts including Hon’ble Jurisdictional High Court, we do not find any infirmity in the order of the ld CIT(A). Since the assessments are quashed for both the assessment years on this preliminary issue, the adjudication of other grounds become academic in nature and hence they are left open. Accordingly, the grounds raised by the revenue are dismissed.

With regard to AY 2017-18, the same falls outside the block period of 6 years but falls within the block period of 10 years. In that scenario, yet another condition prescribed in the statute need to be complied with by the ld AO while recording satisfaction note for initiation of proceedings u/s 153C of the Act i.e. the seized materials handed over by the AO of the searched person should suggest undisclosed income being represented in the form of an asset, expenditure etc exceeding Rs 50 lakhs in aggregate for the years 7 to 10. The ld CITA had categorically noted that no additions were made by the ld AO in AYs 2015-16 and 2016-17. Further even in the Consolidated Satisfaction note, the undisclosed income pertaining to AY 2017-18 was only Rs 16,26,301, which is less than Rs 50 lakhs. Ultimately, the ld AO makes an addition of only Rs 1,33,394 in the search assessment u/s 153C of the Act. All these facts collectively go to prove that the very assumption of jurisdiction u/s 153C of the Act by the ld AO is totally flawed as it does not draw any support from the provisions of the Act. The ld CITA had duly appreciated these contentions of the assessee and had quashed the assessment framed for AY 2017-18. We do not find any infirmity in the said order of the ld CITA. Since the entire assessment for AY 2017-18 is quashed on this invalid assumption of jurisdiction by the ld AO, the adjudication of other grounds become academic in nature and they are left open. Accordingly, the grounds raised by the revenue are dismissed.

In the result, all the appeals of the revenue are dismissed.