DCIT Vs Rasraj Marketing Private Limited (ITAT Delhi Bench)
Search Clock Starts When Seized Papers Reach the “Other Person’s” AO: AYs 2011-12 & 2012-13 Fall Outside s.153C Block
Background: A search u/s 132 was conducted on the Alankit Group, Shri Alok K. Agarwal, his son & certain associates on 18.10.2019. The search allegedly revealed material indicating that the group facilitated acquisition of shares in shell entities, accommodation entries & artificial short-term capital losses.
Certain documents, including ledger accounts, allegedly relating to Rasraj Marketing Pvt. Ltd. were seized from the searched premises.
The AO of the searched person recorded a satisfaction note on 20.12.2021. The jurisdictional AO of Rasraj Marketing recorded a separate satisfaction note on 24.12.2021, following which notices u/s 153C were issued on 28.12.2021.
For AY 2011-12, the assessee had originally declared income of ₹41,310. The AO completed assessment u/s 153C on 30.03.2023, making an addition of ₹28,99,042 u/s 69A & determining total income at ₹29,40,352. A similar assessment was framed for AY 2012-13.
The Crucial Question: Which Date Starts the Clock?
For a person searched directly, the block under s.153A is ordinarily reckoned with reference to the previous year in which the search occurs.
However, Rasraj Marketing was not searched. Proceedings were initiated because documents seized from another person were claimed to relate to it. Therefore, the controversy was whether the six/ten-year period should be calculated from:
