TaxTMI 
TaxTMI 
2026 (9) TMI 1061
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....der: "1. Whether on the facts and under the circumstances of the case and in law, the Ld.CIT(A) was justified in relying upon the judgement of Hon'ble Delhi High Court in the case of PCIT, Central-1, Delhi vs Ojjus Medicare Pvt. Ltd. (ITA No. 52 of 2024), even when the Revenue has filed a SLP against this decision of the Hon'ble Delhi High Court? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that 10 years block periods for assessment u/s. 153C of the Income-tax Act, 1961, have to be calculated from the relevant AY in which date of satisfaction note drawn or from the date of issue of Notice u/s. 153C of the Act and not from the date of initiation of search even when Section 153C(1) of the Act clearly mentions that calculation of block period has to be done from the year of search? 3. Whether on the facts and under the circumstances of the case and in law, Ld.CIT(A) was justified in holding that block periods for assessment u/s. 153C of the Income-tax Act, 1961, have to be calculated from the date of satisfaction note drawn or date of Notice issued u/s. 153C of the Act, even when the positi....
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....d by the AO to the assessee. Copy of the incriminating seized document in the form of Ledger Account along with relevant extract of the statement of Sh. Sunil Kumar Gupta were also provided by AO to the assessee, on 15.12.2022. Further, notices u/s. 142(1) of the Act were also issued by the AO to the assessee from time to time during the course of assessment proceedings, and assessee participated in the assessment proceedings. The assessee has declared income from salary, business and profession and income from other sources, in the return of income filed with Revenue. The AO made detailed enquiry and analysis before making additions in the hands of the assessee, which are recorded in assessment order. These assessment proceedings conducted by the AO culminated into an assessment order dated 31.03.2023 passed by the AO u/s. 153C of the 1961 Act for assessment year 2012-13, wherein addition of Rs. 1,31,481/- were made by the AO in the hands of the assessee u/s. 69A of the 1961 Act, wherein the total income of the assessee was assessed by the AO to the tune of Rs. 9,14,250/- as against returned income of Rs. 7,82,769/- 4. The assessee being aggrieved filed first appeal before the ....
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....ellant. In response, the appellant filed Return of Income (Rol) on 21.01.2022 declaring total income of Rs. 7,82,769/-. Assessment order was subsequently passed on 31.03.2023 determining the income of the appellant for the year at Rs. 9,14,250/-. Against this impugned assessment order, the appellant filed appeal on 19.04.2023 raising 11 grounds of appeal and 2 additional grounds (supra), invoking both legal issues as well as issues on the merits of the additions made and some general/residual grounds. It would be in the fitness of things to examine the main legal issues raised by the appellant at the outset as it goes to the root of the matter. 9. In grounds no. 2 to 4 of appeal and the written submission filed, the appellant has raised a specific legal ground contending that proceedings Initiated u/s. 153C of the Act in his case for the instant assessment year, i.e. AY 2012-13, are barred by limitation, since the instant assessment year falls beyond the period of 10 years from the date of search, interpreted in this case as the date of taking possession of the seized documents or assets by the AO of the appellant or non-searched person or date of handing over of seized do....
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....ed 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; and II) Relating to the method for calculating ten assessment years backwards that can be thrown open for assessment reassessment after search/handing over of seized material to the AO of the non-searched person. 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 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 ye....
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....itiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1. For the purposes 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 fails 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. 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....
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....were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third party assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 10 years 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 153-C supports the interpretation which this Court adopts.... In RRJ Securities (Supra), the Hon'ble Delhi High Court held as under: 24. As discussed herein before, 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 re....
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....r AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year." (Emphasis supplied) 11. The Issue, i.e. what would be the commencement point for the purposes of computation of the six and ten year block and how the six and ten year block will be computed is no more res integra, having been considered by the Hon'ble 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 aforesald judgment, emanating from the same search on Alankit group as in the instant case of the appellant, with respect to what would be the commencement point for the purposes of computation of the six and ten year block, the Hon'ble Delhi High Court, after discussing the statutory provisions and various judicial pronouncements, observed that a deeming legal fiction shifts the commencement point from the date of initiation of search or making of requisition to the date of receipt of books, documents or assets by the jurisdictional AO of the non-searched person. The Hon'ble Cour....
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....ess enunciation of the legal position by the Supreme Court as is manifest from a reading of paragraph 9 of Jasjit Singh. 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 c....
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....rial gathered in the course of the search and pertaining to the non-searched person occurred between 01 April 2021 to 31 March 2022, the same would essentially constitute FY 2021-22 as being the previous year of search for the purposes of the non-searched entity. As a necessary corollary, the relevant AY would become AY 2022-23. AY 2022-23 would thus constitute the starting point for the purposes of identifying the six years which are spoken of in section 153C. The six AYs' are envisaged to be those which immediately precede the AY so identified with reference to the previous year of search. 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 AY's would be:- Computation of the six-years 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 AY's and would as per the table set out hereinabove t....
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.... 8 AY 2014-15 9 AY 2013-14 10 94. Similarly, and in light of what has been held by us hereinabove, the relevant block of ten AY's when computed for the period 01 April 2022-31 March 2023, and where the Satisfaction Note was drawn by the AO of the non-searched person between those two dates, would be as under:- Computation of the ten-years block period as provided under section 153C read with Section 153A of the Act No of Years AY 2023-24 1 AY 2022-23 2 AY 2021-22 3 AY 2020-21 4 AY 2019-20 5 AY 2018-19 6 AY 2017-18 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 AY's 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 AY's 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 AY's and cannot legally or justifiably be reopened under section 153C read with section 153A of the Act. 97. Proc....
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.... e Date of passing of the assessment order 25.03.2023 31.03.2023. 12.2 Thus, in this case, notice u/s. 153C of the Act issued to the appellant was dated 28.12.2021. which date falls in the AY 2022-23. As seen from copies of documents furnished during appellate proceedings, the satisfaction note was recorded by the AO of the searched person on 20.12.2021 and subsequently recorded by the AO of the' other person' on 24.12.2021. which dates also fall in the FY 2021-22 relevant to AY 2022-23. Thus, the relevant FY for reckoning the 'date of search' in this case would be FY 2021-22 pertaining to AY 2022-23. 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). 12.4 Accordingly, based on the aforesaid facts in the instant case of the appellant, following the binding Judgment of the Hon'ble jurisdictional High Court as per judicial discipline, it is held that the period of ten AYs' would commence being counted w.e.f the AY 2022-23, which, by backward counting, would....
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.... Act on 18.10.2019 in the case of Alankit Group etc., and the period of 10 years is to be reckoned from the aforesaid date for computing limitation period for reckoning six/ten assessment years even in the case of the assessee who was not searched although with respect to whom documents or assets seized during search reflected undisclosed income pertaining to the assessee, while the ld. CIT(A) determined the aforesaid period from the date of recording of satisfaction by the AO of the assessee on 24.12.2021, wherein notice u/s. 153C was issued by the AO to the assessee on 28.12.2021. It was submitted by ld. CIT-DR that Revenue has not accepted the judgment and order of Hon'ble Delhi High Court in the case of Ojjus Medicare(supra) and has filed SLP with Hon'ble Supreme Court, which is pending adjudication by Hon'ble Supreme Court. However, on being asked by the Bench, Ld. CIT-DR could not brought on record any order or directions issued by Hon'ble Supreme Court or Hon'ble Delhi High Court, wherein operations of the aforesaid judgment and order of Hon'ble Delhi High Court in the case of Ojjus Medicare (supra) was stayed . 5.2 The ld. Counsel for the assessee relied upon the orders ....
