DCIT Vs Chetan Goyal (ITAT Delhi)
ITAT Delhi: Assessment under Section 153C Quashed – Block Period to Be Counted from Date of Material Receipt, Not Date of Search
Facts in Brief
During a search on Parveen K. Jain Group on 06.01.2021, a mobile phone was seized showing an image relating to a property at 451, Functional Industrial Estate, Patparganj, Delhi allegedly indicating a cash payment of ₹9.58 crore. The AO invoked Section 153C and added ₹3.78 crore as unexplained investment u/s 69, treating the Assessee, Chetan Goyal, as linked to the transaction.
CIT(A) quashed the assessment order dated 30.12.2022, holding it invalid in view of judicial precedents on computation of the “block period” under Section 153C. The Revenue appealed.
Revenue’s Contentions
- CIT(A) wrongly followed Ojjus Medicare Pvt. Ltd. (Delhi HC) and Jasjit Singh (SC, 458 ITR 477).
- Both rulings are under challenge before the Supreme Court; hence assessment ought not to have been quashed.
- Block period should not be computed from the date of receipt of seized material by the jurisdictional AO but from the date of search.
Tribunal’s Findings/ Decision
- CIT(A) rightly relied on Delhi HC in Ojjus Medicare Pvt. Ltd. [2024] 161 taxmann.com 160 & SC in CIT v. Jasjit Singh [2023] 458 ITR 477, which held that the block period u/s 153C must be reckoned from the date the seized material is received by the AO having jurisdiction over the non-searched person.
- Revenue’s argument about pendency of SLPs cannot override binding judicial precedents unless a stay is granted.
- Citing its own earlier decision in DCIT v. Rajesh Craft Jewels India Pvt. Ltd. (ITA 5604/Del/2024, dated 05.05.2025), ITAT reiterated that mere pendency of an SLP does not suspend applicability of existing law.
- The Tribunal dismissed Revenue’s appeal, affirming CIT(A)’s order quashing the assessment as non est in law.
Key Takeaway
