TaxTMI 
TaxTMI 
2025 (12) TMI 1636
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.... to be a private company engaged in the business of manufacturing of inverters, automotive, e-rickshaws, UPS and solar applications as well as power b ups. It is seen from the assessment order that pursuant to a search and seizure operation carried out on the Alankit group [stated to be a conglomerate of several group companies with diversified activities], Shri Alok Kumar Agarwal, his son Shri Ankit Agarwal and close associates on 18.10.2019, certain incriminating evidences pertaining to the appellant were found and seized, in whose case proceedings u/s 153C of the Act were therefore commenced. In view of the aforesaid, notice u/s 153C of the Act was issued on 06.04.2022 to the appellant and assessment order was subsequently passed on 25.03.2023 determining the income of the appellant for the year at Rs. 3,69,98,626/-. Against this impugned assessment order passed u/s 153C of the Act on 25.03.2023, the appellant filed appeal on 21.04.2023 raising 10 (ten) grounds of appeal with various sub-parts and 2 (two) additional grounds of appeal (supra), invoking both legal issues as well as issues on the merits of the additions made and some general grounds. It would be in the fitness of t....
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.... Relating to the date to be reckoned as the cut-off date to determine the 'year of search' so as to ascertain the 'relevant assessment years' in the case of the non- searched entity. 9.2 In this regard, it would be in the fitness of things to examine the provisions of the Act u/s 153A of the Act, reproduced as under, in respect of the time limit for issuance of notice: '153A.[(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person 1-0- where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 - [but on or before the 31st day of March, 2021], the Assessing Officer shall- a. issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particul....
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....expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is concluded or requisition is made. Explanation 2. - For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities; loans and advances, deposits in bank account. ] ...... ' 9.3 The provisions of the section are further explained stating that the AO shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted 'and the relevant assessment year.' The provisions of the above section are to be read in tandem with section 153C of the Act in respect of assessment in the case of a non-searched person. 10. Before moving on to the recent judgement of the Hon'ble Delhi High Court delivered in the case of Ojjus Medicare on the subject....
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....ars which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153C supports the interpretation which this Court adopts ... ' In RRJ Securities (Supra), the Hon'ble Delhi High Court held as under: '24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this ....
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....ion of the six and ten year block and how the six and ten year block will be computed is no more res integra. In fact, this issue has been considered by the jurisdictional High Court in the case of Principal Commissioner of Income- tax (Central-1) v. Ojjus Medicare (P.) Ltd reported in [2024] 465 ITR 101 (Delhi). In the aforesaid judgment, with respect to what would be the commencement point for the purposes of computation of the six and ten year block, the Hon'ble High Court, after discussing the statutory provisions and various judicial pronouncements, has held as under: F. IDENTIFICATION OF THE COMMENCEMENT POINT FOR THE PURPOSES OF COMPUTATION OF THE SIX AND TEN YEAR BLOCK 75. The First Proviso to section 153C significantly shifts the reference point which is spoken of in section 153A(1) while defining the point from which the period of six AYs' is to be calculated, and which stipulates it to be the date of search or requisition, to the date of receipt of books of account, documents or assets seized or requisitioned by the Jurisdictional AO of the non-searched person. The Proviso, thus by virtue of a deeming legal fiction, shifts the commencement point....
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....ve 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. 11.1 Further, it is seen that in the aforesaid judgment, the Hon'ble High Court has noted the relevant facts which are as under: i. Date of search and seizure operation: 18.10.2019 ii. Date of issue of notice u/s 153C: 22.03.2022 iii. Assessment years for which notice u/s 1....
