Search Clock Starts on Seized Material Receipt; AYs 2011-12 & 2012-13 Outside Section 153C

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:

18.10.2019, being the date of search on the Alankit Group; or

24/28.12.2021, when satisfaction was recorded & proceedings were initiated against Rasraj Marketing.

The difference was decisive. If the search date governed, the disputed years could potentially fall within the extended block. If the date on which the other person’s AO received the material governed, the relevant base year became AY 2022-23, making AYs 2011-12 & 2012-13 too old.

CIT(A) Follows Ojjus Medicare

The CIT(A) relied upon the jurisdictional Delhi High Court’s judgment in PCIT v. Ojjus Medicare Pvt. Ltd., 465 ITR 101.

The High Court held that for proceedings against an “other person” u/s 153C, the date of search must be deemed to be the date on which the seized books, documents or assets are received by the AO having jurisdiction over that other person.

Applying that principle, the CIT(A) treated December 2021 as the relevant date. The associated AY was AY 2022-23. The ten-year block would accordingly cover AYs 2013-14 to 2022-23.

Since AYs 2011-12 & 2012-13 preceded that block, the assessments were annulled without adjudicating the additions on merits.

Revenue Relies on Finance Act, 2017 Amendment

The Revenue argued that after amendments made by the Finance Act, 2017 with effect from 01.04.2017, s.153C expressly linked the six-year & extended ten-year periods to the AY relevant to the previous year in which the actual search was conducted.

According to the Department, the first proviso to s.153C creates a deemed date of search based upon receipt of material only for the limited purpose of determining whether pending assessments abate. It does not shift the entire block period.

The Revenue informed the Tribunal that an SLP against Ojjus Medicare was pending before the Supreme Court. However, it could not produce any order staying the operation of the Delhi High Court’s judgment.

Tribunal Records Its View but Follows Binding Precedent

The ITAT referred to its recent decision in DCIT v. Sunil Bhala, which arose from the same Alankit Group search.

In that decision, the Bench had undertaken a detailed examination of the post-2017 statutory provisions. Its interpretative view was that the amendment required the six/ten-year period to be reckoned from the actual search date, while the deemed receipt date under the first proviso was confined to identifying abated & unabated assessments.

Nevertheless, the Tribunal recognised that it was bound by the Delhi High Court’s judgment in Ojjus Medicare. Judicial discipline required the jurisdictional High Court’s interpretation to prevail irrespective of the Tribunal’s own understanding of the amended provision.

The mere filing of an SLP did not dilute the binding force of the judgment, particularly when no stay had been granted.

Final Verdict

Following Ojjus Medicare, the Tribunal held that the relevant block must be computed from the date on which the seized material was handed over to the AO of Rasraj Marketing.

With AY 2022-23 as the reference point, the ten-year period covered AYs 2013-14 to 2022-23. Therefore, AYs 2011-12 & 2012-13 fell outside the permissible period.

Both Revenue appeals were dismissed, leaving the CIT(A)’s annulment intact. However, the ITAT directed that both parties would remain bound by the Supreme Court’s eventual decision in the pending SLP, & the AO must record & implement that direction.

Author’s Comments

This is an unusual order where the Tribunal expressly records one statutory interpretation but reaches the opposite result because binding jurisdictional precedent commands it. That is not inconsistency; it is judicial discipline.

For s.153C proceedings against an “other person,” the choice between the search date & material-receipt date can shift the block by several years. Here, a gap exceeding two years between the October 2019 search & December 2021 satisfaction pushed both disputed AYs beyond the ten-year window.

The Revenue’s pending SLP keeps the controversy alive. If the Supreme Court reverses Ojjus Medicare, the Tribunal’s direction may permit consequential action, subject to the precise terms of the final judgment.

Until then, within Delhi, Ojjus Medicare remains binding: the Department may seize the document on one date, but the other person’s s.153C clock starts only when that document reaches the correct AO.

Cases Discussed

• Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors., 1987 (2) SCC 107
• PCIT, Central-1, Delhi v. Ojjus Medicare Pvt. Ltd.
• DCIT v. Sunil Bhala, ITA No. 3698/Del/2026, order dated 25.08.2026
• SSP Aviation Ltd. v. DCIT, (2012) 20 taxmann.com 214 (Delhi)
• Commissioner of Income Tax-14 v. Shree Jasjit Singh
• CIT v. RRJ Securities Ltd.
• PCIT v. Sarwar Agency (P.) Ltd.
• Pepsi Foods Pvt. Ltd. v. Asst. CIT
• CIT v. Calcutta Knitwear
• ITO v. Vikram Sujitkumar Bhatia
• CIT v. Jasjit Singh
• RKM Powergen

FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, DELHI BENCH

These two appeals are filed by Revenue against the separate appellate order(s) passed by Learned Commissioner of Income Tax (Appeals)-25, New Delhi [CIT(A), in short) both dated 16.12.2025 for assessment years 2011-12 and 2012-13 (DIN & Order No. ITBA/APL/S/250/2025-26/1083733406(1) and ITBA/APL/S/250/2025-26/1083733582(1) ) respectively u/s 250 of the Income-tax Act, 1961 hereinafter called “1961 Act”) , which appeals in turn have arisen from the separate assessment order(s) both dated 30.03.2023, passed by the Assessing Officer, (hereinafter referred as “the AO”) u/s 153C of the 1961 Act for Assessment Year(s) 2011-12 and 2012-13 respectively.

2. Both the captioned appeals filed by the Revenue are having common issue, therefore, both the appeals filed by the Revenue are taken together and are decided by this common order. Both the parties before us concurred that the issues raised by the Revenue in both the appeals are common as similar grounds of appeals are raised by Revenue in both the appeals.

3. It is observed that both these appeals are filed belatedly by Revenue with the Tribunal with delay of 2 days beyond the time stipulated under Section 362(3) of the Income-tax Act, 2025(hereinafter called “2025 Act”). It is stated by Revenue in the condonation applications filed with the Tribunal that due to heavy work-load in finalizing the scrutiny assessments, there was delay of 2 days in filing these appeals belatedly by Revenue by 2 days beyond the time stipulated u/s 362(3) of the 2025 Act. Prayers are made by Revenue to condone this delay of 2 days in filing these appeals belatedly with the Tribunal. The ld. Counsel for the assessee fairly submitted that he has no objection to aforesaid condonation. Keeping in view sufficient cause shown by Revenue, we condone the aforesaid delay of 2 days in filing both these appeals belatedly by Revenue, and proceed to adjudicate these appeals on merits in accordance with law. When the technicalities are pitted against the substantive justice, the Courts will lean towards advancement of substantial justice, unless malice is at writ large or there is a gross negligence. We donot find and malice or gross negligence on the part of Revenue in filing these appeals belatedly with the Tribunal. Sufficient cause is shown by Revenue in filing these appeals belatedly, hence delay stand condoned. Reference is drawn to the judgment and order of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors. 1987(2) SCC 107.

4. First , we take up the appeal filed by Revenue in ITA No.3705/Del/2026 for Assessment Year 2011-12 with Income Tax Appellate Tribunal, Delhi Benches, New Delhi, wherein the Revenue has raised the following grounds of appeal in Memo of appeal filed with the Income Tax Appellate Tribunal, Delhi Benches, New Delhi:

“1. Whether on the facts and under the circumstances of the case and in law, the Ld. CIT(A) was justified in relying upon the judgement of Hon’ble Delhi High Court in the case of PCIT, Central-1. Delhi vs Ojjus Medicare Pvt. Ltd. (ITA No. 52 of 2024), even when the Revenue has filed a SLP against this decision of the Hon’ble Delhi High Court?

2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that 10 years block periods for assessment is 153C of the Income-tax Act, 1961, have to be calculated from the relevant AY in which date of satisfaction note drawn or from the date of issue of Notice w/s 153C of the Act and not from the date of initiation of search even when Section 153C(1) of the Act clearly mentions that calculation of block period has to be done from the year of search?

3. Whether on the facts and under the circumstances of the case and in law, Ld.CIT(A) was justified in relying was justified in holding that block periods for assessment ws 153C of the Income-tax Act, 1961, have to be calculated from the date of satisfaction note drawn or date of Notice issued u/s 153C of the Act, 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 sub-section (1) of 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”?

4. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.

5. That the grounds of appeal are without prejudice to each other.

6. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.”

5. Brief facts of the case are that return of income was originally filed by the assessee u/s 139(1) of the Act , on 29.09.2011 , declaring total income of Rs.41,310/-. Notice dated 28.12.2021 u/s 153C of the Act was issued to the assessee by the AO. The assessee in response thereof filed return of income , on 17.01.2022, declaring income of Rs.41,310/-. Statutory notices u/s 143(2) and 142(1) were also issued by the AO to the assessee, during the course of assessment proceedings. The assessee participated in assessment proceedings conducted by the AO u/s 153C of the 1961 Act. The Genesis of these proceedings were that search and seizure action u/s. 132 of the 1961 Act was carried out by Revenue, on 18.10.2019 , on the Alankit Group, Sh. Alok K Agarwal, his son Ankit Agarwal, and some of the close associates and key employees of Shri Alok K Agarwal. Several Incriminating material was found and seized during the search operations, which indicated Shri Alok Agarwal has facilitated acquisition of shares of several shell entities for benefit of his own group as well his known associates and clients. He has received and provided accommodation entries and also facilitated bogus short term capital loss to set off long term capital gains to various persons through several entities managed and controlled by him and his associates. Some of the incriminating document were found from the searched premises of the aforesaid persons at 3584, Third Floor, Gali No. 4 , Narang Colony , Trinagar, Delhi, in the name of the assessee. The case of the assessee was also Centralized to Central Circle-28, New Delhi. Satisfaction Note dated 20.12.2021 was recorded by the AO of the searched person , as well separate Satisfaction Note dated 24.12.2021 was recorded by the jurisdictional AO of the assessee , which were both provided by the AO to the assessee. . Copy of the incriminating seized documents in the form of Ledger Account along with relevant extract of the statement of Sh. Sunil Kumar Gupta were also provided by AO to the assessee, on 15.12.2022. The AO made detailed enquiry and analysis before making additions in the hands of the assessee, which are recorded in assessment order in details .

These assessment proceedings conducted by the AO culminated into an assessment order dated 30.03.2023 passed by the AO u/s 153C of the 1961 Act , for the assessment year 2011-12, wherein addition of Rs.28,99,042 was made by the AO in the hands of the assessee u/s 69A of the 1961 Act, wherein the total income of the assessee was assessed by the AO to the tune of Rs.29,40,352/- as against returned income of Rs.41,310/-

6. The assessee being aggrieved filed first appeal before the Ld. CIT(A), wherein assessee raised both legal grounds as well raised challenge to the additions made by the AO on merits of the addition. The Ld. CIT(A) adjudicated legal ground raised by the assessee in favour of the assessee by relying upon the judgment and order of Hon’ble Delhi High Court in the case of The PCIT(Central- 1) v. Ojjus Medicare Pvt. Ltd. reported in [2024] 465 ITR 101 (Delhi) , wherein ld. CIT(A) held that the impugned assessment year 2011-12 falls beyond the stipulated period of the ‘relevant assessment year’ as is referred to on sub-section (1) of Section 153A read with Explanation 1, viz. it falls beyond the ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted . While determining the date of search as is contemplated u/s 153C of the Act , the ld. CIT(A) relied on the aforesaid judgment and order of Hon’ble Delhi High Court (jurisdictional High Court) in the case of Ojjus Medicare(Supra) to grant relief to the assessee on above legal ground, and held that for the purposes of Section 153C, the date of search in the case of other person i.e. other than the person in whose case search was conducted u/s 132 of the 1961 Act, shall be deemed to be the date of receiving the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person.

7. Now, it was the turn of the Revenue to be aggrieved by the appellate order passed by ld. CIT(A), and Revenue has now filed an appeal with the Tribunal. The Revenue has raised as many as six grounds of appeal , wherein the main grievance of the Revenue is that ld. CIT(A) erred in relying upon the judgment and Order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), and granting relief to the assessee by holding that the impugned assessment year shall fall outside the period of ten assessment years on the grounds that the aforesaid period is to be determined with reference to the date of receiving of the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person, but in view of Revenue , the said period is to reckoned from the date of searches conducted by Revenue u/s 132 of the 1961 Act or requisition made u/s 132A of the 1961 Act. Thus, as per ld. CIT-DR, the searches were conducted u/s 132 of the 1961 Act on 18.10.2019 in the case of Alankit Group etc., and the period of 6/10 years is to be reckoned from the aforesaid date for computing limitation period for reckoning six/ten assessment years even in the case of the assessee who was not searched although with respect to whom documents or assets seized during search have bearing on the total income of the assessee , while the ld. CIT(A) determined the aforesaid period from the date of recording of satisfaction by the AO of the assessee on 24.12.2021 , wherein notice u/s 153C was issued by the AO to the assessee on 28.12.2021. It was submitted by ld. CIT-DR that Revenue has not accepted the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) , and has filed SLP with Hon’ble Supreme Court, which is pending adjudication by Hon’ble Supreme Court. However, on being asked by the Bench , Ld. CIT-DR could not brought on record any order or directions issued by Hon’ble Supreme Court or Hon’ble Delhi High Court, wherein operations of the aforesaid judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare (supra) was stayed .

7.2 The ld. Counsel for the assessee relied upon the orders passed by ld. CIT(A), and also relied upon judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra). The ld. Counsel for the assessee submitted that the appeal of the Revenue be dismissed by following the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra).

8. We have considered rival contentions and perused the material on record. Brief facts of the case are that return of income was originally filed by the assessee u/s 139(1) of the Act on 29.09.2011 , declaring total income of Rs.41,310/-. Notice dated 28.12.2021 u/s 153C of the Act was issued to the assessee by the AO. The assessee in response thereof filed return of income , on 17.01.2022, declaring income of Rs.41,310/-. The Genesis of these proceedings were that search and seizure action u/s. 132 of the 1961 Act was carried out by Revenue, on 18.10.2019, on the Alankit Group, Sh. Alok K Agarwal, his son Ankit Agarwal, and some of the close associates and key employees of Shri Alok K Agarwal. Several Incriminating material was found and seized during the search operations, which indicated Shri Alok Agarwal has facilitated acquisition of shares of several shell entities for benefit of his own group as well his known associates and clients. He has received and provided accommodation entries and also facilitated bogus short term capital loss to set off long term capital gains to various persons through several entities managed and controlled by him and his associates. Some of the incriminating document were found from the searched premises of the aforesaid persons at 3584, Third Floor, Gali No. 4 , Narang Colony , Trinagar, Delhi, in the name of the assessee. The case of the assessee was also Centralized to Central Circle-28, New Delhi. Satisfaction Note dated 20.12.2021 was recorded by the AO of the searched person , as well separate Satisfaction Note dated 24.12.2021 was recorded by the jurisdictional AO of the assessee , both of which were provided by the AO to the assessee. . Copy of the incriminating seized documents in the form of Ledger Account along with relevant extract of the statement of Sh. Sunil Kumar Gupta were also provided by AO to the assessee, on 15.12.2022. The AO made detailed enquiry and analysis before making additions in the hands of the assessee, which are recorded in assessment order in details . These assessment proceedings conducted by the AO culminated into an assessment order dated 30.03.2023 passed by the AO u/s 153C of the 1961 Act for assessment year 2011- 12, wherein addition of Rs.28,99,042/-was made by the AO in the hands of the assessee u/s 69A of the 1961 Act, wherein the total income of the assessee was assessed by the AO to the tune of Rs.29,40,352/- as against returned income of Rs. 41,310/- .

8.2 The assessee being aggrieved filed first appeal before the Ld. CIT(A), wherein assessee raised both legal grounds as well raised challenge to the additions made by the AO on merits of the addition. The Ld. CIT(A) adjudicated legal ground raised by the assessee in favour of the assessee by relying upon the judgment and order of Hon’ble Delhi High Court in the case of The PCIT(Central-1) v. Ojjus  Medicare Pvt. Ltd. reported in [2024] 465 ITR 101 (Delhi) , wherein ld. CIT(A) held that the impugned assessment year 2011-12 falls beyond the stipulated period of the ‘relevant assessment year’ as is referred to on sub-section (1) of Section 153A read with Explanation 1, viz. it falls beyond the ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted . While determining the date of search as is contemplated u/s 153C of the Act , the ld. CIT(A) relied on the aforesaid judgment and order of Hon’ble Delhi High Court (jurisdictional High Court) in the case of Ojjus Medicare(Supra) to grant relief to the assessee on above legal ground, and held that for the purposes of Section 153C, the date of search in the case of other person i.e. other than the person in whose case search was conducted u/s 132 of the 1961 Act, shall be deemed to be the date of receiving the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person.

8.3. Revenue being aggrieved by the relief granted by ld. CIT(A) has filed an appeal with the Tribunal, averring that ld. CIT(A) erred in relying on judgment and order of the Hon’ble Delhi High Court in the case of Ojjus Medicare(supra). Incidentally, the proceedings u/s 153C arose in the case of Ojjus Medicare(supra) which was before Hon’ble Delhi High Court , from the same search conducted by Revenue u/s 132 of the 1961 Act on 18.10.2019 on the Alankit Group. Similar situation arose in the appeal recently adjudicated by the Division Bench of the Delhi Tribunal wherein the Tribunal pronounced a detailed order running into109 pages in which both of us were part of the Division Bench in the appeal filed by the Revenue in ITA no. 3698/Del/2026 for assessment year 2012-13 in the case of DCIT v. Sunil Bhala, vide orders dated 25.08.2026 which appeal also arose from proceedings initiated u/s 153C with respect to searches conducted by Revenue u/s 132 on 18.10.2019 in the case of Alankit Group, wherein the proceedings were initiated by the AO against the tax-payer Shri Sunil Bhala and notice u/s 153C was issued on 28.12.2021, which culminated into an assessment order dated 31.03.2023 passed by the AO u/s 153C for assessment year 2012-13, wherein the Tribunal after considering the amendments made by Finance Act, 2017 wef 01.04.2017 reached a conclusion that with respect to person other than person searched , the period of six/ten assessment years for framing assessment u/s 153C shall be determined from the date of actual search conducted by Revenue u/s 132 , for searches conducted on or after 01.04.2017 ie. Post Amendment by Finance Act , 2017 wef 01.04.2017 ( obviously till sunset clause on 31.03.2021) . In the said case of Shri Sunil Bhala(supra), the ld. CIT(A) gave relief to the assessee on legal ground by relying on the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), and held that for the purposes of Section 153C of the 1961 Act, the date of search in the case of other person i.e. other than the person in whose case search was conducted u/s 132 of the 1961 Act, shall be deemed to be the date of receiving the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person, and accordingly assessment year 2012-13 was held to fall beyond the stipulated period of the ‘relevant assessment year’ as is referred to on sub-section (1) of Section 153A read with Explanation 1, viz. it falls beyond the ten assessment years from the end of the assessment year relevant to the previous year in which search was conducted . The Tribunal in the case of Shri Sunil Bhala(supra) passed a detailed order dated 25.08.2026 running into 109 pages , wherein the Tribunal after considering the amendments made by Finance Act, 2017 wef 01.04.2017 reached a conclusion that with respect to person other than person searched, the period of six/ten assessment years for framing assessment u/s 153C shall be determined from the date of actual search conducted by Revenue u/s 132 , for searches conducted on or after 01.04.2017 ie. Post Amendment by Finance Act , 2017 wef 01.04.2017 ( obviously till sunset clause on 31.03.2021). However, the Tribunal being lower in judicial hierarchy to Superior Constitutional Courts viz. Hon’ble Supreme Court and Hon’ble High Court is under bounden duty to follow judgment and orders pronounced by Hon’ble Supreme Court. Thus, the Tribunal Respectfully followed the judgment and order of Jurisdictional High Court i.e. Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), and dismissed the appeal filed by Revenue by deciding the legal issue before it in favour of the assessee , wherein it held as under:

“6. We have considered rival contentions and perused materials available on record. Brief facts of the case are that return of income was originally filed by the assessee u/s 139(1) of the Act on 25.07.2012 , declaring total income of Rs.7,82,769/-. Genesis of these proceedings were that search and seizure action u/s. 132 of the 1961 Act was carried out by Revenue, on 18.10.2019 , on the Alankit Group , Sh. Alok K Agarwal, his son Ankit Agarwal, and some of the close associates and key employees of Shri Alok K Agaarwal. Several Incriminating material were found and seized during the search operations, which indicated Shri Alok Agarwal has facilitated acquisition of shares of several shell entities for benefit of his own group as well his known associates and clients. He has received and provided accommodation entries and also facilitated bogus short term capital loss to set off against long term capital gains to various persons through several entities managed and controlled by him and his associates. Incriminating document were found and seized from the searched premises of the aforesaid persons at 3584, Third Floor, Gali No. 4 , Narang Colony , Trinagar, Delhi ,in the name of the assessee which reflected undisclosed income pertaining to the assessee. The case of the assessee was also Centralized to Central Circle-28, New Delhi. Some of the seized incriminating documents suggested that the assessee is also beneficiary of the accommodation entries , representing income of the assessee which was not disclosed to the Revenue in the return of income filed by the assessee with the Revenue.Satisfaction Note dated 20.12.2021 was recorded by the AO of the searched person(PB/Page 90-114). Satisfaction Note dated 24.12.2021 of the jurisdictional AO of the assessee was also recorded (PB/page 115-136). Notice dated 28.12.2021 u/s 153C of the Act was issued to the assessee by the AO. The assessee in response thereof filed return of income , on 21.01.2022, declaring income of Rs.7,82,769/-. The assessee participated in assessment proceedings conducted by the AO u/s 153C of the 1961 Act. Copies of both the satisfaction Note were provided by the AO to the assessee. Copy of the incriminating seized document in the form of Ledger Account along with relevant extract of the statement of Sh. Sunil Kumar Gupta were also provided by AO to the assessee , on 15.12.2022. Further, notices u/s  142(1) of the Act were also issued by the AO to the assessee from time to time during the course of assessment proceedings, and assessee participated in the assessment proceedings. The assessee has declared income from salary, business and profession and income from other sources, in the return of income filed with Revenue. The AO made detailed enquiry and analysis , which are recorded in assessment order. These assessment proceedings conducted by the AO culminated into an assessment order dated 31.03.2023 passed by the AO u/s 153C of the 1961 Act, wherein addition of Rs.1,31,481/- were made by the AO in the hands of the assessee u/s 69A of the 1961 Act, wherein the total income of the assessee was assessed by the AO to the tune of Rs.9,14,250/- u/s 153C of the 1961 Act for impugned assessment year 2012-13 as against returned income of Rs. 7,82,769/-, vide assessment order dated 31st March, 2023 passed by the AO u/s 153C of the 1961 Act. The assessee filed first appeal with ld. CIT(A), which culminated into an appellate order dated 29.12.2025, wherein ld. CIT(A) deleted the aforesaid addition made by the AO on legal jurisdictional ground by relying on judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), wherein ld. CIT(A) held that the impugned assessment year 2012-13 falls beyond the stipulated period of the ‘relevant assessment year’ as is referred to on sub-section (1) of Section 153A read with Explanation 1, as it falls beyond the ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted . While determining the date of search as is contemplated u/s 153C of the Act , the ld. CIT(A) relied on the aforesaid judgment and order of Hon’ble Delhi High Court (jurisdictional High Court) in the case of Ojjus Medicare(Supra) , and held that for the purposes of Section 153C, the date of search in the case of other person i.e. person other than the person in whose case search was conducted u/s 132 of the 1961 Act, shall be deemed to be the date of receiving the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person, which shall be starting point for determining the period of six/ten assessment years for framing of assessment in the case of person other than persons searched with respect to him certain assets or documents seized reflected undisclosed income.

