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Judgment
These three matters instituted by the Revenue, alongside corresponding three Cross Objections filed by the Assessee. These proceedings are preferred against the consolidated appellate order passed by the Learned Commissioner of Income Tax (Appeals)-Delhi-25 on 19.12.2025, arising from the assessment orders dated 20.02.2024, 27.02.2024 & 21.02.2024 passed by the Assessing Officer, DCIT, Central Circle-26, Delhi (hereinafter referred as “the AO”) u/s 153C of Income Tax Act, 1961 (hereinafter referred to as “the Act”) for the A.Ys. 2012-13, 2013-14 & 2014-15; respectively.
Since the above captioned appeals were heard together and the facts in issues are identical except for difference in amounts, all the three appeals are being disposed of by this common order for the sake of convenience and brevity.
The grounds of appeal raised by the Revenue in ITA Nos. 3805, 3806 and 3807/Del/2026 are identical mutatis mutandis, except for the change in figures. The grounds read as under:
1.“Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs.37,282/- made u/s 69A 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.1,118/- made u/s 69C of the Income Tax Act.
3.Whether the computation of the block period under Sections 153C 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 l5 February 2018.
4.Whether on the facts and under the circumstances of the case and in law, the Hon'ble High Court was justified in holding that block periods for assessment u/s 153C of the Income-tax Act, 1961, have to be calculated from the date of receipt of the books of accounts, documents or assets seized, by the jurisdictional AO of the non-searched person, even when the position of law is clarified after the amendment introduced by Finance Act, 2017, that the block period of 6AYs and 10AYs as mentioned in Section 153C and Section 153A have same meaning and have to be calculated from the assessment year relevant to the previous year in which search is conducted"?
The grounds of cross objection raised by the assessee in CO Nos. 145, 146 and 147/Del/2026 are identical mutatis mutandis, except for the change in figures. The grounds read as under:
1.On the facts and circumstances of the case, the proceedings initiated under section 153C of the Act and consequently the order passed by the learned AO under section 153C of the Act are illegal, invalid, without jurisdiction, barred by limitation and hence liable to be quashed.
2.On the facts and in the circumstances of the case, the proceedings initiated and the assessment framed under section 153C are illegal, invalid and void ab initio as the satisfaction of the Assessing Officer and the handing over of seized material to the Assessing Officer of the assessee took place after 01.04.2021 and therefore the deemed date of search falls after 01.04.2021 rendering section 153C inapplicable in view of section 153C(3) of the Act.
3.On the facts and circumstances of the case, the notice issued under section 153C of the Act and the consequential order passed by the learned AO is invalid and barred by limitation as the impugned assessment year does not fall within the definition of 'relevant assessment year' as defined under Explanation 1 to fourth proviso to section 153A(1) of the Act.
4.On the facts and circumstances of the case, the satisfaction recorded by the assessing officer for initiating proceeding under section 153C is beyond the permissible period and hence the same is bad in law and liable to be quashed.
5.On the facts and circumstances of the case, the proceedings initiated under Section 153C of the Act and the assessment order passed under the said section is illegal, without jurisdiction and hence liable to be quashed in the absence of any valid satisfaction being recorded by the assessing officer of the searched person as well as assessing officer of the assessee.
6.On the facts and circumstances of the case, the additions made by the AO in the assessment order passed under section 153C of the Act are illegal, without jurisdiction and hence unsustainable in the absence of any incriminating material belonging to the assessee being found during the course of the search of the searched person.
7.On the facts and circumstances of the case, the assumption of jurisdiction under section 153C and the consequential reassessment order passed under section 153C are invalid, illegal, unsustainable and liable to be quashed, as the satisfaction note has been recorded by the Assessing Officer of the searched person and that of the assessee collectively for various Assessment Years and without identifying or linking alleged material to any specific Assessment Year.
8.On the facts and circumstances of the case, the learned AO has erred in issuing notice under section 153C of the Act and completing the assessment under the said section without recording any valid independent satisfaction upon the material or document relied upon by him, that has bearing on the determination of the total income of the assessee.
9.On the facts and circumstances of the case, the satisfaction recorded by the assessing officer for nitiating proceeding under section 153C is illegal, invalid, mechanical in nature and has been recorded without application of mind.
10.On the facts and in the circumstances of the case, the satisfaction notes recorded by AO of searched person and AO of other person under section 153C of the Act have been issued without there being valid Document Identification Number (DIN) quoted on the body of the satisfaction note, violating the CBDT Circular No. 19/2019.
11.(1) On the facts and in the circumstances of the case, the learned AO has erred in passing the order under section 153C of the Act without obtaining valid prior approval under section 153D of the Income Tax Act.
(ii)That the purported approval is illegal, mechanical in nature and has been given without application of mind.
12.On the facts and circumstances of the case, even otherwise the additions made by the AO are invalid, illegal and unsustainable on merits also.