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.... u/s. 153C of the 1961 Act. Copies of both the satisfaction Note were provided by the AO to the assessee. Copy of the incriminating seized document in the form of Ledger Account along with relevant extract of the statement of Sh. Sunil Kumar Gupta were also provided by AO to the assessee, on 15.12.2022. Further, notices u/s. 142(1) of the Act were also issued by the AO to the assessee from time to time during the course of assessment proceedings, and assessee participated in the assessment proceedings. The assessee has declared income from salary, business and profession and income from other sources, in the return of income filed with Revenue. The AO made detailed enquiry and analysis, which are recorded in assessment order. These assessment proceedings conducted by the AO culminated into an assessment order dated 31.03.2023 passed by the AO u/s. 153C of the 1961 Act, wherein addition of Rs. 1,31,481/- were made by the AO in the hands of the assessee u/s. 69A of the 1961 Act, wherein the total income of the assessee was assessed by the AO to the tune of Rs. 9,14,250/- u/s. 153C of the 1961 Act for impugned assessment year 2012-13 as against returned income of Rs. 7,82,769/-, vide ....
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....of other person i.e. person other than the person in whose case search was conducted u/s. 132 of the 1961 Act, shall be deemed to be the date of receiving of the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person, which shall be starting point for determining the period of six/ten assessment years for framing of the search assessment u/s. 153C in the case of person other than persons searched with respect to him certain assets or documents seized reflect undisclosed income of the person other than the person searched. It will be relevant to reproduce the decision of Hon'ble Delhi High Court in the case of Ojjus Medicare(supra), as was relied upon by ld. CIT(A) to give relief to the assessee on the aforesaid legal ground by holding that the impugned assessment year shall be outside the limit of ten assessment years available for farming assessment u/s. 153C ( date of search u/s. 132 was 18.10.2019, date of recording of satisfaction by the AO of the assessee was 24.12.2021), the operative portion of aforesaid judgment and order is reproduced hereunder: E. ANALYSIS OF THE STATUTORY FRAMEWORK 51. Havin....
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....osed income as a result of search.-- xxx xxx xxx (3) Where the assessee proves to the satisfaction of the Assessing Officer that any part of income referred to in sub-section (1) relates to an assessment year for which the previous year has not ended or the date of filing the return of income under sub-section (1) of section 139 for any previous year has not expired, and such income or the transactions relating to such income are recorded on or before the date of the search or requisition in the books of account or other documents maintained in the normal course relating to such previous years, the said income shall not be included in the block period." 53. The aforesaid sub-section reinforces the scheme of Chapter XIVB requiring the block period assessment being undertaken independent of a regular assessment and thereby not contemplating a merger of the two assessment proceedings or abatement of pending assessments. Section 158BI came to be incorporated in Chapter XIVB by virtue of Finance Act 2003 with effect from 01 June 2003 and reads as under:- "158BI. Chapter not to apply after certain date.-- The provisions of this Chapter shall not apply where a s....
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....previous year during which such search is conducted or requisition is made and such assessment or reassessment shall be made in respect of each assessment year falling within six assessment years. This clause also provides that the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section, pending on the date of the initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. This clause also provides that save as otherwise provided in section 153A, section 153B and section 153C, all other provisions of the Income-tax Act shall apply to the assessment or reassessment made under this section and in the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. The proposed sub-section (1) of the new section 153B provides for the time-limit for completion of assessment in case of a person where a search is initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A.It provides....
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....he case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued and in the case of requisition made under section132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer. The proposed new section 153C provides for assessment or reassessment of income of any other person. Where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A.These amendments will take effect from 1st June, 2003." 56. Section 153A, when finally introduced, commenced with a non- obstante cl....
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.... person. Under the existing provisions of section 153A, where the Assessing Officer is satisfied that books of account or documents or assets seized under section 132 or requisitioned under section132A belong to a person other than a person in whose case search under section 132 or requisition under section 132A was made, he shall handover the same to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person under section 153A. Second proviso to section 153A provides that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in the said section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. It is proposed to amend the said section so as to provide that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents....
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....er to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year-- (a) no return of income has been furnished by such other per....
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....39, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to any person, other than the person referred to in section 153A, then books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A if he is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A . The amendment will take effect from 1st October, 2014." 62. Clause 53 of the Notes on clauses explaining the amendment to Section 153C introduced vide the 2014 Finance Act is reproduced hereinbelow: "Clause 53 of the Bill s....
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....fied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub- section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the ....
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....me-Tax Act, 1961 - As Amended by Amended by Finance Act 2015 Finance Act 2017 Assessment in case of search or Assessment in case of search or requisition.: requisition : 153A. [(1)] Notwithstanding 153A. [(1)] Notwithstanding anything contained in section anything contained in section 139, section 147, section 139, section 147, section 148, 148,section 149, section 151 section 149,section 151 and and section 153, in the case of a section 153, in the case of a person where a search is person where a search is initiated under section 132 or initiated under section 132 or books of account, other books of account, other documents or any assets are documents or any assets are requisitioned under section requisitioned under section 132A after the 31st day of May, 132A after the 31st day of May, 2003, the Assessing Officer 2003, the Assessing Officer shall--shall-- (a) issue notice to such person (a) issue notice to such requiring him to furnish within requiring him to furnish such period, as may be such period, as may be specified in the notice, the specified in the notice, return of income in respect of return of income in respe each assessment year falling each assess....
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....any assessment or by it and published in the reassessment has abated under Official Gazette (except in the second proviso),specify the cases where any assessment or class or classes of cases in reassessment has abated under which the Assessing Officer the second proviso),specify the shall not be required to issue class or classes of cases in notice for assessing or which the Assessing Officer reassessing the total income for shall not be required to issue six assessment years notice for assessing or immediately preceding the reassessing the total income for assessment year relevant to the six assessment years previous year in which search is immediately preceding the conducted or requisition is assessment year relevant to the made.] previous year in which search is conducted or requisition is [(2) If any proceeding initiated made [and for the relevant or any order of assessment or assessment year or years]:] reassessment made under sub- section(1) has been annulled in [Provided also that no notice for appeal or any other legal assessment or reassessment proceeding, then, shall be issued by the Assessing notwithstanding anything Officer for the relevant contained in sub-section (1) ....
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....ear which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.--For the removal of doubts, it is hereby declared that,-- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." 65. A similar comparative table which would indicate how Section 153C read between Finance Acts, 2015 and 2017 is set out herein below: Income-Tax Act, 1961 - As Income-Tax Act, 1961 - As Amended by Amended by Finance Act 2015 Finance Act 2017 Assessment of income of any Assessment of income of any other person: other person.: 153C. [(1)] [Notwithstanding 153C. [(1)] [Notwithstanding anything contained in section anythi....
