Jurisdiction of AO u/s 153C of Income Tax Act  beyond block of 10 year is invalid: Delhi HC upholds ITAT Order [Read Order]

The Delhi High Court in its judgement upheld the Income Tax Appellate Tribunals (ITAT)’s Order finding the AO’s assumption of jurisdiction under Section 153C of the  Income Tax Act, 1961 in respect of AY 2012-13 is invalid.  The bench found that AY 2012-13 falls beyond the block of ten years that are required to be reckoned from the end of the AY 2022-23.                            

ICAI Releases 10th Edition of GST Acts and Rules – Bare Law with New Amendments [Read Bare Law]

The Revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 [the Act] impugning an order dated 13.09.2024 passed by the Income Tax Appellate Tribunal [ITAT]. The Assessee,Amol Awasthi filed his return of income for AY 2012-13 on 24.09.2012 declaring an income of ₹10,03,030/-, which was processed under Section 143(1) of the Act. On 30.06.2019, a search was conducted in the case of one Sh. Sanjay Jain. The Assessee was also considered one of the searched persons and accordingly, a notice under Section 153A of the Act was issued.

 While the proceedings pursuant to the notice issued under Section 153A were pending, the Assessing Officer [AO] exercising jurisdiction in case of the Assessee received information that a search had been conducted on 30.06.2019 under Section 132 of the Act in the case relating to one Sh. Rajiv Saxena. The AO exercising jurisdiction in the case of the searched person (Sh. Rajiv Saxena), recorded a satisfaction note stating that the documents or material unearthed during the said search belonged to the Assessee or contained information pertaining to the Assessee. 

Law Simplified with Tables, Charts & Illustrations – Easy to Understand - Click here

The AO dropped the proceedings initiated against the Assessee under Section 153A of the Act under the process of initiating fresh proceedings under Section 153C of the Act.  However, in the meanwhile, searches were also conducted on 18.10.2019 in cases relating to Alankit Group. The AO exercising jurisdiction in respect of such searched person also recorded his satisfaction that the materials found during the search belonged to or contained information pertaining to the Assessee.  The AO issued the notice dated 29.09.2021 under Section 153C of the Act requiring the Assessee to file his return of income for the relevant assessment year.  The said proceedings culminated in the draft assessment order dated 31.03.2023 making certain additions on protective basis.  

Finance Ministry Revises Customs Tariffs on Gold, Silver, and Crude Oil w.e.f. May 1st [Read Notification]

The Assessee appealed the said assessment order before the ITAT, which was allowed. The learned ITAT, following the decision of this Court in The Pr. Commissioner of Income Tax - Central-1 v. Ojjus Medicare Pvt. Ltd held that AY 2012-13 falls outside the block of ten assessment years, which could be reopened pursuant to a notice issued under Section 153C of the Act.  Concededly, in terms of the said decision, the block of ten years for which assessments could be reopened is required to be construed from the end of the assessment year relevant to the financial year in which the satisfaction note under Section 153C of the Act was recorded by the AO. 

A division bench of  Justice Vibhu Bakhru and Justice Tejas Karia found that the AO had recorded its satisfaction note under Section 153C of the Act on 29.09.2021 and therefore, the period of ten years for which the assessments could be reopened under Section 153C of the Act read with Section 153A of the Act are required to be reckoned from the end of the AY 2022-23.  

S.43B Disallowance not Applicable When No Deduction Claimed and Liability Reported as Current Liability: ITAT [Read Order]

Concededly, AY 2012-13 falls beyond the block of ten years that are required to be reckoned from the end of the AY 2022-23.  The court upheld the view of ITAT in finding that the AO’s assumption of jurisdiction under Section 153C of the Act in respect of AY 2012-13 is invalid.  

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates