Rishi Pal Vs DCIT (ITAT Delhi)
The Delhi ITAT disposed of five appeals relating to Assessment Years (AYs) 2012-13, 2014-15, 2015-16, 2016-17 and 2017-18 arising from assessments framed under Section 153C read with Section 143(3) of the Income-tax Act, 1961. Since all appeals involved common jurisdictional issues, they were heard together. The Tribunal observed that where the legal foundation of an assessment fails, the consequential assessment cannot survive, and therefore examined the jurisdictional grounds before considering the merits.
For AY 2012-13, the principal issue was whether the assessment was valid under Section 153C. The assessee contended that although the search on the searched person took place on 16.10.2019, the Assessing Officer recorded the satisfaction note on 28.09.2021 and issued notice under Section 153C on 30.09.2021. According to the assessee, the date of recording satisfaction constituted the deemed date for computing the block period under Section 153C. Consequently, AY 2012-13 fell outside the permissible block period and could not be assessed under Section 153C. The Revenue relied upon the orders of the lower authorities.
The Tribunal found that the issue was covered by its earlier decisions and by the judgments of the Delhi High Court and the Supreme Court. It noted that in the case of a person other than the searched person, the relevant date for determining the block assessment period is the date on which the seized documents are received by the jurisdictional Assessing Officer or the satisfaction note is recorded, rather than the date of the search conducted on the searched person. Applying these binding precedents, the Tribunal held that the Commissioner (Appeals) had not correctly interpreted the legal position. Since the satisfaction note was recorded on 28.09.2021, the assessment for AY 2012-13 fell outside the permissible block period under Section 153C. Accordingly, the Tribunal set aside the appellate order and quashed the assessment order dated 30.03.2023 passed under Section 153C. Having allowed the legal ground, all remaining grounds, including those on merits, were treated as academic.