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....uch other person, the reference to other person, the reference to the date of initiation of the date of initiation of the search under section 132 or search under section 132 or making of requisition under making of requisition under section 132A in the second section 132A in the second proviso to [sub-section (1) of] proviso to [sub-section (1) of] section 153A shall be construed section 153A shall be construed as reference to the date of as reference to the date of receiving the books of account receiving the books of account or documents or assets seized or or documents or assets seized or requisitioned by the Assessing requisitioned by the Assessing Officer having jurisdiction over Officer having jurisdiction over such other person :] such other person :] [Provided further that the [Provided further that the Central Government may by Central Government may by rules made by it and published rules made by it and published in the Official Gazette, specify in the Official Gazette, specify the class or classes of cases in the class or classes of cases in respect of such other person, in respect of such other person, in which the Assessing Officer which the Assessing Officer shall no....
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....ore if any, has been made, the date of receiving the books before the date of receiving the of account or documents or books of account or documents assets seized or requisitioned by or assets seized or requisitioned the Assessing Officer having by the Assessing Officer having jurisdiction over such other jurisdiction over such other person, such Assessing Officer person, such Assessing Officer shall issue the notice and assess shall issue the notice and assess or reassess total income of such or reassess total income of such other person of such assessment other person of such assessment year in the manner provided in year in the manner provided in section 153A.] section 153A.] 66. Turning our gaze firstly upon Section 153A, it becomes pertinent to note that the provision as it stands presently, and at least as it existed on the date of issuance of the impugned notices, regulates assessments pertaining to searches conducted between 31 May 2003 and up to 31 March 2021. The latter terminal point governing the applicability of that provision came to be inserted by virtue of Finance Act, 2021, with effect from 01 April 2021. A similar sunset clause came to be introduced in Se....
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....ted under Section 133-A, other than under sub-section (2-A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under Section 132 or under Section 132-A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under Section 132 or Section 132-A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullio....
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....der section 148 shall be issued for the relevant assessment year,-- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of-- (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: 70. Section 153(3A) of the Act also introduced the following salient provisions relevant to search assessments:- "153. Time limit for completion of assessment, reassessment and recomputation xxxx xxxx xxxx (3A) Notwithstanding anything contained in sub-sections (1), (1A), (2) and 93), where an assessment or reassessment is pending on the date of initiation of search under section 132 or making of requisition under sect....
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....e 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." 73. Section 153A(1), in addition to the above, also erects the following additional conditions which must be shown to exist in case a notice for assessment or reassessment is proposed to be issued for the "relevant assessment year" and comprising the larger block of ten AYs'. The aforesaid conditions stand introduced by virtue of the Fourth Proviso which is extracted hereunder:- "153A. Assessment in case of search or requisition xxxx xxxx xxxx Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless-- (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred ....
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....st 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 accounts, 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 from the date of initiation of search or making of requisition to the date of receipt of books, documents or assets by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person thus being governed and regulated by the First Proviso of Section 153C(1) is, however, an issue which is no longer res integra. This aspect came to be duly noticed and lucidly explained by our Court in the matter of SSP Aviation Ltd. v. Deputy CIT22. The relevant extracts of SSP Aviation Ltd are set out hereinunder: "14. Now, there can be a situation when during the search conducted on one person under section 132, some documents or valuable assets or books of accoun....
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....ment or reassessment of any assessment year within the period of the six assessment years shall abate shall be the date of initiation of the search under Section 132 or the requisition under Section 132A, in the case of the other person (like the Assessee in the present case) "such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date". 4. Although, the ITAT has also referred to its own decision in the case of DSL Properties Pvt. Ltd., which decision is pending consideration in ITA No. 585 of 2013 in this Court, in which a question of law has been framed, the decision in SSP Aviation Ltd. (supra) puts the matter beyond all doubt. In addition, the Court has been shown by learned counsel for the Respondent a circular dated 31st March 2014 issued by the CBDT, containing the guidelines regarding Section 153C of the Act. Para 2.5 of the said circular clarifies as under: ....
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....r, the Assessing Officer has to transfer the seized assets/documents to the Assessing Officer having jurisdiction of the assessee to whom such assets/ documents belong. Section 153C(1) of the Act clearly postulates that once the Assessing Officer of a person--other than the one searched, has received the assets or the documents, he is to issue a notice to assess/ reassess the income of such person, that is, the assessee other than the person searched in accordance with the provisions of section 153A of the Act. xxxx xxxx xxxx 15. The controversy in this regard is no longer res integra. A co- ordinate Bench of this court in SSP Aviation Ltd. v. Deputy CIT (2012) 346 ITR 177 (Delhi) has held that (page 188): "In the case of the searched person, the date with reference to which proceedings for assessment or reassessment of any assessment year within a period of six assessment years shall abate, is the date of initiation of the search under section 132 or requisition under section 132A. .. However, in the case of other person. .. such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer ....
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....ia, any document is found in the possession or control of any person in the course of a search it may be presumed that such document belongs to such person. It is similarly provided in section 292C(1)(i). In other words, whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or 'satisfaction' that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of 'satisfaction'.. .. It is evident from the above satisfaction note that apart from saying that the documents belonged to the petitioner and that the Assessing Officer is satisfied that it is a fit case for issuance of a notice under section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere u....
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....ey, document, etc., belongs to a person other than the searched person, then such money, documents, etc., are to be handed over to the Assessing Officer having jurisdiction over 'such other person'. The second stage commences from the recording of such satisfaction by the Assessing Officer of the 'searched person' followed by handing over of all the requisite documents, etc., to the Assessing Officer of such 'other person', thereafter followed by issuance of the notice of the proceedings under section 153C read with section 153A against such 'other person'. The initiation of proceedings against 'such other person' are dependant upon a satisfaction being recorded. Such satisfaction may be during the search or at the time of initiation of assessment proceedings against the 'searched person', or even during the assessment proceedings against him or even after completion of the same, but before issuance of notice to the 'such other person' under section 153C. Even in a case, where the Assessing Officer of both the persons is the same and assuming that no handing over of documents is required, the recordi....
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....fficer would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of section 153C(1) of the Act, which construes the date of receipt of assets and documents by the Assessing Officer of the assessee (other than one searched) as the date of the search on the assessee. The rationale appears to be that whereas in the case of a searched person the Assessing Officer of the searched person assumes possession of the seized assets/documents on search of the assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the Assessing Officer of that person only after the Assessing Officer of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the Assessing Officer of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for the assessment year 2003-04 and the assessment year 2004-05 were outside the scope of section 153C of the Act and the Assessin....
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....nt or reassessment to the six assessment years will be examined with reference to such date." 9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. 10. This Court is of the opinion that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials - of the search party, under Section 132 - would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually "relate back" as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the ....
