2026 (2) TMI 252 - AT - Income Tax

Validity of assessments under search and seizure: deemed search date fixes limitation, earlier assessment years held beyond jurisdiction.

Date of recording the satisfaction note in the searched person's files constitutes the deemed date of search for the nonsearched person, so limitation for ... Validity of the assessment order framed u/s 153C - period of limitation - as alleged impugned A.Ys are beyond the block of six/ten A.Ys, as per provisions of the Act. HELD THAT:- It is a settled proposition of law that as per provisions of section 153C of the Act, for taking action u/s 153C of the Act, date of search in the case of the other person, would be date of receiving books of account or documents or assets belonging to the other person and seized in the course of search of the searched person. In other words, date of recording of the satisfaction in the case of the non-searched person qua the searched person, becomes date of search in the case of other person [the assessee in the present case]. The above proposition of law has been well settled in the case of CIT Vs. Jasjit Singh [2023 (10) TMI 572 - SUPREME COURT] AND Ojjus Medicare Pvt Ltd [2024 (4) TMI 268 - DELHI HIGH COURT] We find that the satisfaction note for the non-searched person i.e., the assessee, was recorded on 24.06.2022 and therefore the deemed year of search for the assessee will be FY 2022- 23 relevant to AY 2023-24. The 10 years (i.e. 1+6+3) years calculation from AY 2023-24 backward comes to AY 2014-15 only. Accordingly, for the purpose of section 153C of the Act, the Assessing Officer will not have the jurisdiction for AYs 2011-12 and 2012-13 in the case of the assessee as the same are beyond the block of ten A.Ys which starts from A.Y 2013-14. Decided against revenue. Issues: Whether the assessments framed under section 153C of the Income-tax Act, 1961 for A.Y. 2011-12 and A.Y. 2012-13 are time-barred because the satisfaction note in respect of the non-searched person (assessee) was recorded on 24.06.2022, thereby making the deemed year of search A.Y. 2023-24 and excluding the impugned assessment years from the ten-year block.Analysis: The Court examined the effect of the First Proviso to section 153C(1) which deems the commencement date for computing the six-year or ten-year block to be the date of receipt of books of accounts, documents or assets seized from the searched person by the jurisdictional AO of the non-searched person. Relying on the authoritative rulings interpreting section 153C (including the Supreme Court decision in CIT v. Jasjit Singh and subsequent High Court authority), the Court treated the satisfaction note dated 24.06.2022 as the deemed date of search for the assessee, shifting the reference point for limitation to A.Y. 2023-24 and computing the backward ten-year block accordingly.Conclusion: The assessments framed under section 153C for A.Y. 2011-12 and A.Y. 2012-13 are time-barred and the impugned assessment orders are quashed. The Revenue's appeals are dismissed.