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.... It would thus lead us to conclude that it would be the six AYs' immediately preceding AY 2022-23 which could have formed the basis for initiation of action under section 153C. Consequently, and reckoned backward, the six relevant AYs' would be: - Computation of the six-year block period as provided under section 153C of the Act No. of years AY 2021-22 1 AY 2020-21 2 AY 2019-20 3 AY 2018-19 4 AY 2017-18 5 AY 2016-17 6 Consequently, AY 2021-22 would become the first of the six preceding AYs' and would as per the table set out hereinabove terminate at AY 2016-17. 88. Section 153A replicates the basis on which the six AYs' are to be identified and computed with the solitary distinction being that in the case of the searched person, the six AYs' are liable to be computed from the AY pertaining to the FY in which the search was conducted. The starting point for the purposes of identifying the six AYs' in the case of section 153A would thus turn upon the year of search as opposed to the handover of material which is spoken of in the First Proviso to section 153C. If one were to therefore assume that a sea....
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....7-18 7 AY 2016-17 8 AY 2015-16 9 AY 2014-15 10 ......... 96. To recall, the petitions forming part of List I pertain to AYs 2010-11, 2011-12 and 2012-13. So far as the aforenoted writ petitions are concerned, undisputedly AY 2010-11, 2011-12 and 2012-13 fall beyond the maximum period of ten AYs'. Since the ten AYs', when computed from the end of AY 2022-23 would terminate upon AY 2013-14, AYs' 2010-11, 2011-12 and 2012-13 would clearly fall outside the block period of ten AYs' and cannot legally or justifiably be reopened under section 153C read with section 153A of the Ac t . 97. Proceeding then to List II, we find that the petitions placed in that list pertain to cases where the hand over occurred in FYs 2022-23 and 2023-24. Consequently, the relevant AYs' would be AY2023-24 and AY 2024-25 respectively. In light of the principles enunciated by us and which explain how the period of six and ten AYs' is liable to be computed, the reopening of assessments pertaining to AYs' 2010-11, 2011-12, 2012-13 and 2013- 14 would clearly fall beyond the ambit of ten AYs' as provided under Section 153C read with Sect....
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....llant and seen from record are: - Date of recording of Satisfaction note by the AO of the searched person -16.02.2022 [pertaining to AY 2022-23] - Date of receipt of seized material by the AO of the non-searched person /appellant -06.04.2022 [pertaining to AY 2023-24] - Date of issue of notice u/s 153C of the Act - 06.04.2022 [pertaining to AY 2023-24] 12.3 It is thus seen that the facts of the present case are similar to the facts considered in the case of Ojjus Medicare (P.) Ltd (Supra) [which also refers to the same Search and seizure operation on the Alankit group]. In the instant case of the appellant under consideration, while notice u/s 153C of the Act was issued to the appellant on 06.04.2022, i.e. in the FY 2022-23 relevant to the AY 2023-24, however the seized documents/material were received by the AO of the appellant in the preceding financial year, on 16.02.2022, i.e. in the FY 2021-22 relevant to the AY 2022-23. The Hon'ble Court in para 86 of the judgment in the case of Ojjus Medicare (supra) has observed that - ... Undisputedly, the First Proviso to section 153C, and which has been consistently recognized to also embo....
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....3C notice issued to the assessee on 22.03.2022 as per the facts emanating from the case records. 5. The above being the clinching fact, we find merit in the learned CIT(A)'s detailed discussion that once the date of search in such an instance as per section 153C(1) 1st proviso is the date of receipt of records by the non-searched person's Assessing Officer, it is the said date which forms the date of search itself; and, therefore, the ten relevant assessment years ought to be counted backwards in light of Explanation (1) to section 153A of the Act i.e. from "end of the assessment year relevant to the previous year in which search is conducted or requisition is made." Learned CIT-DR could hardly dispute that given the fact that the assessee's Assessing Officer had received the records in assessment year 2022-23, the relevant ten assessment years to be covered for the purpose of framing the assessment in the assessee's case terminate upto assessment year 2013-14 whereas the assessment year before us is A.Y. 2012-13. 6. Faced with this situation, the Revenue vehemently argues that we ought to go by the date of original search dated 18.10.2019 wherein the ten asse....