Assessment order within limitation period under Section 153B makes Section 263 revision valid despite petitioner's challenge

Delhi HC dismissed the petition challenging revision under Section 263 of IT Act. The court held that the assessment order dated 31st March, 2023 for AY 2015-16 was within the limitation period prescribed under Section 153B. Despite petitioner's argument that search operations concluded in March 2021, the court found that the search definitively concluded on 29th April, 2021 when Locker 299 was inspected for the first time. The assessment order fell within the twelve-month limitation period from the last search date, making the revisional jurisdiction under Section 263 valid and petitioner's challenge untenable.

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Issues Involved:
1. Validity of the search and seizure operations.
2. Limitation period for completion of assessment under Section 153A of the Income Tax Act.
3. Validity of the invocation of revisional jurisdiction under Section 263 of the Income Tax Act.

Summary:

1. Validity of the Search and Seizure Operations:
The Petitioner, an entrepreneur in apparel design and consultancy, was subjected to search and seizure operations under Section 132 of the Income Tax Act in March 2021. The searches included various premises and lockers held by the Petitioner and her family. The searches were conducted in two phases: initially from 02nd to 06th March 2021, and subsequently on 29th and 30th April 2021. No articles were seized during the second phase of the searches, and panchnamas were drawn accordingly.

2. Limitation Period for Completion of Assessment:
The Petitioner received notices under Section 153A for AY 2015-16 to 2020-21 and submitted returns accordingly. The assessment orders were issued in March 2023. The Petitioner contended that the assessment order for AY 2015-16 was barred by the limitation period prescribed under Section 153B, arguing that the limitation should be calculated from the first search in March 2021. The Court analyzed Section 153B and determined that the limitation period should be twelve months from the end of the financial year in which the last authorization for search was executed. The Court found that the search concluded on 29th April 2021, making the assessment order dated 31st March 2023 within the prescribed time limit.

3. Validity of the Invocation of Revisional Jurisdiction:
The Respondent issued a notice under Section 263, observing that the assessment order was erroneous and prejudicial to the interest of revenue. The Petitioner challenged this, asserting the notice was barred by limitation. The Court concluded that the search operation definitively concluded on 29th April 2021, and thus, the assessment under Section 153A, completed on 31st March 2023, was within the limitation period. Consequently, the invocation of revisional jurisdiction under Section 263 was found to be valid.

Conclusion:
The Court dismissed the petition, finding no jurisdictional error in the assessment order dated 31st March 2023 for AY 2015-16. The merits of the assessment order were not examined, and all rights and contentions of the parties were left open.

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