Period of Limitation as per S. 153 C Commences with date on which documents were Submitted: Delhi HC [Read Judgement]

The Delhi High Court in its recent case held that the period of limitation as per section 153C of the Income Tax Act, 1961 commenced with date on which documents were submitted.

Landcraft Developers Private Limited, the Petitioner has filed the present petition impugning a notice dated 19.12.2023 [impugned notice] issued under Section 153C of the Income Tax Act, 1961 [the Act] in respect of Assessment Year [AY] 2015-16. The Petitioner stateted that the proceedings pursuant to the impugned notice dated 19.12.2023 are barred by limitation, as no assessment order can now be passed, as the time period stipulated for passing an assessment order, has elapsed.

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The Petitioner’s challenged the rests on Section 153B of the Act, which stipulates that an assessment order pursuant to a notice under Section 153C is required to be passed within a period of twelve months from the end of the financial year in which the said notice was issued. The Petitioner claims that since the said period has elapsed, the Revenue is required to be restrained from proceeding further with the impugned notice.

The notice in the present petition was issued on 26.03.2025, and the Revenue was granted time to file a reply, if any, within a period of two weeks from the date of the said order. However, no such reply has been furnished. The counsel appearing for the Revenue also sought further time on 01.05.2025, which was granted and accordingly, the petition has been listed today. However, the Revenue has not filed its counter affidavit.

The Petitioner filed its return of income for AY 2015-16 on 29.11.2015, declaring a total income of ₹80,84,170/-. On 18.10.2019, a search and seizure operation were conducted under Section 132 of the Act in respect of entities belonging to the Alankit Group. It is alleged that during the course of search, certain assets/documents were found, which belonged to the Petitioner or contained information relating to the Petitioner.

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The Assessing Officer [AO], exercising jurisdiction over the searched entities, recorded a satisfaction note on 22.06.2022. It was evident that the documents and information relating to the Petitioner were handed over to the AO having jurisdiction over the case of the Petitioner is correct. Thus, the documents in question were received by the AO of the Petitioner on 22.06.2022. In the given facts, the period of limitation, as stipulated under Section 153B of the Act, for passing an assessment order is to be reckoned from the said date.

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A division bench Justice Vibhu Bakhru and Justice Tejas Karia observed that “In terms of Section 153B of the Act, the AO was required to pass an assessment order within a period of twelve months from the end of the financial year in which the documents were received, that is, from the end of the financial year 2022-23. Therefore, the last date for completion of the assessment was 31.03.2024, which has since passed. The present petition was listed on 26.03.2025, and admittedly, no order of assessment has been passed as of the date of filing of the petition.”

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The court allowed the petition and set aside the proceedings commenced pursuant to the impugned notice are set aside. It is also clarified that, in the event, any assessment order has been passed after filing of this petition in respect of AY 2015-16 pursuant to the impugned notice, the same would also stand quashed.

To Read the full text of the Order CLICK HERE

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