6.2.The Tribunal being creation of statute viz. Income-tax Act, 1961 , is lower in hierarchy to Superior Courts viz. Hon’ble Supreme Court and Hon’ble High Court being Constitutional Courts, is bound by judgments and orders of Superior Courts. In the instant case , judgment and order passed by Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) being jurisdictional High Court, is a binding precedent and the Tribunal is bound to follow the aforesaid judgment and order. The Hon’ble Delhi High Court has adjudicated the issue in Ojjus Medicare(supra) even after considering the amendments as were brought to Section 153C and 153A , by Finance Act, 2017 effective from 01.04.2017, and then decided the issue in favour of the assessee by holding that for the purposes of Section 153C, the date of search in the case of other person i.e. person other than the person in whose case search was conducted u/s 132 of the 1961 Act, shall be deemed to be the date of receiving of the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person, which shall be starting point for determining the period of six/ten assessment years for framing of the search assessment u/s 153C in the case of person other than persons searched with respect to him certain assets or documents seized reflect undisclosed income of the person other than the person searched. It will be relevant to reproduce the decision of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), as was relied upon by ld. CIT(A) to give relief to the assessee on the aforesaid legal ground by holding that the impugned assessment year shall be outside the limit of ten assessment years available for farming assessment u/s 153C ( date of search u/s 132 was 18.10.2019, date of recording of satisfaction by the AO of the assessee was 24.12.2021) , the operative portion of aforesaid judgment and order is reproduced hereunder:

E. ANALYSIS OF THE STATUTORY FRAMEWORK

51. Having noticed the rival submissions which were addressed, we now proceed with our analysis of the questions which stand posited. Prior to the insertion of Sections 153A, 153B, and 153C in the Chapter pertaining to procedure for assessment, an assessment in respect of search cases was governed and regulated by Chapter XIVB of the Act. The said Chapter comprising of Sections 158B to 158BH set out the procedure for assessment or reassessment proceedings being undertaken as a fallout of a search which may have been conducted. Chapter XIVB spoke of assessments being undertaken for a block period comprising of six AYs’ preceding the previous year in which the search may have been conducted or a requisition made. In terms of Section 158BA, the total undisclosed income relating to the block period as determined was to be taxed at rates specified in Section 113 as income of the block period irrespective of the previous year or years to which such income related. In terms of the Explanation which stood placed in Section 158BA, the assessment under Chapter XIVB was to be in addition to regular assessment in respect of each previous year included in the block period. The Explanation to Section 158 BA is reproduced hereinbelow:-

“Explanation- “For the removal of doubts, it is hereby declared that–

(a) the assessment made under this Chapter shall be in addition to the regular assessment in respect of each previous year included in the block period;

(b) the total undisclosed income relating to the block period shall not include the income assessed in any regular assessment as income of such block period;

(c) the income assessed in this Chapter shall not be included in the regular assessment of any previous year included in the block period.”

52. As would be manifest from a reading of the various provisions that stood placed in that Chapter, they essentially contemplated and envisaged two separate assessments being undertaken, namely, one pertaining to the block period and which would get triggered pursuant to a search or a requisition made and the second consisting of a regular assessment proceeding parallelly and unconcerned with the computation of the undisclosed income identified for the said block period. Of equal significance was Section 158BA(3) of the Act and which read as follows:-

“158BA. Assessment of undisclosed income as a result of search.–

xxx xxx xxx (3) Where the assessee proves to the satisfaction of the Assessing Officer that any part of income referred to in sub-section (1) relates to an assessment year for which the previous year has not ended or the date of filing the return of income under sub-section (1) of section 139 for any previous year has not expired, and such income or the transactions relating to such income are recorded on or before the date of the search or requisition in the books of account or other documents maintained in the normal course relating to such previous years, the said income shall not be included in the block period.”

53. The aforesaid sub-section reinforces the scheme of Chapter XIVB requiring the block period assessment being undertaken independent of a regular assessment and thereby not contemplating a merger of the two assessment proceedings or abatement of pending assessments. Section 158BI came to be incorporated in Chapter XIVB by virtue of Finance Act 2003 with effect from 01 June 2003 and reads as under:-

“158BI. Chapter not to apply after certain date.– The provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003.“

54. Sections 153A, 153B and 153C were introduced by virtue of Finance Act, 2003. The trinity provisions constituted a paradigm change in the manner in which search assessments were liable to be conducted. They set up a procedure clearly distinct from that which was envisaged under Chapter XIVB and were ordained to apply in respect of all searches or requisitions made after 31 May 2003. The fact that these provisions were envisaged to now govern and regulate all search assessments came to be reinforced by virtue of the introduction of Section 158BI and thus bringing the curtains down on the block period assessment procedure set out in Chapter XIVB and which had held the field till then.

55. It would in this regard be pertinent to refer to the Notes on Clauses of the Finance Bill, 2003 relevant parts whereof are reproduced hereinbelow:-

“Notes on Clauses xxx xxx xxx Clause 59 seeks to insert new sections 153A, 153B and 153C in the Income-tax Act relating to assessment in case of search or requisition made after 31st May, 2003, specifying time-limit for completion of assessment or reassessment of income and assessment of income of any other person in certain cases.

The proposed new section 153A provides that in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall, notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, issue notices to such person requiring him to furnish within such period as may be specified in the notice the return of income in respect of each assessment year falling within six assessment years referred to in clause (b) of section 153A, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of the Income-tax Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. The Assessing Officer shall assess or reassess the total income of six assessment years immediately preceding the previous year during which such search is conducted or requisition is made and such assessment or reassessment shall be made in respect of each assessment year falling within six assessment years. This clause also provides that the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section, pending on the date of the initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. This clause also provides that save as otherwise provided in section 153A, section 153B and section 153C, all other provisions of the Income-tax Act shall apply to the assessment or reassessment made under this section and in the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.

The proposed sub-section (1) of the new section 153B provides for the time-limit for completion of assessment in case of a person where a search is initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A.It provides that the Assessing Officer shall make an order of assessment or reassessment in respect of each assessment year falling within six assessment years referred to in clause (b) of section 153A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed. The Assessing Officer shall make an order of assessment or reassessment in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed. This clause also provides that in computing the period of limitation for the purposes of this section, the period during which the assessment proceeding is stayed by an order or injunction of any court; or the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section, or the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee of being re-heard under the proviso to section 129, or in a case where an application made before the Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Commissioner under sub-section (2) of that section, shall be excluded. This clause also provides that where immediately after the exclusion of the aforesaid period, the period of limitation available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the period of limitation shall be deemed to be extended accordingly.

The proposed sub-section (2) seeks to provide that the authorisation referred to in clause (a) and clause (b) shall be deemed to have been executed in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued and in the case of requisition made under section132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.

The proposed new section 153C provides for assessment or reassessment of income of any other person. Where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A.These amendments will take effect from 1st June, 2003.”

56. Section 153A, when finally introduced, commenced with a non- obstante clause giving it overriding effect over Sections 139,147 to 149, 151 and 153 in case of a person where a search may have been initiated or a requisition made after 31 May 2003. It provided that where a search comes to be initiated or where books of accounts or other documents or assets come to be requisitioned, the AO would require the searched person to furnish a return of income in respect of each AY falling within six AYs’ immediately preceding the AY relevant to the previous year in which search may have been conducted or requisition made. The First Proviso further stipulated that the AO would assess or reassess the total income in respect of each AY falling within the block of six AYs’. Of equal significance was the Second Proviso and which prescribed that if any proceedings relating to assessment or reassessment relating to the “relevant assessment year” spoken of earlier were pending on the date of initiation of the search or on the making of a requisition, the same would abate.

57. While Section 153A pertained to assessment in case of the person searched, it undoubtedly laid in place the assessment machinery for the non-searched person and in respect of whom the search may have led to the identification of money, bullion, jewellery or other valuable article or thing, books of account, documents belonging to that “other person”. Section 153C did not lay in place a separate procedure for assessment and merely postulated that assessment or reassessment, as the case may be, would have to be undertaken in accordance with the provisions of Section 153A. In terms of Finance Act, 2005, a Proviso came to be inserted in section 153C(1) in the following terms:-

“Provided that in case of such other person, the reference to the date of initiation of the search under section132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person.”

58. Clause 47 of the Notes on Clauses explained the intent underlying the introduction of this Proviso with retrospective effect from 01 June 2003 in the following words:-

“Clause 47 seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person.

Under the existing provisions of section 153A, where the Assessing Officer is satisfied that books of account or documents or assets seized under section 132 or requisitioned under section132A belong to a person other than a person in whose case search under section 132 or requisition under section 132A was made, he shall handover the same to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person under section 153A. Second proviso to section 153A provides that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in the said section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. It is proposed to amend the said section so as to provide that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having the jurisdiction over such other person.

It is further proposed to insert a new sub-section (2) so as to provide that for assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A in case of other person, where (a) no return of income has been furnished by such person and no notice under sub-section (1) of section 142 has been issued to him, or (b) are turn of income has been furnished by such person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person for such assessment year in the manner provided in section 153A. The provisions of proposed new subsection (2) would apply where books of account or documents or assets seized or requisitioned referred to in sub- section (1) has been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A.

This amendment will take effect retrospectively from 1st June,2003 and will, accordingly, apply in relation to a search initiated under section 132 or in relation to books of account, other documents or any assets requisitioned under section 132A after the 31st May, 2003.”

59. The recast Section 153C, as amended by the Finance Act, 2005 read as under:-

“153C. (1) Notwithstanding anything contained in section 139, section 147 , section 148, section 149 ,section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A :

Provided that in case of such other person, the reference to the date of initiation of the search under section132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person.

(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year–

(a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or

(b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or

(c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.”

60. Thereafter, vide the 2014 Finance Act, Section 153C was further amended to provide that the jurisdictional AO of the “other person”

was empowered to issue notice to such “other person” if he was satisfied that the books of accounts or documents or assets seized “have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section(1) of section 153A”.

61. The relevant extracts of the Memorandum explaining the provisions of the Finance Bill, 2014 are reproduced hereinbelow:

“Assessment of income of a person other than the person who has been searched Section 153C of the Act relates to assessment of income of any other person. The existing provisions contained in sub-section (1) of the said section 153C provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to any person, other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A.

It is proposed to amend section 153C of the Act to provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to any person, other than the person referred to in section 153A, then books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A if he is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A .

The amendment will take effect from 1st October, 2014.”

62. Clause 53 of the Notes on clauses explaining the amendment to Section 153C introduced vide the 2014 Finance Act is reproduced hereinbelow:

“Clause 53 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person.

The existing provisions contained in sub-section (1) of the aforesaid section provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person, other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A.

It is proposed to amend the said sub-section so as to provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person, other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, such Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A.

This amendment will take effect from 1st October, 2014.”

63. The recast Section 153C, as amended vide the 2014 Finance Act is set out below:

“Assessment of income of any other person.

153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub- section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person:

Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated.

(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year —

(a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or

(b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or

(c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.”

64. The next and crucial amendments which came to be made in Sections 153A, 153B and 153C were introduced by virtue of the Finance Bill, 2017 and which for the first time adopted the concept of the “relevant assessment year” and provided an explanation for the said term. The definition of the expression “relevant assessment year” also came to be introduced by virtue of this Bill. It would at this stage be apposite to set out a comparative table which would indicate how Sections 153A and 153C existed between Finance Acts, 2015 and 2017:-

“Income-Tax Act, 1961 – As Income-Tax Act, 1961 – As Amended by Amended by Finance Act 2015 Finance Act 2017 Assessment in case of search or Assessment in case of search or requisition.: requisition :

153A. [(1)] Notwithstanding 153A. [(1)] Notwithstanding anything contained in section anything contained in section 139, section 147, section 139, section 147, section 148, 148,section 149, section 151 section 149,section 151 and and section 153, in the case of a section 153, in the case of a person where a search is person where a search is initiated under section 132 or initiated under section 132 or books of account, other books of account, other documents or any assets are documents or any assets are requisitioned under section requisitioned under section 132A after the 31st day of May, 132A after the 31st day of May, 2003, the Assessing Officer 2003, the Assessing Officer shall– shall–

(a) issue notice to such person (a) issue notice to such requiring him to furnish within requiring him to furnish such period, as may be such period, as may be specified in the notice, the specified in the notice, return of income in respect of return of income in respe each assessment year falling each assessment year fall within six assessment years within six assessment yea

referred to in clause (b), in the [and for the relevant assessment prescribed form and verified in year or years] referred to in the prescribed manner and clause (b), in the prescribed setting forth such other form and verified in the particulars as may be prescribed prescribed manner and setting and the provisions of this Act forth such other particulars as shall, so far as may be, apply may be prescribed and the accordingly as if such return provisions of this Act shall, so were a return required to be far as may be,

apply furnished under section 139; accordingly as if such return were a return required to be furnished under section 139;

(b) assess or reassess the total (b) assess or reassess the total income of six assessment years income of six assessment years immediately preceding the immediately preceding the assessment year relevant to the assessment year relevant to the previous year in which such previous year in which such search is conducted or search is conducted or requisition is made: requisition is made [and for the relevant assessment year or Provided that the Assessing years]:

Officer shall assess or reassess the total income in respect of Provided that the Assessing each assessment year falling Officer shall assess or reassess within such six assessment the total income in respect of years: each assessment year falling within such six assessment years [and for the relevant assessment year or years]:

Provided further that assessment or reassessment, if Provided further

any, relating to any assessment assessment or reassessment, if year falling within the period of any, relating to any assessment six assessment years referred to year falling within the period of in this[sub-section] pending on six assessment years [and for the date of initiation of the the relevant assessment year or search under section 132 or years] referred to in this[sub- making of requisition under section] pending on the date of section 132A, as the case may initiation of the search under be, shall abate: section 132 or making of requisition under section 132A, [Provided also that the Central as the case may be, shall abate:

Government may by rules made by it and published in the [Provided also that the Central Official Gazette (except in Government may by rules made cases where any assessment or by it and published in the reassessment has abated under Official Gazette (except in the second proviso),specify the cases where any assessment or class or classes of cases in reassessment has abated under which the Assessing Officer the second proviso),specify the shall not be required to issue class or classes of cases in notice for assessing or which the Assessing Officer reassessing the total income for shall not be required to issue six assessment years notice for assessing or immediately preceding the reassessing the total income for assessment year relevant to the six assessment years previous year in which search is immediately preceding the conducted or requisition is assessment year relevant to the made.] previous year in which search is conducted or requisition is [(2) If any proceeding initiated made[and for the relevant or any order of assessment or assessment year or years]:] reassessment made under sub- section(1) has been annulled in [Provided also that no notice for appeal or any other legal assessment or reassessment proceeding, then, shall be issued by the Assessing notwithstanding anything Officer for the relevant contained in sub-section (1) or assessment year or years section 153, the assessment or unless–

reassessment relating to any assessment year which has (a) the Assessing Officer has in abated under the second proviso his possession books of account to sub-section (1), shall stand or other documents or evidence revived with effect from the which reveal that the income, date of receipt of the order of represented in the form of asset, such annulment by the which has escaped assessment [Principal Commissioner or] amounts to or is likely to Commissioner: amount to fifty lakh rupees or more in the relevant assessment Provided that such revival shall year or in aggregate in the cease to have effect, if such relevant assessment years; order of annulment is set aside.]

(b) the income referred to in Explanation. –For the removal clause (a) or part thereof has of doubts, it is hereby declared escaped assessment for such that,– year or years;

and

(i) save as otherwise provided (c) the search under section 132 in this section, section 153B is initiated or requisition under and section 153C, all other section 132A is made on or provisions of this Act shall after the 1st day of April, 2017.

apply to the assessment made under this section; Explanation 1. –For the purposes of this sub-section, the

(ii) in an assessment or expression “relevant assessment reassessment made in respect of year” shall mean an assessment an assessment year under this year preceding the assessment year relevant to the previous section, the tax shall be year in which search is chargeable at the rate or rates as conducted or requisition is applicable to such assessment made which falls beyond six year. assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.

Explanation 2. –For the purposes of the fourth proviso, “asset” shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.] [(2) If any proceeding initiated or any order of assessment or reassessment made under sub- section(1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner:

Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.–For the removal of doubts, it is hereby declared that,–

(i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section;

(ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.”

65. A similar comparative table which would indicate how Section 153C read between Finance Acts, 2015 and 2017 is set out hereinbelow:

Income-Tax Act, 1961 – As Income-Tax Act, 1961 – As Amended by Amended by Finance Act 2015 Finance Act 2017 Assessment of income of any Assessment of income of any other person: other person.:

153C. [(1)] [Notwithstanding 153C. [(1)] [Notwithstanding anything contained in section anything contained in section 139, section 147, section 148, 139, section 147,  section 148, section 149, section 151 and section 149, section 151 and section 153, where the section 153, where the Assessing Officer is satisfied Assessing Officer is satisfied that,– that,–

(a) any money, bullion, (a) any money, bullion, jewellery or other valuable jewellery or other valuable article or thing, seized or article or thing, seized or requisitioned, belongs to; or requisitioned, belongs to; or

(b) any books of account or (b) any books of account or documents, seized or documents, seized or requisitioned, pertains or requisitioned, pertains or pertain to, or any information pertain to, or any information contained therein, relates to, contained therein, relates to, a person other than the person a person other than the person referred to in section 153A, referred to in section 153A, then, the books of account or then, the books of account or documents or assets, seized or documents or assets, seized or requisitioned shall be handed requisitioned shall be handed over to the Assessing Officer over to the Assessing Officer having jurisdiction over such having jurisdiction over such other person] [and that other person] [and that Assessing Officer shall proceedAssessing Officer shall proceed against each such other person against each such other person and issue notice and assess or and issue notice and assess or reassess the income of the other reassess the income of the other person in accordance with the person in accordance with the provisions of section 153A, if,provisions of section 153A, if, that Assessing Officer is that Assessing Officer is satisfied that the books of satisfied that the books of account or documents or assets account or documents or assets seized or requisitioned have a seized or requisitioned have a bearing on the determination ofbearing on the determination of the total income of such other the total income of such other person for the person [for six assessment years relevant assessment year or years immediately preceding the referred to in sub-section (1) of assessment year relevant to the section 153A]:] previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A]:] [Provided that in case of such [Provided that in case of such other person, the reference to other person, the reference to the date of initiation of the the date of initiation of the search under section 132 or search under section 132 or making of requisition under making of requisition under section 132A in the second section 132A in the second proviso to [sub-section (1) of] proviso to [sub-section (1) of] section 153A shall be construed section 153A shall be construed as reference to the date of as reference to the date of receiving the books of account receiving the books of account or documents or assets seized or or documents or assets seized or requisitioned by the Assessing requisitioned by the Assessing Officer having jurisdiction over Officer having jurisdiction over such other person:] such other person:] [Provided further that the [Provided further that the Central Government may by Central Government may by rules made by it and published rules made by it and published in the Official Gazette, specify in the Official Gazette, specify the class or classes of cases in the class or classes of cases in respect of such other person, in respect of such other person, in which the Assessing Officer which the Assessing Officer shall not be required to issue shall not be required to issue notice for assessing or notice for assessing or reassessing the total income for reassessing the total income for six assessment years six assessment years immediately preceding the immediately preceding the assessment year relevant to the assessment year relevant to the previous year in which search is previous year in which search is conducted or requisition is conducted or requisition is made except in cases where any made [and for the relevant assessment or reassessment has assessment year or years as abated.] referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated.] [(2) Where books of account or [(2) Where books of account or documents or assets seized or documents or assets seized or requisitioned as referred to in requisitioned as referred to in subsection (1) has or have been subsection (1) has or have been received by the Assessing received by the Assessing Officer having jurisdiction over Officer having jurisdiction over such other person after the due such other person after the due date for furnishing the return of date for furnishing the return of income for the assessment year income for the assessment year relevant to the previous year in relevant to the previous year in which search is conducted which search is conducted under section 132 or requisition under section 132 or requisition is made under section 132A and is made under section 132A and in respect of such assessment in respect of such assessment year– year–

(a) no return of income has (a) no return of income has been furnished by such other been furnished by such other person and no notice under person and no notice under subsection (1) of section 142 subsection (1) of section 142 has been issued to him, or has been issued to him, or

(b) a return of income has been (b) a return of income has been furnished by such other person furnished by such other person but no notice under subsection but no notice under subsection (2) of section 143 has been (2) of section 143 has been served and limitation of serving served and limitation of serving the notice under sub-section (2) the notice under sub-section (2) of section 143 has expired, or of section 143 has expired, or

(c) assessment or reassessment, (c) assessment or reassessment, if any, has been made, before if any, has been made, the date of receiving the books before the date of receiving the of account or documents or books of account or documents assets seized or requisitioned by or assets seized or requisitioned the Assessing Officer having by the Assessing Officer having jurisdiction over such other jurisdiction over such other person, such Assessing Officer person, such Assessing Officer shall issue the notice and assess shall issue the notice and assess or reassess total income of such or reassess total income of such other person of such assessment other person of such assessment year in the manner provided in year in the manner provided in section 153A.] section 153A.]

