DCIT Vs Chandra Vidya Investment & Finance Pvt. Ltd. (ITAT Delhi)
Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed four appeals filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 17.02.2025 concerning Assessment Years (AYs) 2010–11 to 2013–14. The core issue before the Tribunal was the computation of the block period for assessment under Section 153C of the Income Tax Act, 1961—specifically, whether the ten-year block should be reckoned from the date of initiation of search or from the date of receipt of seized materials by the Assessing Officer (AO) of the non-searched person.
The assessee, Chandra Vidya Investment and Finance Pvt. Ltd., was part of the Ojjus Medicare group. A search had been conducted at a third party, Alankit Group, on 18.10.2019 (during the previous year 2019–20 relevant to AY 2020–21). Based on materials seized during that search, proceedings under Section 153C were initiated against the assessee. The AO recorded a satisfaction note on 24.06.2022 and issued notice under Section 153C on 09.09.2022. Pursuant to these proceedings, assessments were made and additions were made to income.
The assessee challenged these assessments before the CIT(A), contending that the assessments for AYs 2010–11 to 2013–14 were beyond the permissible block period. The CIT(A) accepted the plea, holding that the computation of block period under Section 153C begins from the date of receipt of seized materials by the AO of the non-searched person, not from the date of search itself. Accordingly, the CIT(A) annulled the assessments for want of jurisdiction.
Aggrieved, the Revenue appealed to the Tribunal. The Departmental Representative supported the AO’s view and argued that the block period should be reckoned from the date of search.
After hearing the Departmental Representative and examining the record, the Tribunal upheld the decision of the CIT(A). The ITAT noted that the issue was no longer res integra and was conclusively settled by several judicial pronouncements, including the Supreme Court’s decision in CIT v. Jasjit Singh [(2023) 458 ITR 437 (SC)]. The Tribunal extracted the Supreme Court’s observations, which clarified that Section 153C’s proviso was introduced to address not only the question of abatement but also the reckoning of the six- or ten-year block period. The Apex Court emphasized that computing the period from the date of search rather than from the date of receipt of seized materials would unfairly prejudice non-searched persons who might be drawn into proceedings belatedly.
The Tribunal further referred to the Delhi High Court’s detailed interpretation in Ojjus Medicare Pvt. Ltd. (2024), where it was held that the first proviso to Section 153C creates a legal fiction shifting the starting point for the computation of the block period to the date on which the seized books or documents are received by the jurisdictional AO of the non-searched person. The High Court clarified that this principle distinguishes Section 153C assessments (for non-searched persons) from Section 153A assessments (for searched persons).
Applying these binding judicial principles, the Tribunal held that in the present case, the AO recorded his satisfaction on 24.06.2022 and issued notice under Section 153C on 09.09.2022. Therefore, the “previous year in which search is conducted or requisition is made,” as per the first proviso to Section 153C, would be the financial year 2022–23, corresponding to AY 2023–24. Consequently, the ten assessment years immediately preceding AY 2023–24 would span from AY 2014–15 to AY 2023–24.
Since the impugned assessments pertained to AYs 2010–11 to 2013–14, they fell outside this ten-year block period. Accordingly, the AO lacked jurisdiction to frame assessments for these years under Section 153C.
The Tribunal thus upheld the CIT(A)’s finding that the impugned assessments were invalid, being beyond the permissible block period. Having quashed the assessments for lack of jurisdiction, the Tribunal found it unnecessary to go into the merits of the additions made by the AO.
Result: The Revenue’s appeals in ITA Nos. 3697, 3698, 3699, and 3700/DEL/2025 were dismissed.
Order pronounced in open court on 07.11.2025.
FULL TEXT OF THE ORDER OF ITAT DELHI
