DCIT Vs Somani Wordsted Limited (ITAT Delhi)
Satisfaction Note of 24.05.2021 Shifts Search-Year: ITAT Holds AY 2011-12 Outside Six-Year Block
Search u/s 132 was conducted on 02.11.2017 in the Rakesh Jain Group, including premises of Prahlad Kumar Aggarwal. During 153A assessment of the searched person, seized documents allegedly “pertaining to” Somani Worsted Ltd were found. AO of searched person recorded satisfaction on 24.05.2021, & handed over documents to AO of the Assessee. Based on this, AO initiated 153C proceedings & completed assessment u/s 144 r.w.s 153C on 30.12.2023 determining taxable income at Rs.15.50 crore.
Before Ld. CIT(A), Assessee raised legal additional grounds that: (i) the date of satisfaction/handing-over (24.05.2021) determines the search year for 153C; (ii) hence deemed search year becomes AY 2022-23; (iii) AY 2011-12 falls far beyond the permissible six assessment years & is therefore barred by limitation; (iv) consolidated satisfaction note for 2008-09 to 2018-19 is invalid; (v) AY 2011-12 being an unabated year, no addition u/s 60/68 can be made without incriminating material.
CIT(A) applied the binding decisions of:
- CIT v. Jasjit Singh (2023) 155 taxmann.com 155 (SC)
- PCIT v. Ojjus Medicare (P) Ltd (2024) 161 taxmann.com 160 (Delhi HC)
& held that the six-year block is to be reckoned from the date of recording of satisfaction / receipt of documents, not from original search date. Therefore AY 2011-12 lies outside the statutory block, & the assessment is void ab initio for want of jurisdiction.