66. Turning our gaze firstly upon Section 153A, it becomes pertinent to note that the provision as it stands presently, and at least as it existed on the date of issuance of the impugned notices, regulates assessments pertaining to searches conducted between 31 May 2003 and up to 31 March 2021. The latter terminal point governing the applicability of that provision came to be inserted by virtue of Finance Act, 2021, with effect from 01 April 2021. A similar sunset clause came to be introduced in Section 153C with the addition of sub-section (3) and which prescribed that nothing contained in the aforesaid provision would apply in respect of any search conducted or assets requisitioned on or after 01 April 2021. The aforesaid amendments appear to have been triggered by the schematic amendments which came to be introduced in Sections 145 to 151 and the procedure for reassessment inquiry being radically amended consequent to the introduction of Section 148A. The time limit for initiation of action also came to be amended with Section 149 being recast. For purposes which may be germane to the present batch, we also take note of the addition of the First and Second Provisos to Section 149 and which are extracted hereunder:-

“149. Time limit for notice.–

xxxx xxxx xxxx Provided that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under Section 148 or Section 153-A or Section 153-C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or Section 153-A or Section 153-C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021:

Provided further that the provisions of this sub-section shall not apply in a case, where a notice under Section 153-A, or Section 153-C read with Section 153-A, is required to be issued in relation to a search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132-A, on or before the 31st day of March, 2021″

67. The 2021 amendments also saw the introduction of a significant statutory shift insofar as assessments or reassessments triggered by a search were concerned and which  came to be made part of the escaped assessment regime by virtue of the introduction of Explanation 2 in Section 148 which reads as follows:-

“148. Issue of notice where income has escaped assessment xxxx xxxx xxxx Explanation 2.–For the purposes of this section, where,–

(i) a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A, on or after the 1st day of April, 2021, in the case of the assessee; or

(ii) a survey is conducted under Section 133-A, other than under sub-section (2-A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or

(iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under Section 132 or under Section 132-A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or

(iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under Section 132 or Section 132-A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.”

68. Although Section 148A made specific provisions for the assessee being placed on notice and being provided with the opportunity to explain why reassessment should not be initiated and any objections connected therewith being liable to be decided before reassessment was undertaken, reassessments triggered by a search were excluded from the ambit of that provision as would be manifest from a reading of the Proviso to Section 148A and which is couched in the following terms:-

“148-A. Conducting inquiry, providing opportunity before issue of notice under Section 148. xxxx xxxx xxxx Provided that the provisions of this section shall not apply in a case where, —

(a) a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A in the case of the assessee on or after the 1st day of April, 2021; or

(b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under Section 132 or requisitioned under Section 132- A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or

(c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under Section 132 or requisitioned under Section 132-A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, [relate to, the assessee; or

(d) the Assessing Officer has received any information under the scheme notified under Section 135-A pertaining to income chargeable to tax escaping assessment for any assessment year in the case of the assessee.”

69. Section 149 of the Act, which sets out the time limit for the issuance of a notice under Section 148, and which prior to 01 April 2021, contemplated of a maximum period of six years having elapsed from the end of the relevant AY, also came to be amended with the following qualifying clauses being introduced:-

“149. Time limit for notice.– (1) No notice under section 148 shall be issued for the relevant assessment year,–

(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);

(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of–

(i) an asset;

(ii) expenditure in respect of a transaction or in relation to an event or occasion; or

(iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:

70. Section 153(3A) of the Act also introduced the following salient provisions relevant to search assessments:-

“153. Time limit for completion of assessment, reassessment and recomputation xxxx xxxx xxxx (3A) Notwithstanding anything contained in sub-sections (1), (1A),  (2) and 93), where an assessment or reassessment is pending on the date of initiation of search under section 132 or making of requisition under section 132A, the period available for completion of assessment or reassessment, as the case may be, under the said sub-sections shall, –

(a) in a case where such search is initiated under section 132 or such requisition is made under section 132A;

(b) in the case of an assessee, to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to;

(c) in the case of an assessee, to whom any books of a account or documents seized or requisitioned pertains or pertain to, or any information contained therein, relates to, be extended by twelve months.”

71. Of equal significance is Section 153(8) and which makes the following provisions:-

“153. Time limit for completion of assessment, reassessment and recomputation xxx xxx xxx (8) Notwithstanding anything contained in the foregoing provisions of this section, sub-section (2) of section 153A or sub- section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within a period of one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later.”

Sub-section (8) thus caters to situations where pending assessment or reassessment proceedings may abate by virtue of Section 153A(1) and be read in line with the timelines prescribed by Section 153B.

72. Reverting then to the principal provisions made in Section 153A and as the provision stands presently, we find that it essentially enables the AO to issue notice to the searched person requiring it to submit a return of income in respect of each AY falling within the six AYs’ as well as for the “relevant assessment year”. As noticed hereinabove, all pending assessments or reassessments pertaining to the period of six AYs’ or the “relevant assessment year” would abate in light of the Second Proviso to Section 153A(1). The aforenoted provision defines the expression “relevant assessment year” in terms of Explanation 1 as under:-

“Explanation 1.–For the purposes of this sub-section, the expression “relevant assessment year” shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.”

73. Section 153A(1), in addition to the above, also erects the following additional conditions which must be shown to exist in case a notice for assessment or reassessment is proposed to be issued for the “relevant assessment year” and comprising the larger block of ten AYs’. The aforesaid conditions stand introduced by virtue of the Fourth Proviso which is extracted hereunder:-

“153A. Assessment in case of search or requisition xxxx xxxx xxxx Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for  the relevant assessment year or years unless–

(a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years;

(b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and

(c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017.”

The Fourth Proviso thus puts in place certain preconditions which regulate assessment or reassessment for the four additional AYs’ which would fall within the meaning of the expression “relevant assessment year” and fall beyond the six AYs’ immediately preceding the AY relevant to the previous year which stands covered by Section 153A(1)(b).

74. Section 153C, as it stood on the date when the impugned notices came to be issued, proceeding along similar lines is statutorily proclaimed to override the provisions of Section 139, 147, 148, 149, 151 and 153. The said provision enables the AO of a non- searched party to commence proceedings for assessment or reassessment for six AYs’ immediately preceding the AY relevant to the previous year in which search is conducted or requisition made and for the “relevant assessment year” as defined by Section 153A. The aforenoted provision comes into play the moment the AO of the searched person comes to discover that some money, bullion, jewellery, valuable article or thing seized or requisitioned belongs to or books of account, documents seized or requisition pertain or pertains to a person other than the person searched and covered by Section 153A. The  AO of the searched person, on being satisfied that the aforenoted conditions are fulfilled, is obliged to transmit the books of account or documents and assets seized or requisitioned to the AO having jurisdiction over the non-searched person. Upon receipt of that material from the AO of the searched person, the jurisdictional AO of the non- searched party becomes empowered to call upon that person by issuance of notice to submit a return for the preceding six AYs’ and for the “relevant assessment year”. In terms of Section 153C, upon receipt of the material from the AO of the searched person, the jurisdictional AO is obliged in law to be satisfied that the books of accounts or documents or assets seized “…….have a bearing on the determination of the total income of such other person. “.

F. IDENTIFICATION OF THE COMMENCEMENT POINT FOR THE PURPOSES OF COMPUTATION OF THE SIX AND TEN YEAR BLOCK

75. The First Proviso to Section 153C significantly shifts the reference point which is spoken of in Section 153A(1) while defining the point from which the period of six AYs’ is to be calculated, and which stipulates it to be the date of search or requisition, to the date of receipt of books of accounts, documents or assets seized or requisitioned by the jurisdictional AO of the non-searched person. The Proviso, thus by virtue of a deeming legal fiction, shifts the commencement point from the date of initiation of search or making of requisition to the date of receipt of books, documents or assets by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person thus being governed and regulated by the First Proviso of Section 153C(1) is, however, an issue which is no longer res integra. This aspect came to be duly noticed and lucidly explained by our Court in the matter of SSP Aviation Ltd. v. Deputy CIT22. The relevant extracts of SSP Aviation Ltd are set out hereinunder:

“14. Now, there can be a situation when during the search conducted on one person under section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the manner contemplated by the provisions of section 153A. Now, a question may arise as to the applicability of the second proviso to section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search under section 132 or the  requisition under section 132A. For instance, in the present case, with reference to the Puri group of companies, such date will be January 5, 2009.

However, in the case of the other person, which, in the present case, is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date.”

76. Following SSP Aviation, our Court in Commissioner of Income Tax – 14 v. Shree Jasjit Singh 23 held:-

“3. The question raised before the ITAT was with reference to the first proviso to Section l 53C (1). The ITAT has relied upon the judgment of this Court in SSP Aviation Ltd. v. Deputy Commissioner of Income Tax (2012) 252 CTR (Del) 291, which in para 14 held that while in the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate shall be the date of initiation of the search under Section 132 or the requisition under Section 132A, in the case of the other person (like the Assessee in the present case) “such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date”.

4. Although, the ITAT has also referred to its own decision in the case of DSL Properties Pvt. Ltd., which decision is pending consideration in ITA No. 585 of 2013 in this Court, in which a question of law has been framed, the decision in SSP Aviation Ltd. (supra) puts the matter beyond all doubt. In addition, the Court has been shown by learned counsel for the Respondent a circular dated 31st March 2014 issued by the CBDT, containing the guidelines regarding Section 153C of the Act. Para 2.5 of the said circular clarifies as under:

“The AO of the other person assumes jurisdiction under Section 153C with the receipt of the relevant seized material from the AO of the searched person. Also, a copy of the satisfaction received from the AO of the searched person in this regard would enable him to proceed further in the case of the other person under Section 153C.

Delhi High Court order dated 11.08.2015 in ITA 337/2015 Though there is no statutory requirement for the AO of such other person to record any satisfaction/reason before issuing notice under Section 153C and proceeding further, considering the above aspects, it is advisable for maintaining institutional  memory that the AO records receipt of the seized material and the satisfaction from the AO of the searched person and such recording/noting may be kept in the assessment folder of such other person. In case, the AO of the searched person exercises jurisdiction over the other person also, appropriate referencing should be made in the relevant assessment records of such other person.”

5. It may be noted that in the present case satisfaction note was prepared by the AO on 25th February 2010. Consequently, the finding of the ITAT in the present case that the assessment made under Section 143(1) of the Act for the AY 2009-10 was not valid, calls for no interference. No substantial question of law arises in the facts and circumstances of the present case.

6. Accordingly, the appeal is dismissed.”

77. A more elaborate discussion with respect to the significance of the Proviso is found in RRJ Securities. We deem it apposite to extract the following passages from that decision:-

“13. The first and foremost step for initiation of proceedings under section 153C of the Act is for the Assessing Officer of the searched person to be satisfied that the assets or documents seized belong to the assessee (being a person other than the searched person). The Assessing Officer of the assessee, on receiving the documents and the assets seized, would have jurisdiction to commence proceedings under section 153C of the Act. The Assessing Officer of the searched person is not required to examine whether the assets or documents seized reflect undisclosed income. All that is required for him is to satisfy himself that the assets or documents do not belong to the searched person but to another person. Thereafter, the Assessing Officer has to transfer the seized assets/documents to the Assessing Officer having jurisdiction of the assessee to whom such assets/ documents belong. Section 153C(1) of the Act clearly postulates that once the Assessing Officer of a person–other than the one searched, has received the assets or the documents, he is to issue a notice to assess/ reassess the income of such person, that is, the assessee other than the person searched in accordance with the provisions of section 153A of the Act.

xxxx xxxx xxxx

15. The controversy in this regard is no longer res integra. A co- ordinate Bench of this court in SSP Aviation Ltd. v. Deputy CIT (2012) 346 ITR 177 (Delhi) has held that (page 188):

“In the case of the searched person, the date with reference to which proceedings for assessment or reassessment of any assessment year within a period of six assessment years shall abate, is the date of initiation of the search under section 132 or requisition under section 132A… However, in the case of other person…  such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date”

xxxx xxxx xxxx

17. In Pepsi Foods Pvt. Ltd. v. Asst. CIT (2014) 367 ITR 112 (Delhi), this court had explained that on a plain reading of section 153C of the Act, a notice under that section could be issued only after two preceding conditions had been met. First of all, the Assessing Officer of the searched person would have to arrive at a satisfaction that document or asset seized does not belong to the person searched but to some other person and, secondly, the seized documents/assets are handed over to the Assessing Officer having jurisdiction over that person, that is, the person other than the one searched and to whom the seized documents/assets are said to belong. The relevant extract of the said decision is quoted below (page 117):

“On a plain reading of section 153C, it is evident that the Assessing Officer of the searched person must be ‘satisfied’ that, inter alia, any document seized or requisitioned ‘belongs to’ a person other than the searched person. It is only then that the Assessing Officer of the searched person can handover such document to the Assessing Officer having jurisdiction over such other person (other than the searched person). Furthermore, it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or reassess his income in accordance with the provisions of section 153A. Therefore, before a notice under section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step is–after such satisfaction is arrived at–that the document is handed over to the Assessing Officer of the person to whom the said document ‘belongs’. In the present cases, it has been urged on behalf of the petitioner that the first step itself has not been fulfilled. For this purpose, it would be necessary to examine the provisions of presumptions as indicated above. Section 132(4A)(i) clearly stipulates that when, inter alia, any document is found in the possession or control of any person in the course of a search it may be presumed that such document belongs to such person. It is similarly provided in section 292C(1)(i). In other words, whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or ‘satisfaction’ that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized  document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of ‘satisfaction’….

It is evident from the above satisfaction note that apart from saying that the documents belonged to the petitioner and that the Assessing Officer is satisfied that it is a fit case for issuance of a notice under section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere use or mention of the word ‘satisfaction’ or the words ‘I am satisfied’ in the order or the note would not meet the requirement of the concept of satisfaction as used in section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of the searched person is satisfied that the seized documents belong to a person other than the searched person. We are afraid that going through the contents of the satisfaction note, we are unable to discern any ‘satisfaction’ of the kind required under section 153C of the said Act.”

xxxx xxxx xxxx

19. The Allahabad High Court in the case of CIT v. Gopi Apartment (2014) 365 ITR 411 (All) has expressed a similar view in the following words (page 419):

“A bare perusal of the provision contained in section 153C of the Income-tax Act leaves no doubt that, as is provided under section 158BD, where the Assessing Officer, while proceeding under section 153A against a person who has been subjected to search and seizure under section 132(1) or has been proceeded under section 132A, is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that the Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A.

Thus, there are two stages:

The first stage comprises of a search and seizure operation under section 132 or proceeding under section 132A against a person, who may be referred as ‘the searched person’. Based on such search and seizure, assessment proceedings are initiated against the ‘searched person’ under section 153A. At the time of initiation of such proceedings against the ‘searched person’ or during the assessment proceedings against him or even after the completion of the assessment proceedings against him, the Assessing Officer of such a ‘searched person’, may, if he is satisfied, that any money, document, etc., belongs to a person other than the searched person, then such money, documents, etc., are to be handed over to the Assessing Officer having jurisdiction over ‘such other person’.

The second stage commences from the recording of such satisfaction by the Assessing Officer of the ‘searched person’ followed by handing over of all the requisite documents, etc., to the Assessing Officer of such ‘other person’, thereafter followed by issuance of the notice of the proceedings under section 153C read with section 153A against such ‘other person’.

The initiation of proceedings against ‘such other person’ are dependant upon a satisfaction being recorded. Such satisfaction may be during the search or at the time of initiation of assessment proceedings against the ‘searched person’, or even during the assessment proceedings against him or even after completion of the same, but before issuance of notice to the ‘such other person’ under section 153C.

Even in a case, where the Assessing Officer of both the persons is the same and assuming that no handing over of documents is required, the recording of ‘satisfaction’ is a must, as, that is the foundation, upon which the subsequent proceedings against the ‘other person’ are initiated. The handing over of documents, etc., in such a case may or may not be of much relevance but the recording of satisfaction is still required and in fact it is mandatory.”

xxxx xxxx xxxx

24. As discussed hereinbefore, in terms of the proviso to section 153C of the Act, a reference to the date of the search under the second proviso to section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the assessee (being the person other than the one searched) to the Assessing Officer having jurisdiction to assess the said assessee. Further proceedings, by virtue of section 153C(1) of the Act would have to be in accordance with section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the Assessing Officer of the assessee. In this case, it would be the date of the recording of satisfaction under section 153C of the Act, i.e., September 8, 2010. In this view, the assessments made in respect of the assessment years 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the Assessing Officer of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the Assessing Officer would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of section 153C(1) of the Act, which construes the date of receipt of assets and documents by the Assessing Officer of the assessee (other than one searched) as the date of the search on the assessee. The rationale appears to be that whereas in the case of a searched person the Assessing Officer of the searched person assumes possession of the seized assets/documents on search of the assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the Assessing Officer of that person only after the Assessing Officer of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the Assessing Officer of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for the assessment year 2003-04 and the assessment year 2004-05 were outside the scope of section 153C of the Act and the Assessing Officer had no jurisdiction to make an assessment of the assessee’s income for that year.”

78. In the appeal which was taken to the Supreme Court against the judgment rendered by this Court in Jasjit Singh, the view as expressed by our Court in that decision came to be affirmed with the following significant observations being entered:-

“8. In SSP Aviation (supra) the High Court inter alia reasoned as follows:–

“14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the, manner contemplated by the provisions of Section 153A. Now a question may arise as to the applicability of the second proviso to Section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search under Section 132 or the requisition under Section 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In  the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date.”

9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement.

10. This Court is of the opinion that the revenue’s argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials – of the search party, under Section 132 – would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually “relate back” as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third party assessee’s prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153-C supports the interpretation which this Court adopts.”

79. The fact that in the case of a Section 153C assessment, the starting point is ordained to be the handing over of books of account or documents or assets seized and that event constituting the point from which the preceding six AYs’ or the “relevant assessment year” is to be computed stands reiterated by the Supreme Court in Vikram Sujitkumar Bhatia, as would be evident from the following paragraphs of the report:-

“41. Thus, as per the proviso to Section 153C as inserted vide Finance Act, 2005, and the effect of the said proviso is that it creates a deeming fiction wherein any reference made to the date of initiation of search is deemed to be a reference made to the date when the Assessing Officer of the non-searched person receives the books of account or documents or assets seized etc. Thus, in the present case, even though the search under Section 132 was initiated prior to the amendment to Section 153C w.e.f. 01.06.2015, the books of account or documents or assets were seized by the Assessing Officer of the non-searched person only on 25.04.2017, which is subsequent to the amendment, therefore, when the notice under Section 153C was issued on 04.05.2018, the provision of the law existing as on that date, i.e., the amended Section 153C shall be applicable.”

80. The aforesaid discussion thus renders a determinative quietus to the identification of the starting post from which the block of six AYs’ or the “relevant assessment year” would have to be calculated. The contention of the respondents that the said block periods would have to be reckoned with reference to the date of search thus can neither be countenanced nor possibly accepted. That submission is clearly addressed contrary to a long and consistent line of precedents which have held to the contrary and which unequivocally accepted the point of commencement for the purposes of identifying the six or the “relevant assessment year” to be etched from the date of handover of documents, assets or things to the AO of the non-searched party.

81. As was noticed by us hereinabove, the respondents had also sought to urge that the First Proviso to Section 153C(1) is relevant only for the purposes of abatement of pending assessment or reassessment proceedings and which is spoken of in Section 153A(1). According to them, since the First Proviso to Section 153C(1) is linked to the Second Proviso to Section 153A(1), it must be interpreted as being confined and restricted to the subject of abatement and cannot be viewed as constructing the point from which the block of six AYs’ or the “relevant assessment year” is to be computed. They had in this connection referred to the judgement rendered by our Court in Sarwar Agency and where an identical submission was addressed as would be evident from a reading of paragraph 6 of the report and which reads as follows:

“6. The case of the Revenue is that the first proviso to section 153C refers only to the second proviso to section 153A(1) of the Act, which only indicates that any assessment relating to any assessment year falling within the period of six assessment years which is pending as of the initiation of search shall abate. Therefore, the second proviso to section 153C is also concerned only with the aspect of abatement of pending assessments. According to the Revenue, this makes no difference to the computation of the block of six years preceding the assessment year relevant to the previous year in which the search was conducted. In other words, according to the Revenue, the block period for both the searched person and the “other person” would remain the same notwithstanding that there may be some delay in transmitting the documents recovered during the search which belong or pertain to the “other person” to the Assessing Officer of such other person.”

