DCIT Vs Maharaja Agarsain Builders Private Limited (ITAT Delhi)
Section 153C Clock Starts With Receipt of Seized Material: Pending SLP Cannot Save Assessments
Background: Search in Alankit Group Led to Section 153C Proceedings
The dispute arose from a search conducted on 18 October 2019 in the cases of the Alankit Group and its associates.
Following that search, proceedings under Section 153C were initiated against Maharaja Agarsain Builders Private Limited on 16 September 2022. Assessments were subsequently completed under Section 153C read with Section 144 for AYs 2011-12 and 2012-13.
The assessee challenged those assessments before the CIT(A).
By separate orders dated 15 December 2025, the CIT(A) quashed the assessments after examining the applicable assessment-year window in light of the Delhi High Court’s decision in PCIT v. Ojjus Medicare (P.) Ltd.
The Revenue appealed against both orders before the Tribunal.
Several Additions Were Challenged, but Jurisdiction Came First
For the lead year, AY 2011-12, the Revenue challenged relief concerning additions of ₹42.50 lakh under Section 69A, ₹1,27,500 under Section 69C, ₹19,26,486 under Section 41(1), ₹16,30,153 under Section 37(1) and ₹1,85,94,693 under Section 68.
However, the decisive controversy was whether the assessment year itself could validly be covered by the Section 153C proceedings.
The correctness of an addition becomes secondary when the assessment falls outside the statutory jurisdictional window.
The Tribunal therefore examined the Revenue’s common legal argument concerning computation of the permissible period before considering the individual adjustments.
Revenue Wanted the Period Counted From the Search Date
The Revenue argued that the relevant starting point was the search date of 18 October 2019.
On that basis, it contended that neither AY 2011-12 nor AY 2012-13 fell outside the maximum period of ten assessment years contemplated by Section 153A and the connected provisions.
Its grounds also referred to the Finance Act, 2017 amendments and CBDT Circular No.2/2018 dated 15 February 2018. The Department maintained that the assessment-year periods under Sections 153A and 153C should be computed with reference to the assessment year relevant to the previous year in which the search was conducted.
The Tribunal found no merit in this approach.
Receipt by the Non-Searched Person’s AO Was Decisive
The Bench relied on CIT v. RRJ Securities Ltd. [2016] 380 ITR 612 (Delhi), PCIT v. Ojjus Medicare (P.) Ltd. [2024] 465 ITR 101 (Delhi) and CIT v. Jasjit Singh [2023] 458 ITR 437 (SC).
It held that these authorities settled the issue in light of the first proviso to Section 153C(1).
For the assessee before it, the relevant reference point was the date on which the concerned seized material was received by its jurisdictional Assessing Officer.
The Tribunal noted that the CIT(A) had examined the precise dates and concluded that both assessment years fell outside the specified statutory period, including the relevant ten-year window.
It accordingly upheld that conclusion. The order does not separately reproduce the exact material-receipt date, so that date should not be assumed to be identical to the date of initiation of proceedings.
Pending SLP Did Not Displace Binding Precedent
The Departmental Representative strongly relied on the fact that the Revenue’s SLP against Ojjus Medicare was pending before the Supreme Court.
The Tribunal rejected this as a basis for taking a different view.
It held that mere pendency of an SLP is no ground to depart from a binding decision of the jurisdictional High Court.
The Revenue’s disagreement with the precedent, and its pursuit of further litigation, did not justify disregarding the legal position applicable to the Tribunal.
Consequently, the CIT(A)’s orders quashing both Section 153C assessments were sustained.
Both Revenue Appeals Dismissed
The Tribunal dismissed the Revenue’s appeals for AYs 2011-12 and 2012-13.
Once the assessments were held invalid on the assessment-year-window issue, the remaining arguments on the merits of the additions became academic.
The decision therefore does not independently establish that the disputed credits, expenditure or liabilities were satisfactorily explained. The assessments failed on the jurisdictional issue.
Author’s Comments
Section 153C requires careful examination of dates belonging to the non-searched person’s proceedings. The original search date, receipt of seized material and initiation of proceedings are distinct events and should be supported by the relevant records.
The ruling also reinforces judicial discipline: a pending challenge does not, by itself, erase the authority of a binding judgment.
Its reference to a ten-year period should not be read as granting an automatic ten-year assessment power in every case. The applicable statutory conditions must still be examined.
Cases Discussed
- CIT-7 Vs RRJ Securities Ltd. (Delhi High Court), (2016) 380 ITR 612 (Delhi) — relied upon for the principle that, for proceedings against a person other than the searched person, the relevant date for determining the Section 153C assessment period is linked to handing over/receipt of the seized material by the jurisdictional Assessing Officer.
- PCIT Vs Ojjus Medicare (P.) Ltd. (Delhi High Court), (2024) 465 ITR 101 (Delhi) — jurisdictional High Court precedent followed for computation of the assessment-year period under Section 153C with reference to receipt of seized material by the jurisdictional AO of the non-searched person.
- CIT Vs Jasjit Singh (Supreme Court), (2023) 458 ITR 437 (SC) — relied upon along with RRJ Securities and Ojjus Medicare on the relevant reference date for Section 153C proceedings against a non-searched person.
FULL TEXT OF THE ORDER OF ITAT DELHI
These Revenue’s twin appeals ITA Nos.3796 & 3797/Del/2026 for assessment years 2011-12 and 2012-13, arise against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], Delhi’s-25 orders, both dated 15.12.2025, having DINs and Orders No. ITBA/APL/S/250/2025-26/1083681800(1) and 1083681988(1), involving proceedings under section 153C r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case files perused.
2. The Revenue raises the following identical substantive grounds in its “lead” appeal ITA No. 3796/Del/2026:
“Grounds of appeals
M/s Maharaja Agarsain Builders Private Limited: 2011-12
1. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs. 42,50,000/- made u/s 69A of the Income Tax Act.
2. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs. 1,27,500/- made u/s 69C of the Income Tax Act.
3. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs. 19,26,486/- made u/s 41(1) of the Income Tax Act.
4. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs. 16,30,153/- made u/s 37(1) of the Income Tax Act.
5. Whether the facts and in the circumstances of the case, the Ld. CIT (A) has erred in deleting the Addition of Rs. 1,85,94,693/- made u/s 68 of the Income Tax Act.
6. Whether the computation of the block period under Sections 153C and 153A of the Income Tax Act, as interpreted by the Hon’ble High Court in the case of Ojjus Medicare Pvt. Ltd., aligns with the legislative intent and procedural flexibility outlined in CBDT Circular No. 2/2018 dated 15 February 2018.
7. Whether on the facts and under the circumstances of the case and in law, the Hon’ble High Court 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 receipt of the books of accounts, documents or assets seized, by the jurisdictional AO of the non-searched person, even when the position of law is clarified after the amendment introduced by Finance Act, 2017, that the block period of 6AYs and 10AYs as mentioned in Section 153C and Section 153A have same meaning and have to be calculated from the “assessment year relevant to the previous year in which search is conducted “?
3. These Revenue’s twin cases emanate from the learned departmental authorities’ common search action dated 18.10.2019 carried out in M/s. Alankit Group of cases and its associates leading to initiation of proceedings in both the cases on 16.09.2022 u/s 153C of the Act, which culminated in the corresponding section 153C assessments framed in the assessee’s hands and quashed in the learned CIT(A)’s identical detailed discussion in light of Ojjus Medicare Pvt. Ltd (supra).
It is in this factual backdrop that the Revenue’s common/identical ground/argument herein is that going by the relevant date of search i.e. 18.10.2019, none of the impugned assessment years falls beyond the statutory period of maximum ten assessment years as per section 153A(1) read with the 2nd proviso thereto.
4. We have given our thoughtful consideration to the Revenue’s instant identical legal ground in these twin appeals and find no merit therein. We wish to emphasize here that various recent judicial precedents CIT-7 Vs. RRJ Securities Ltd. (2016) 380 ITR 612 (Del) and PCIT Vs. Ojjus Medicare (P) Ltd., (2024) 465 ITR 101 (Del) and CIT Vs. Jasjit Singh, 458 ITR 437 (SC) have settled the issue in light of section 153C(1) 1st proviso that we ought to go by the date of receiving of the concerned seized material by the assessee’s jurisdictional Assessing Officer only. There is further no denial to the clinching fact that the learned CIT(A) has gone by the very precise dates to conclude that none of the assessment years involved in the assessee’s cases falls within the specified period of “relevant assessment year or years” i.e. ten assessment years; as the case may be, u/s 153A(1) r.w. the 2nd proviso thereto.
5. Faced with this situation, learned CIT(DR) vehemently submits that the Revenue’s Special Leave Petition “SLP” against Ojjus Medicare (supra) is pending before the hon’ble apex court. We are of the considered view that mere pendency of SLP is no ground to adopt a different approach against binding decision of hon’ble jurisdictional high court. We thus uphold that the learned CIT(A)’s identical lower appellate discussion quashing the impugned section 153C assessments in both these cases in very terms.
All other remaining pleadings between the parties on merits stand rendered academic.
6. These Revenue’s twin appeals ITA Nos.3796 & 3797/Del/2026 are dismissed in above terms. A copy of this common order be placed in the respective case files.
Order pronounced in the open court on 27th August, 2026
