TaxTMI 
TaxTMI 
2026 (4) TMI 1634
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....itution of India, the petitioner challenges the notice dated 22.03.2025 issued under Section 148 of the Income Tax Act, 1961 (for short "the Act") seeking to re-open income tax assessment of the petitioner for the Assessment Year 2015-16 (for short "the assessment year under consideration") by the Assistant Commissioner of Income Tax, Central Circle 2(3), Ahmedabad (for short "the respondent"). 4.1 The petitioner is a company and has filed its return of income for the assessment year 2015-16 on 31.12.2015 declaring total income at Rs. 36,41,950/-. The petitioner is part of MSK Group which is engaged in the business of infrastructure development. The said MSK and Madhav Group of Gujarat including the petitioner were subjected to search action under Section 132 of the Act on 18.05.2024. The Respondent issued a notice dated 22.03.2025 under Section 148 of the Act for the year under consideration. It is stated therein that a search was initiated under Section 132 of the Act on 18.05.2024 in the case of the Petitioner or in the case of the person in respect of which the Petitioner is assessable under the Act. It was further stated that the Respondent is satisfied, with the approval o....
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....isions of Section 149 of the Act, more particularly the proviso to Section 149 read with explanation - 1 to Section 153A of the Act, and it is submitted that so far as the limitation is concerned, for reopening of the assessment, the same is pari materia to Section 153C of the Act. 5.3 It is submitted that in the instant case, the search action was carried out in the case of third party on 18.05.2024 i.e. during the Financial Year 2024-25, and hence relevant assessment year to the previous year in which the search was undertaken under Section 132 of the Act is Assessment Year 2025-26. It is further submitted that the notice under Section 148 of the Act for the Assessment Year 2015-16 would be time-barred, as the period of ten years would end at the Assessment Year 2016-17, since the Assessment Year 2025-26 will become the first assessment year as per the provisions of Section 153A of the Act. The table showing the calculation was placed before this Court and the same is reproduced as under: Number Assessment Year 1st year Assessment Year 2025-26 2nd year Assessment Year 2024-25 3rd year Assessment Year 2023-24 4th year Assessment Year 2022-23 5th....
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....s 31st March. Whereas for the purpose of going backward, the end would be considered as 1st April. Thus, since it is required to go backward for purpose of calculating 10 assessment years, 'end' is to be construed as 1st April. It is therefore submitted that considering the aforesaid contentions and the legislative intent as borne out from the notes on clauses and memorandum explaining the provisions relating to Finance Act, 2017, for purpose of calculating 10 assessment years, search year is to be excluded and it is always to be considered as six plus four assessment years and therefore, 'end' is to be construed as 1st April for going backward for making the said provision effectively workable as per the legislative intent. It is submitted that the purpose of introducing the amendment was to extend the reach of assessing officer and therefore while interpreting the provisions of Section 153A of I.T., apart from the six previous assessment years, the authority of assessing officer must include for another four years, otherwise the intention of the legislature and purpose of the proviso would be defeated. 7.1 While referring to Explanation (1) to Section 153A of the Act, it is co....
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....and for calculation of the ten-year block period by excluding the previous year from computation of ten years. Thus, it is urged that this Court may take a different view, disagreeing with the judgments of the Delhi High Court as well as the Kerala High Court, and it is urged that the action of the respondent may be upheld for reopening the Assessment Year 2015-16. 7.4 Thus, it is urged that the action of the respondent in issuing the impugned notice for the A.Y. 2015-16 under Section 148 of the Act may be upheld and the present petition may be dismissed. ANALYSIS AND OPINION: 8. We have heard the learned advocates for the respective parties at length. We have also perused the case laws cited, considered the provisions threadbare and have also perused the material on record. 9. The sole issue that arises for consideration in the present petition is that - (i) Whether the notice issued by the respondent for the Assessment Year 2015-16 is barred by limitation; (ii) Dealing with this issue, uncontroverted facts are that the search took place in the case of the petitioner on 18.05.2024 which indisputably falls in the Financial Year 2024-25 and Assessment Y....
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....specified conditions and refers to "relevant assessment year" as stated in Explanation 1 of Section 153A of the Act defines "relevant assessment year" as: "For the purpose of this sub-section, the 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 conducted or requisition is made." 12.1 The key expression that flows from reading of the section is "not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted". 13. Thus, the computational framework of Section 153A of the Act, including Explanation 1, applies pari materia to the proceedings under Section 153C of the Act. A plain reading of Section 153A of the Act reveals that the Parliament has consciously adopted two different phraseologies: Six-Year Block Ten-Year Block "six assessment years immediately preceding" "not later than ten assessment year....
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.... year" model (ten years). 13.3 Thus, it can be concluded that Section 153A of the Act prescribes two distinct and independent computational regimes. The six assessment years are those "immediately preceding" the assessment year relevant to the previous year of search, thereby excluding the search year whereas the ten assessment years under Explanation 1 of Section 153A of the Act are to be computed "from the end of the assessment year" relevant to the previous year of search. The statutory language necessarily results in inclusion of the search assessment year within the ten-year reckoning. Any interpretation that applies the six-year exclusion model, if made applicable to the ten-year block, would defeat the legislative scheme and render material words redundant. Accordingly, while computing the extended ten-year period under Explanation 1 to Section 153A read with Section 153C of the Act, the assessment year relevant to the previous year of search is to be included in the reckoning. 13.4 Even otherwise, this issue is no more res integra as the same is covered by the judgement of this Court in the case of Jayantibhai Karamshibhai Maniya vs. Income-tax Officer, [2026] 182 tax....
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....akes us then to the issue of identifying the "relevant assessment year" for the purposes of computing the ten year block. Explanation 1 to section 153A specifies the manner in which the entire ten AY period is to be computed. While the computation of six AYs follows the position as enunciated and identified above, Explanation I prescribes that the ten AYs' would have to be computed from the end of the AY relevant to the FY in which the search was conducted or requisition made The ten AY period consequently is to be reckoned from the end of the AY pertaining to the previous year in which the search was conducted as distinct from the preceding year which is spoken of in the case of the six relevant AYs. 90. Viewed in that light, and while keeping the period of 01 April 2021 to 31 March 2022 as the constant, the relevant AY would be AY 2022-23. The ten AYs would have to be computed from 31 March 2023with the said date indubitably constituting the end of the AY relevant to the previous year of search. Viewed in light of the above, the block period of 10 AYs would be as follows.- Computation of the six-year block period as provided under section 153C read with Section 15....
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....e previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013-14. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year. In other words, search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided within the scope of the provision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity Such a provision cannot be elastically construed. 11. One other contention urged by the standing counsel has to be dealt with. It is pointed out ....