Case Law Details
DCIT Vs Blue Bell Infosolutions Pvt Ltd (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeals for Assessment Years 2010-11, 2012-13, and 2015-16, upholding the order of the Commissioner of Income Tax (Appeals) [CIT(A)] that proceedings initiated under Section 153C of the Income-tax Act were barred by limitation.
The Revenue challenged the CIT(A)’s reliance on the decisions of the Delhi High Court in PCIT v. Ojjus Medicare Pvt. Ltd. and the Supreme Court in CIT v. Jasjit Singh. It contended that the block period for assessment under Section 153C should be calculated from the assessment year relevant to the previous year in which the search was conducted and not from the date of the satisfaction note or issuance of notice under Section 153C. The Revenue also argued that the judicial decisions relied upon by the CIT(A) related to the legal position before the Finance Act, 2017, and were distinguishable.
No one appeared on behalf of the assessee before the Tribunal, and the matter was heard with the assistance of the Departmental Representative.
The Tribunal noted that a search on the Alankit Group and other persons was conducted on 18 October 2019. The Assessing Officer (AO) of the searched person recorded the satisfaction note on 1 June 2022 and handed over the seized material to the AO having jurisdiction over the assessee, who was a non-searched person. Proceedings under Section 153C were thereafter initiated, and the assessment was completed under Section 144 read with Section 153C on 29 March 2024.
Before the CIT(A), the assessee argued that the assessment years under consideration fell outside the permissible period prescribed under Section 153C. It was submitted that where the escaped income was less than Rs. 50 lakh, notice under Section 153C could be issued only for up to six assessment years from the end of the assessment year relevant to the previous year in which the seized books of account, documents, or assets were received by the jurisdictional AO. The CIT(A) identified two issues: the relevant date for calculating the six assessment years under Section 153C and whether reassessment beyond six years but within ten years was permissible in the facts of the case.
Relying on the decisions in CIT v. Jasjit Singh and PCIT v. Ojjus Medicare Pvt. Ltd., the CIT(A) held that the assessment orders were beyond the limitation prescribed under Section 153C and that the assumption of jurisdiction by the AO was not legally sustainable. Accordingly, the appeals were allowed on the legal issue.
The Tribunal observed that the central issue was whether the relevant assessment years under Section 153C should be reckoned from the date of the original search or from the date on which the seized material was handed over by the AO of the searched person to the jurisdictional AO of the non-searched person.
The Tribunal found that this issue was directly covered by the decisions of the Supreme Court in Jasjit Singh and the Delhi High Court in Ojjus Medicare Pvt. Ltd.. It noted that these decisions held that the commencement point for reckoning the six or ten assessment years shifts from the date of search to the date on which the seized books, documents, or assets are received by the jurisdictional AO of the non-searched person.
As the Departmental Representative could not controvert the judicial precedents relied upon by the CIT(A), the Tribunal upheld the CIT(A)’s well-reasoned order and dismissed the Revenue’s appeal for Assessment Year 2010-11. Since the facts for Assessment Years 2012-13 and 2015-16 were identical, the Tribunal applied the same reasoning and dismissed those appeals as well. Consequently, all the Revenue’s appeals were dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The Revenue has filed appeals against the order of the Learned Commissioner of Income-tax (Appeals)-30, Delhi [“Ld. CIT(A)”, for short] dated 25.09.2025 for the Assessment Years 2010-11, 2012-13 and 2015-16.
2. Since the issues are common and the appeals are connected, hence the same are heard together and being disposed off by this common order. We take up the Revenue’s appeal being ITA No.65/Del/2026 for AY 2010-11 as lead case to adjudicate the issues under consideration. The Revenue has raised following grounds of appeal :-
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 able 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 u/s 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 u/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 u/s 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 l0AYs 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. Whether on the facts and circumstances of the case and in law, Ld.CIT(A) was justified in relying on the judgment of Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh (2023 SCC Online SC 1265) and of Hon’ble High Court in the case of CIT vs. RRJ Securities Ltd. (2015 SCC Online Del 13085), even though the facts of the instant case are different from that of Jasjit Singh case and RRJ Securities case, since the decisions rendered by the Court in Jasjit Singh as well as in RRJ Securities had dealt with a pre-2017 position (i.e. for search conducted before 1st April, 2017) and hence are clearly distinguishable.
5. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.
6. That the grounds of appeal are without prejudice to each other.
3. None appeared on behalf of the assessee. We proceeded to adjudicate the issue with the assistance of ld. DR of the Revenue.
4. At the outset, it is brought to our notice that search action was initiated on Alankit Group and other persons on 18.10.2019 and proceedings under section 153C of the Income-tax Act, 1961 (for short ‘the Act’) were initiated in the case of the assessee in the year under consideration. It is fact on record that satisfaction note was recorded by the AO of the searched person on 01.06.2022 and handed over the seized material to AO of the non-searched person. In view of the above, assessment proceedings were initiated u/s 153C of the Act in the case of the assessee. Thereafter, assessment was completed u/s 144 r.w.s 153C of the Income Tax Act on 29.03.2024 at an income of Rs.19,75,946/-.
5. Aggrieved against the above order, assessee preferred an appeal before the ld. CIT (A) and raised grounds of appeal. Before the ld. CIT (A), assessee filed detailed submissions on the legal issue raised in the grounds and relied on the decision of Hon’ble Supreme Court in the case of CIT vs. Jasjit Singh (2023) 155 com 155 and Hon’ble Delhi High Court in the case of PCIT vs. Ojjus Medicare (P.) Ltd. (2024) 161 taxmann.com 160 (Delhi). Ld. CIT (A), after going through the detailed submissions of the assessee and relying on the aforesaid decisions, held that the assessment years, under consideration, clearly falls outside the scope of application of section 153C of the Act, therefore, the contention of the assessee is found to be correct on this count. Further the assessee has stated before ld. CIT (A) that in cases where the escaped income is less than Rs. 50 Lakhs, the notice under section 153C of the Act can be issued for upto 6 assessment years from the end of the AY relevant to the previous year in which the books of accounts or documents or assets seized are received by the AO, and hence in the instant case under consideration (AY 2010-11), the proceedings were barred by limitation. He further submitted before ld. CIT (A) that ld. CIT (A) observed that the position of the statute has been clear insofar as the amount of income that has escaped assessment for which the reopening can be done for the ‘relevant assessment years’, i.e. beyond six years and up to ten years, is concerned. Accordingly, ld. CIT (A) observed that in the instant case, there are two issues arising by virtue of the grounds of appeal taken before him, and summarized the same below:
i. Relating to the date of reckoning for calculating six AYs backwards that can be thrown open for assessment/reassessment after search/handing over of seized material to the AO of the non-searched person; and
ii. Relating to whether the assessment/reassessment can be carried out in the instant case being beyond six years but within ten years of the date of search/handing over of seized documents/material to the AO of the non-searched entity.
6. Accordingly, following the aforesaid decision and in view of principles of judicial discipline, he held that the impugned assessment order is beyond the limitation prescribed under section 153C of the Act, and therefore, the jurisdiction assumed by the Assessing Officer is not tenable in the light of aforesaid legal positions. Accordingly, he allowed the appeal on the legal grounds.
7. At the time of hearing, ld. DR of the Revenue relied on the findings of the AO but could not controvert the aforesaid decisions relied on by the ld. CIT(A).
8.Considered the submissions of ld. DR of the Revenue and material placed on record. We observed that the issue under consideration is whether the year of search should be reckoned from the date of handing over of the searched material by the AO of the searched person or from the date of original search to initiate the proceedings u/s 153C of the Act. We observed that this issue under consideration is squarely covered by the decision of Hon’ble Delhi High Court and Hon’ble Supreme Court in the cases of Ojjus Medicare Pvt. Ltd.(supra) and Jasjit Singh (2023) 155 com 155 (SC). For the sake of brevity, we reproduce the Head Note 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”
9. Respectfully following the aforesaid decisions, 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.
10. In the result, the appeal filed by the Revenue for the assessment year 2010-11 is dismissed.
11. Since the facts in AYs 2012-13 and 2015-16 are exactly similar to Assessment Year 2010-11, our above findings in AY 2010-11are applicable mutatis mutandis in Assessment Years 2012-13 & 2015-16. Accordingly, the appeals filed by the Revenue for AYs 2012-13 & 201516 are dismissed.
12. To sum up : all the appeals filed by the Revenue are dismissed.
Order pronounced in the open court on this 24th day of June, 2026
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