82. However, the aforesaid submission came to be stoutly negated with the Court relying upon the decision rendered in RRJ Securities, which in turn relied upon the decision rendered in SSP Aviation as would be evident from the following extracts of that decision:-

“11. Mr. Ashok Manchanda, learned Senior Standing counsel for the Appellant, sought to pursue this Court to reconsider its view in RRJ Securities (supra). The Court declines to do so for more than one reason. First, for reasons best known to it, the Revenue has not challenged the decision of this Court in RRJ Securities (supra) in the Supreme Court. The said decision has been consistently followed by  the authorities under this Court as well as by this court. Thirdly, the recent amendment to Section 153 C(1) of the Act states for thefirst time that for both the searched person and the other person the period of reassessment would be six AYs preceding the year of search. The said amendment is prospective.

12. Consequently, no substantial question of law arises from the impugned order of the ITAT. The appeal is, accordingly, dismissed.”

We thus fail to either fathom or discern any observation rendered in that decision which may be read as lending strength or credence to the contention of the respondents.

83. Reliance was then placed on the decision rendered by a learned Judge of the Madras High Court in RKM Powergen. We note that in RKM Powergen, the learned Judge while considering the challenge to assessment orders cited certain observations from an earlier order passed by the said High Court and the relevant observations whereof are set out hereunder:

“2. The grounds that have been argued and my conclusions thereupon are as follows:

(i) The bar of limitation: both limbs of this ground have been considered and rejected by me as per orders dated 12-7-2022, 15.07.22 and 26-7-2022, extracted below:

11. Reliance is also placed upon two decisions of the Delhi High Court in the case of CIT v. RRJ Securities Ltd. and Pr. CIT v. Sarwar Agency (P.) Ltd. In both cases the view that the block of six years must be construed as commencing from the date of handing over of the documents seized by the officer of the searched entity to the officer of the third party, that is, petitioner in this case.

12. I am of the considered view that the proviso has no application in the construction of the block period. Section 153C deals with the assessment of income of any other person in relation to the searched person and section 153C(1) reads as under:

Assessment of income of any other person.

153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,–

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or

(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1)of section 153A]

13. There is thus an in-built mechanism in 153C(1) as to how the block period is to be formulated. No doubt, the portion within parenthesis has been inserted only with effect from 1- 4-2017 and has no application in the case of the petitioner seeing as the date of search in its case ranges between 21-3-2015 to 11-1-2016. However, one hardly need to refer this portion, since the construction of the block is detailed in the last portion of section 153C(1) that states ‘for the relevant assessment year or years referred to in sub- section (1) of section 153(1).

xxxx xxxx xxxx

15. Thus, the block is to comprise of the those assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made. Seen in this context, the inclusion of assessment year 2010-11 and 2011-12 in the case of RKM Powergen Limited and 2010-11 in the case of RK Powergen Private Limited is seen to be in order.

16. The first proviso to section 153C only deals with the date of initiation of search for the purpose of the second proviso to section 153A(1) to determine the abatement for the sake of completion. ”

84. As would be evident from the above, although the decisions in Sarwar Agency and RRJ Securities were cited, the learned Judge chose to observe that the Section 153C(1) Proviso would only be liable to be construed as relevant for the purposes of abatement. We find ourselves unable to sustain that line of reasoning since both Sarwar Agency as well as RRJ Securities have struck a line which is in consonance with the view taken in SSP Aviation and which has since come to be affirmed by the Supreme Court in Jasjit Singh. In any case, the law as enunciated in RKM Powergen would not sustain bearing in mind the express enunciation of the legal position by the Supreme Court as is manifest from a reading of paragraph 9 of Jasjit Singh.

85. That then takes us to the principal question of identifying the point of origin for the purposes of computation of the six AYs’ and the “relevant assessment year” as defined by Section 153A. As is manifest from a plain reading of Section 153C, the six AYs’ are ordained to be those which immediately precede the AY relevant to the previous year in which the search may have been conducted or requisition made. The block of six AYs’ would thus have to be identified bearing in mind the AY pertaining to the FY in which the search had been conducted or requisition made. The aforesaid AY would thus constitute the anchor point for the purposes of identification of the six AYs’. The statute envisages a similar process to be adopted for the purposes of computation of the “relevant assessment year” and where applicable constructs a block of ten AYs’. The significant difference between the two however is that while the six AYs’ hinge upon the phrase “immediately preceding” the AY pertaining to the search year, the ten AYs’ are liable to be computed or reckoned from the end of the AY relevant to the year of search. In our considered opinion, the petitioners have correctly identified the aforesaid distinction as being crucial and determinative for the purposes of reckoning the six and the ten AY block period.

G. COMPUTATION OF THE SIX AND TEN YEAR BLOCK IN THE PRESENT BATCH OF WRIT PETITIONS

86. In the present batch, List I pertains to writ petitions which have Satisfaction Notes recorded or Section 153C notices issued between the period 01 April 2021 to 31 March 2022. Undisputedly, the First Proviso to Section 153C, and which has been consistently recognized to also embody the commencement point for reckoning the six or the ten AYs’, shifts the relevant date from the date of initiation of search or a requisition made to the date of receipt of books of account or documents and assets seized by the jurisdictional AO of the non- searched person. Consequently, the block of six or ten AYs’ would have to be reckoned bearing the aforesaid date in mind. Although in the present batch of writ petitions, the date of actual handing over has not been explicitly mentioned in a majority of the writ petitions, learned counsels for respective sides had addressed submissions based on the assumption that it would be the date of issuance of the Satisfaction Note by the AO of the non-searched person and in the case of non-availability of such a note, the date of issuance of the Section 153C notices which would be pertinent for the purposes of the First Proviso to Section 153C.

87. Assuming, therefore, that the handover of material gathered in the course of the search and pertaining to the non-searched person occurred between 01 April 2021 to 31 March 2022, the same would essentially constitute FY 2021-22 as being the previous year of search for the purposes of the non-searched entity. As a necessary corollary, the relevant AY would become AY 2022-23. AY 2022-23 would thus constitute the starting point for the purposes of identifying the six years which are spoken of in Section 153C. The six AYs’ are envisaged to be those which immediately precede the AY so identified with reference to the previous year of search. It would thus lead us to conclude that it would be the six AYs’ immediately preceding AY 2022-23 which could have formed the basis for initiation of action under Section 153C. Consequently, and reckoned backward, the six relevant AYs’ would be as follows:-

Computation of the six-year block No. of years period as provided under Section 153C of the Act Consequently, AY 2021-22 would become the first of the six preceding AYs’ and would as per the table set out hereinabove terminate at AY 2016-17.

88. Section 153A replicates the basis on which the six AYs’ are to be identified and computed with the solitary distinction being that in the case of the searched person, the six AYs’ are liable to be computed from the AY pertaining to the FY in which the search was conducted. The starting point for the purposes of identifying the six AYs’ in the case of Section 153A would thus turn upon the year of search as opposed to the handover of material which is spoken of in the First Proviso to Section 153C. If one were to therefore assume that a search took place on a person between 01 April 2021 to 31 March 2022, the pertinent AY would become AY 2022-23 and the corresponding six AYs’ would be as follows:-

Computation of the six-year block No. of years period as provided under Section 153C of the Act.

89. That takes us then to the issue of identifying the “relevant assessment year” for the purposes of computing the ten year block. Explanation 1 to Section 153A specifies the manner in which the entire ten AY period is to be computed. While the computation of six AYs’ follows the position as enunciated and identified above, Explanation 1 prescribes that the ten AYs’ would have to be computed from the end of the AY relevant to the FY in which the search was conducted or requisition made. The ten AY period consequently is to be reckoned from the end of the AY pertaining to the previous year in which the search was conducted as distinct from the preceding year which is spoken of in the case of the six relevant AYs’.

90. Viewed in that light, and while keeping the period of 01 April 2021 to 31 March 2022 as the constant, the relevant AY would be AY 2022-23. The ten AYs’ would have to be computed from 31 March 2023 with the said date indubitably constituting the end of the AY relevant to the previous year of search. Viewed in light of the above, the block period of 10 AYs’ would be as follows:-

Computation of the ten-year block No. of years period as provided under Section 153C read with Section 153A of the Act

91. Tested on the aforesaid precepts, it would be manifest that AY 2022-23 would form the first year of the block of ten AYs’ and with the maximum period of ten AYs’ terminating in AY 2013-14. We, in this regard also bear in consideration the following instructive passages as appearing in the decision handed down by a learned Judge of the Madras High Court in A.R. Safiullah. We deem it appropriate to extract the following paragraphs from that decision:-

“9. Explanation-I is clear as to the manner of computation of the ten assessment years. It clearly and firmly fixes the starting point. It is the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. There cannot be any doubt that since search was made in this case on 10.04.2018, the assessment year is 2019-20. The end of the assessment year 2019-20 is 31.03.2020. The computation of ten years has to run backwards from the said date ie., 31.03.2020. The first year will of course be the search assessment year itself. In that event, the ten assessment years will be as follows:

Year	Assessment Year
1st Year	2019-20
2nd Year	2018-19
3rd Year	2017-18
4th Year	2016-17
5th Year	2015-16
6th Year	2014-15
7th Year	2013-14
8th Year	2012-13
9th Year	2011-12
10th Year	2010-11

The case on hand pertains to AY 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department.

10. In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013- 14. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year. In other words, search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided within the scope of the provision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically construed.

11. One other contention urged by the standing counsel has to be dealt with. It is pointed out that the petitioner has invoked the writ jurisdiction at the notice stage. Since the petitioner has demonstrated that the subject assessment year lies beyond the ambit of the provision, the respondent has no jurisdiction to issue the impugned notice. Once lack of jurisdiction has been established, the maintainability of the writ petition cannot be in doubt.”

In our considered opinion, the decision in A.R. Safiullah correctly expounds the legal position and the interpretation liable to be accorded to the identification of the ten AYs’ which are spoken of in Sections 153A and 153C.

92. List II, forming part of this batch pertains to cases where Satisfaction Notes of the AO of the non-searched person were drawn between the period 01 April 2022 to 31 March 2023 and 01 April 2023 to 31 March 2024. Tested on the principles enunciated by us in the preceding passages of this judgment, we come to the conclusion that the relevant six AYs’ would comprise the following years, when computed for the period 01 April 2022 to 31 March 2023:-

Computation of the six-year block No. of years period as provided under Section 153C of the Act.

93. The relevant block of six AYs’ when computed for the period of 01 April 2023 to 31 March 2024 would be the following:

Computation of the six-year block No. of years period as provided under Section 153C of the Act

94. Similarly, and in light of what has been held by us hereinabove, the relevant block of ten AYs’ when computed for the period 01 April 2022 – 31 March 2023, and where the Satisfaction Note was drawn by the AO of the non-searched person between those two dates, would be as under:-

Computation of the ten-year block No. of years period as provided under Section 153C read with Section 153A of the Act

95. The relevant block of ten AYs’ when computed for the period 01 April 2023 – 31 March 2024, with the date of the Satisfaction Note drawn by the AO of the non-searched person falling within that period, would come to be identified as under:

Computation of the ten-year block No. of years period as provided under Section 153C read with Section 153A of the Act

96. To recall, the petitions forming part of List I pertain to AYs’ 2010-11, 2011-12 and 2012-13. So far as the aforenoted writ petitions are concerned, undisputedly AY 2010-11, 2011-12 and 2012-13 fall beyond the maximum period of ten AYs’. Since the ten AYs’, when computed from the end of AY 2022-23 would terminate upon AY 2013-14, AYs’ 2010-11, 2011-12 and 2012-13 would clearly fall outside the block period of ten AYs’ and cannot legally or justifiably be reopened under Section 153C read with Section 153A of the Act.

97. Proceeding then to List II, we find that the petitions placed in that list pertain to cases where the hand over occurred in FYs 2022-23 and 2023-24. Consequently, the relevant AYs’ would be AY 2023-24 and AY 2024-25 respectively. In light of the principles enunciated by us and which explain how the period of six and ten AYs’ is liable to be computed, the reopening of assessments pertaining to AYs’ 2010-11, 2011-12, 2012- 13 and 2013-14 would clearly fall beyond the ambit of ten AYs’ as provided under Section 153C read with Section 153A. We note in this behalf that all of the writ petitions forming part of List II pertain to the aforenoted AYs’ 2010-11, 2011-12, 2012-13 and 2013-

98. We are therefore of the opinion that the Section 153C notices issued against the writ petitioners placed in List I and insofar as they pertain to AYs’ 2010-11, 2011-12 and 2012-13 would not sustain being beyond the “relevant assessment year” which could have possibly formed the basis for initiation of action under that provision. Similarly, the Section 153C notices impugned by the writ petitioners placed in List II and insofar as they pertain to AYs’ 2010-11, 2011-12, 2012-13 and 2013-14 and which have been found to fall outside the net of “relevant assessment year”, being the ten year block, would be liable to be set aside on this score alone.

H. THRESHOLDS AS PER THE FOURTH PROVISO OF SECTION 153A

99. The writ petitioners had also assailed the validity of the notices based on the provisions comprised in the Fourth Proviso to Section 153A. It must at the outset be noted that the amount of INR 50 lakhs which is spoken of in clause (a) of the Fourth Proviso merely constitutes a threshold. Regard must also be had to the fact that at the stage when the AO is issuing notice, it has yet not had the opportunity to undertake a detailed or in-depth examination of the evidence collected or come to a conclusive opinion with respect to the total income which may have escaped assessment. The computation and assessment of the income that is likely to have escaped assessment is at this particular stage clearly tentative and nebulous. It would therefore and in our considered opinion be incorrect to strike down initiation of action merely because the notice may on an ex facie examination refer or allude to the value of an asset as being less than INR 50 lakhs. This more so when the petitioners call upon the Court to render a verdict based on a mere facial perusal of the Section 153C notice. We are also of the view that it would also perhaps be imprudent to accord a judicial imprimatur to the test as proposed by the petitioners and elevate it to attain the status of an inviolable rule  especially when we bear in mind the limited scrutiny of the material that the AO may have had an occasion to undertake at that stage coupled with the fact that the returns of the assessee for the six or the ten AYs’ are yet to be received or examined. 

100. For this purpose, it is pertinent to note that clause (a) of the Fourth Proviso also uses the phrase “..income represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years.” The Legislature appears to have consciously used the expression “likely to” bearing in mind the provisional character of the opinion that the AO would have formed at that stage, the fact that returns of the assessee are yet to be received and scrutinised and all of the above contributing to a mere preliminary formation of opinion.

101. However, and at the same time, even if the identified asset at this stage be less than INR 50 lakhs, the AO must on the basis of cogent reasons so recorded be of the opinion that the ultimate computation of escaped assessment is likely to exceed INR 50 lakhs. The aforesaid satisfaction would have to be based on a valid assessment of the material gathered and the potentiality of the same being indicative of the escaped assessment exceeding INR 50 lakhs. The notice under Section 153C would have to clearly reflect due application of mind by the AO in this respect and be prima facie sustainable. The formation of opinion in this respect would have to be based not on mere ipse dixit but reflective of being based on a fair assessment of the quantum of income likely to have escaped assessment as opposed to being speculative and conjectural. In case the AO intends to reopen assessment for the ten year block period, it would have to be shown that the formation of opinion in that respect is referenced to the material obtained in the search and in its possession and the same having the prospect or likelihood of escaped income being pegged at INR 50 lakhs or more. The Fourth Proviso, when interpreted along the lines suggested by us, and which commends acceptance, would strike a just and appropriate balance between the right of the respondents to initiate proceedings on the basis of material gathered in the course of the search and that of the assessee who could assail the reopening of ten assessment years if the prerequisites are not shown to have been met.

102. We are also of the firm opinion that the figure of INR 50 lakhs is not meant to be the qualifying criteria for each of the “relevant assessment year” independently. Clause  (a) in unambiguous terms uses the expression “in aggregate in the relevant assessment years”.

Consequently, even if the income likely to have escaped assessment on a cumulative computation be in excess of INR 50 lakhs, the same would qualify the statutory requirements as placed by the Fourth Proviso.

I. ISSUE OF FINALITY/CLOSURE FOR AYs’ 2010-11 AND 2011-12 AND THE APPLICABILTY OF THE 2017 AMENDING ACT

103. We then lastly proceed to deal with the challenge which stood raised to the impugned notices, with it being contended that for AYs’ 2010-11 and 2011-12, the period for assessment or reassessment when computed in accordance with the permissible period prescribed in Sections 143 and 153 of the Act as well as Sections 148 and 149 having come to an end prior to 01 April 2017, the respondents would stand legally deprived of the authority to invoke Section 153C for the said AYs’. In the alternative, it was also contended by the writ petitioners that for the aforenoted AYs’, namely, AYs’ 2010-11 and 2011-12, the period of assessment or reassessment under the unamended Section 153C having come to an end prior to 01 April 2017, the respondents would have no jurisdiction to proceed under Section 153C. The latter submission was based on the contention of the petitioners that the extended period of ten AYs’ having been introduced by virtue of the 2017 Amending Act would not be applicable to assessments which had attained closure prior to 01 April 2017.

104. The aforesaid submission proceeded in light of the amendments introduced in Sections 153A and 153C by virtue of the 2017 Amending Act and which added the concept of “relevant assessment year”. Undoubtedly, prior to 01 April 2017, the respondents could have reopened assessments only for six AYs’. It was by virtue of the 2017 Amending Act that the period which could be subjected to Section 153A or Section 153C assessments came to be enlarged to cover ten AYs’. It is also pertinent to note that the concept of a search assessment now stretching up to ten AYs’ was contemporaneously introduced both in Section 153A as well as Section 153C. The submission of the writ petitioners of the amended Section 153C not being applicable proceeds on account of the four additional AYs’ which have now become liable to be reassessed. According to the writ petitioners, any assessment which may have attained finality prior to 01 April 2017 and which could not have formed subject matter of assessment or reassessment, either under Sections 153A or 153C or for that matter the other cognate provisions of the Act, would be immune and cannot be subjected to a fresh assessment in accordance with Sections 153A and 153C as they came to exist on the statute book after 01 April 2017. It was in the aforesaid backdrop that the decisions of the Supreme Court in S.S. Gadgil and K.M. Sharma as well as of this Court in C.B. Richards Ellis and Brahm Dutt had been cited for our consideration.

105. We, however, find ourselves unable to sustain this leg of the challenge for reasons which are recorded hereinafter. It becomes pertinent to note at the outset that the contention of a bar of limitation operating in respect of assessments or of those proceedings having attained finality proceeds in ignorance of Sections 153A and 153C commencing with a non obstante clause and thus being representative of the legislative intent of those two provisions overriding Sections 139, 147, 148, 149, 151 and 153 of the Act. The non obstante clause which accompanies both those provisions are a manifestation of the clear intent of the Legislature of those provisions and the powers comprised therein being available to be invoked and exercised notwithstanding the fetters and controls placed upon the powers of assessment or reassessment that may otherwise be available to be exercised by virtue of Sections 139, 147, 148, 149, 151 and 153 of the Act. Sections 153A and 153C thus stand unshackled from the rigours of Sections 147, 148, 149, 151 or 153 of the Act.

106. The fact that Sections 153A and 153C would thus be freed from the restrictive timeframes which are erected by the aforenoted set of provisions would also appeal to logic bearing in mind the undisputed position that assessments or reassessments under Sections 153A and 153C are predicated upon a search. A search by its very nature would be an event unpredictable and unforeseen. It would therefore be wholly illogical to tie down assessments resting upon a search which may be undertaken to the periods of closure prescribed by Sections 147, 148, 149, 151 and 153 of the Act. It becomes pertinent to note that assessments which may be commenced pursuant to material that may be gathered in the course of a search would be wholly unrelated to the statutory timeframes which the Act erects for purposes of submission of returns and completion of assessments. A search assessment power is also clearly distinct and different from a reassessment that forms the subject matter of Sections 147 and 148. The reassessment power which stands comprised in Sections 147 and 148 is based upon the AO being satisfied that income susceptible to tax has escaped assessment. The reassessment power comprised in the aforenoted two provisions is based on information that may fall in the hands of the AO or where it come to form the opinion that income had escaped assessment. In terms of Section 148 as it stands presently, the AO is enabled to initiate reassessment only if it has information that income chargeable to tax has escaped assessment in the case of the assessee for the relevant AY. While under the earlier regime, and as Section 148 stood prior to its amendment on 01 April 2021, the expression ‘information’ had not been specifically defined, the power to reassess rested upon the AO having reason to believe that income chargeable to tax had escaped assessment. The unamended Sections 147 and 148 placed an added fetter upon the AO in cases where reassessment was proposed to be undertaken after the expiry of four years from the end of the relevant AY and the same being qualified by it being found that the assessee had failed to fully and truly disclose all material facts necessary for the purposes of assessment.

107. The amended Section 148 expands the meaning to be assigned to the word “information”, as would be evident from Explanation 1 and also incorporates deeming provisions by virtue of Explanation 2 and in cases where the said provisions were to apply, the AO is deemed to have information which suggests that income chargeable to tax had escaped assessment. While admittedly Explanation 2 to Section 148, and more particularly clause (i) thereof, speaks of material gathered in the course of a search being deemed to be information which would be suggestive of income chargeable to tax having escaped assessment, the same in our considered opinion would have no bearing on our conclusion that the finality which is spoken of cannot be a ground which would warrant the amplitude of Sections 153A and 153C being abridged. As was noticed hereinbefore, a search would be an event which would be inherently unfathomable and clearly defy prediction. It would thus be wholly incorrect to conceive of a connection between statutory timeframes which are otherwise embodied in the Act to search assessments.