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....eld to the contrary and which unequivocally accepted the point of commencement for the purposes of identifying the six or the "relevant assessment year" to be etched from the date of handover of documents, assets or things to the AO of the non-searched party. 81. As was noticed by us hereinabove, the respondents had also sought to urge that the First Proviso to Section 153C(1) is relevant only for the purposes of abatement of pending assessment or reassessment proceedings and which is spoken of in Section 153A(1). According to them, since the First Proviso to Section 153C(1) is linked to the Second Proviso to Section 153A(1), it must be interpreted as being confined and restricted to the subject of abatement and cannot be viewed as constructing the point from which the block of six AYs' or the "relevant assessment year" is to be computed. They had in this connection referred to the judgement rendered by our Court in Sarwar Agency and where an identical submission was addressed as would be evident from a reading of paragraph 6 of the report and which reads as follows: "6. The case of the Revenue is that the first proviso to section 153C refers only to the secon....
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....ent orders cited certain observations from an earlier order passed by the said High Court and the relevant observations whereof are set out hereunder: "2. The grounds that have been argued and my conclusions thereupon are as follows: (i) The bar of limitation: both limbs of this ground have been considered and rejected by me as per orders dated 12-7-2022, 15.07.22 and 26-7-2022, extracted below: 11. Reliance is also placed upon two decisions of the Delhi High Court in the case of CIT v. RRJ Securities Ltd. and Pr. CIT v. Sarwar Agency (P.) Ltd. In both cases the view that the block of six years must be construed as commencing from the date of handing over of the documents seized by the officer of the searched entity to the officer of the third party, that is, petitioner in this case. 12. I am of the considered view that the proviso has no application in the construction of the block period. Section 153C deals with the assessment of income of any other person in relation to the searched person and section 153C(1) reads as under: Assessment of income of any other person. 153C. (1) Notwithstanding anything contained in section 139,....
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....atement for the sake of completion. " 84. As would be evident from the above, although the decisions in Sarwar Agency and RRJ Securities were cited, the learned Judge chose to observe that the Section 153C(1) Proviso would only be liable to be construed as relevant for the purposes of abatement. We find ourselves unable to sustain that line of reasoning since both Sarwar Agency as well as RRJ Securities have struck a line which is in consonance with the view taken in SSP Aviation and which has since come to be affirmed by the Supreme Court in Jasjit Singh. In any case, the law as enunciated in RKM Powergen would not sustain bearing in mind the express enunciation of the legal position by the Supreme Court as is manifest from a reading of paragraph 9 of Jasjit Singh. 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 r....
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.... 01 April 2021 to 31 March 2022, the same would essentially constitute FY 2021-22 as being the previous year of search for the purposes of the non-searched entity. As a necessary corollary, the relevant AY would become AY 2022-23. AY 2022-23 would thus constitute the starting point for the purposes of identifying the six years which are spoken of in Section 153C. The six AYs' are envisaged to be those which immediately precede the AY so identified with reference to the previous year of search. 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 as follows:- Computation of the six-year block No. of years period as provided under Section 153C of the Act 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 p....
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.... decision:- "9. Explanation-I is clear as to the manner of computation of the ten assessment years. It clearly and firmly fixes the starting point. It is the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. There cannot be any doubt that since search was made in this case on 10.04.2018, the assessment year is 2019-20. The end of the assessment year 2019-20 is 31.03.2020. The computation of ten years has to run backwards from the said date ie., 31.03.2020. The first year will of course be the search assessment year itself. In that event, the ten assessment years will be as follows : 1st Year 2019-20 2nd Year 2018-19 3rd Year 2017-18 4thYear 2016-17 5th Year 2015-16 6th Year 2014-15 7th Year 2013-14 8th Year 2012-13 9thYear 2011-12 10th Year 2010-11 The case on hand pertains to AY 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up t....
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....batch pertains to cases where Satisfaction Notes of the AO of the non-searched person were drawn between the period 01 April 2022 to 31 March 2023 and 01 April 2023 to 31 March 2024. Tested on the principles enunciated by us in the preceding passages of this judgment, we come to the conclusion that the relevant six AYs' would comprise the following years, when computed for the period 01 April 2022 to 31 March 2023:- Computation of the six-year block No. of years period as provided under Section 153C of the Act. 93. The relevant block of six AYs' when computed for the period of 01 April 2023 to 31 March 2024 would be the following: Computation of the six-year block No. of years period as provided under Section 153C of the Act 94. Similarly, and in light of what has been held by us hereinabove, the relevant block of ten AYs' when computed for the period 01 April 2022 - 31 March 2023, and where the Satisfaction Note was drawn by the AO of the non-searched person between those two dates, would be as under:- Computation of the ten-year block No. of years period as provided under Section 153C read with Section 153A of the Act ....
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.... 99. The writ petitioners had also assailed the validity of the notices based on the provisions comprised in the Fourth Proviso to Section 153A. It must at the outset be noted that the amount of INR 50 lakhs which is spoken of in clause (a) of the Fourth Proviso merely constitutes a threshold. Regard must also be had to the fact that at the stage when the AO is issuing notice, it has yet not had the opportunity to undertake a detailed or in-depth examination of the evidence collected or come to a conclusive opinion with respect to the total income which may have escaped assessment. The computation and assessment of the income that is likely to have escaped assessment is at this particular stage clearly tentative and nebulous. It would therefore and in our considered opinion be incorrect to strike down initiation of action merely because the notice may on an ex facie examination refer or allude to the value of an asset as being less than INR 50 lakhs. This more so when the petitioners call upon the Court to render a verdict based on a mere facial perusal of the Section 153C notice. We are also of the view that it would also perhaps be imprudent to accord a judicial imprimatur to th....
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....ceedings on the basis of material gathered in the course of the search and that of the assessee who could assail the reopening of ten assessment years if the prerequisites are not shown to have been met. 102. We are also of the firm opinion that the figure of INR 50 lakhs is not meant to be the qualifying criteria for each of the "relevant assessment year" independently. Clause (a) in unambiguous terms uses the expression "in aggregate in the relevant assessment years". Consequently, even if the income likely to have escaped assessment on a cumulative computation be in excess of INR 50 lakhs, the same would qualify the statutory requirements as placed by the Fourth Proviso. I. ISSUE OF FINALITY/CLOSURE FOR AYs' 2010-11 AND 2011-12 AND THE APPLICABILTY OF THE 2017 AMENDING ACT 103. We then lastly proceed to deal with the challenge which stood raised to the impugned notices, with it being contended that for AYs' 2010-11 and 2011-12, the period for assessment or reassessment when computed in accordance with the permissible period prescribed in Sections 143 and 153 of the Act as well as Sections 148 and 149 having come to an end prior to 01 A....
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....ention of a bar of limitation operating in respect of assessments or of those proceedings having attained finality proceeds in ignorance of Sections 153A and 153C commencing with a non obstante clause and thus being representative of the legislative intent of those two provisions overriding Sections 139, 147, 148, 149, 151 and 153 of the Act. The non obstante clause which accompanies both those provisions are a manifestation of the clear intent of the Legislature of those provisions and the powers comprised therein being available to be invoked and exercised notwithstanding the fetters and controls placed upon the powers of assessment or reassessment that may otherwise be available to be exercised by virtue of Sections 139, 147, 148, 149, 151 and 153 of the Act. Sections 153A and 153C thus stand unshackled from the rigours of Sections 147, 148, 149, 151 or 153 of the Act. 106. The fact that Sections 153A and 153C would thus be freed from the restrictive timeframes which are erected by the aforenoted set of provisions would also appeal to logic bearing in mind the undisputed position that assessments or reassessments under Sections 153A and 153C are predicated upon a search....
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....athered in the course of a search being deemed to be information which would be suggestive of income chargeable to tax having escaped assessment, the same in our considered opinion would have no bearing on our conclusion that the finality which is spoken of cannot be a ground which would warrant the amplitude of Sections 153A and 153C being abridged. As was noticed hereinbefore, a search would be an event which would be inherently unfathomable and clearly defy prediction. It would thus be wholly incorrect to conceive of a connection between statutory timeframes which are otherwise embodied in the Act to search assessments. 108. We also find ourselves unable to countenance the submissions based upon the two Proviso's placed in Section 149 for the following reasons. It must at the outset be noted that Section 149 regulates the time within which a notice under Section 148 may be issued. It thus neither ventures nor attempts to regulate the search assessment powers that are available to be invoked in terms of Sections 153A or 153C. Secondly, although the First Proviso (and to the extent that it included a reference to Sections 153A and 153C), came to be introduced by virtu....
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....dication of the legislative intent being to cover all searches conducted after the aforenoted date and no immunity intended to be attached to assessments attaining closure before the said date. There could not, in our considered opinion, be a clearer expression of the legislative will for those provisions having a retroactive application. 111. Although the petitioners sought to draw sustenance from the decision of this Court in C.B. Richards Ellis, we find that the reliance placed on the said decision as well as the others cited in its company is clearly misplaced. C.B. Richards Ellis in fact holds that the period within which reassessment may be initiated is a matter of procedure and that it is the time period prescribed and prevalent on the date of issuance of notice which would be applicable. We deem it appropriate to notice the lucid explanation of the legal position which appears in the decision of the Supreme Court in S.C. Prashar, Income Tax Officer Vs. Vasantsen Dwarkadas 24 and where the aspect of finality attached to assessments was explained in the following terms:- "93. The amending Act of 1948 was passed on September 8, 1948, and came into force from ....
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.... be enforced at any time. What the law does is to prevent harassment of assessees to the end of time by prescribing a limit of time for its own officers to take action. This limit of time is binding upon the officers, but the liability under the charging section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains it cannot be enforced by the officers administering the tax laws. If the disability is removed or according to a new law a new time limit is created retrospectively, there is no reason why the liability should not be treated as still enforceable. The law does not deal with concluded claims or their revival but with the enforcement of a liability to the State which though existing remained to be enforced. This aspect was admirably summed up by Chakravarti, C.J. (Sarkar, J. concurring) in Income tax Officer v. Calcutta Discount Co. Ltd. as follows: "The plain effect of the substitution of the new Section 34 with effect from 30th March, 1948, is that from that date the Income Tax Act is to be read as including the new section as a part thereof and if it is to be so rea....
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....made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section already mentioned. This proviso was challenged under Article 14 of the Constitution but that is a different matter. If the section is constitutionally enacted then it also means what it says. It is hardly possible to imagine clearer language then the one used. It says that the limit of time mentioned in Section 34 is removed in certain cases that is to say, action can be taken at any time in these cases. In our judgment, each case of a notice must be judged according to the law existing on the date the notice was issued or served, as the law may require. So long as the notice where the notice is in question, and the assessment, where the assessment is in question, are within the time limited by the law, as it exists when the respective actions are taken, the actions cannot be questioned provided the law is clearly retrospective. The only case in which no further action can be taken is one in which action was not taken under the old law within the period prescribed by that law and which is not also within the period mentioned in the new law if its op....
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....here would be no difficulty in understanding and appreciating the fallacy and the error in the primary argument raised by the Revenue. It is a settled position that liability to tax as a levy is normally determined as per statute as it exists on the first day of the assessment year, but this is not the issue or question in the present case. The issue or question in the present case relates to assessment i.e. initiation of re-assessment proceedings and whether the time/limitation for initiation of the re-assessment proceedings specified by the Finance Act, 2001 is applicable. We are not determining/deciding the liability to tax but have to adjudicate and decide whether the re-assessment notice is beyond the time period stipulated. This is a matter/issue of procedure i.e. the time period in which the assessment or re-assessment proceedings can be initiated. Thus the time period/limitation period prescribed on the date of issue of notice will apply. In our opinion, the answer is clear and has to be in affirmative, i.e. in favour of the assessee." 114. C.B. Richards Ellis thus constitutes a precedent which had clearly recognised that while the liability to tax may continue to ....
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.... of the other stipulations placed in the provisions and the existence of the jurisdictional prerequisites. 116. The very fact that the statute in unequivocal terms provisioned for it to be applicable to all searches conducted or requisitions made post that date is evidence of the manifest legislative intent for it applying to the "relevant assessment year" computed in accordance with Explanation 1 placed in Section 153A. The statutory scheme so put in place is representative of the intent of the Legislature to overcome conclusiveness that may attach to a particular assessment when tested on the anvil of the period prescriptions contained in Section 149 of the Act. We also bear in mind the pertinent observations of the Supreme Court when it had observed that finality which may ordinarily come to imbue an order of assessment does not result in the creation of a corresponding vested right in the assessee. In any case and for reasons aforenoted, we are of the firm opinion that the judgements rendered in the context of Sections 145-151 would not constitute a prudent basis to interpret Sections 153A and 153C insofar as the argument of closure as canvassed by the writ petitioners....
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.... CONCLUSIONS 119. We thus record our conclusions as follows: A. Prior to the insertion of Sections 153A, 153B and 153C, an assessment in respect of search cases was regulated by Chapter XIVB of the Act, comprising of Sections 158B to 158BI and which embodied the concept of a block assessment. A block assessment in search cases undertaken in terms of the provisions placed in Chapter XIVB was ordained to be undertaken simultaneously and parallelly to a regular assessment. Contrary to the scheme underlying Chapter XIVB, Sections 153A, 153B 25 ITAT and 153C contemplate a merger of regular assessments with those that may be triggered by a search. On a search being undertaken in terms of Section 153A, the jurisdictional AO is enabled to initiate an assessment or reassessment, as the case may be, in respect of the six AYs' immediately preceding the AY relevant to the year of search as also in respect of the "relevant assessment year", an expression which stands defined by Explanation 1 to Section 153A. Of equal significance is the introduction of the concept of abatement of all pending assessments as a consequence of which curtains come down on regular assessments. ....
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.... which the period of the "relevant assessment year" is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken....
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....at the ultimate computation of escaped income is likely to exceed INR 50 lakhs. The aforesaid satisfaction would have to be based on an assessment of the material gathered and the potentiality of the same being indicative of the escaped assessment exceeding INR 50 lakhs. The formation of opinion in this respect would have to be based not on mere ipse dixit but reflective of a fair assessment of the quantum of income likely to have escaped assessment as distinct from mere speculation and conjecture. I. We further hold that since the precondition of INR 50 lakhs or more constitutes a sine qua non for initiating action for the extended ten year block, the aforesaid satisfaction and the reasons in support thereof would have to borne out from the Satisfaction Note itself. We are also of the opinion that the precondition of INR 50 lakhs is not liable to be viewed as being the qualifying criteria for each "relevant assessment year" that may be thrown open and that the said condition would stand satisfied if the escaped income cumulatively or in the aggregate meets the minimum benchmark of INR 50 lakhs. J. The contention of finality and closure addressed with respect to A....
