DCIT Vs Mani Capital Limited (ITAT Delhi)
153C Notices Beyond 10-Year Limit Invalid: ITAT Delhi Follows Ojjus Medicare & Quashes All Four Assessments
Revenue filed four appeals for AYs 2010-11 to 2013-14 against CIT(A)’s consolidated orders deleting assessments framed u/s 153C r.w.s. 144/143(3). Tribunal considered AY 2010-11 as the lead case. Assessee had filed original return on 29.09.2010. A search u/s 132 was carried out on Alankit Group on 18.10.2019 (relevant to AY 2020-21). Incriminating material allegedly relating to Assessee was forwarded only in June 2022, and satisfaction u/s 153C was recorded in FY 2022-23 relevant to AY 2023-24. AO then issued notices for AYs 2010-11 to 2013-14 & completed assessments making additions unrelated to any seized documents.
Assessee challenged the very jurisdiction of 153C proceedings, submitting that AYs 2010-11 to 2013-14 fell outside the 10-year block prescribed in Explanation 1 to section 153A, which applies to section 153C as well. CIT(A) accepted this contention, holding that computation of the 6-year & 10-year block must begin from the end of the AY relevant to the previous year in which the AO of the non-searched person receives the seized material, as held by Delhi High Court in Ojjus Medicare Pvt. Ltd., 2024 (4) TMI 268 & by Supreme Court in Jasjit Singh (2023 SCC OnLine SC 1265). As the handover occurred in FY 2022-23, the 10 permissible years were AYs 2014-15 to 2023-24. Therefore, AYs 2010-11 to 2013-14 were time-barred.
CIT(A) further held that even otherwise, there was no incriminating material pertaining to these years. Additions were derived only from regular books already disclosed. Relying on Abhisar Buildwell (SC), U.K. Paints (SC), Kabul Chawla (Del HC), Singhad Technical Education Society (SC) & Dev Technofab (Del HC), CIT(A) held that 153C cannot be invoked when seized material does not pertain to the relevant AY.
Tribunal examined CIT(A)’s detailed findings (pages 6–9 of the order) and found them to be correct and fully supported by the binding decision of the jurisdictional Delhi High Court in Ojjus Medicare, which squarely covered the issue. Tribunal held that all four AYs fell beyond the statutory 10-year block & the assumption of jurisdiction u/s 153C was illegal. With jurisdiction itself failing, all other grounds became academic.
Tribunal accordingly dismissed Revenue’s appeals for all four years.
FULL TEXT OF THE ORDER OF ITAT DELHI
