ACIT Vs Royal Sales Private Limited (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s connected appeals concerning Assessment Years 2010-11 and 2011-12 and upheld the relief granted by the Commissioner of Income-tax (Appeals)-25, New Delhi. The appeals were filed with a delay of six days, which the Tribunal condoned after finding reasonable cause. The dispute concerned the computation of the permissible assessment block under Section 153C of the Income-tax Act, 1961 in the case of a person other than the person searched. The original search on the Alankrit Group took place on 18 October 2019; according to the assessee’s submissions recorded in the order, the Assessing Officer of the searched person recorded satisfaction on 14 June 2022, while reasons for initiating proceedings and issuing notice under Section 153C were recorded on 30 June 2022. The Revenue argued that the block period should be calculated with reference to the year of the original search and challenged the CIT(A)’s reliance on PCIT v. Ojjus Medicare (P.) Ltd., pointing out that an SLP had been filed against that decision. The assessee contended that the date relevant to a non-searched person was the date on which the seized material was handed over to its jurisdictional Assessing Officer or the date on which satisfaction was recorded, and that the impugned years consequently fell outside Section 153C. Relying principally on CIT v. Jasjit Singh and PCIT v. Ojjus Medicare (P.) Ltd., the Tribunal held that AYs 2010-11 and 2011-12 were outside the scope of Section 153C and that the Assessing Officer’s assumption of jurisdiction was untenable. It upheld the CIT(A)’s order and dismissed ITA No. 2401/Del/2026 for AY 2010-11. Since the facts for AY 2011-12 were stated to be identical, the Tribunal applied its findings mutatis mutandis and dismissed ITA No. 2402/Del/2026 as well. The order was pronounced on 24 July 2026.
Cases Discussed
1. CIT v. Jasjit Singh [2023] 155 taxmann.com 155 (SC) — The first proviso to Section 153C governs not merely abatement but also the date from which the assessment block is reckoned for a non-searched person.
