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Judgment
PER C.N. PRASAD, J.M.
These two appeals are filed by the assessee against the different orders of the Ld. CIT(A) /NFAC, Delhi-31 dated 18.02.2025 and 21.02.205 respectively for the A.Y.2010-11.
Since issues are common in both these appeals, therefore, they were heard together and disposed off by this common order for the sake of convenience and brevity.
Ld. Counsel for the assessee at the outset submitted that in both these appeals Assessee has challenged the order of the Ld. CIT(A) in sustaining the additions/ disallowances made by the AO :
1.The Ld. Commissioner of Income tax (Appeals) erred in law and on facts in holding that the assessee failed to comply with his notices and was not interested in pursuing the appeal.
2.The Ld. Commissioner of Income tax (Appeals) erred in law and on facts in confirming an invalid assessment.
3.The Ld. Commissioner of Income tax (Appeals) erred in law and on facts in confirming the AO's action of holding the assessee to be trader in real estate and, accordingly, treating the exempt capital gains on transfer of agricultural land as profits and gains of business.
4.The Ld. Commissioner of Income tax (Appeals) erred in law and on facts in confirming the AO's action of treating the sale proceeds of land amounting to Rs.66,03,813/as income and denying deduction for the cost of acquisition as well as any other expenditure that the assessee may have incurred in connection with the transfer. 5. The Ld. Commissioner of Income tax (Appeals) erred in law and on facts in confirming the AO's action of treating the 5 alleged excess credits of Rs.40,54,294/ in the assessee's bank accounts as the latter's unexplained money and deeming the same to be income u/s 69A of the I.T.Act.
6.The Ld. Commissioner of Income tax (Appeals) erred in law and on facts in confirming the AO's action of denying the 6 benefit of deduction of Rs.51,488/ towards interest on borrowed capital u/s 24(b) of the Income tax Act while computing 'income from house property'.
7.The Ld. Commissioner of Income tax (Appeals) erred in law and on facts in confirming the AO's action of treating the exempt agricultural income of Rs.60,000/, shown by the assessee, as 'income from other sources',
8.All the above grounds are independent, in the alternative and without prejudice to one another.”
Ld. Counsel further submitted that the assessee also filed additional legal grounds of appeal challenging the order of the assessment on various grounds. Ld. Counsel for the assessee however submitted that though the assessee had raised several additional grounds of appeal he is mainly contesting the additional ground no.1 which is as under :-
“Additional Ground No.1 :
The Ld. CIT(A) erred in law and on facts in not annulling the assessment as the same was outside the ambit of the definition of the term ‘relevant assessment year’ appearing in Explanation 1 to section 153A of the Income Tax Act, as interpreted by the Hon’ble Delhi High Court in the case of Ojjus Medicare (P) Ltd. [2024] 465 ITR 101 (Delhi).”
Referring to additional ground No.1 which is relating to the time barring of notice and assessment framed u/s.153(A) was challenged it is submitted that in view of the decision of the Hon’ble Jurisdictional High Court in the case of Ojjus Medicare Pvt. Ltd. (465 ITR 101) the assessment famed for A.Y. 2010-11 is out of the block period of 10 assessment years.
Ld. Counsel for the assessee submitted that the additional ground raised by the assessee challenging the very validity of assessment framed for the A.Y.2010-11 goes to the very root of the matter and purely legal ground and therefore, the same may be admitted for adjudication.
Reliance was placed on the decision of the Hon’ble Supreme Court in the case of NTPC Ltd.Vs. CIT (229 ITR 383) and the decision of the Hon’ble Delhi High Court in the case of Gedore Pvt. Ltd. Vs. CIT (238 ITR 268).
On hearing both the sides and perusing the additional ground No.1 raised by the assessee we find that the said ground is purely legal ground challenging the very assessment made for the A.Y.2010-11 and therefore, following the decision of the Hon’ble Supreme Court in the case of NTPC Ltd. Vs. CIT (supra), the same is admitted for adjudication.
Ld. Counsel submits that in the case of the assessee search was conducted on 04.03.2020 and last warrant was executed on 05.11.2020 and therefore, it falls in the F.Y.2020-21 relevant to A.Y.2021-22 and the block period has to be computed with reference to this date as per Explanation 1 to 4th proviso to section 153A and accordingly the relevant assessment year of search is A.Y. 2021-22 and 10th preceding assessment year would end with assessment year 2012-13. Therefore, the assessment completed for A.Y.2010-11 is out of the block period of 10 assessment years.
On the other hand the Ld. DR requested for time on the ground that the revenue is in process of appointing of Special Counsel as the assessee has challenged the validity of approval granted u/s.153D of the Act.
Ld. Counsel for the assessee submitted that the additional ground No.5 raised by the assessee challenging the validity of approval u/s 153D of the Act is not pressed. Accordingly, additional ground No.5 is dismissed as not pressed.
In view of the submissions of the Ld. Counsel for the assessee we see no valid reason to grant adjournment to the revenue. Further the issue in appeal with respect to additional ground No.1 is covered by the Jurisdictional Hon’ble Delhi High Court in the case of Ojjus Medicare Pvt Ltd. (supra) and therefore, we proceed to dispose off these appeals adjudicating only the additional ground No.1.
The Hon’ble Jurisdictional Delhi High Court in the case of PCIT Vs. Ojjus Medicare Pvt Ltd. (supra) held as under :-
“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 of ten 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.”
Applying the ratio of the decision to the facts of the assessee’s case the assessment for assessment year 2010-11 fall out aside the block of 10 assessment years and thus respectfully following the said decision we quash the assessment for the A.Y.2010-11 as barred by limitation.
Facts being identical in the case of Raj Kumar Nagar in ITA No.2551/Del/2025, the decision taken in the appeal in ITA No.2496/Del/2025 applies mutatis mutandis for ITA No. 2551/Del/2025. We order accordingly. Additional ground No. 1 is allowed for both appeals.
Since we have quashed the assessment allowing additional ground No.1, the other grounds on merits need be adjudicated at this stage as they become academic in nature and they are left open.
In the result, both the appeals are partly allowed as indicated above.