Gaurav Rakhecha vs ACIT, CC-13

PER ANUBHAV SHARMA, JM:

These appeals preferred by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-26, New Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 153C r.w.s 143(3) of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’).

Further details of the orders of the lower authorities are as under: -

On hearing both sides we find that the issue involved in the appeals is a legal issue raised by the assessee alleging that the impugned assessment orders are vitiated as the assessment have been completed u/s 143(3) r.w.s 153C, however same should have been passed u/s 148 of the Act as the material was handed over to the AO of the assesse, who is a non-searched person, on 19.02.2022 and therefore, the deemed search year falls after 1.04.2021 and thus, the provisions of Section 153C would not be applicable by virtue of Section 153C(3) of the Act and reliance in this regard was placed on the decision of Hon’ble Madras High Court in the case of Harigovind Vs. ACIT (2025) 180 taxmann.com 197 (Mad).

Ld. DR has however, contended that the contentions are devoid of any merit as the search was conducted on 23.03.2021 in Ballar Marketing Group and handing over of the seized documents and satisfaction note for initiation of proceeding u/s 153C of the Act is only a procedural requirement and that does not change the year of search for the purpose of assumption of jurisdiction u/s 153C.

We have considered the rival contention and there is no dispute to the fact on the basis of copy of letter dated 19.09.2022 placed on record that vide its letter F.No. DCIT/CC-13/153C/2022-23/646, DCIT, CC-13, New Delhi, had forwarded the seized documents and satisfaction note to ITO, Ward 50(1), Delhi, the AO of assessee, for initiation of proceedings u/s 153C of the Act in the case of assesse.

The law in this regard is now settled that in case of non searched person it the date of recording satisfaction note or receipt of record, the date of searched is to be construed and reliance is placed on Hon’ble Supreme Court decision in the case of CIT v. Jasjit Singh [2023] 458 ITR 437 (SC) and Hon’ble Jurisdictional High Court decision in Pr. CIT (Central-1) v. Ojjus Medicare (P.) Ltd. [2024] 161 taxmann.com 160/465 ITR 101 (Delhi), where Hon’ble High Court has further expanded the proposition and held that where the date of handing over of documents is not available, date of issuance of satisfaction note by the Assessing Officer under section 153C would be pertinent for the purpose of first proviso to section 153C.

Thus in case of present assessee the deemed date of search shall be 19.09.2022, and thus by virtue of Section 153(3) of the Act, the assessment could not be completed u/s 153 of the Act, but could have been by way of proceedings u/s 147 of the Act, and a co-ordinate bench, in which one of us, the Judicial Member was on Bench, in case of Smt. Geetanjali Bhayana, Versus DCIT, Central Circle-32, New Delhi vide ITA No.2227, 2228 & 2252/Del/2025, order dated 27.01.2026 by while taking in consideration decision of Hon’ble Madras High Court in Harigovind (Supra) has quashed the assessment concluded u/s 153C of the Act. Reliance for this is also placed on Rakesh Goel, Jaipur vs DCIT, CC-25, Delhi decided on 15 July, 2026 vide ITA Nos.- 1772 to 1778/DEL/2026.

We thus sustain the corresponding ground no. 2, and allow the appeals. The impugned assessments are quashed.