Ashwani Kumar Gupta V. Assistant Commissioner of Income Tax Central Circle 17 and ANR

W.P.(C)/3715/2023

AI Insights

The case involves a writ petition filed by Ashwani Kumar Gupta against a notice issued by the Assistant Commissioner of Income Tax under Section 153C of the Income Tax Act, 1961, for the Assessment Year 2011-12. The notice was challenged on the grounds that it was issued beyond the permissible time frame for such assessments. The High Court examined the legal provisions under Section 153C and relevant judicial precedents, particularly focusing on the interpretation of the time blocks for assessment years following a search or seizure. The court found that the notice was issued beyond the maximum window of ten years allowed for such assessments, leading to the quashing of the notice and all related proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 797777 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 08-05-2024
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd, SSP Aviation, RRJ Securities, Jasjit Singh, Vikram Sujitkumar Bhatia
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: INDRUJ SINGH; SANJEEV MENON; RAHUL SINGH; NISHANT SHOKEEN; SUMITA SINGH
• Assessee Lawyers: SOMIL AGARWAL; DUSHYANT AGRAWAL
• Keywords: Assessment Year; Books of Accounts; Income Tax; Legal fiction; Notice; Section 153C
• Section: 153C

Judgement Text

"$~39 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3715/2023 & CM APPL. 14344/2023-Stay ASHWANI KUMAR GUPTA ..... Petitioner Through: Mr. Somil Agarwal & Mr. Dushyant Agrawal, Advs. versus ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 17, & ANR. ..... Respondents Through: Mr. Indruj Singh, SSC with Mr. Sanjeev Menon, Mr. Rahul Singh, Mr. Nishant Shokeen & Ms. Sumita Singh, JSCs. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV O R D E R % 08.05.2024 1. This writ petition has been preferred against the impugned notice dated 23 June 2022 issued under Section 153C of the Income Tax Act, 1961 [“Act”] for Assessment Year [“AY’”] 2011-12 and all consequential proceedings. 2. Bearing in mind the undisputed fact that notice under Section 153C was dated 23 June 2022, it is ex facie evident that the aforenoted AY would fall beyond the maximum window of ten years as prescribed. 3. The issue in any case stands answered and covered in favour of the writ petitioner in light of the judgment rendered in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd [2024 SCC OnLine Del 2439]. The relevant paragraphs of the aforesaid This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/05/2024 at 11:30:23 decision read as under:- “D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “relevant assessment year” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs’ would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A. F. While the identification and computation of the six AYs’ hinges upon the phrase “immediately preceding the assessment year relevant to the previous year” of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “from the end of the assessment year”. This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of the assessment year” while speaking of the ten year block.” 4. Accordingly, and for reasons assigned in our decision in Ojjus This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/05/2024 at 11:30:23 Medicare, we allow the instant writ petition and quash the impugned notice dated 23 June 2022 issued under Section 153C of the Act and all consequential proceedings arising therefrom. YASHWANT VARMA, J. PURUSHAINDRA KUMAR KAURAV, J. MAY 08, 2024/kk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/05/2024 at 11:30:23 "