DCIT Vs Visionary Infraprojects Private Ltd. (ITAT Delhi)
Delhi Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)–24, New Delhi [CIT(A)] dated 31.07.2024 for Assessment Year (AY) 2012–13 in the case of DCIT vs Visionary Infraprojects Pvt. Ltd. The core dispute concerned the validity of the notice issued under Section 153C of the Income-tax Act, 1961, and whether AY 2012–13 fell within the permissible six-year block period prescribed under the provision.
The assessee had taken an additional legal ground before the CIT(A) that the notice issued under Section 153C was beyond the block of six assessment years, rendering the assessment order void for want of jurisdiction. The CIT(A), after considering detailed submissions and judicial precedents, accepted the contention and quashed the assessment order, deleting the additions made by the Assessing Officer (AO).
Before the Tribunal, the Departmental Representative (DR) argued that the CIT(A) erred in reckoning the block period from the date of receipt of seized material by the AO of the non-searched person, instead of from the date of the search itself. The DR contended that after the amendment made by the Finance Act, 2017 (effective from 01.04.2017), the block period for both searched and non-searched persons under Sections 153A and 153C was to be calculated with reference to the assessment year relevant to the previous year in which the search was conducted. According to the Revenue, the CIT(A) had wrongly relied on the pre-amendment position of law and ignored that the satisfaction in this case was recorded on 20.09.2018—after the amendment had come into effect.
The Tribunal, however, upheld the order of the CIT(A), observing that it was a well-reasoned and legally sound decision supported by judicial precedents of the Delhi High Court and the Supreme Court.
In its order, the CIT(A) had examined the facts in detail. A search under Section 132 was conducted on Ashish Begwani Group on 22.10.2016, during which documents relating to accommodation entries were seized. The AO of the searched person recorded satisfaction under Section 153C on 20.09.2018 and handed over the seized material to the AO of the assessee on the same date. The AO of Visionary Infraprojects Pvt. Ltd. also recorded satisfaction on 20.09.2018 and issued notice under Section 153C on 24.09.2018.
The CIT(A) observed that the six-year block period for the purpose of Section 153C must be determined with reference to the date of recording of satisfaction and receipt of seized material by the AO of the non-searched person. Since the satisfaction was recorded on 20.09.2018 (falling in FY 2018–19, relevant to AY 2019–20), the six-year period would cover AYs 2013–14 to 2018–19. Consequently, AY 2012–13 fell outside this range, and the AO lacked jurisdiction to issue notice or frame assessment for that year.
In support of this conclusion, the CIT(A) relied on key judicial pronouncements including:
