Case Law Details
DCIT Vs Betsy Growth Finance Ltd. (ITAT Delhi)
The Delhi ITAT dismissed the Revenue’s appeals relating to assessment years 2010-11 and 2013-14, holding that the assessments framed under Section 153C of the Income-tax Act were barred by limitation. The Tribunal held that the ten-year block period under Section 153C must be reckoned from the date of recording of the satisfaction note or the date of issuance of notice under Section 153C, and not from the date of search. In the present case, the satisfaction note was recorded on 12 May 2022 and the notice under Section 153C was issued on 30 June 2022. Accordingly, the relevant year for computing the ten-year period was FY 2022-23 (AY 2023-24), restricting the permissible block period up to AY 2014-15. Since AYs 2010-11 and 2013-14 fell outside the permissible ten-year period, the assessment orders passed under Section 153C were held to be invalid and liable to be quashed. The Tribunal followed the decisions of the SC in CIT v. Jasjit Singh and the Delhi HC in PCIT v. Ojjus Medicare (P.) Ltd., and upheld the CIT(A)’s order. Consequently, both Revenue appeals were dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. These are Revenues’ appeals filed against the respective orders of the Ld. Commissioner of Income Tax (Appeals)-25, New Delhi, involving proceedings under section 153C of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Since in both the revenues’ appeals, the identical issues are involved, hence, the same were heard together and disposed of by this common order for the sake of convenience, by dealing with ITA No. 1364/Del/2026 (AY 2010-11), being the lead case.
2. At the threshold, it is noted that the assessment proceedings u/s. 153C is barred by limitation as ten year period for Section 153C because the same is be counted from the date of recording of satisfaction note/date of issue of notice u/s. 153C.
3. Ld. DR argued that SLP is pending before the Hon’ble Supreme Court against the order of the Hon’ble Court on this point of law, hence, the matter may be adjourned to some other date.
4. After hearing the Ld. DR and perused the records, we find that in the instant case the satisfaction note was recorded by the AO of the searched person on 12.5.2022 and the notice u/s. 153C was issued on 30.6.2022, hence, the relevant year for counting ten years would be from FY 2022-23 i.e. AY 2023-24 and the 10 year would run till AY 2014-15. Thus, AY 2010-11 and AY 2013-14 would fall outside the 10 years block period, hence, the impugned assessment order dated 26.3.2024 & 31.3.2024 passed u/s. 153C of the Act for the years in pursuance of such notices would not survive, being beyond the period of 10 years and thus the same is invalid and deserve to be quashed in view of the decision of Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh (supra) and Hon’ble Delhi High Court in the case of PCIT vs. Ojjus Medicare (P.) Ltd. For the sake of brevity, we reproduce the Head Notes of the aforesaid decisions :-
“CIT vs Jasjit Singh-[2023| 155 taxmann.com 155 (SC)
From Headnote
“On appeal, Tribunal held that period for which assessee were required to file returns, commenced only from date when materials were forwarded to their jurisdictional Assessing officers – High Court upheld said order”
PCIT Vs Ojjus Medicare (P.) Ltd- [2024] 161 taxmann.com 160 (Delhi)
From Headnote
“Whether first proviso to section 153C, and which has been consistently recognized to also embody commencement point for reckoning six or ten assessment years, shifts relevant date from date of initiation of search or a requisition made to date of receipt of books of account or documents and assets seized by jurisdictional Assessing Officer of non-searched person – Held, yes”
5. Respectfully following the aforesaid precedents, we are inclined to uphold the order of the ld. CIT (A) who has passed the well-reasoned and speaking order relying on the aforesaid decisions. Accordingly, the grounds taken by the Revenue are dismissed. Accordingly, the Revenue’s appeal is dismissed for assessment year 201011.
6. As regards other appeal of revenue is concerned, the same is related to assessment year 2013-14, our decision given in assessment year 2010-11, as aforesaid will apply mutatis mutandis to this assessment year as well, being issue involved is identical in other remaining appeal of the Revenue also. Resultantly, the appeal for AY 2013-14 of the Revenue also stand dismissed in the aforesaid manner.
7. To sum up, both the Revenues’ appeals stand dismissed. A copy of this common order be placed in the respective case files.
Order Pronounced in the Open Court on 24/06/2026.
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