108. We also find ourselves unable to countenance the submissions based upon the two Proviso’s placed in Section 149 for the following reasons. It must at the outset be noted that Section 149 regulates the time within which a notice under Section 148 may be issued. It thus neither ventures nor attempts to regulate the search assessment powers that are available to be invoked in terms of Sections 153A or 153C. Secondly, although the First Proviso (and to the extent that it included a reference to Sections 153A and 153C), came to be introduced by virtue of Finance Act, 2022 [Act 6 of 2022] with retrospective effect from 01 April 2021, the non obstante clause in Sections 153A and 153C was left untouched. Of equal significance is the fact that that Sections 153A and 153C of their own stipulate no period within which a notice initiating search assessment may be issued. We further find that the bar created by virtue of the First Proviso is in relation to Sections 153A and 153C as they stood immediately before the commencement of Finance Act, 2021. The concept of “relevant assessment year” and the block of ten AYs’ was made part of those provisions way back in 2017 itself and thus formed an integral part of those provisions as on 01 April 2021.

109. Any doubt that could have possibly been harboured is in any case stand dispelled by the Second Proviso to Section 149 and which unambiguously proclaims that the provisions of that sub-section would not apply to searches conducted or requisitions made prior to 31 March 2021. Thus, all searches conducted prior to 31 March 2021 remained unimpacted by the Provisos’ placed in Section 149 of the Act. These statutory amendments to Section 149 would have to be read in juxtaposition with Section 153C(3) which brought the curtains down upon search assessments liable to be made in accordance with the trinity provisions with effect from 01 April 2021. This, since Parliament by virtue of Finance Act, 2021 had merged the original reassessment power as well as those which may be predicated upon a search within the ambit of Section 148 and its family of provisions.

110. The contention with respect to retroactivity would also not sustain in light of the manifest intent of the search assessment power being statutorily intended to be invoked and available to be exercised in respect of all searches conducted between 31 May 2003 and 31 March 2021. This, coupled with the non obstante language embodied in Sections 153A and 153C, in our considered opinion, demolishes the argument of finality and AYs’ 2010-11 and 2011-12 being rendered invulnerable. Regard may also be had to the fact that the Fourth Proviso to Section 153A which came to be added contemporaneously with Explanation 1 and the inclusion of the concept of “relevant assessment year” in that provision restricted its application to searches conducted on or after 01 April 2017. This again is a clear indication of the legislative intent being to cover all searches conducted after the aforenoted date and no immunity intended to be attached to assessments attaining closure before the said date. There could not, in our considered opinion, be a clearer expression of the legislative will for those provisions having a retroactive application.

111. Although the petitioners sought to draw sustenance from the decision of this Court in C.B. Richards Ellis, we find that the reliance placed on the said decision as well as the others cited in its company is clearly misplaced. C.B. Richards Ellis in fact holds that the period within which reassessment may be initiated is a matter of procedure and that it is the time period prescribed and prevalent on the date of issuance of notice which would be applicable. We deem it appropriate to notice the lucid explanation of the legal position which appears in the decision of the Supreme Court in S.C. Prashar, Income Tax Officer Vs. Vasantsen Dwarkadas 24 and where the aspect of finality attached to assessments was explained in the following terms:-

“93. The amending Act of 1948 was passed on September 8, 1948, and came into force from March 30, 1948. In some cases it has been hold that its retrospectivity cannot be carried further than March 30, 1948. That is true in one sense but not in the sense how its provisions were to work in relation to the assessees. The section was meant to enable the issue of notices with a view to re- assessing income which had escaped assessment and allowed the re-assessment of income for back years. It was meant to operate retrospectively for eight years in some cases and four years in others. In our opinion it had retrospective operation in respect of back years according to its own provisions. If the 1948 Amendment could be treated as enabling the Income Tax Officer to take action at any point of time in respect of back assessment years within eight years of March 30, 1948 then such cases were within his power to tax. We have such a case here in CA No. 509 of 1958 where the notice was issued in 1949 to the lady whose husband had remitted Rs 9180 to her from Bangkok in the year relative to Assessment Year 1942-43. That lady was assessable in respect of this sum under Section 4(2) of the Income Tax Act. She did not file a return. If the case stood governed by the 1939 Amendment the period applicable would have been four years if she had not concealed the particulars of the income. She had of course not deliberately furnished inaccurate particulars thereof. If the case was governed by the 1948 Amendment she would come within the eight-year rule because she had failed to furnish a return. Now, we do not think that we can treat the different periods indicated under Section 34 as periods of limitation, the expiry of which grant prescriptive title to defaulting tax-payers. It may be said that an assessment once made is final and conclusive except for the provisions of Sections 34 and 35 but it is quite a different matter to say that a “vested right” arises in the assessee. On the expiry of the period the assessments, if any, may also become final and conclusive but only so long as the law is not altered retrospectively. Under the scheme of the Income Tax Act a liability to pay tax is incurred when according to the Finance Act in force the amount of income, profits or gains is above the exempted. That liability to the State is independent of any 24 AIR 1963 SC 1356 consideration of time and, in the absence of any provision restricting action by a time limit, it can be enforced at any time. What the law does is to prevent harassment of assessees to the end of time by prescribing a limit of time for its own officers to take action. This limit of time is binding upon the officers, but the liability under the charging section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains it cannot be enforced by the officers administering the tax laws. If the disability is removed or according to a new law a new time limit is created retrospectively, there is no reason why the liability  should not be treated as still enforceable. The law does not deal with concluded claims or their revival but with the enforcement of a liability to the State which though existing remained to be enforced. This aspect was admirably summed up by Chakravarti, C.J. (Sarkar, J. concurring) in Income tax Officer v. Calcutta Discount Co. Ltd. as follows:

“The plain effect of the substitution of the new Section 34 with effect from 30th March, 1948, is that from that date the Income Tax Act is to be read as including the new section as a part thereof and if it is to be so read, the further effect of the express language of the section is that so far as cases coming within clause (a) of sub-section (1) are concerned, all assessment years ending within eight years from 30th March, 1948, and from subsequent dates, are within its purview and it will apply to them, provided the notice contemplated is given within such eight years What is not within the purview of the section is an assessment year which ended before eight years from 30th March 1948.”

xxxx xxxx xxxx

95. We come now to the next amendment in 1956. It created a change of a far-reaching character by removing the limit of time for action where the sum likely to be taxed amounted to rupees one lakh or more either for a single year or for a group of years going back to the year ending on March 31, 1941. These cases were governed by the eight-year rule under the 1948 amendment. In other words, the eight-year period was retained for cases involving less than one lakh of rupees and the limit of time was removed for those cases in which the amount involved was one lakh rupees or more. We are not concerned at this moment with the sanctions necessary before action could be taken. That is a separate matter. If no sanction was obtained then the notice would be bad for that reason but not on the ground of a limit of time. What we have said above about the amendment of 1948 applies mutatis mutandis also to the amendment of 1956. That provision was also to operate retrospectively as has been stated by us earlier. There is good reason to think that this is the correct view because when the Calcutta High Court in the Debi Dutta Moody case held that the 1956 amendment was not applicable to the case, Parliament passed the 1959 Act nullifying that decision. By the same Act, Parliament gave power to issue a notice at any time in all these cases in which the eight- year period under the principal Act as it stood prior to the 1956 Amendment, had expired. The words “at any time” mean what they say. There is no special meaning to be attributed to them. “Any time” thus meant action to be taken without any limit of time. A similar result was reached in certain cases under the 1953 Amendment of the second proviso to sub-section (3) of Section 34. It provided: nothing in the section limiting the time within which any action may be taken shall apply to an assessment or re-assessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section already mentioned. This proviso was challenged under Article 14 of the Constitution but that is a different matter. If the section is constitutionally enacted then it also means what it says. It is hardly possible to imagine clearer language then the one used. It says that the limit of time mentioned in Section 34 is removed in certain cases that is to say, action can be taken at any time in these cases. In our judgment, each case of a notice must be judged according to the law  existing on the date the notice was issued or served, as the law may require. So long as the notice where the notice is in question, and the assessment, where the assessment is in question, are within the time limited by the law, as it exists when the respective actions are taken, the actions cannot be questioned provided the law is clearly retrospective. The only case in which no further action can be taken is one in which action was not taken under the old law within the period prescribed by that law and which is not also within the period mentioned in the new law if its operation is retrospective. All other cases are covered by the law in force at the time action is taken. It is from these viewpoints that these appeals, in our opinion, should be judged.”

112. As is manifest from the aforesaid passages, the Supreme Court significantly observed that while the statute may not confer a power upon an officer to assess or reopen beyond a particular period of time and the assessment in that sense becoming final and conclusive, that would not justify it being presumed that a corresponding vested right comes to be created in favour of an assessee. It was held that the assessment would remain conclusive as long as the law is not altered retrospectively or the disability removed.

113. Regard must also be had to the fact that C.B. Richards Ellis was a case which was dealing with a situation where the period within which a reassessment action could have been initiated came to be abridged. It was in the aforesaid context that our Court held that it would be the period applicable on the date of issuance of notice which would govern. The aforenoted decision assumes added significance in light of what was observed in para 12 of the report and where the Court laid emphasis on the distinction which must be recognised to exist between a liability to tax under the Act and the right to assess and which may culminate in the creation of a liability coupled with the power to enforce that liability. Although we have extracted the relevant paragraphs of that decision in the preceding parts of this judgment, for the sake of continuity, we deem it apposite to reproduce the following passage from that judgment hereunder:-

“12. Law of limitation does not create any right in favour of a person or define or create any cause of action, but simply prescribes that the remedy can be exercised or availed of by or within the period stated and not thereafter. Subsequently, the right continues to exist but cannot be enforced. The liability to tax under the Act is created by the charging Section read with the computation provisions. The assessment proceedings crystallize the said liability so that it can be enforced and the tax if short paid or unpaid can be collected. If this difference between liability to tax and the procedure prescribed under the Act for computation of the liability (i.e. the procedure of assessment), is kept in mind, there would be no difficulty in understanding and appreciating the fallacy and the error in the primary argument raised by the Revenue. It is a settled position that liability to tax as a levy is normally determined as per statute as it exists on the first day of the assessment year, but this is not the issue or question in the present case. The issue or question in the present case relates to assessment i.e. initiation of re-assessment proceedings and whether the time/limitation for initiation of the re-assessment  proceedings specified by the Finance Act, 2001 is applicable. We are not determining/deciding the liability to tax but have to adjudicate and decide whether the re-assessment notice is beyond the time period stipulated. This is a matter/issue of procedure i.e. the time period in which the assessment or re- assessment proceedings can be initiated. Thus the time period/limitation period prescribed on the date of issue of notice will apply. In our opinion, the answer is clear and has to be in affirmative, i.e. in favour of the assessee.”

114. C.B. Richards Ellis thus constitutes a precedent which had clearly recognised that while the liability to tax may continue to exist, if the statutory period within which it could be enforced had come to lapse, the assessment would be conferred finality. The core question which arose for the consideration of the Court was with respect to a matter of procedure and the stipulations of time within which the power to reassess could have been exercised. Similar was the issue which arose in Brahm Datt. That too was a decision which was dealing with the validity of reassessment proceedings initiated under Section 148 of the Act. As held by us in the earlier parts of this decision, the reassessment provisions firstly incorporate strict time frames within which alone that power can be invoked. Neither Section 153A nor Section 153C embody a similar restraint. This obviously since those powers would be precipitated by a search, an event which is inherently beset by an element of unpredictability. Secondly, the Legislature has clearly and bearing mind the aforesaid aspect ordained that those two provisions would have overriding effect over the reassessment provisions. It would thus be clearly fallacious to introduce or read the restrictions placed in Sections 147 and 148 into the search assessment provisions with which we are concerned.

115. Sections 153A and 153C are provisions which are triggered by material that may be fortuitously recovered in the course of a search. Both those provisions override and are ordained to operate above and beyond the normal assessment or reassessment provisions. At the time when they were originally introduced in the statute in 2003, they enabled the AO to carry out an assessment exercise stretching over six AYs’. In 2017, the provisions came to be amended and the AO consequently came to conferred further power to reopen ten AYs’. We have already found that the power to initiate an assessment under Sections 153A and 153C is separate and distinct from the ordinary reassessment provisions comprised in Section 148. Both sets of provisions are intended to operate in separate silos. The power to assess over a larger period of ten years when introduced in the concerned provisions was made subject only to the preconditions comprised in the Fourth Proviso to Section 153A. All that the Legislature deemed appropriate to provide was to restrict the application of that power to searches conducted on or after 01 April 2017 subject of course to the fulfilment of the other stipulations placed in the provisions and the existence of the jurisdictional prerequisites.

116. The very fact that the statute in unequivocal terms provisioned for it to be applicable to all searches conducted or requisitions made post that date is evidence of the manifest legislative intent for it applying to the “relevant assessment year” computed in accordance with Explanation 1 placed in Section 153A. The statutory scheme so put in  place is representative of the intent of the Legislature to overcome conclusiveness that may attach to a particular assessment when tested on the anvil of the period prescriptions contained in Section 149 of the Act. We also bear in mind the pertinent observations of the Supreme Court when it had observed that finality which may ordinarily come to imbue an order of assessment does not result in the creation of a corresponding vested right in the assessee. In any case and for reasons aforenoted, we are of the firm opinion that the judgements rendered in the context of Sections 145-151 would not constitute a prudent basis to interpret Sections 153A and 153C insofar as the argument of closure as canvassed by the writ petitioners is concerned. We consequently find ourselves unable to hold in favour of the writ petitioners insofar as this aspect is concerned.

117. Turning then to ITA 52/2024 filed by the Department we find that the impugned order dated 29 July 2022 is assailed on the ground that the ITAT has erred in holding that the computation of the preceding six AYs’ would be from the date of receipt of the books of accounts or documents or assets seized or requisitioned by the jurisdictional AO of the non-searched person instead of the actual date of search. Assailing this finding, the Department is in appeal before us and has proposed the following questions of law for our consideration:

“2.1 Whether Ld. ITAT has erred in law by quashing the assessment on the ground that the date of search has to be reckoned from the date when books of accounts or other documents seized have been received by the Assessing Officer of the other person and not in accordance with the date of the search?

2.2 Whether Ld. ITAT has erred in law by ignoring that the implementation provisions have to be interpreted in accordance with the charging provision and there cannot be any anomalous situation created by the interpretation of the implementation provisions. The provisions under section 153A and 153C of the Act have to be construed in such a harmonious way that there will not be any different sets of 6 years for reopening of the assessments in case of the person searched and the other person?”

118. Having examined the issue of commencement point for the purposes of computation of the six and the ten year block under Section 153C of the Act in detail in the foregoing paragraphs of this judgment, we find no perversity in the findings recorded by the Income Tax Appellate Tribunal 25 while passing the impugned order dated 29 July 2022. We also additionally find that the ITAT committed no error in holding that the 2017 Amending Act would not apply to the facts of the present case since the search was conducted prior to the introduction of the 2017 amendments and consequently the extended ten year block would not apply in the facts of that case. Consequently, no substantial question of law arises in the instant appeal. We see no reason to interfere with the ITAT’s impugned order dated 29 July 2022. The appeal is thus liable to be dismissed.

K. SUMMARY OF CONCLUSIONS

119. We thus record our conclusions as follows:

A. Prior to the insertion of Sections 153A, 153B and 153C, an assessment in respect of search cases was regulated by Chapter XIVB of the Act, comprising of Sections 158B to 158BI and which embodied the concept of a block assessment. A block assessment in search cases undertaken in terms of the provisions placed in Chapter XIVB was ordained to be undertaken simultaneously and parallelly to a regular assessment. Contrary to the scheme underlying Chapter XIVB, Sections 153A, 153B 25 ITAT and 153C contemplate a merger of regular assessments with those that may be triggered by a search. On a search being undertaken in terms of Section 153A, the jurisdictional AO is enabled to initiate an assessment or reassessment, as the case may be, in respect of the six AYs’ immediately preceding the AY relevant to the year of search as also in respect of the “relevant assessment year”, an expression which stands defined by Explanation 1 to Section 153A. Of equal significance is the introduction of the concept of abatement of all pending assessments as a consequence of which curtains come down on regular assessments.

B. Both Sections 153A and 153C embody non-obstante clauses and are in express terms ordained to override Sections 139, 147 to 149, 151 and 153 of the Act. By virtue of the 2017 Amending Act, significant amendments came to be introduced in Section 153A. These included, inter alia, the search assessment block being enlarged to ten AYs’ consequent to the addition of the stipulation of “relevant assessment year” and which was defined to mean those years which would fall beyond the six year block period but not later than ten AYs’. The block period for search assessment thus came to be enlarged to stretch up to ten AYs’. The 2017 Amending Act also put in place certain prerequisite conditions which would have to inevitably be shown to be satisfied before the search assessment could stretch to the “relevant assessment year”. The preconditions include the prescription of income having escaped assessment and represented in the form of an asset amounting to or “likely to amount to” INR 50 lakhs or more in the “relevant assessment year” or in aggregate in the “relevant assessment years”.

C. Section 153C, on the other hand, pertains to the non-searched entity and in respect of whom any material, books of accounts or documents may have been seized and were found to belong to or pertain to a person other than the searched person. As in the case of Section 153A, Section 153C was also to apply to all searches that may have been undertaken between the period 01 June 2003 to 31 March 2021. In terms of that provision, the AO stands similarly empowered to undertake and initiate an assessment in respect of a non-searched entity for the six AYs’ as well as for “the relevant assessment year”. The AYs’, which would consequently be thrown open for assessment or reassessment under Section 153C follows lines pari materia with Section 153A.

D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to  be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “relevant assessment year” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non- searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted.

E. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs’ would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A.

F. While the identification and computation of the six AYs’ hinges upon the phrase “immediately preceding the assessment year relevant to the previous year” of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “from the end of the assessment year”. This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of the assessment year” while speaking of the ten year block.

G. Insofar as the thresholds put in place by virtue of the Fourth Proviso to Section 153A are concerned and the argument of the writ petitioners of the condition of INR 50 lakhs being an unwavering precondition, we find ourselves unable to sustain that submission bearing in mind the indubitable fact that proceedings for search assessment commence upon the issuance of a notice and the AO at that stage having really not had the occasion to undertake a detailed or in depth examination of the evidence collected or come to a definitive opinion with respect to the total income which may have escaped assessment. Since the computation and assessment of income that is likely to have escaped assessment would at this stage be provisional, it would be incorrect to strike down initiation of action on a mere ex facie examination of the Satisfaction Note. We also in this regard bear in mind the Fourth Proviso using the expression “amounts to or is likely to amount”. The usage of the phrase “likely to” is indicative of the Legislature being conscious of the provisional character of the opinion that the AO may have formed at that stage.

H. However, and at the same time, even if the identified asset at that stage be quantified as less than INR 50 lakhs, the AO must for reasons to be duly recorded, be of the opinion that the ultimate computation of escaped income is likely to exceed INR 50 lakhs. The aforesaid satisfaction would have to be based on an assessment of the material gathered and the potentiality of the same being indicative of the escaped assessment exceeding INR 50 lakhs. The formation of opinion in this respect would have to be based not on mere ipse dixit but reflective of a fair assessment of the quantum of income likely to have escaped assessment as distinct from mere speculation and conjecture.

I. We further hold that since the precondition of INR 50 lakhs or more constitutes a sine qua non for initiating action for the extended ten year block, the aforesaid satisfaction and the reasons in support thereof would have to borne out from the Satisfaction Note itself. We are also of the opinion that the precondition of INR 50 lakhs is not liable to be viewed as being the qualifying criteria for each “relevant assessment year” that may be thrown open and that the said condition would stand satisfied if the escaped income cumulatively or in the aggregate meets the minimum benchmark of INR 50 lakhs.

J. The contention of finality and closure addressed with respect to AYs’ 2010-11 and 2011-12 on the basis of the statutory timeframes prescribed for assessment or reassessment and as those provisions stood prior to 01 April 2017 is misconceived, since it proceeds on the assumption that once the period of assessment or reassessment were to come to an end, it would inevitably lead to the creation of a vested right in favour of the assessee. The aforesaid argument proceeds on the incorrect premise of the reassessment provisions controlling or cabining the power conferred by Sections 153A and 153C. Acceptance of the aforesaid contention would amount to ignoring the plain and evident intent of the Legislature for Sections 153A and 153C operating above and beyond the reassessment powers.

K. The submission of closure and finality also fails to bear in consideration the indubitable fact that a search is an eventuality which is inherently unpredictable, a circumstance which would defy prophecy and it consequently being wholly irrational to read the time frames pertaining to reassessment as regulating or controlling the period within which an assessment predicated on that event may be initiated. It would be wholly illogical to conceive of a connection between the statutory time frames which are otherwise embodied in the Act and search assessments. In fact the acceptance of this submission would amount to virtually erasing the non obstante clause contained in Sections 153A and 153C.

L. The legislative intent of those provisions having retroactive application is clearly evidenced from the statue declaring that they would apply to all searches conducted between 31 May 2003 to 31 March 2021, and the Fourth Proviso in unambiguous terms extending the applicability of those provisions to all searches conducted post 01 April 2017 and Sections 153A and 153C superseding the provisions for reassessment, otherwise appearing in the Act.

M. The argument of closure also fails to take note of the accepted distinction between the liability to tax under the Act and the right to assess and enforce a liability created pursuant thereto. While a statute may denude an authority of the power to enforce a liability and in that limited sense conferring finality upon an assessment, the said position would prevail only till such time as that halo of impregnability is not statutorily removed. As was eloquently observed by the Supreme Court, the deprivation of a power to enforce would not lead to the creation of a vested right. As was pertinently observed, the liability to the State exists and operates de hors a consideration of time and in the absence of the statute itself imposing a time limit. The only limitations which are introduced while enacting Sections 153A and 153C was of the period within which the search had been conducted.

L. DISPOSTIF

120. In view of the aforesaid discussion, the writ petitions placed in Lists I and II and pertaining to AYs’ 2010-11, 2011-12, 2012-13 and 2013-14, all of which fall beyond the maximum ten year block period shall stand allowed. The impugned notices pertaining to the aforenoted AYs’ shall consequently stand quashed.

121. From the petitions placed in List III, we allow WP(C) Nos. 400/2024, 384/2024 and 383/2024 since the impugned notices pertain to AYs’ 2010-11, 2011-12 and 2012-13 and thus beyond the maximum block of ten years. However, WP (C) 694/2024 pertains to AY 2016-17 which would fall within the eighth year of the “relevant assessment year”. The asset which is spoken of in the impugned notice is valued at INR 25,20,000. While we allow the said writ petition and quash the impugned notice, we accord liberty to the AO to examine whether the income which has allegedly escaped assessment is likely to amount to INR 50 lakhs or more in light of the principles enunciated in this judgment. In case the AO comes to conclude that the initiation of action would meet the prerequisites placed by virtue of the Fourth Proviso to Section 153A as interpreted by us, it would be open to it to commence proceedings afresh if otherwise permissible in law. All other rights and contentions of the petitioner assessee are kept open.

122. ITA 52/2024 shall for reasons aforenoted stand dismissed.

123. All pending applications shall stand disposed of.”

6.3 Proceeding further, Section 4 of the 1961 Act governs chargeability to income-tax on the total income of the previous year of the tax-payer i.e. it is a fundamental substantive charging section which creates charge to income-tax on the total income of the tax-payer. By virtue of Section 4, legal power is vested in the Government to collect income-tax. Section 132 of the 1961 Act deals with search and Seizure operations conducted by Revenue. Search and Seizure operations are serious invasion into privacy of a person. It provides machinery and enforcement mechanism for tax authorities to unearth undisclosed income, with an intent to bring the same to income-tax. Section 132 of the 1961 Act is an extraordinary power vested under the 1961 Act, which is invasive to life and liberty of the person as enshrined under Article 21 of the Constitution of India, and hence such powers has to be used with utmost care within strictest framework and bounden limits as provided u/s 132 of the 1961 Act, which provision of the statute i.e. Section 132 of the 1961 Act stipulates all such extraordinary circumstances warranting invocation of search powers u/s 132 of the 1961 Act. In this process there is likelihood of some inconvenience caused to the persons against whom such search powers are invoked u/s 132, or with respect to persons other than the person searched in whose case undisclosed income relates arising from the documents or assets seized during search operations and against which proceedings u/s 153C are invoked.The said inconvenience so caused cannot be a justification for quashing the proceedings, more so such intrusive powers are used by Revenue only in those cases where there is credible information that the valuable assets or books of accounts or documents etc having a bearing on the income of the tax-payer was not disclosed or would not be disclosed to the department. Section 153 A of the 1961 Act falls under Chapter XIV which deals with ‘procedure for assessment’, wherein it deals with procedure for assessment in the case of search u/s 132 or requisition made u/s 132A. Undisclosed income unearthed during search operations conducted u/s 132 of the 1961 Act or requisition made u/s 132A, are, inter-alia, brought to income-tax in the hands of the person searched by adopting a procedure stipulated u/s 153A, within the legal power vested in the Government by virtue of fundamental substantive charging Section 4 of the 1961 Act. Section 153C deals with procedure for making assessment in the cases of persons other than the person searched u/s 132 of the 1961 Act, wherein undisclosed income unearthed during search relates to a person other than searched person.

6.4 It will be relevant here to reproduce provisions of Section 153A and 153C of the 1961 Act, as were applicable post amendment by Finance Act, 2017, as the searches and seizure operations u/s 132 of the 1961 Act in the instant case were conducted by Revenue on 18.10.2019 in the case of Alankit Group and other persons as detailed in preceding para’s of this order. During search operations, certain documents etc were seized pertaining to the assessee reflecting undisclosed income of the assessee. The satisfaction note in the case of the assessee was prepared by the AO of the searched person on 20.12.2021, while the satisfaction note by the jurisdictional AO was prepared on 24.12.2021. Notice u/s 153C of the 1961 Act was issued by the AO to the assessee on 28.12.2021.

6.5 The controversy is in very narrow range, as to that for the purposes of Section 153C, the date of search in the case of other person i.e. other than the person in whose case search was conducted u/s 132 of the 1961 Act, and in whose case undisclosed income is unearthed during searches conducted u/s 132 of the 1961 Act, shall be deemed to be the date of receiving the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person, or whether the said date shall be reckoned from the date of searches actually conducted by the Revenue u/s 132 of the 1961 Act. It assumed significance as there could be a time gap between the searches conducted by the Revenue u/s 132 of the 1961 Act wherein incriminating documents, assets etc pertaining to some other person were found which reflected undisclosed income of such other person other than person searched, and the date of receiving of such documents, records etc by the jurisdictional AO of the such other person other than searched person, and hence period of six/ten assessment years as stipulated u/s 153C is to be reckoned whether from the date of actual search conducted by Revenue u/s 132 or from the date of receiving of documents etc by the AO of such other person. The Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) has interpreted that such date is to be reckoned from the date of receiving of such documents etc by the AO of the such other person in whose case search assessment is now to be framed u/s 153C. The Revenue on the other hand is relying on the amended provisions of Section 153C read with Section 153A as amended by Finance Act, 2017 wef 01.04.2017, to contend that such date is to be reckoned from the date of actual searches conducted by Revenue u/s 132 of the 1961 Act. The date of search u/s 132 in the instant case was 18.10.2019, while satisfaction note was prepared by jurisdictional AO of the assessee on 24.12.2021, while notice u/s 153C was issued by the AO to the assessee on 28.12.2021. It will be relevant at this stage to reproduce Section 153A and 153C of the 1961 Act as amended by Finance Act, 2017 wef 01.04.2017, which reads as under: “Assessment in case of search or requisition.

153A. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person68 where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall—

(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;

(b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made [and for the relevant assessment year or years]: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years]: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment year or years] referred to in this [sub section] pending on the  date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made [and for the relevant assessment year or years]:]

[Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless—

(a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years;

(b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and

(c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.—For the purposes of this sub-section, the expression “relevant assessment year” shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.

Explanation 2.—For the purposes of the fourth proviso, “asset” shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.]

[(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.—For the removal of doubts, it is hereby declared that,—

(i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section;

(ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.

Assessment of income of any other person. 153C. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,—

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or

(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A]:]

[Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub-section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person:]

[Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made [and for the relevant assessment year or years as referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated.]

[(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year —

(a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or

(b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or

(c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.

6.6 Immediately prior to introduction of Section 153A/153C for framing search assessment with respect to searches conducted after 31st May, 2003, Chapter XIVB viz. Section 158B to Section 158BI of the 1961 Act held the field for framing search assessments to compute undisclosed income of the searched person for the Block Period u/s 158BC, wherein similar provisions by way of Section 158BD existed for framing search assessments in the case of person other than searched person, to compute undisclosed income for the Block Period, which consisted previous years relevant to six assessment years preceding the previous year in which the search was conducted u/s 132 or any requisition was made u/s 132A and also includes the period upto the date of the commencement of such search or the date of such requisition in the previous year in which said search was conducted or requisition was made. Provided that where the search is initiated or the requisition is made before the 1st day of June 2001, the Block Period shall constitute ten assessment years instead of six assessment years. Thus, provisions of Section 158BC and 158BD provided for computing Block Assessment to compute undisclosed income for six/ten assessment years, as the case may be, in the case of searched person, as well in the case of other person other than person searched to whom undisclosed income relates to or pertains or belongs to such other person as was found during the course of searches conducted by Revenue or requisition made u/s 132A from the seized documents or assets. At this point of time, it will be relevant to reproduce provisions of Section 158BC and 158BD of the 1961 Act, which reads as under:

“Procedure for block assessment. 158BC.

Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then,—

[(a) the Assessing Officer shall—

(i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days;

(ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days,

as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period:

Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter:

Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;]

( b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and (3) of section 143 [, section 144 and section 145] shall, so far as may be, apply;

( c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment;

[(d) the assets seized under section 132 or requisitioned under section 132A shall be dealt with in accordance with the provisions of section 132B.]”

“Undisclosed income of any other person.

158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed [under section 158BC] against such other person and the provisions of this Chapter shall apply accordingly”.

6.7 At this stage it will be relevant to refer to judgment and order of Hon’ble Supreme Court in the case of CIT v.Calcutta Knitwear(2014) 362 ITR 673 446(SC), which was delivered in context of Section 158BD of the 1961 Act, wherein Hon’ble Supreme Court directed the stage at which satisfaction can be recorded by the AO of such other person other than the person in whose case searches were conducted u/s 132, to compute undisclosed income of the Block Period. In this case, search u/s 132 was conducted by Revenue on 05.02.2003 in two premises of Bhatia Group namely Swastik Trading Company and M/s Kavita International Company, and certain incriminating documents which revealed certain undisclosed income pertaining to the assessee firm were found in the said search. The Hon’ble Supreme Court held that recording of satisfaction by the AO of the searched person before transmitting the record to the AO of such other person is sine qua non as well time framework for recording such satisfaction was also mandated by Hon’ble Supreme Court in para 44 of the aforesaid judgment and order, which stipulated that satisfaction is required to be recorded by the AO of the searched person, which can be recorded at the time of or along with the initiation of proceedings against the searched person u/s 158BC or along with the assessment proceedings u/s 158BC in the case of searched person or immediately after the assessment proceedings are completed u/s 158BC in the case of searched person, by holding as under:

“18. In order to resolve the controversy, certain provisions of the Act require to be noticed by us.

19. Chapter XIV-B of the Act is a special provision carved out by the legislature for the purpose of the assessments in cases pertaining to Sections 132 and 132A of the Act. The said chapter was introduced by the Finance Act, 1995 with effect from 01.07.1995 and comprises Sections 158B to 158BH of the Act. The provisions under this Chapter were made inapplicable in case of search initiated under Section 132 or Section 132A after 31.05.2003 by introduction of an amendment to the Chapter as Section 158BI vide the Finance Act, 2003 with effect from 01.06.2003. The lis before us requires examination of the provisions of the said Chapter, particularly Section 158BD.

20. Section 158B of the Act is the dictionary clause. It provides for the definition of “block period” and “undisclosed income”. For the purpose of this case, a reference to the definition of the “undisclosed income” as provided for in Section 158B(b) is necessary and, therefore, it is noticed. The same reads as under: ‘”Undisclosed income” includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act or any expense, deduction or allowance claimed under this Act which is found to be false.’

21. Sections 158BC and 158BD of the Act are machinery provisions. Section 158BC of the Act provides the procedure for block assessment and Section 158BD of the Act provides for assessments in the case of an undisclosed income of any other person. The said sections are relevant for the purpose of this case and, therefore, they are extracted. They read as under: “Section 158BC. Procedure for Block Assessment.— Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then, —

(a) The Assessing Officer shall,

(i) In respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995 but before the 1st day of January, 1997 serve a notice to such person requiring him to furnish within such time not being less than fifteen days;

(ii) In respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause 

(i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period: Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter: Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;

(b) The Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and (3) of section 143 section 144 and section 145 shall, so far as may be, apply;

(c) The Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment;

(d) The assets seized under section 132 or requisitioned under section 132A shall be dealt with in accordance with the provisions of section 132B.

**                                                **                                     **

Section 158BD. Undisclosed income of any other person.— Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158BC against such other person and the provisions of this Chapter shall apply accordingly.”

22. Section 158BC speaks of procedure for assessment of a person searched under Section 132 of the Act or books of accounts, other documents or assets are requisitioned under section 132A. The limitation for the purpose of completion of the block assessments for the purpose of Section 158BC of the Act is as provided under Section 158BE(1)(a) of the Act, that is the time limit for completion of block assessment.

23. Section 158BD of the Act provides for “undisclosed income” of any other person. Before we proceed to explain the said provision, we intend to remind ourselves of the first or the basic principles of interpretation of a fiscal legislation. It is time and again reiterated that the courts, while interpreting the provisions of a fiscal legislation should neither add nor subtract a word from the provisions of instant meaning of the sections. It may be mentioned that the foremost principle of interpretation of fiscal statutes in every system of interpretation is the rule of strict interpretation which provides that where the words of the statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule (Swedish Match AB v. SEBI AIR 2004 SC 4219, CIT v. Ajax Products Ltd. [1965] 55 ITR 741 (SC).

24. We may gainfully refer to Cape Brandy Syndicate v. Inland Revenue Commissioners [1921] 1 KB 64 at 71 which involved the Finance (No. 2) Act 1915 which imposed excess profits duty on trade or businesses commenced after the outbreak of the First World War in 1914. By subjecting the legislation to a strict literal interpretation, Rowlatt J. held that the Finance (No. 2) Act 1915, in isolation, did not apply to businesses that commenced after the outbreak of war in 1914 and observed as follows:

“… the principle in favour of a strict literal approach … simply means that in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.”

25. In Commissioner of Stamp Duties (NSW) v. Simpson (1917) 24 CLR 209 Barton J., citing Viscount Haldane in Lumsden v. Inland Revenue Commissioners [1914] AC 877, stated the following:

“The duty of Judges in construing Statutes is to adhere to the literal construction unless the context renders it plain that such a construction cannot be put on the words. This rule is especially important in cases of Statutes which impose taxation.”

The Court in Simpson’s case (supra) sought to determine whether a deed poll constituted a settlement for the purposes of Section 49 of the Stamp Duties Act, 1898 (NSW). Section 3 which defined the word ‘settlement’ as meaning ‘any contract or agreement’ was examined. The Court by adopting a strict literal approach held that only a contract or an agreement could constitute a settlement and that Section 49 providing for deed poll was not applicable and therefore, the taxpayer did not have to pay any stamp duty.

26. Lord Granworth in Grundy v. Pinniger (1852) 1 LJ Ch 405 has observed that: “To adhere as closely as possible to the literal meaning of the words used, is a cardinal rule from which if we depart we launch into a sea of difficulties which it is not easy to fathom.” That is to say, once the literal rule is departed, then any number of interpretations can be put to a statutory provision, each Judge having a free play to put his own interpretation as he likes. This would be destructive of the edifice of fiscal legislations which impose economic duties and sanctions.

27. In taxing statutes, even if the literal interpretation results in hardship or inconvenience, it has to be followed (G.P. Singh’s Principles of Statutory Interpretations, 12th Ed, 2010, Lexis Nexis Butterworths Wadhwa Nagpur; Bennion on Statutory Interpretation, 5th Ed., Lexis Nexis, p. 863; Vepa P. Sarathi, Interpretation of Statutes, 5th Ed., Easter Book Company, Chapter VIII, Taxing Statutes). This Court in CIT v. Keshab Chandra Mandal AIR 1950 SC 265has held that hardship or inconvenience cannot alter the meaning of the language employed by the legislature if such meaning is clear and apparent. Hence departure from the literal rule should only be done in very rare cases, and ordinarily there should be judicial restraint to do so. Pandian Chemicals Ltd. v. CIT [2003] 262 ITR 278/129 Taxman 539 (SC), Narsiruddin v. Sita Ram Agarwal AIR [2003] SC 1543, Bhaiji v. Sub-Divisional Officer [2003] 1 SCC 692, J.P. Bansal v. State of Rajasthan AIR 2003 SC 1405, State of Jharkhand v. Govind Singh: JT 2004(10) SC 349, Jinia Keotin v. K.S. Manjhi, 2003 (1) SCC 730, Shiv Shakti Co-operative Housing Society v. Swaraj Developers AIR 2003 SC 2434, Grasim Industries Ltd. v. Collector of Customs [2002] 4 SCC 297 and Union of India v. Hamsoli Devi [2002] 7 SCC 273.

28. The Australian High Court in Federal Commissioner of Taxation v. Westraders Pty Ltd. (1980) 144 CLR 55 considered the scope of Section 36A of the Income Tax Assessment Act, 1936(Cth), which on a literal interpretation allowed the taxpayer to make a profit and still claim a loss for tax purposes. The Commissioner argued the taxpayer’s conduct amounted to a tax avoidance scheme and should therefore be disallowed under Section 260 of the Income Tax Assessment Act, 1936(Cth). The Court held that under a literal interpretation Section 36A could apply to allow the taxpayer to claim a loss. Barwick CJ, speaking for the majority relied on the decision in Inland Revenue Commissioners v. Westminster (Duke), [1936] AC 1 which advocated the literal approach be applied when interpreting taxation legislation and stated the following:

“It is for the Parliament to specify, and to do so, in my opinion, as far as language will permit, with unambiguous clarity, the circumstances which will attract an obligation on the part of the citizen to pay tax. The function of the court is to interpret and apply the language in which the Parliament has specified those circumstances. The court is to do so by determining the meaning of the words employed by the Parliament according to the intention of the Parliament which is discoverable from the language used by the Parliament. It is not for the court to mould or to attempt to mould the language of the statute so as to produce some result which it might be thought the Parliament may have intended to achieve, though not expressed in the actual language employed.”

29. In Cooper Brookes (Wollongong) Pty Ltd v. Federal Commissioner of Taxation (1981) 147 CLR 297 it is held that in a taxing statute if the language is unambiguous, departing from the literal approach ‘may lead judges to put their own ideas of justice or social policy in place of the words of the statute’. Similar view was espoused in C & J Clark Ltd v. Inland Revenue Commissioners, [1975] 1 WLR 413 and BP Refinery (Westernport) Pty Ltd v. Hastings Shire, (1977) 180 CLR 266.

30. In Hepples v. FCT, (1991) 173 CLR 492, the High Court of Australia unequivocally favoured the principle that taxation legislation should be subject to a strict literal interpretation and opined that such an approach was supported by ‘common sense’. Therein, the taxpayer, on ceasing to be employed, was paid $40,000 by his employer in exchange for the taxpayer agreeing that he would not carry on or be interested in certain businesses and would not divulge any trade secrets. The issue before the Court was whether or not such payment would form part of the taxpayer’s assessable income for the purposes of the Income Tax Assessment Act, 1936(Cth). It was held that since the Act did not provide for such payments to form part of a taxpayer’s assessable income, the payment would not be assessable.

31. This Court in Tata Consultancy Services v. State of Andhra Pradesh [2004] 271 ITR 401/141 Taxman 132 has ascribed plain meaning to the terms computer and computer programme in a fiscal statute and reiterating the proposition laid down in Inland Revenue Commissioner case (supra), observed that a court should  not be over zealous in searching ambiguities or obscurities in words which are plain.

32. In Prakash Nath Khanna v. CIT [2004] 266 ITR 1/135 Taxman 327, this Court has explained that the language employed in a statute is the determinative factor of the legislative intent. The legislature is presumed to have made no mistake. The presumption is that it intended to say what it has said. Assuming there is a defect or an omission in the words used by the legislature, the Court cannot correct or make up the deficiency. Where the legislative intent is clear from the language, the Court should give effect to it Delhi Financial Corpn.v. Rajiv Anand [2004] 11 SCC 625; Government of Andhra Pradesh v. Road Rollers Owners Welfare Association, [2004] 6 SCC 210.

33. In B. Premanand v. Mohan Koikal [2011] 4 SCC 266 this Court has observed as follows:

“32. The literal rule of interpretation really means that there should be no interpretation. In other words, we should read the statute as it is, without distorting or twisting its language.”

33.1 We may mention here that the literal rule of interpretation is not only followed by Judges and lawyers, but it is also followed by the lay man in his ordinary life. To give an illustration, if a person says “this is a pencil”, then he means that it is a pencil; and it is not that when he says that the object is a pencil, he means that it is a horse, donkey or an elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean.”

34. Thus, the language of a taxing statute should ordinarily be read understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative animation. A taxing statute should be strictly construed; common sense approach, equity, logic, ethics and morality have no role to play. Nothing is to be read in, nothing is to be implied; one can only look fairly at the language used and nothing more and nothing less. (J. Srinivasa Rao v. Govt. of A.P. 2006(13) SCALE 27, Raja Jagdambika Pratap Narain Singh v. CBDT [1975] 100 ITR 698(SC))

35. It is also trite that while interpreting a machinery provision, the courts would interpret a provision in such a way that it would give meaning to the charging provisions and that the machinery provisions are liberally construed by the courts. In Mahim Patram (P.) Ltd. v. Union of India [2007] 3 SCC 668 this Court has observed that:

“20. A taxing statute indisputably is to be strictly construed. [See J. Srinivasa Rao v. Govt. of Andhra Pradesh and Anr., 2006(13)SCALE 27]. It is, however, also well-settled that the machinery provisions for calculating the tax or the procedure for its calculation are to be construed by ordinary rule of construction. Whereas a liability has been imposed on a dealer by the charging section, it is well-settled that the court would construe the statute in such a manner so as to make the machinery workable.

21. In J. Srinivasa Rao (supra), this Court noticed the decisions of this Court in Gursahai Saigal v. CIT[1963] 48 ITR 1 (SC) and Ispat Industries Ltd. v. Commissioner of Customs, Mumbai, 2006(202)ELT561(SC).In Gursahai Saigal (supra), the question which fell for consideration before this Court was construction of the machinery provisions vis-à-vis the charging provisions. Schedule appended to the Motor Vehicles Act is not machinery provision. It is a part of the charging provision. By giving a plain meaning to the Schedule appended to the Act, the machinery provision does not become unworkable. It did not prevent the clear intention of the legislature from being defeated. It can be given an appropriate meaning.”

36. A reference to the observations of this Court in J.K. Synthetics Ltd.v. CTO [1994] 4 SCC 276 would be apposite:

“13. It is well-known that when a statute levies a tax it does so by inserting a charging section by which a liability is created or fixed and then proceeds to provide the machinery to make the liability effective. It, therefore, provides the machinery for the assessment of the liability already fixed by the charging section, and then provides the mode for the recovery and collection of tax, including penal provisions meant to deal with defaulters. … Ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same. (Whitney v. Commissioners of Inland Revenue 1926 A C 37, CIT v. Mahaliram Ramjidas (1940) 8 ITR 442, Indian United Mills Ltd. v. Commissioner of Excess Profits Tax, Bombay, [1955] 27 ITR 20(SC) and Gursa-hai Saigal v. CIT, Punjab, [1963] 1 ITR 48 (SC).”