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.... Court, the deprivation of a power to enforce would not lead to the creation of a vested right. As was pertinently observed, the liability to the State exists and operates de hors a consideration of time and in the absence of the statute itself imposing a time limit. The only limitations which are introduced while enacting Sections 153A and 153C was of the period within which the search had been conducted. L. DISPOSTIF 120. In view of the aforesaid discussion, the writ petitions placed in Lists I and II and pertaining to AYs' 2010-11, 2011-12, 2012-13 and 2013-14, all of which fall beyond the maximum ten year block period shall stand allowed. The impugned notices pertaining to the aforenoted AYs' shall consequently stand quashed. 121. From the petitions placed in List III, we allow WP(C) Nos. 400/2024, 384/2024 and 383/2024 since the impugned notices pertain to AYs' 2010-11, 2011-12 and 2012-13 and thus beyond the maximum block of ten years. However, WP (C) 694/2024 pertains to AY 2016-17 which would fall within the eighth year of the "relevant assessment year". The asset which is spoken of in the impugned notice is valued at INR 25,20,000. Wh....
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.... Revenue only in those cases where there is credible information that the valuable assets or books of accounts or documents etc having a bearing on the income of the tax-payer was not disclosed or would not be disclosed to the department. Section 153 A of the 1961 Act falls under Chapter XIV which deals with 'procedure for assessment', wherein it deals with procedure for assessment in the case of search u/s. 132 or requisition made u/s. 132A. Undisclosed income unearthed during search operations conducted u/s. 132 of the 1961 Act or requisition made u/s. 132A, are, inter-alia, brought to income-tax in the hands of the person searched by adopting a procedure stipulated u/s. 153A, within the legal power vested in the Government by virtue of fundamental substantive charging Section 4 of the 1961 Act. Section 153C deals with procedure for making assessment in the cases of persons other than the person searched u/s. 132 of the 1961 Act, wherein undisclosed income unearthed during search relates to a person other than searched person. 6.4 It will be relevant here to reproduce provisions of Section 153A and 153C of the 1961 Act, as were applicable post amendment by Finance Act, 2017, a....
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....al searches conducted by Revenue u/s. 132 of the 1961 Act. The date of search u/s. 132 in the instant case was 18.10.2019, while satisfaction note was prepared by jurisdictional AO of the assessee on 24.12.2021, while notice u/s. 153C was issued by the AO to the assessee on 28.12.2021. It will be relevant at this stage to reproduce Section 153A and 153C of the 1961 Act as amended by Finance Act, 2017 wef 01.04.2017, which reads as under: "Assessment in case of search or requisition. 153A. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person68 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, 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....
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....-For the purposes 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. 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.] [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect....
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....cify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made [and for the relevant assessment year or years as referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated.] [(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year - (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-sectio....
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....nder section 132A, in the case of any person, then,- [(a) the Assessing Officer shall- (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period : Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter : Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;] ....
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....gment and order, which stipulated that satisfaction is required to be recorded by the AO of the searched person, which can be recorded at the time of or along with the initiation of proceedings against the searched person u/s. 158BC or along with the assessment proceedings u/s. 158BC in the case of searched person or immediately after the assessment proceedings are completed u/s. 158BC in the case of searched person, by holding as under: "18. In order to resolve the controversy, certain provisions of the Act require to be noticed by us. 19. Chapter XIV-B of the Act is a special provision carved out by the legislature for the purpose of the assessments in cases pertaining to Sections 132 and 132A of the Act. The said chapter was introduced by the Finance Act, 1995 with effect from 01.07.1995 and comprises Sections 158B to 158BH of the Act. The provisions under this Chapter were made inapplicable in case of search initiated under Section 132 or Section 132A after 31.05.2003 by introduction of an amendment to the Chapter as Section 158BI vide the Finance Act, 2003 with effect from 01.06.2003. The lis before us requires examination of the provisions of the said Chapte....
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....rovided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter: Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return; (b) The Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and (3) of section 143 section 144 and section 145 shall, so far as may be, apply; (c) The Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) The assets seized under section 132 or requisitioned under section 132A shall be dealt with in accordance with the provisions of section 132B. ** ** ** Section 158BD. Undisclosed income of any other person.- Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account ....
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.... equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." 25. In Commissioner of Stamp Duties (NSW) v. Simpson (1917) 24 CLR 209 Barton J., citing Viscount Haldane in Lumsden v. Inland Revenue Commissioners [1914] AC 877, stated the following: "The duty of Judges in construing Statutes is to adhere to the literal construction unless the context renders it plain that such a construction cannot be put on the words. This rule is especially important in cases of Statutes which impose taxation." The Court in Simpson's case (supra) sought to determine whether a deed poll constituted a settlement for the purposes of Section 49 of the Stamp Duties Act, 1898 (NSW). Section 3 which defined the word 'settlement' as meaning 'any contract or agreement' was examined. The Court by adopting a strict literal approach held that only a contract or an agreement could constitute a settlement and that Section 49 providing for deed poll was not applicable and therefore, the taxpayer did not have to pay any stamp duty. 26. Lord Granworth in Grundy v. P....
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....could apply to allow the taxpayer to claim a loss. Barwick CJ, speaking for the majority relied on the decision in Inland Revenue Commissioners v. Westminster (Duke), [1936] AC 1 which advocated the literal approach be applied when interpreting taxation legislation and stated the following: "It is for the Parliament to specify, and to do so, in my opinion, as far as language will permit, with unambiguous clarity, the circumstances which will attract an obligation on the part of the citizen to pay tax. The function of the court is to interpret and apply the language in which the Parliament has specified those circumstances. The court is to do so by determining the meaning of the words employed by the Parliament according to the intention of the Parliament which is discoverable from the language used by the Parliament. It is not for the court to mould or to attempt to mould the language of the statute so as to produce some result which it might be thought the Parliament may have intended to achieve, though not expressed in the actual language employed." 29. In Cooper Brookes (Wollongong) Pty Ltd v. Federal Commissioner of Taxation (1981) 147 CLR 297 it is held that ....
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.... "32. The literal rule of interpretation really means that there should be no interpretation. In other words, we should read the statute as it is, without distorting or twisting its language." 33.1 We may mention here that the literal rule of interpretation is not only followed by Judges and lawyers, but it is also followed by the lay man in his ordinary life. To give an illustration, if a person says "this is a pencil", then he means that it is a pencil; and it is not that when he says that the object is a pencil, he means that it is a horse, donkey or an elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean." 34. Thus, the lan....
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....ich a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection of tax, including penal provisions meant to deal with defaulters. ... Ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same. (Whitney v. Commissioners of Inland Revenue 1926 A C 37, CIT v. Mahaliram Ramjidas (1940) 8 ITR 442, Indian United Mills Ltd. v. Commissioner of Excess Profits Tax, Bombay, [1955] 27 ITR 20(SC) and Gursa-hai Saigal v. CIT, Punjab, [1963] 1 ITR 48 (SC)." 37. It is the duty of the court while interpreting the machinery provisions of a taxing statute to give effect to its manifest purpose. Wherever the intention to impose liability is clear, the Courts ought not be hesitant in espousing a c....
