TaxTMI 
TaxTMI 
2026 (10) TMI 1447
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....his petition under Article 226 of the Constitution of India, the petitioner challenges the notice dated 31.03.2023 issued under Section 148 of the Income Tax Act, 1961 (for short "the Act") by the Assistant Commissioner of Income Tax, Central Circle 2(3), Ahmedabad (for short "the respondent"), seeking to reopen the income tax assessment of the petitioner for the Assessment Year 2012-13. 4.1 A search and seizure action under Section 132 of the Act was carried out in the case of the Sambhaav Nila Group of Ahmedabad and its key associates, which was initiated on 08.09.2021 and concluded on 27.10.2021. During the course of the said search, the residential premises of one Shri Anilkumar Mohanlal Fulmali, a third party, were also covered under Section 132 of the Act and certain documents, in the form of hand-written ledgers and tally data, were seized therefrom. On the basis of the said material, the Deputy Commissioner of Income Tax, Central Circle 2(3), Ahmedabad recorded a satisfaction note dated 14.06.2022 to the effect that the seized documents pertain to or contain information relating to the petitioner, which satisfaction note was approved by the Principal Commissioner of Inco....
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....on 153C of the Act could not have been issued at that time on account of being beyond the time limit specified under Section 149(1)(b) or Section 153A or Section 153C of the Act, as they stood immediately before the commencement of the Finance Act, 2021. It was submitted that the assessment year 2012-13, is an assessment year beginning before 01.04.2021, and that the first proviso squarely applies. 5.1 It was further submitted that under Section 149(1)(b) of the Act, as it stood prior to 01.04.2021, a notice under Section 148 of the Act could be issued only up to six years from the end of the relevant assessment year, which period, for A.Y. 2012-13, expired on 31.03.2019. It was submitted that, in so far as the search provisions are concerned, Section 153C of the Act, read with Section 153A of the Act, permitted a notice to be issued for "six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted" and for the "relevant assessment year or years", and that the expression "relevant assessment year" is defined in Explanation 1 to Section 153A of the Act to mean an assessment year preceding the assessment year relevant to....
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....Court has, in the said judgments, held that while computing the extended ten-year period under Explanation-1 to Section 153A read with Section 153C of the Act, the assessment year relevant to the previous year of search is to be included in the reckoning. 5.5 Thus, it was urged that the impugned notice issued under Section 148 of the Act for the assessment year 2012-13 may be quashed and set aside. 6. Per contra, learned Senior Standing Counsel Mr. Varun K. Patel for the respondent opposed the petition and contended that the impugned notice under Section 148 of the Act is valid and within limitation. It was contended that, since the search was initiated after 01.04.2021, the erstwhile Section 153A/153C regime does not apply, and that the case is governed by the reassessment regime introduced by the Finance Act, 2021, under which, in terms of Section 149(1)(b) of the Act, a notice can be issued if not more than ten years have elapsed from the end of the relevant assessment year, provided the escaped income represented in the form of an asset is Rs.50 lakhs or more. It was submitted that the alleged escaped income in the present case is Rs. 2,83,41,000/-, that ten years from th....
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....in the form of an asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. The first proviso to Section 149(1) of the Act, however, reads as under: "Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021:" 9.1 The first proviso is a saving provision in favour of the assessee. It makes it clear that the extended period of ten years under the substituted Section 149(1)(b) of the Act cannot be invoked to reopen an assessment year beginning on or before 01.04.2021 if, under the law as it stood immediately before 01.04.2021, a notice under Section 148, Section 153A or Section 153C of the Act could not have been issued for that year on account of being beyond the time limit specified t....
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.... expression "relevant assessment year" is defined in Explanation 1 to Section 153A of the Act as under: "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 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." 11.1 Section 153C of the Act, in turn, requires the Assessing Officer of the other person to proceed against such other person and assess or reassess his income "in accordance with the provisions of section 153A", for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted and for the relevant assessment year or years referred to in sub-section (1) of Section 153A of the Act. Thus, the computational framework of Section 153A of the Act, including Explanation 1, applies pari materia to proceedings under Section 153C of the Act. 12. A plain reading of Section 153A of the A....
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....ch, thereby excluding the search year whereas the ten assessment years under Explanation 1 of Section 153A of the Act are to be computed "from the end of the assessment year" relevant to the previous year of search. The statutory language necessarily results in inclusion of the search assessment year within the ten-year reckoning. Any interpretation that applies the six-year exclusion model, if made applicable to the ten-year block, would defeat the legislative scheme and render material words redundant. Accordingly, while computing the extended ten-year period under Explanation 1 to Section 153A read with Section 153C of the Act, the assessment year relevant to the previous year of search is to be included in the reckoning. 13.4 Even otherwise, this issue is no more res integra as the same is covered by the judgement of this Court in the case of Jayantibhai Karamshibhai Maniya v. ITO [2026] 182 taxmann.com 493 (Gujarat). This Court has taken a view, after considering the earlier judgement in the case of Bhavin Zinzuwadia (supra), that while calculating the period of ten years under Section 153C of the Act, keeping in mind the language of Explanation 1 to Section ....