37. It is the duty of the court while interpreting the machinery provisions of a taxing statute to give effect to its manifest purpose. Wherever the intention to impose liability is clear, the Courts ought not be hesitant in espousing a commonsense interpretation to the machinery provisions so that the charge does not fail. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same (Whitney v. Commissioners of Inland Revenue 1926 A C 37, CIT v. Mahaliram Ramjidas [1940] 8 ITR 442 (PC), Indian United Mills Ltd. v. CIT [1955] 27 ITR 20(SC), and Gursahai Saigal v. CIT [1963] 48 ITR 1 (SC); CWT v. Sharvan Kumar Swarup & Sons [1994] 6 SCC 623; CIT v. National Taj Traders [1980] 121 ITR 535/[1979] 2 Taxman 546 (SC); Associated Cement Co. Ltd. v. CTO [1981] 48 STC 466 (SC). Francis Bennion in Bennion on Statutory Interpretation, 5th Ed., Lexis Nexis in support of the aforesaid proposition put forth as an illustration that  since charge made by the legislator in procedural provisions is excepted to be for the general benefit of litigants and others, it is presumed that it applies to pending as well as future proceedings.

38. Having said that, let us revert to discussion of Section 158BD of the Act. The said provision is a machinery provision and inserted in the statute book for the purpose of carrying out assessments of a person other than the searched person under Sections 132 or 132A of the Act. Under Section 158BD of the Act, if an officer is satisfied that there exists any undisclosed income which may belong to a other person other than the searched person under Sections 132 or 132A of the Act, after recording such satisfaction, may transmit the records/documents/chits/papers etc. to the assessing officer having jurisdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of the said other documents relating to such other person, the jurisdictional assessing officer may proceed to issue a notice for the purpose of completion of the assessments under Section 158BD of the Act, the other provisions of XIV-B shall apply.

39. The opening words of Section 158BD of the Act are that the assessing officer must be satisfied that “undisclosed income” belongs to any other person other than the person with respect to whom a search was made under Section 132 of the Act or a requisition of books were made under Section 132A of the Act and thereafter, transmit the records for assessment of such other person. Therefore, the short question that falls for our consideration and decision is at what stage of the proceedings should the satisfaction note be prepared by the assessing officer: whether at the time of initiating proceedings under Section 158BC for the completion of the assessments of the searched person under Section 132 and 132A of the Act or during the course of the assessment proceedings under Section 158BC of the Act or after completion of the proceedings under Section 158BC of the Act.

40. The Tribunal and the High Court are of the opinion that it could only be prepared by the assessing officer during the course of the assessment proceedings under Section 158BC of the Act and not after the completion of the said proceedings. The Courts below have relied upon the limitation period provided in Section 158BE(2)(b) of the Act in respect of the assessment proceedings initiated under Section 158BD, i.e., two years from the end of the month in which the notice under Chapter XIV-B was served on such other person in respect of search initiated or books of account or other documents or any assets are requisitioned on or after 01.01.1997. We would examine whether the Tribunal or the High Court are justified in coming to the aforesaid conclusion.

41. We would certainly say that before initiating proceedings under Section 158BD of the Act, the assessing officer who has initiated proceedings for completion of the assessments under Section 158BC of the Act should be satisfied that there is an undisclosed income which has been traced out when a person was searched under Section 132 or the books of accounts were requisitioned under Section 132A of the Act. This is in contrast to the provisions of Section 148 of the Act where recording of reasons in writing are a sine qua non. Under Section 158BD the existence of cogent and demonstrative material is germane to the assessing officers’ satisfaction in concluding that the seized documents belong to a person other than the searched person is necessary for initiation of action under Section 158BD. The bare reading of the provision indicates that the satisfaction note could be prepared by the assessing officer either at the time of initiating proceedings for completion of assessment of a searched person under Section 158BC of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisition of books of accounts were made under Section 132A of the Act. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person.

42. Further, Section 158BE(2)(b) only provides for the period of limitation for completion of block assessment under section 158BD in case of the person other than the searched person as two years from the end of the month in which the notice under this Chapter was served on such other person in respect of search carried on after 01.01.1997. The said section does neither provides for nor imposes any restrictions or conditions on the period of limitation for preparation the satisfaction note under Section 158BD and consequent issuance of notice to the other person.

43. In the lead case, the assessing officer had prepared a satisfaction note on 15.07.2005 though the assessment proceedings in the case of a searched person, namely, S.K. Bhatia were completed on 30.03.2005. As we have already noticed, the Tribunal and the High Court are of the opinion that since the satisfaction note was prepared after the proceedings were completed by the assessing officer under Section 158BC of the Act which is contrary to the provisions of Section 158BD read with Section 158BE(2)(b) and therefore, have dismissed the case of the Revenue. In our considered opinion, the reasoning of the learned Judges of the High Court is contrary to the plain and simple language employed by the legislature under Section 158BD of the Act which clearly provides adequate flexibility to the assessing officer for recording the satisfaction note after the completion of proceedings in respect of the searched person under Section 158BC. Further, the interpretation placed by the Courts below by reading into the plain language of Section 158BE(2)(b) such as to extend the period of limitation to recording of satisfaction note would run counter to the avowed object of introduction of Chapter to provide for cost-effective, efficient and expeditious completion of search assessments and avoiding or reducing long drawn proceedings.

44. In the result, we hold that for the purpose of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under Section 158BC of the Act; (b) along with the assessment proceedings under Section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under Section 158BC of the Act of the searched person.

45. We are informed by Shri Santosh Krishan, who is appearing in seven of the appeals that the assessing officer had not recorded the satisfaction note as required under Section 158BD of the Act, therefore, the SUNIL Tribunal and the High Court were justified in setting aside the orders of assessment and the orders passed by the first appellate authority. We do not intend to examine the aforesaid contention canvassed by the learned counsel since we are remanding the matters to the High Court for consideration of the individual cases herein in light of the observations made by us on the scope and possible interpretation of Section 158BD of the Act.

46. With these observations, the appeals are disposed of. The matters are remanded to the respective High Courts for deciding the matters afresh after affording an opportunity of hearing to the parties. Ordered accordingly.”

6.7.2. There is no time stipulated in the Statute within which satisfaction is to be recorded by the AO nor any time line is provided in the statute within which notice is required to be issued in the case of such other person other than searched person, but, however, period of two years from the end of the month in which notice under Chapter XIVB was served on such other person in respect of search conducted on or after 01.01.1997, is provided to complete the Block assessment in the case of person other than searched person. Hon’ble Supreme Court has issued directions in Para 44 of the aforesaid judgment and order that recording of satisfaction by the AO before transmitting the record to the AO of such other person is sine qua non as well time framework for recording such satisfaction is also mandated in para 44 of the aforesaid judgment and order, which stipulated that satisfaction is required to be recorded by the AO of the searched person, which can be recorded at the time of or along with the initiation of proceedings against the searched person u/s 158BC or along with the assessment proceedings u/s 158BC in the case of searched person or immediately after the assessment proceedings are completed u/s 158BC in the case of searched person. These directions are issued under Article 141 of the Constitution of India, and being law declared by Supreme Court are binding on all Courts within the territory of India. Thus, if the AO does not record the satisfaction before transmitting the record to the AO of such other person or it is not transmitted within stipulated time framework as mandated in Para 44 of aforesaid judgment and order in the case of Calcutta Knitwear(supra), the proceedings are liable to be quashed. This judgment and order in the case of Calcutta Knitwear(supra) although in context of Section 158BD was pronounced on 12.03.2014. The searches were conducted in that case on 05.02.2003. The assessment u/s 158BC was completed in the case of searched person on 31.03.2005. The satisfaction was recorded on 15.07.2005. The Hon’ble High Court held that since satisfaction was recorded after completion of assessment u/s 158BC, the same was held to be bad in law, and proceedings were accordingly quashed. The Hon’ble Supreme Court held in Calcutta Knitwears(supra) at para 43 that Hon’ble High Court fell into an error as the satisfaction was recorded in the said case immediately after completion of assessment u/s 158BC.

6.8 Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. It is well settled that there is no equity in the taxing statute, and taxing statute is to be strictly construed. Thus, if the tax-payer falls within the provisions enacted in the taxing statute, the tax-payer must be taxed, however great the hardship may be. Thus, if the words of the statute are clear and the tax-payer fall within the letter of law, the tax-payer must be taxed howsoever the great hardship may. Thus, if the words of taxing statute are clear, taxing statute calls for strict and literal construction, and there is no scope of intendment. In the aforesaid judgment and order of Hon’ble Supreme Court in the case of Calcutta Knitwear(supra) has elaborately discussed in para 23 onwards till para 37, as to how taxing statute are to be interpreted.

6.9. Now, we turn to judgment and order dated 26.09.2023 of Hon’ble Supreme Court in the case of CIT v. Jasjit Singh (2023) 458 ITR 437(SC), wherein Hon’ble Supreme Court in context of Section 153C, held as under:

“3. In this batch of appeals the revenue questions four sets of orders of the Delhi High Court, dismissing its appeals under section 260A of the Income Tax Act, 1961 (hereinafter referred to as ‘IT Act’). Though the facts in each appeal differ, substantially for the purposes of clarity and completeness the facts in the appeal arising from SLP (C) No.6644 of 2016 are taken into account. The facts are that search and seizure proceedings were conducted in the premises of one M/s KOUTON Group on 19.02.2009. In the course of scrutiny, the concerned Assessing Officer (A.O.) having jurisdiction after issuing notice under Section 154A(sic. 153A) of the IT Act, to the searched party, was of the opinion that some documents and material “belonging to” the respondents(s) assessee, were involved. Therefore, notices were issued to them by the AO having jurisdiction over their assessments on different dates (i.e. 25.02.2010 in [SLP(C) No. 6644 of 2016 & SLP(C)No. 14447 of 2016], 12.03.2009 in [SLP(C)No. 23621 of 2016] and 11.08.2014 [SLP(C) Diary No(s). 30718/2023]).

4. Notice was issued by the concerned jurisdictional A.Os. to the said assessees who contended that the period for which they were required to file returns, commenced only from the date the materials were forwarded to their A.Os. The Revenue, on the other hand, urged that the date (relatable to the period for which six years returns were to be filed by the assessee) was to be from the date when the search and seizure proceedings were conducted, in respect of the main assessee under Section 132.

5. The impugned order upheld the order of the Income Tax Appellate Tribunal (hereinafter referred to “ITAT”) which in turn affirmed the assessee’s arguments.

6. It is submitted on behalf of the revenue by Ms. Bagchi, learned counsel that the impugned order is erroneous because the date referred under proviso to Section 153(1) is relatable to the second proviso to section 153A, only as far as it concerns abatement. The revenue relied upon the ruling of a Division Bench of the Delhi High Court, reported as SSP Aviation Ltd. v. Dy. CIT [2012] 20 taxmann.com 214/207 Taxman 260/346 ITR 177.

7. Sections 153A and section 153C of the Income Tax Act, 1961 to the extent they are relevant are extracted below:

“153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 61[but on or before the 31st day of March, 2021], the Assessing Officer shall—

(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;

(b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referred to in this sub section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate:….” “153C.(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,—

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or

(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A:

Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated.”

8. In SSP Aviation (supra) the High Court inter alia reasoned as follows:

“14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the, manner contemplated by the provisions of Section 153A. Now a question may arise as to the applicability of the second proviso to Section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search under Section 132 or the requisition under Section 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date.”

9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be  reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement.

10. This Court is of the opinion that the revenue’s argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials– of the search party, under section 132 – would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually “relate back” as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third party assessee’s prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of section 153-C supports the interpretation which this Court adopts.

11. For the foregoing reasons, the Court finds no merit in these appeals; they are accordingly dismissed, without order on costs.”

6.9.2 We have observed that judgment and order dated 12.03.2014 passed by Hon’ble Supreme Court in the case of Calcutta Knitwear(supra) was not brought to the notice of Hon’ble Supreme Court by Rival Parties while arguing in the aforesaid case of Jasjit Singh(supra). It is also observed that Hon’ble Delhi High Court vide its judgment and order dated 29.03.2012 in SSP Aviation Limited v. DCIT, reported (2012) 20 taxmann.com 214(Delhi), has observed that reference to date of initiation of search in the case of person other than searched person shall be reckoned from the date of receiving of documents by the AO of such other person. This judgment and order of Hon’ble Delhi High Court in the case of SSP Aviation(supra) is heavily relied on by Hon’ble Supreme Court in the case of Jasjit Singh(supra). It is observed that Hon’ble Delhi High Court judgment and order in the case of SSP Aviation(supra) was decided on 29.03.2012, which is prior to judgment and order of Hon’ble Supreme Court in the case of Calcutta Knitwear(supra), was pronounced on 12.03.2014. It is also observed that there are fears allayed that the AO of the searched person could delay forwarding of the seized material by four years to the AO of such other person to whom undisclosed income relates, and such other person may have to preserve records for ten years which could cause severe prejudice to such other person. First of all, Hon’ble Supreme Court under Article 141 has declared a binding law in judgment and order in the case of Calcutta Knitwear(supra) at para 44 although in context of Section 158BD, and if the AO delays forwarding of seized material beyond the stipulated period, the whole proceedings would be liable to be quashed even in the cases covered u/s 153C( as these sections 158BD and 153C deals with framing of search assessments in the case of other persons other than person searched). Secondly, lawmakers have vide Section 153B has stipulated time line  within which assessment order is required to be passed in the case of searched person under the provisions of 153A of the 1961 Act. Thirdly, lawmakers have vide Section 153B has stipulated time line within which assessment order is required to be passed in the case of such other person other than person searched under the provisions of 153C of the 1961 Act. Fourthly, It is once again reiterated that taxing statute are to be strictly construed, and there is no scope for intendment, howsoever harsh the consequences may be. It is well settled that there is no equity in the taxing statute, and taxing statute is to be strictly construed. Thus, if the tax-payer falls within the provisions enacted in the taxing statute, the tax-payer must be taxed, however great the hardship may be. Thus, if the words of the statute are clear and the tax-payer fall within the letter of law, the tax-payer must be taxed howsoever the great hardship may. Thus, if the words of taxing statute are clear, taxing statute calls for strict and literal construction, and there is no scope of intendment. In the judgment and order of Hon’ble Supreme Court in the case of Calcutta Knitwear(supra) has elaborately discussed in para 23 onwards till para 37, as to how taxing statute are to be interpreted. The Hon’ble Delhi High Court in the case of S S P Aviation(supra), held as under:

“13. Sections 153A to 153D are placed in Chapter XIV of the Act, which is titled “procedure for assessment”. Section 153A provides for the assessment in case of search or requisition. This section applies to a person in whose case a search is initiated under Section 132 or books of account etc. are requisitioned under Section 132A. The procedure prescribed under Section 153A is that the Assessing Officer shall call upon the assessee who is searched to furnish returns of income for six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made. The assessee, on receipt of the notice from the Assessing Officer, shall furnish the returns of income and thereafter the Assessing Officer is empowered to assess or re-assess the total income in respect of different assessment year falling within six assessment years. Now, a question may arise as to what would happen to the regular returns, if any, filed by the searched assessee for any of the six assessment years which are pending on the date on which the search was initiated. The answer is given by the second proviso to Section 153A, which says that if any of those returns is or are pending, the assessment or reassessment relating to those returns shall abate. The object obviously is to avoid multiplicity of assessment or reassessment proceedings in respect of the same assessment year or years. Once Section 153A is found to be applicable, there will be only one assessment in respect of each of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted, in which the “total income” of the assessee will be assessed or reassessed. It should be remembered that only the pending assessment or reassessment proceedings in respect of any those six assessment years that will abate; in case the assessment or reassessment for any of those 6 years have already been completed as on the date of search then there is no question of any of them abating for the simple reason that what can abate is only what remains pending.

14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the manner contemplated by the provisions of Section 153A. Now a question may arise as to the applicability of the second proviso to Section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search under Section 132 or the requisition under Section 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date.

15. It needs to be appreciated that the satisfaction that is required to be reached by the Assessing Officer having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other than the searched person. There is no requirement in Section 153C(1) that the Assessing Officer should also be satisfied that such valuable articles or books of account or documents belonging to the other person must be shown to show to conclusively reflect or disclose any undisclosed income.

16. It will be appreciated from the above that the procedure envisaged by Section 153C, which is applicable to the petitioner herein, does not in any way infringe any rights of the petitioner or curtail or curb his right to be heard by the Assessing Officer or to file appeals and question the assessments made pursuant to the notice under Section 153A. There is no ground for any apprehension that the petitioner will not be heard before the assessments or reassessments for the six assessment years are completed. In fact, in the case of the petitioner itself the Assessing Officer has not made any addition in the assessments completed under Section 153A read with Section 153C for the assessment years 2003-04 to 2006-07 and 2008-09. He has made the addition of Rs.86 crores only in the assessment year 2007-08 against which an appeal has already been filed, as stated by the ld. senior standing counsel. This also finds mention in para VI of the counter affidavit filed by the respondent. Thus, full opportunity of being heard is available, and in fact was made available to the petitioner herein to represent against the proposed assessments or reassessments. The apprehension expressed by Mr. Bajpai, ld. senior counsel for the  petitioner seems to be futile and spartan in the present case, as no adverse order/ addition has been made except in one year, i.e. 2007-08 in respect of which documents were found. This addition is also pending in appeal.

17. The judgment of this court in Saraya Industries Ltd. (supra) was relied upon by Mr. Bajpai, in support of his contention that the seizure of the document must be of such nature that even closed assessments for six years could be reopened and this requirement postulates that the provisions of Section 153C can be set in motion only if there is a finding that the seized document or books of account or valuable article represents the undisclosed income of the other person. The said decision does not assist the petitioner. The section merely enables the revenue authorities to investigate into the contents of the document seized, which belongs to a person other than the person searched so that it can be ascertained whether the transaction or the income embedded in the document has been accounted for in the case of the appropriate person. It is aimed at ensuring that income does not escape assessment in the hands of any other person merely because he has not been searched under Section 132 of the Act. It is only a first step to the enquiry, which is to follow. The Assessing Officer who has reached the satisfaction that the document relates to a person other than the searched person can do nothing except to forward the document to the Assessing Officer having jurisdiction over the other person and thereafter it is for the Assessing Officer having jurisdiction over the other person to follow the procedure prescribed by Section 153A in an attempt to ensure that the income reflected by the document has been accounted for by such other person. If he is so satisfied after obtaining the returns from such other person for the six assessment years, the proceedings will have to be closed. If the returns filed by the other person for the period of six years does not show that the income reflected in the document has been accounted for, additions will be accordingly made after following the procedure prescribed by law and after giving adequate opportunity of being heard to such other person. That, in sum and substance, is the position.

18. A reference to Section 158BD of the Act, which falls under the Chapter XIV-B, may be of some use. This section provided for assessment of the undisclosed income by any person other than the person searched under Section 132. It applies to search conducted prior to 31.05.2003. It provided as follows: “Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly.”[Emphasis supplied]

It will be seen that whereas Section 158D refers to the satisfaction of the Assessing Officer that any “undisclosed income” belongs to any person other than the searched person, Section 153C(1) in contrast refers merely to the satisfaction of the Assessing Officer that the valuable article or books of account or document “belongs” to a person other than the searched person. The latter provision does not refer to any undisclosed income at all. The machinery provided in Sections 153C read with 153A merely facilitates an enquiry regarding the existence or otherwise of undisclosed income in the hands of the person other than the searched person. The starting point of the enquiry is the seizure of the valuable article or books of account or document, which according to the satisfaction reached by the Assessing Officer, belongs to a person other than the searched person. It is necessary to notice the difference between the two provisions in order to deal with the contention put forward by the ld. counsel for the petitioner that the seizure itself is invalid or illegal on the ground that there could not have been any satisfaction before issuing the warrant of authorization under Section 132 of the Act that the petitioner had earned undisclosed income because the income reflected in the seized documents namely, the Collaboration Agreement dated 24.8.2006 and the Assignment Agreement dated 21.7.2006, had already been taken note of in the account books of the petitioner. This is a debatable issue as is apparent from the submission of the Revenue. They have submitted to the contrary. It cannot be said that the seizure of the documents was unwarranted or contrary to law. As noticed above, Revenue has highlighted that finalization and audit of accounts was after the date of the search. The accounts for the year ended 31.03.2009 now relied upon by the petitioner, were finalized after the search on 05.01.2009. Seizure has to judged in the perspective and the facts known and within the knowledge when it was made. On that date, the Revenue was not in a position to know whether any income from the transaction had been discharged by the petitioner in its books of account for the year ended 31.03.2009. In the very nature of things, the warrant of authorization of the search under Section 132 could not have been issued on the footing that there was undisclosed income in the case of the petitioner simply because action under Section 132 was taken not against the petitioner, but against the Puri Group of Companies. Section 153C postulates that while conducting the search on the person in whose name the search warrant is issued under Section 132, some valuable article or books of account or document is seized, which does not belong to the searched person but is seen to belong to any other person, the procedure stated therein should be followed. Therefore, nothing is to be gained from saying that the pre-conditions mentioned in clauses (a), (b) and (c) of sub-section (1) to Section 132 have not been satisfied vis-Ã-vis the petitioner so as to confer legality upon the seizure of the documents in question. In our opinion, it is not necessary for the revenue authorities to have reasons to believe that the petitioner would not produce any books of account or document or that the petitioner is in possession of any money, bullion, jewellery or other valuable article or thing which it had not or will not disclose for the purpose of the assessment proceedings. The petitioner was not searched. Search was on a third person and validity of the seizure has to be examined with reference to the said person searched. At the time when the Assessing Officer having jurisdiction over the searched person reaches the satisfaction that the document belongs to a person other than the searched person, it is not necessary for him to also reach a firm conclusion/ opinion that the document shows undisclosed income belonging to such other person. That is a matter for enquiry, which is to be conducted in the manner prescribed by Section 153C. The fact that the procedure envisaged by Section 153C is somewhat cumbersome and that the person other than the searched person is put to some inconvenience cannot be an argument to hold that the entire proceedings are bad in law.

19. In the course of his arguments, Mr. Bajpai, ld. sr. counsel for the petitioner, administered a caution that a search under Section 132 of the Act is a serious invasion into the privacy of an individual and, therefore, the provisions relating to such a power should be strictly construed and the grave consequences which may result due to exercise of such a power should be kept in mind while interpreting the provisions relating to search and seizure. There can be no quarrel with the proposition put forth by him. In the present case, however, there is no scope for applying the proposition. Herein we are concerned with a person in whose case no search under Section 132 has been authorized. Documents belonging to the petitioner were found during the search carried out in the premises of Puri Group of Companies and the Assessing Officer, being satisfied that they belong to the petitioner, forwarded then to the Assessing Officer having jurisdiction over the petitioner. This procedure followed by the Assessing Officer was strictly in accordance with sub-section (1) of Section 153C. There is no averment that the seizure or the forwarding of the document after duly reaching the satisfaction was a malafide action on the part of the respondent. The procedure followed was also in accordance with the statutory provision referred to above.

20. The other apprehension expressed by Mr. Bajpai, namely, that there is grave danger that even disclosed transactions/ income are likely to undergo a further scrutiny causing harassment to those persons whose assets or valuable articles or books of accounts or documents are found during the search conducted in the case of another person, may be justified to a limited extent, if facing an inquiry all over again can be justly described as harassment. There can be some inconveniences in a case where the income had already been disclosed by the other person who has not been searched. However, there is no cause for any apprehension that the income tax authorities will exploit the situation to harass assessees where there is evidence adduced by them to show and establish that the income reflected by the valuable article or books of accounts or document seized during the search has already been disclosed by them. Even if they tend to act unreasonably or under misplaced enthusiasm, there are adequate safeguards which can be availed of by those persons. The apprehensions expressed by Mr. Bajpai in our opinion and with respect, are unfounded.

21. The above discussion in our opinion is sufficient to dispose of the contentions of the ld. senior counsel for the petitioner. However, in the course of the arguments there was a debate as to whether the petitioner was justified in following the percentage of completion method of accounting for recognising the income from the sale of the development rights. We have gone through the relevant documents to which our attention was drawn by both the sides in support of their rival stands, but we do not think that it would be proper for us to examine the question since the assessment order for the assessment year 2007-08 passed under Section 153C read with 143(3) on 30.12.2010 is under appeal before the CIT (Appeals). Even otherwise, in proceedings under Article 226, this question should not be gone into, as appellate statutory forum is the right and  proper course/ remedy. It is for the petitioner to make out the case in the appeal pending before the appellate authorities under the relevant provisions of the Act. We express no opinion on the merits of the addition of Rs.86 crores.

22. For the aforesaid reasons we see no merit in the writ petition filed by the petitioner. The same is accordingly dismissed. All interim orders stand vacated. There shall be no order as to costs.”

6.10 It is also observed that Review petition filed by Revenue against judgment and order of Hon’ble Supreme Court in the case of Jasjit Singh (supra), stood dismissed by Hon’ble Supreme Court in the case of CIT v. Jasjit Singh reported in (2025) 173 taxmann.com 575(SC).

6.11 It will be pertinent to mention that Hon’ble Delhi High Court in the case of CIT v. RRJ Securities Limited reported in (2016) 380 ITR 612(Del.) has taken a similar view that in the case covered u/s 153C while framing assessment in the case of other person other than person searched, the date of initiation of search shall be taken to be handing over of the documents or assets by the AO of such other person, thus, period of six assessment years for which assessment/ reassessment could be made u/s 153C would also have to be construed with reference to date of handing over by the AO of the searched person of the documents/assets to the AO of the such other person other than the searched person. Similar view was taken by Hon’ble Delhi High Court in the case of PCIT v. Sarwar Agency Private Limited (2017) 85 taxmann.com 269(Del.), wherein Hon’ble High Court vide judgment and order dated 17.08.2017, held as under:

“8. In RRJ Securities (supra), the Court after noticing the decision in SSP Aviation Ltd. v. Dy. CIT [2012] 346 ITR 177/207 Taxman 260/20 taxmann.com 214 (Delhi), held as follows:

“21. As discussed hereinbefore, once the AO of the searched person is satisfied that the seized assets/documents belong to another person and the said assets/documents have been transferred to the AO of such other person, the proceedings for assessment/reassessment of income of the other person has to proceed in accordance with provisions of Section 153A of the Act. Section 153 A requires that where a search has been initiated under Section 132 of the Act, the AO is required to issue notice requiring the noticee to furnish returns of income in respect of six assessment years relevant to the six previous years preceding the previous year in which the search is conducted. As discussed hereinbefore, by virtue of second proviso to Section 153A, the assessment/reassessment pending on the date of initiation of search abate. In the context of proceedings under Section 153C of the Act, the reference to the date of initiation of the search in the second proviso to Section 153A has to be construed as the date on which the AO receives the documents or assets from the AO of the searched person. Thus, by virtue of second proviso to Section 153A of the Act as it applies to proceedings under Section 153C of the Act, the assessment/reassessment pending on the date on which the assets/documents are received by the AO would abate. In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of concluded assessments, the AO would assume jurisdiction to reassess provided that the assets/documents received by the AO represent or indicate any undisclosed income or possibility of any income that may have remained undisclosed in the relevant assessment years……

24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee.”

9. The said decision in RRJ Securities (supra) has been followed by this Court subsequently in ARN Infrastructure India Ltd. v. Asstt. CIT [2017] 394 ITR 569/81 taxmann.com 260 (Delhi).

10. Mr. Salil Aggarwal, learned counsel for the Assessee, has drawn the attention of the Court to the recent amendment made in Section 153 C of the Act by the Finance Act, 2017 with effect from 1st April 2017. This amendment in effect states that the block period for the searched person as well as the ‘other person’ would be the same six AYs immediately preceding the year of search. This amendment is prospective.

11. Mr. Ashok Manchanda, learned Senior Standing counsel for the Appellant, sought to pursue this Court to reconsider its view in RRJ Securities (supra). The Court declines to do so for more than one reason. First, for reasons best known to it, the Revenue has not challenged the decision of this Court in RRJ Securities (supra) in the Supreme Court. The said decision has been consistently followed by the authorities under this Court as well as by this court. Thirdly, the recent amendment to Section 153 C(1) of the Act states for the first time that for both the searched person and the other person the period of reassessment would be six AYs preceding the year of search. The said amendment is prospective.

12. Consequently, no substantial question of law arises from the impugned order of the ITAT. The appeal is, accordingly, dismissed.”

6.11.2. While adjudicating appeal u/s 260A of the 1961 Act, in the case of Sarwar Agency(supra), Hon’ble Delhi High Court observed in para 10 and 11 as brought to its notice by ld. Counsel for the assessee that there is amendment in Section 153C of the 1961 Act by Finance Act, 2017 wef 01.04.2017, and this amendment in effect states that that the block period for the searched person and the other person shall would be the same six AY’s immediately preceding the year of the search for the searches conducted post amendment i.e. 01.04.2017. It is also observed that the judgments and orders referred to herein above in the case of Jasjit Singh (supra), RRJ Securities(supra) , SSP Aviation(supra) and even Sarwar Agency(supra) are all concerned to searches conducted by Revenue prior to amendments made by Finance Act, 2017 wef 01.04.2017, while in the instant case we are dealing with searches conducted by Revenue u/s 132 on Alankit Group and other persons as detailed above in this order, on 18.10.2019. The ld. CIT(A) has relied upon the judgment and order dated 03.04.2024 of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) wherein it was held that for the purposes of Section 153C, period of six/ten assessment years in the case of non searched person shall be determined from the date of handing over of the documents/assets to the AO of the person other than the person searched, which infact is the case which dealt with searches conducted on Alankit Group itself on 18.10.2019 i.e. the same searches conducted by Revenue which we are presently seized off. Thus, it dealt with searches conducted on 18.10.2019 which is Post Amendment by Finance Act, 2017 wef 01.04.2017. Proceedings u/s 153C against the assessee in the instant case has also arisen from the same search conducted on Alankit Group on 18.10.2019. Incidentally, Hon’ble Delhi High Court in Ojjus Medicare(supra) is a later decision pronounced on 03.04.2024 which has taken note and considered the earlier judgment and order of Hon’ble Delhi High Court in the case of Sarwar Agency(supra) which was pronounced on 17.08.2017. Revenue has contended that SLP has been filed by it with Hon’ble Supreme Court against the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), which is pending adjudication by Hon’ble Supreme Court. No reference, however, was made to Larger Bench keeping in view judgment and order of Hon’ble Delhi High Court in the case of Sarwar Agency(supra) which was pronounced on 17.08.2017.

6.12. Be that as it may be, let us analyse the amended provisions of Section 153C and 153A of the 1961 Act, which stood amended by Finance Act, 2017 effective from 01.04.2017. Amended Provisions of Section 153A and 153C, are reproduced hereunder: “Assessment in case of search or requisition.

153A. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person68 where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall—

(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;

(b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made [and for the relevant assessment year or years]:

Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years]:

Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment year or years] referred to in this [sub section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made [and for the relevant assessment year or years]:]

[Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless—

(a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years;

(b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and

(c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.—For the purposes of this sub-section, the expression “relevant assessment year” shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.—For the purposes of the fourth proviso, “asset” shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.]

[(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.]

Explanation.—For the removal of doubts, it is hereby declared that,—

(i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section;

(ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.

Assessment of income of any other person.

153C. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,—

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or

(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A]:]

[Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub-section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person:]

[Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made [and for the relevant assessment year or years as referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated.]

[(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the  assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year —

(a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or

(b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or

(c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.

6.12.2 We will deal with amended provisions of Section 153C and 153A, as amended by Finance Act, 2017 wef 01.04.2017. In the instant appeal before us, the search took place on 18.10.2019, while notice u/s 153C was issued on 28.12.2021 persuant to satisfaction recorded by the jurisdictional AO of the assessee on 24.12.2021. Sub-section (1) to Section 153C of the 1961 Act starts with Non-obstante clause and stipulates that notwithstanding anything contained in Section 139, Section 147, Section 148, Section1 49, Section 151 and Section 153, where the AO is satisfied that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned belongs to; or any books of accounts or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in Section 153A, then the books of account or documents or assets, seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that the AO shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of Section 153A, if, that AO is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A. 6.12.3 First Proviso to sub-section 1 to Section 153C stipulates that provided in case of such other person, the reference to the date of initiation of the search u/s 132 or making of requisition u/s 132A in the second proviso to sub-section (1) of Section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the AO having jurisdiction over such other person. 6.12.3 Section 153A deals with assessment in the case of searched person u/s 132 or on whose case requisition is made u/s 132A of the 1961 Act. 6.12.4 Second Proviso to sub-section 153A stipulates that provided further that assessment or reassessment, if any, relating to any assessment year relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referred to in this sub-section pending on the date of initiation of the search u/s 132 or making of requisition u/s 132A, as the case, may be, shall abate.

6.12.5 Thus, it could be seen that there is amendment by Finance Act, 2017 wef 01.04.2017, wherein Section 153C(1) clearly stipulates that in the case of non-searched person, the AO shall assess or reassess total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, and for the relevant assessment year or years as is referred to in sub-section 1 of Section 153A. Relevant assessment year or years is explained in Explanation 1 to Section 153A(1) which provides that for the purposes of Section 153A(1), the expression relevant assessment year shall mean an assessment year preceding assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.

6.12.6 Thus, after considering the amended law which stood amended by Finance Act, 2017, leave no doubt that the period for determining the six/assessment years for assessing or reassessing the income of person other than searched person shall be reckoned from the date of search conducted u/s 132 or requisition made u/s 132A in the case of searched person.

6.13 Further, Proviso is an exception to the substantive provision. Once substantive provision clearly stipulates liability to tax, proviso to the section carves out exception to the main section which but for the proviso, the main section would have included the subject matter of the proviso, and its scope is to be strictly limited to what is stated in the Proviso. Scope of main section cannot be enlarged or limited by the Proviso other than what is stated in the Proviso. The first proviso to Section 153C(1) stipulates that the reference to the date of initiation of the search u/s 132 or making of requisition u/s 132A in the second proviso to sub-section (1) of Section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the AO having jurisdiction over such other person. While Second Proviso to sub-section(1) to Section 153A stipulates that Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referred to in this sub-section pending on the date of initiation of the search u/s 132 or making of requisition u/s 132A, as the case may be, shall abate. The abatement has to be construed in reference to as to whether income is to be assessed or reassessed. There could be some time gap between the date of search conducted u/s 132 and handing over of the documents or books of account or asset seized having a bearing on the determination of the total income of such other person, by the AO of the searched person to the AO of the such other person other than persons searched in the case of which such books of account or document or asset have a bearing on the determination of the total income, and the assessments could get concluded in the meantime in the said time gap which shall not be abated, while on the other hand there could be some assessments which are pending on the date of handing over of such documents, books of accounts or assets, which shall stood abated. This would warrant assessing the total income of the assessment years wherein assessment stood abated, while for concluded years, the total income shall be reassessed. Thus, after amendment by Finance Act, 2017 wef 01.04.2017,  the period of six/ten assessment years for framing assessment u/s 153C in the case of non-searched persons is to be determined with reference to the date of conducting of the search u/s 132 or making of requisition u/s 132A, and not from the date of receiving of the documents or book of account or assets by the AO of the non-searched person. Further, scope of first proviso to Section 153C under the amendment by Finance Act, 2017 wef 01.04.2017 cannot be enlarged to hold that date of initiation of search u/s 132 or making of requisition u/s 132A is to be determined for framing of assessment u/s 153C from the date of handing over of the book of account or document or asset by the AO of the searched person to the AO of non searched person. It’s scope is to be restricted to what is specified in second provisio to Section 153A(1). It is once again reiterated that taxing statute are to be strictly construed, and there is no scope for intendment, howsoever harsh the consequences may be. It is well settled that there is no equity in the taxing statute, and taxing statute is to be strictly construed. Thus, if the tax-payer falls within the provisions enacted in the taxing statute, the tax-payer must be taxed, however great the hardship may be. Thus, if the words of the statute are clear and the tax-payer fall within the letter of law, the tax-payer must be taxed howsoever the great hardship may. Thus, if the words of taxing statute are clear, taxing statute calls for strict and literal construction, and there is no scope of intendment. In the judgment and order of Hon’ble Supreme Court in the case of Calcutta Knitwear(supra) has elaborately discussed in para 23 onwards till para 37, as to how taxing statute are to be interpreted. Search and Seizure operations conducted by Revenue u/s 132 of the 1961 Act are serious invasion into privacy of a person. It provides machinery and enforcement mechanism for tax authorities to unearth undisclosed income, with an intent to bring the same to income-tax. Section 132 of the 1961 Act is an extraordinary power vested under the 1961 Act, which is invasive to life and liberty of the person as enshrined under Article 21 of the Constitution of India, and hence such powers has to be used with utmost care and caution within strictest framework and bounden limits as provided u/s 132 of the 1961 Act, which provision of the statute i.e. Section 132 of the 1961 Act stipulates all such extraordinary circumstances warranting invocation of search powers u/s 132 of the 1961 Act. In this process there is likelihood of some inconvenience caused to the persons against whom such search powers are invoked u/s 132, or with respect to persons other than the person searched in whose case undisclosed income relates representing from the documents or assets seized during search operations and against which proceedings u/s 153C are invoked.The said inconvenience so caused cannot be a justification for quashing the proceedings, more so such intrusive powers are used by Revenue only in those cases where there is credible information that the valuable assets or books of accounts or documents etc having a bearing on the income of the tax-payer were not disclosed or would not be disclosed to the department. 6.14 Further, deeming fiction created by First proviso to Section 153C(1) read with second proviso to Section 153A(1) cannot be expanded. It is well settled that if the statute create deeming fiction and treats something as true or real, even if it is not true or real, to achieve a specific legislative purpose, its scope is strictly confined and bounded by the purpose for which it is created, and cannot be expanded beyond what is stipulated and intended by deeming fiction. In the instant case, the scope of first proviso to Section 153C is to identify date of initiation of search for considering abated or unabated assessment, and obviously keeping in view time gap between searches conducted u/s 132 or requisition made u/s 132A and the actual date of handing over of documents, book of account or assets by the AO of the searched person to the other person to whom income belongs, the date of handing over of the said document or book of account or assets will be relevant for identifying the abated or unabated assessment so that AO can assess or reassess the total income for six/ten assessment years for determining of which the actual searches conducted u/s 132 or requisition made u/s 132A shall be relevant. Thus, deeming fiction and scope of Proviso in the instant case cannot be expanded or widened to shift the goal post itself i.e. the conducting of search u/s 132 on 18.10.2019 to the recording of satisfaction by the AO of the assessee on 24.12.2021 to be deemed as date of initiation of search.

6.15. The Tribunal is lower in hierarchy to Superior Courts viz. Hon’ble Supreme Court and Hon’ble High Courts, and is bound by the judgments and orders of Superior Courts. The Hon’ble Delhi High Court after considering the amendment in Section 153C and 153A by Finance Act, 2017 wef 01.04.2017 has in Ojjus Medicare(supra) has held that period of six/ten assessment years for framing assessment u/s 153C in the case of non searched person shall be reckoned from the date of handing over of the documents, book of account or asset by the AO of the searched person to the AO of the person other than person searched. We are bound by the aforesaid judgment of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) which was pronounced on 03.04.2024. Thus, Respectfully following the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), we hold that the said period of six/ten assessment years shall be determined from the date of handing over of documents, book of account or assets by the AO of the searched person to the AO of the assessee. The search u/s 132 took place on 18.10.2019. The satisfaction note was prepared by the AO of the searched person on 20.12.2021, while the satisfaction note was prepared by the AO of the assessee on 24.12.2021. The notice u/s 153C was issued to the assessee by the AO on 28.12.2021. The assessment year shall be 2022-23, and period of ten assessment years shall be computed effective from end of assessment year 2022-23. The ten assessment years covered shall be 2013-14 to 2022-23 as per Explanation 1 to Section 153A(1). Presently, impugned assessment year before us is assessment year 2012-13, which clearly falls beyond the aforesaid ten assessment years, and hence appeal of the Revenue lacks merit and stands dismissed. However, the Revenue has submitted that SLP against the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) is filed by Revenue with Hon’ble Supreme Court which is pending adjudication by Hon’ble Supreme Court. We direct that both the parties shall be bound by the outcome of SLP adjudicated by Hon’ble Supreme Court. The AO is directed to record our above directions, and implement the same. We order accordingly.

7. In the result, the appeal filed by the Revenue stands dismissed.”

8.4 Thus, Respectfully following the aforesaid detailed order of the Division Bench of Delhi Tribunal in the case of DCIT v. Sunil Bhala in ITA no.3698/Del/2026, order dated 25.08.2026, wherein the Tribunal after considering the amendments made by Finance Act, 2017 wef 01.04.2017 reached a conclusion that with respect to person other than person searched, the period of six/ten assessment years for framing assessment u/s 153C shall be determined from the date of actual search conducted by Revenue u/s 132,, for searches conducted on or after 01.04.2017 ie. Post Amendment by Finance Act, 2017 wef 01.04.2017 ( obviously till sunset clause on 31.03.2021), but keeping in fact that the Tribunal being lower in judicial hierarchy is under bounden duty to follow the binding judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), the legal issue raised by Revenue is decided in favour of the assessee, and consequently appeal of the Revenue stands dismissed. However, the Revenue has submitted that SLP against the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) is filed by Revenue with Hon’ble Supreme Court, which is pending adjudication before Hon’ble Supreme Court. We direct that both the parties shall be bound by the outcome of the aforesaid SLP adjudicated by Hon’ble Supreme Court. The AO is directed to record our above directions, and implement the same. We order accordingly.

9. In the result, appeal filed by the Revenue in ITA no. 3705/Del/2026 for assessment year 2011-12 stands dismissed.

ITA No. 3706/Del/2026-Assessment Year 2012-13

10. Our decision in ITA no. 3705/Del/2026 for assessment year 2011-12 shall apply mutatis mutandis to appeal filed by Revenue in ITA No. 3706/Del/2026 for assessment year 2012-13, which also stood dismissed, as ratio of decision of the Tribunal in the case of DCIT v. Sunil Bhala in ITA no.3698/Del/2026, vide detailed  order dated 25.08.2026 which infact followed judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra), shall apply. Thus, Revenue appeal stand dismissed. However, the Revenue has submitted that SLP against the judgment and order of Hon’ble Delhi High Court in the case of Ojjus Medicare(supra) is filed by Revenue with Hon’ble Supreme Court which is pending adjudication before Hon’ble Supreme Court. We direct that both the parties shall be bound by the outcome of the aforesaid SLP adjudicated by Hon’ble Supreme Court. The AO is directed to record our above directions, and implement the same. We order accordingly.

11. In the result, appeal filed by the Revenue in ITA no. 3706/Del/2026 for assessment year 2012-13 stands dismissed.

12. In the result, both the appeals filed by the Revenue in ITA no. 3705 & 3706/Del/2026 for assessment years 2011-12 and 2012-13 respectively stands dismissed, with the similar directions as outlined by us in this order, which AO is directed to record, and implement the same.

Orders are pronounced in the Open Court on 02.09.2026.