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....ecision is at what stage of the proceedings should the satisfaction note be prepared by the assessing officer: whether at the time of initiating proceedings under Section 158BC for the completion of the assessments of the searched person under Section 132 and 132A of the Act or during the course of the assessment proceedings under Section 158BC of the Act or after completion of the proceedings under Section 158BC of the Act. 40. The Tribunal and the High Court are of the opinion that it could only be prepared by the assessing officer during the course of the assessment proceedings under Section 158BC of the Act and not after the completion of the said proceedings. The Courts below have relied upon the limitation period provided in Section 158BE(2)(b) of the Act in respect of the assessment proceedings initiated under Section 158BD, i.e., two years from the end of the month in which the notice under Chapter XIV-B was served on such other person in respect of search initiated or books of account or other documents or any assets are requisitioned on or after 01.01.1997. We would examine whether the Tribunal or the High Court are justified in coming to the aforesaid conclusion....
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.... note on 15.07.2005 though the assessment proceedings in the case of a searched person, namely, S.K. Bhatia were completed on 30.03.2005. As we have already noticed, the Tribunal and the High Court are of the opinion that since the satisfaction note was prepared after the proceedings were completed by the assessing officer under Section 158BC of the Act which is contrary to the provisions of Section 158BD read with Section 158BE(2)(b) and therefore, have dismissed the case of the Revenue. In our considered opinion, the reasoning of the learned Judges of the High Court is contrary to the plain and simple language employed by the legislature under Section 158BD of the Act which clearly provides adequate flexibility to the assessing officer for recording the satisfaction note after the completion of proceedings in respect of the searched person under Section 158BC. Further, the interpretation placed by the Courts below by reading into the plain language of Section 158BE(2)(b) such as to extend the period of limitation to recording of satisfaction note would run counter to the avowed object of introduction of Chapter to provide for cost-effective, efficient and expeditious completion o....
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....time framework for recording such satisfaction is also mandated in para 44 of the aforesaid judgment and order, which stipulated that satisfaction is required to be recorded by the AO of the searched person, which can be recorded at the time of or along with the initiation of proceedings against the searched person u/s. 158BC or along with the assessment proceedings u/s. 158BC in the case of searched person or immediately after the assessment proceedings are completed u/s. 158BC in the case of searched person. These directions are issued under Article 141 of the Constitution of India, and being law declared by Supreme Court are binding on all Courts within the territory of India. Thus, if the AO does not record the satisfaction before transmitting the record to the AO of such other person or it is not transmitted within stipulated time framework as mandated in Para 44 of aforesaid judgment and order in the case of Calcutta Knitwear(supra), the proceedings are liable to be quashed. This judgment and order in the case of Calcutta Knitwear(supra) although in context of Section 158BD was pronounced on 12.03.2014. The searches were conducted in that case on 05.02.2003. The assessment u/....
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....espondents(s) assessee, were involved. Therefore, notices were issued to them by the AO having jurisdiction over their assessments on different dates (i.e. 25.02.2010 in [SLP(C) No. 6644 of 2016 & SLP(C)No. 14447 of 2016], 12.03.2009 in [SLP(C)No. 23621 of 2016] and 11.08.2014 [SLP(C) Diary No(s). 30718/2023]). 4. Notice was issued by the concerned jurisdictional A.Os. to the said assessees who contended that the period for which they were required to file returns, commenced only from the date the materials were forwarded to their A.Os. The Revenue, on the other hand, urged that the date (relatable to the period for which six years returns were to be filed by the assessee) was to be from the date when the search and seizure proceedings were conducted, in respect of the main assessee under Section 132. 5. The impugned order upheld the order of the Income Tax Appellate Tribunal (hereinafter referred to "ITAT") which in turn affirmed the assessee's arguments. 6. It is submitted on behalf of the revenue by Ms. Bagchi, learned counsel that the impugned order is erroneous because the date referred under proviso to Section 153(1) is relatable to the second p....
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.... valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requi....
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....er Section 132 or the requisition under Section 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date." 9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. 10.....
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....he searched person could delay forwarding of the seized material by four years to the AO of such other person to whom undisclosed income relates, and such other person may have to preserve records for ten years which could cause severe prejudice to such other person. First of all, Hon'ble Supreme Court under Article 141 has declared a binding law in judgment and order in the case of Calcutta Knitwear(supra) at para 44 although in context of Section 158BD, and if the AO delays forwarding of seized material beyond the stipulated period, the whole proceedings would be liable to be quashed even in the cases covered u/s. 153C( as these sections 158BD and 153C deals with framing of search assessments in the case of other persons other than person searched) . Secondly, lawmakers have vide Section 153B has stipulated time line within which assessment order is required to be passed in the case of searched person under the provisions of 153A of the 1961 Act. Thirdly, lawmakers have vide Section 153B has stipulated time line within which assessment order is required to be passed in the case of such other person other than person searched under the provisions of 153C of the 1961 Act. Fourthly,....
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.... in respect of the same assessment year or years. Once Section 153A is found to be applicable, there will be only one assessment in respect of each of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted, in which the "total income" of the assessee will be assessed or reassessed. It should be remembered that only the pending assessment or reassessment proceedings in respect of any those six assessment years that will abate; in case the assessment or reassessment for any of those 6 years have already been completed as on the date of search then there is no question of any of them abating for the simple reason that what can abate is only what remains pending. 14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, th....
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....eard by the Assessing Officer or to file appeals and question the assessments made pursuant to the notice under Section 153A. There is no ground for any apprehension that the petitioner will not be heard before the assessments or reassessments for the six assessment years are completed. In fact, in the case of the petitioner itself the Assessing Officer has not made any addition in the assessments completed under Section 153A read with Section 153C for the assessment years 2003-04 to 2006-07 and 2008-09. He has made the addition of Rs. 86 crores only in the assessment year 2007-08 against which an appeal has already been filed, as stated by the ld. senior standing counsel. This also finds mention in para VI of the counter affidavit filed by the respondent. Thus, full opportunity of being heard is available, and in fact was made available to the petitioner herein to represent against the proposed assessments or reassessments. The apprehension expressed by Mr. Bajpai, ld. senior counsel for the petitioner seems to be futile and spartan in the present case, as no adverse order/ addition has been made except in one year, i.e. 2007-08 in respect of which documents were found. This addit....
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....s follows: "Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly."[Emphasis supplied] It will be seen that whereas Section 158D refers to the satisfaction of the Assessing Officer that any "undisclosed income" belongs to any person other than the searched person, Section 153C(1) in contrast refers merely to the satisfaction of the Assessing Officer that the valuable article or books of account or document "belongs" to a person other than the searched person. The latter provision does not refer to any undisclosed income at all. The machinery provided in Sections 153C read with 153A merely facilitates an enquiry regarding the existence or otherwise of undisclosed incom....