13.On the facts and circumstances of the case, even otherwise the additions made under section 69A and 69C of the Act are invalid, illegal and unsustainable as the provisions of section 69A and section 69C are not applicable to the present case and therefore the additions made in the assessment order is unsustainable in law.
14.On the facts and circumstances of the case, even otherwise the additions made by the AO is invalid, illegal and unsustainable as the same has been made relying upon the statements recorded at the back of the assessee without providing opportunity to cross examine the same.
15.Without prejudice to above, the Revenue Appeal is otherwise not maintainable in view of tax effect being below Rs. 60 lakhs as mandated by CBDT circular no. 09/2024 dated 17.09.2024.
16.The respondent craves leave to add, amend or alter any of the grounds of appeal.”
Brief facts of the case are that a search has been carried out in the case of Alankit Group (third party) on 18.10.2019. At the outset, the ld counsel of the assessee submitted that Satisfaction has been recorded in the case of assessee on 01.06.2022 and 21.12.2022 by AO of searched person and AO of assessee respectively, and consequently a notice u/s 153C has been issued to the assessee on 30.12.2022. As the satisfaction, in the case of the assessee, was recorded on 21.12.2022, the assessment year relevant to the previous year in which search is conducted or requisition is made, as per the first proviso of section 153C, becomes A.Y. 2023-24. The claim of the assessee is that AY 2012-13 and AY 2013-14 fall beyond the maximum permissible block of ten assessment years reckoned from AY 2023-24 and for the AY 2014-15, the escapement of income is less than 50 Lakh as per 4th proviso to section 153A, and therefore, the proceedings for these years are barred by limitation and without jurisdiction. The ld. counsel for the assessee also relied upon the Hon'ble Delhi High Court in the case of Ojjus Medicare Pvt Ltd & Others [2024] 161 taxmann.com 160 (Delhi) order dated 03.04.2024.
Aggrieved by the order of the ld. AO, assessee was in appeal before the ld. CIT(A), the ld. CIT(A) allowed the appeal of the assessee. Aggrieved the Revenue is now in appeal before us.
We have heard the rival submissions and have perused the relevant material on record. We find that this issue of the date of search for non-searched persons covered under section 153C, is no longer res-integra and is now been well settled by the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437(SC) and the Hon'ble Delhi High Court in the case of Ojjus Medicare Pvt Ltd [2024] [supra] which mandates that as per first proviso of section 153C of the Act, the commencement date for computation of the six/ten assessment years is deemed to be the date of receipt of books of account/materials/asset of non-searched person, by the jurisdictional Assessing Officer of the non-searched person. We further are fortified by the hon’ble Delhi High Court in the case of PCIT Vs. Deepak Kumar Aggarwal, 2025 (12) TMI 1183, dated 12.12.2025 and the hon’ble Bombay High Court in the case of Ashok Khandelwal Versus UOI, 2025 (11) TMI 658, dated 04.11.2025.
We find that in the instant case, search action was initiated on Alankit Group on 18.10.2019. It is an unrebutted fact that the AO of the assessee, i.e., the non-searched person, initiated the proceedings u/s 153C by recording the satisfaction note on 21.12.2022. As the satisfaction note was recorded by the AO of the assessee i.e., non-searched person, on 21.12.2022, the assessment year relevant to the previous year in which search is conducted or requisition is made, as per the first proviso of section 153C, becomes A.Y. 2023-24. The ten assessment years immediately preceding the assessment year relevant to the previous year in which deemed search is conducted or requisition is made, begins from A.Ys. 2023-24. Further, as per 4th proviso of section 153A, the income escaping assessment for relevant assessment years or year, as represented in the form of asset, must be Rs 50 lakh or more. Accordingly, counting backwards, we find that for the impugned A.Y.2012-13 and AY 2013-14 falls beyond the ten year period. As far as AY 2014-15 is concerned, the income escaping assessment being Rs 8,88,345/-, represented in the form of asset is less than Rs 50 lakh and therefore they are out of the block of ten assessment years for which assessment could be made as follows:
| Computation of the ten-year block period | Additions made by AO |
AY 2023-24 1 year AY 2022-23 2 Year AY2021-22 3 year AY2020-21 4 year AY2019-20 5 year AY2018-19 6 year AY2017-18 7 year AY2016-17 8 year Time barred as it is beyond six AY from date AY2015-16 9 year of deemed search and do not fall within
| AY2014-15 | 10th year | 8,88,345 |
AY 2013-14 11 Year Beyond the permissible block of ten years AY2012-13 12 Year
We therefore, hold that the decision of the CIT(A) is legally sound and accordingly quash the impugned assessment orders having been made without legal and valid assumption of jurisdiction u/s 153C of the Act. The ground is dismissed.
As relief has been granted, the other legal as well as grounds on merits are left open.
In the result, appeals of Revenue in ITA Nos. 3805, 3806 and 3807/DEL/2026 are dismissed. The Cross Objections of assessee in 145,146,and 147/Del/2026 are allowed.