No Income Tax Assessment Beyond 10-year limit u/s153A: ITAT favours Assessee [Read Order]

The New Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently quashed an assessment order passed by the Assessing Officer holding that the assessment year was beyond the ten-year outer ceiling limit prescribed by Section 153A of the Income Tax Act,1961.

The assessee challenged the assumption of jurisdiction by the Assessing Officer and consequent passing of the Assessment Order. Counsels appearing for the assessee, Ved Jain, Aman Garg and Ishika Dua, challenged the issuance of notice u/s 153A of the Act,1961 for the assessment year 2008-09 on the reasoning that the said notice was issued beyond the period of limitation. Hence, it was contended that the same was illegal and invalid in the eyes of law.

Read more: Six Year Time Limit u/s 153C(1) of Income tax Act applies only from Transfer of Seized Materials to Jurisdictional AO: Supreme Court 

Emphasis was also placed on Explanation 1 to Section 153A  of the Act,1961 to submit that the assessment beyond the period of 10 years from the end of the relevant AY in which search had been carried out could not be initiated. It was further submitted that the search took place on 22.01.2018 and therefore the AY- 2008-09 was beyond the 10 year outer ceiling limit. Reliance was also placed by the assessee on the judgment of the Hon’ble Delhi High Court in Ojjus Medicare Pvt. Ltd. & Ors. (2024) to support his contentions.

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Jaya Choudhary and Om Prakash, appearing for the Department, placed emphasis on the findings of the Commissioner of Income Tax (Appeals) [ CIT (A) ] and contended that the impugned order should be sustained.

Read more: Time Limit u/s 153 of Income Tax Act Prevails over Assessment Time Limit u/s 144C of Income Tax Act: Bombay HC

The bench comprising Vikas Awasthy (Judicial Member) and Avdesh Kumar Mishra (Accountant Member), on a perusal of the material available on record, placed reliance on the judgment in Ojjus Medicare (2024) and observed that the Assessment year 2008-09 is beyond the ten-year outer ceiling limit as prescribed u/s 153A of the Income Tax Act, 1961. It was further observed that the Assessing Officer erred in assuming jurisdiction.

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Reliance was placed heavily on the reasoning given by the Hon’ble Delhi High Court in Ojjus Medicare (supra) wherein it was observed that “The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department.” It was further observed that “When the law has prescribed a particular length, it is not for the court to stretch it.”

Hence, the assessment order was quashed and the appeal was allowed.

To Read the full text of the Order CLICK HERE

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