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....section (1) to Section 132 have not been satisfied vis-Ã-vis the petitioner so as to confer legality upon the seizure of the documents in question. In our opinion, it is not necessary for the revenue authorities to have reasons to believe that the petitioner would not produce any books of account or document or that the petitioner is in possession of any money, bullion, jewellery or other valuable article or thing which it had not or will not disclose for the purpose of the assessment proceedings. The petitioner was not searched. Search was on a third person and validity of the seizure has to be examined with reference to the said person searched. At the time when the Assessing Officer having jurisdiction over the searched person reaches the satisfaction that the document belongs to a person other than the searched person, it is not necessary for him to also reach a firm conclusion/ opinion that the document shows undisclosed income belonging to such other person. That is a matter for enquiry, which is to be conducted in the manner prescribed by Section 153C. The fact that the procedure envisaged by Section 153C is somewhat cumbersome and that the person other than the searc....
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....em. Even if they tend to act unreasonably or under misplaced enthusiasm, there are adequate safeguards which can be availed of by those persons. The apprehensions expressed by Mr. Bajpai in our opinion and with respect, are unfounded. 21. The above discussion in our opinion is sufficient to dispose of the contentions of the ld. senior counsel for the petitioner. However, in the course of the arguments there was a debate as to whether the petitioner was justified in following the percentage of completion method of accounting for recognising the income from the sale of the development rights. We have gone through the relevant documents to which our attention was drawn by both the sides in support of their rival stands, but we do not think that it would be proper for us to examine the question since the assessment order for the assessment year 2007-08 passed under Section 153C read with 143(3) on 30.12.2010 is under appeal before the CIT (Appeals). Even otherwise, in proceedings under Article 226, this question should not be gone into, as appellate statutory forum is the right and proper course/ remedy. It is for the petitioner to make out the case in the appeal pending befor....
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....which the search is conducted. As discussed hereinbefore, by virtue of second proviso to Section 153A, the assessment/reassessment pending on the date of initiation of search abate. In the context of proceedings under Section 153C of the Act, the reference to the date of initiation of the search in the second proviso to Section 153A has to be construed as the date on which the AO receives the documents or assets from the AO of the searched person. Thus, by virtue of second proviso to Section 153A of the Act as it applies to proceedings under Section 153C of the Act, the assessment/reassessment pending on the date on which the assets/documents are received by the AO would abate. In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of concluded assessments, the AO would assume jurisdiction to reassess provided that the assets/documents received by the AO represent or indicate any undisclosed income or possibility of any income that may have remained undisclosed in the relevant assessment years...... 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference ....
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....ed in para 10 and 11 as brought to its notice by ld. Counsel for the assessee that there is amendment in Section 153C of the 1961 Act by Finance Act, 2017 wef 01.04.2017, and this amendment in effect states that that the block period for the searched person and the other person shall would be the same six AY's immediately preceding the year of the search for the searches conducted post amendment i.e. 01.04.2017. It is also observed that the judgments and orders referred to herein above in the case of Jasjit Singh (supra), RRJ Securities(supra), SSP Aviation(supra) and even Sarwar Agency(supra) are all concerned to searches conducted by Revenue prior to amendments made by Finance Act, 2017 wef 01.04.2017, while in the instant case we are dealing with searches conducted by Revenue u/s. 132 on Alankit Group and other persons as detailed above in this order, on 18.10.2019. The ld. CIT(A) has relied upon the judgment and order dated 03.04.2024 of Hon'ble Delhi High Court in the case of Ojjus Medicare(supra) wherein it was held that for the purposes of Section 153C, period of six/ten assessment years in the case of non searched person shall be determined from the date of handing over of ....
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....e furnished under section 139; (b) 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 or requisition is made [and for the relevant assessment year or years] : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years] : Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment year or years] referred to in this [sub section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate : [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing o....
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....3B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. Assessment of income of any other person. 153C. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the p....
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...., before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 6.12.2 We will deal with amended provisions of Section 153C and 153A, as amended by Finance Act, 2017 wef 01.04.2017. In the instant appeal before us, the search took place on 18.10.2019, while notice u/s. 153C was issued on 28.12.2021 persuant to satisfaction recorded by the jurisdictional AO of the assessee on 24.12.2021. Sub-section (1) to Section 153C of the 1961 Act starts with Non-obstante clause and stipulates that notwithstanding anything contained in Section 139, Section 147, Section 148, Section1 49, Section 151 and Section 153, where the AO is satisfied that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned belongs to ; or any books of accounts or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in....
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....purposes of Section 153A(1), the expression relevant assessment year shall mean an assessment year preceding 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. 6.12.6 Thus, after considering the amended law which stood amended by Finance Act, 2017, leave no doubt that the period for determining the six/assessment years for assessing or reassessing the income of person other than searched person shall be reckoned from the date of search conducted u/s. 132 or requisition made u/s. 132A in the case of searched person. 6.13 Further, Proviso is an exception to the substantive provision. Once substantive provision clearly stipulates liability to tax, proviso to the section carves out exception to the main section which but for the proviso, the main section would have included the subject matter of the proviso, and its scope is to be strictly limited to what is stated in the Proviso. Scope of main section cannot....
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....arged to hold that date of initiation of search u/s. 132 or making of requisition u/s. 132A is to be determined for framing of assessment u/s. 153C from the date of handing over of the book of account or document or asset by the AO of the searched person to the AO of non searched person. It's scope is to be restricted to what is specified in second provisio to Section 153A(1). It is once again reiterated that taxing statute are to be strictly construed, and there is no scope for intendment, howsoever harsh the consequences may be. It is well settled that there is no equity in the taxing statute, and taxing statute is to be strictly construed. Thus, if the tax-payer falls within the provisions enacted in the taxing statute, the tax-payer must be taxed, however great the hardship may be. Thus, if the words of the statute are clear and the tax-payer fall within the letter of law, the tax-payer must be taxed howsoever the great hardship may. Thus, if the words of taxing statute are clear, taxing statute calls for strict and literal construction, and there is no scope of intendment. In the judgment and order of Hon'ble Supreme Court in the case of Calcutta Knitwear(supra) has elaboratel....
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....ts, book of account or assets by the AO of the searched person to the other person to whom income belongs, the date of handing over of the said document or book of account or assets will be relevant for identifying the abated or unabated assessment so that AO can assess or reassess the total income for six/ten assessment years for determining of which the actual searches conducted u/s. 132 or requisition made u/s. 132A shall be relevant. Thus, deeming fiction and scope of Proviso in the instant case cannot be expanded or widened to shift the goal post itself i.e. the conducting of search u/s. 132 on 18.10.2019 to the recording of satisfaction by the AO of the assessee on 24.12.2021 to be deemed as date of initiation of search. 6.15. The Tribunal is lower in hierarchy to Superior Courts viz. Hon'ble Supreme Court and Hon'ble High Courts, and is bound by the judgments and orders of Superior Courts. The Hon'ble Delhi High Court after considering the amendment in Section 153C and 153A by Finance Act, 2017 wef 01.04.2017 has in Ojjus Medicare(supra) has held that period of six/ten assessment years for framing assessment u/s. 153C in the case of non searched person shall be reckoned f....