DEPUTY COMMISIONER OF INCOME TAX CENTRAL CIRCLE 1(4) AHMEDABAD, AHMEDABAD V. FALGUNI SURYAKANT THAKAR , AHMEDABAD

ITSSA 94/AHD/2025

AI Insights

The case involves appeals by the Revenue against Falguni Suryakant Thakar concerning assessments and penalties for the Assessment Year 2009-10, following a search and seizure operation under section 132 of the Income Tax Act. The primary legal issue was the validity of the assessment made under section 153C, which the Ld. CIT(A) found to be beyond the permissible period as stipulated by the Act, particularly in light of the amendments and judicial interpretations concerning the timeline for such assessments post-search operations. The Tribunal's decision relied heavily on precedents set by the Supreme Court and other High Courts, which clarified the application of section 153C and the relevant timelines for assessments in cases involving non-searched persons.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 824556 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2025
• Other Referred Cases: Commissioner of Income-tax vs. Jasjit Singh, Union of India vs. Ashish Agarwal, PCIT vs. Ojjus Medicare (P.) Ltd., Jitendra H. Modi vs. Income Tax Officer, Calcutta Knitwears vs. Income Tax, Vikram Sujitkumar Bhatia vs. Income Tax
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Unexplained investment; Document seized; Documents seized; Period of limitation; Reopening of assessment; Search and seizure; Time period of passing order
• Section: 143(3); 142(1); 271(1)(c); 132; 153A; 69; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member The DCIT Central Circle-1(4), Ahmedabad Vs Falguni Suryakant Thakar A-302, Suryaketu Apartment, Near Judges Bunglow, Bodakdev, Gujarat Ahmedabad-380054, PAN: AAECK 1876D Falguni Suryakant Thakar A-302, Suryaketu Apartment, Near Judges Bunglow, Bodakdev, Gujarat Ahmedabad-380054, PAN: AAECK 1876D (Appellant) Vs The DCIT Central Circle-1(4), Ahmedabad (Respondent) Revenue Represented: Shri Rignesh Das, CIT-DR & Shri Yogesh Mishra, Sr. D.R. Assessee Represented: Shri D.K. Parikh, A.R. Date of hearing : 17-12-2025 Date of pronouncement : 30-12-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- These two appeals are filed by the Revenue as against the appellate order dated 17-06-2025 against the quantum appeal IT(SS)A No: 94/Ahd/2025, ITA No: 1563/Ahd/2025 and C.O. No. 87/Ahd/2025 Assessment Year: 2009-10 Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 2 passed under section 153C r.w.s. 144 of the Income Tax Act 1961 (hereinafter referred as the Act) and appellate order dated 18-06- 2025 against the penalty order levied under section 271(1)(c) of the Act relating to the same Asst. Year 2009-10. The assessee has filed Cross Objection against quantum appeal in IT(SS)A No. 94/Ahd/2025. Since common issue is involved in these appeals, the same are disposed of by this common order. 2. Brief fact of the case is that the assessee is an individual has not filed original Return of Income under section 139 of the Act for the Asst. Year 2009-10. A search and seizure action in the case of “SSS (Satyam, Sangani, Shaligram) Group” under section 132 of the Act was carried out on 06-03-2018. During the course of search document containing information related and/or pertained to the assessee was seized from the laptop of Shri Viral Patel, who was the key person handling the cash transaction relating to the M/s. Satyam Developers Ltd., which clearly established the assessee had made cash payment of Rs. 4 crores for purchase of unit A2 in project “Satyam Santossa Greenland Phase A-B”. 2.1. Therefore a satisfaction note dated 18-02-2021 from the ‘searched person’ assessing officer was recorded following which the assessing officer of the assessee namely ITO, Ward-1, Mehsana recorded his satisfaction on 10-11-2021 for initiation of proceedings u/s. 153C of the Act for the Asst. Year 2008-09 to 2017-18. Thus notices under section 153C dated 15-11-2021 were issued on the assesse. The assessee failed to file Return of Income, therefore notices u/s. 142(1) were issued, the assessee failed to Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 3 make reply thereby assessing officer issued final show cause notice dated 24-12-2021 and completed exparte assessment order making addition of Rs. 4 crores under section 69 of the Act being unexplained investment made by the assessee for the Asst. Year 2009-10. The assessing officer also initiated penalty proceedings u/s. 271(1)(c) of the act and levied penalty of Rs. 1,34,49,260/- vide penalty order dated 27-06-2022 under section 271(1)(c) of the Act. 3. Aggrieved against the order, assessee filed an appeal before Ld. CIT(A) challenging the jurisdiction of assessment relating to the Asst. Year 2009-10. The Ld. CIT(A) by a detailed order held that the initiation of proceedings u/s. 153C for the Asst. Year 2009-10 is bad in law by observing as follows: “i. The provisions of section 153C follow the provisions of Sec. 153A being the substantive provisions. Sec. 153A(1) (a) provide that notice is to be issued to furnish return of income in respect of 6 assessment years and the relevant assessment year. The fourth proviso inserted by the Finance Act 2017 with effect from 01.04.2017, read with Explanation 1 and Explanation 2, imply that in case the AO has in criminative material in the form of books of account on other document or evidence which reveal that the income, represented in the form of assets, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years, cases beyond six AY but not later than ten AY from the end of AY relevant to the previous year in which search is conducted, are covered u/s. 153A, or, 153C, as the case may be. ii. I have carefully perused the details of ledger presented to me in the seized material. The date of search is 06.03.2018. The relevant Search assessment year is AY. 2018-19. The ledger in the seized material suggests a prima facie investment in property of Rs. 4 Cr, which is more than the threshold of Rs. 50,00,000/-. As such, 10 AY prior to AY 2018-19 can be considered for assessment under section 153A as per plain reading of the provisions and AY 2009-10 is covered in the ten- year block. The AO has carried out proceedings for AY. 2009-10 u/s 153C. For the purposes of proceedings u/s 153C, the stipulations under first Proviso have to be considered. Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 4 As per this proviso, by a deeming fiction, the Search-relevant assessment year would be the date of receiving of books or documents by the AO having jurisdiction over the person in whose case proceedings u/s 153C are contemplated. In the Assessment order, the date of receipt of incriminating documents is not mentioned. However, the date of initiation of the proceeding's u/s 153C for AY 2009-10 is 15.11.2021, i.e. FY 2021-22, which appears to be a date around the time the AO of the appellant has received seized material and recorded satisfaction. This pertains to AY 2022-23, or, in other words, \"Search\" relevant AY becomes AY 2022-23. On backward calculation, the six years would be between AY 2016-17 to AY 2021-22. Four years further, supposing there was an asset above Rs. 50 Lakhs, would bring one to AY 2012-13. Thus Prima facie, there is no case for assumption of jurisdiction for AY 2009-10 u/s 153C. Thus, the appellant has rightly contended that the assumption of jurisdiction u/s 153C by issuing notice u/s 153C on 15.11.2021 is bad in Law. I place my reliance in this regard on the decision of Hon SC in the case of Commissioner of Income- tax vs. Jasjit Singh [2023] 155 taxmann.com 155 (SC)/[2023] 295 Taxman 612 (SC)/[2023] 458 ITR 437 (SC) [26-09-2023]. The review petition of Revenue against the decision of CIT vs Jasjit Singh has also been dismissed by Hon SC in Commissioner of Income-tax vs. Jasjit Singh [2025] 173 taxmann.com 575 (SC) [26-03-2025]. This has been discussed and relied upon by Ld. ITAT, Ahmedabad in the decision in the matter of IT(SS)(A) No. 12/Ahd/2024 Ushaben Jayantilal Patel vs the ITO. The relevant extract are as follows: \"8. We have carefully considered the facts of the case and the materials available on record. There is no dispute to the fact that the proceedings under Section 153C of the Act was initiated by the AO on 31.03.2018. A copy of the satisfaction note to initiate proceedings under Section 153C of the Act has been brought on record, as per which the AO had initiated proceedings under Section 153C of the Act for A.Y. 2009-10 to A.Y.2014-15 in the case of the assessee. As per provision of Section 153C of the Act, if the AO of the searched person is satisfied that the seized books of accounts or documents or any information contained therein relates or pertains to person other than the searched person, then the books of accounts or documents shall be handed over to the AO having jurisdiction over such other person. Thereafter, the AO having jurisdiction of such other person shall initiate proceedings under Section 153C of the Act, if he is satisfied that such books of accounts or documents have a bearing on the determination of the total income of such other person. The proceedings under Section 153C of the Act can be initiated for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 5 The first proviso of Section 153C of the Act further explains the date of initiation of search for the proceedings under Section 153C of the Act as under. \"Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub- section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person:\" 9. The above proviso makes it crystal clear that the date of initiation of search as referred in 2nd Proviso of Section 153A of the Act shall be construed as reference to the date of receiving the books of accounts or documents or assets seized or requisitioned by the AO having jurisdiction over such other person. Thus, the date of receiving of the books of accounts by the AO of the other person shall be treated/ deemed as date of search and six years preceding to that year will be construed as the relevant years for which proceedings under Section 153C of the Act can be initiated in respect of such other person. In this regard, it is relevant to consider the observation of the Hon'ble Delhi High Court in the case of PCIT vs. Ojjus Medicare (P.) Ltd. (supra): The First Proviso to Section 153C introduces a legal fiction based on 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. 10. The Hon'ble Court categorically held that in case of a search assessment undertaken under Section 153C of the Act, the previous year of search would stand substituted by the date or the Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 6 year in which the books of accounts/documents and assets seized are handed over to the jurisdictional AO of the other person as opposed to the year of search which constitutes the basis for an assessment under Section 153A of the Act. Thus, the block period for the proceedings under Section 153C of the Act has to be computed from the date of receipt of books of accounts or documents by the AO of the non-searched person. This principle has been upheld by the Hon'ble Supreme Court in the case of CIT vs. Jasjit Singh (supra), wherein Hon'ble Court held as under: 10. This Court is of the opinion that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials of the search party, under section 132 would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually \"relate back\" as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third-party assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of section 153-C supports the interpretation which this Court adopts.\" 11. The Apex Court had held in that case that in case of other person the period for which they were required to file returns, commenced only from date when materials were forwarded to their jurisdictional Assessing Officers. The Apex Court categorically held that the proviso to section 153C(1) catered not merely to question of abatement but also with regard to date from which six year period was to be reckoned, in respect of which returns were to be filed by third party whose premises were not searched and in respect of whom specific provision of section 153C was enacted. 12. In view of the above legal position, there is no ambiguity that for the proceedings under Section 153C of the Act, the year of search shall be substituted by the year of receipt of books or documents by the AO of the other person and thereafter the period of six years has to be counted backwards from that year. In the instant case, seized documents were received by the AO of the assessee in F.Y. 2017-18 relevant to A.Y. 2018-19. Therefore, the proceeding u/s 153C could have been initiated in the case of the assessee for the six years preceding the A.Y. 2018-19 i.e. for the A.Y.2017-18 to A.Y.2012-13 only. Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 7 13. As per amended provision of section 153A w.e.f. 01.04.2017, proceedings can be started for the assessment year beyond preceding six assessment years from the date of search or from the date of handing over the documents pertaining to other person but not later than ten assessment years, if the income that has escaped assessment is rupees fifty lakhs or more in aggregate. Thus, the proceeding could have been initiated in this case for the A.Y.2011-12 only if the escaped income for this year or for the preceding 7th to 10th year was Rs.50 Lacs or more. From the satisfaction as recorded by the AO for initiating proceeding u/s 153C of the Act, no such fact is evident. In fact, the addition made by the AO in the A.Y. 2011-12 was to the extent of Rs.22.56 Lakhs only. Therefore, the condition of escapement of income of Rs.50 Lacs or more was also not satisfied in this year. Therefore, no proceeding u/s 153C could have been initiated in this case for the A.Y.2011-12. 14. In view of the above facts, we are of the considered opinion, that the AO had no jurisdiction to initiate proceedings under Section 153C of the Act for the A.Y. 2011-12. Therefore, the additional ground taken by the assessee is allowed and the order of the AO passed under Section 153C r.w.s. 143(3) of the Act, being beyond jurisdiction, is quashed. 15. Since, the assessment order is quashed on the basis of legal ground taken by the assessee, we do not deem it necessary to adjudicate the other grounds taken by the assessee. 16. In the result, appeal preferred by the assessee is allowed.\" v. The AO has mentioned no reason for late receipt of documents, or late issue of notice u/s 153C. The AO has not specified if the delay was attributable to the COVID pandemic. Hon SC has in the suo-motto proceedings excluded the period between 15-03-2020 to 28-02-2022 from all limitations. The assessment order does not mention the date of receipt of seized material/books of accounts or recording of satisfaction. vi. On the basis of the above discussions, respectfully following the judicial authorities, I am inclined to quash the order u/s 153C on legal ground. Hence the discussion on other grounds of appeal becomes academic and they are not being taken up for discussion. The appeal succeeds and is allowed. “ 4. Aggrieved against the quantum appeal, the Revenue is in appeal before us in IT(SS)ANo.94/Ahd/2025 raising the following Grounds of Appeal: Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 8 1. On the facts and in law, the Ld. CIT(A) erred in holding that the notice issued u/s. 153C of the Act on 15.11.2021 for A.Y. 2009-10 was barred by limitation and beyond the permissible ten-year period from the search year, thereby quashing the assessment order passed u/s. 144 r.w.s. 153C of the Act.\" 2. The Ld. CIT(A) failed to appreciate that Explanation 2 to section 153C, as inserted by the Finance Act, 2017 with effect from 01.04.2017, clearly allows reopening of assessments up to ten preceding assessment years if the seized material represents or is relatable to income of Rs. 50 lakhs or more in any one year or in aggregate, and that this condition was duly satisfied in the present case.\" 3 The Ld. CIT(A) erred in law and on facts by not giving due cognizance to the exclusion of the period from 15.03.2020 to 28.02.2022 as per the decision of the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) No.3/2020 and the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, which render the notice dated 15.11.2021 to be within limitation.\" 4. The Revenue craves leave to add/alter/amend and/or substitute any or all of the grounds of appeal. 5. The Cross Objection filed by the Assessee in ITA No. 87/Ahd/2025 with the following Grounds of Appeal: 1. The learned CIT(Appeals) has erred both in law and in fact in not adjudicating grounds number 3, 5 & 6 being grounds against exparte assessment and grounds on merits against erroneous addition of Rs.4,00,00,000/- made u/s 153C without any evidence and wrongly invoking section 69/115BBE of the IT Act. 2. On the facts and circumstances of the case and written submissions and records, the addition of Rs.4,00,00,000/- ought to have been deleted considering the above grounds. 3. The ld. CIT(A) ought to have accepted the appellant's grounds/submissions and allowed the appeal in toto Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 9 4. The appellant craves leave to add, alter, modify or delete any of the grounds at the 6. Aggrieved against the penalty order, the Revenue is in appeal before us in ITA No. 1563/Ahd/2025 raising the following Grounds of Appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty of Rs. 1,34,49,260/- levied under section 271(1)(c) of the Income-tax Act, 1961 by holding that the assessment order passed under section 153C r.w.s. 144 for A.Y. 2009-10 is invalid due to lack of jurisdiction, without appreciating that the said assessment was validly made within the extended limitation period and in accordance with the provisions of the Act.\" 2. The Ld. CIT(A) has erred in not considering the applicability of the Hon'ble Supreme Court's directions in Suo Motu Writ Petition (Civil) No. 3 of 2020, wherein the period from 15.03.2020 to 28.02.2022 was excluded from the computation of limitation and which applies to assessment proceedings under section 153C as well.\" 3 The Ld. CIT(A) has erred in not following the ratio laid down by the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agarwal Civil Appeal No. 3005 of 2022), wherein reassessment notices issued during the extended limitation period under the TOLA were held to be valid, thereby supporting the validity of the present assessment.\" 4. The Revenue craves leave to add/alter/amend and/or substitute any or all of the grounds of appeal. 7. Ld. CIT-DR Shri Rignesh Das appearing for the Revenue strongly contended that the Ld. CIT(A) is not correct in quashing the assessment for the Asst. Year 2009-10 which is barred by limitation and beyond permissible ten years period from the search year. Further Ld. CIT(A) failed to take cognizance to the exclusion Covid-19 Pandemic period from 15-03-2020 to 28-02-2022 as per the Supreme Court Judgment and the provisions of Taxation and Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 10 Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 which render the notice u/s. 153C dated 15-11-2021 to be well within limitation. Thus Ld. CIT-DR requested to reverse the order passed by Ld. CIT(A) and confirm the order passed by the A.O. 8. Per contra, Ld. Counsel Shri D. K. Parikh appearing for the assessee submitted that the order passed by Ld. CIT(A) does not require any interference, since in the case of the assessee being a non-searched person and after handing over the seized materials by the assessing officer of the searched person, the reopening of assessment for Asst. Year 2009-10 is beyond the period of limitation. Further the question of exclusion period during Covid- 19 Pandemic was also considered by Jurisdictional High Court in the case of Parag Rameshbhai Gathani (Through Poa Holder Dhiren Vinodchandra Shah) –Vs- Income Tax Officer, Ward 2 International Taxation & Anr in Special Civil Application No. 3734 of 2025 vide judgment dated 18-11-2025 held against the Revenue. Thus the orders passed by the Ld. CIT(A) does not require any interference and requested to dismiss the Revenue appeals. 9. We have given our thoughtful consideration and perused the materials available on record. To decide the legal issue namely the assessment framed for the Asst. Year 2009-10 is well within the period of limitation under section 153C of the Act. The following dates are relevant: Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 11 Dates Remarks 06-03-2018 Search in the case of SSS Group 18-02-2021 Satisfaction recorded by the A.O. of searched person 10-11-2021 153C notices issued by the A.O. of the assessee/non-searched person. (date of recording of satisfaction by the non-searched officer is not available on record) 9.1. As per provision of Section 153C of the Act, if the AO of the searched person is satisfied that the seized books of accounts or documents or any information contained therein relates or pertains to person other than the searched person, then the books of accounts or documents shall be handed over to the AO having jurisdiction over such other person. Thereafter, the AO having jurisdiction of such other person shall initiate proceedings under Section 153C of the Act, if he is satisfied that such books of accounts or documents have a bearing on the determination of the total income of such other person. The proceedings under Section 153C of the Act can be initiated for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. The first proviso of Section 153C of the Act further explains the date of initiation of search for the proceedings under Section 153C of the Act as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. 9.2. Thus, the date of receiving of the books of accounts by the AO of the other person shall be treated/ deemed as date of search and Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 12 six years preceding to that year will be construed as the relevant years for which proceedings under Section 153C of the Act can be initiated in respect of such other person. In the Assessment order, the date of receipt of incriminating documents is not mentioned. However, the date of initiation of proceedings u/s. 153C is 15-11- 2021 relating to the Asst. Year 2022-23 which means the date around the time the A.O. of the assessee received the seized material and recorded his satisfaction. On backward calculation, the six years would be between A.Y. 2016-17 to A.Y. 2021-22. Further four years, where the escaped asset is above Rs. 50 Lakhs, then the assessment year will be A.Y. 2012-13. But whereas the Ld. A.O. has calculated from the date of search and reopened the Asst. Year 2009-10 which is patently illegal and beyond the provisions of law. The First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the judgments of the High Courts 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. 9.3. Further the AO has mentioned no reason for late receipt of seized documents, or late issue of notice u/s 153C of the Act. The AO also has not specified if the delay was attributable to the COVID pandemic. Hon’ble Supreme Court has in the suo-motto proceedings excluded the period between 15-03-2020 to 28-02- 2022 from all limitations. The Jurisdictional High Court in the case of Parag Rameshbhai Gathani (cited supra) considered this issue of Covid-19 pandemic and held as follows: Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 13 “(17) Thus, as per the Circular of the respondent Department, the judgment of the Supreme Court in the case of Calcutta Knitwears (supra) and the recording of the satisfaction note in three stages apply to the proceedings under Section 153C of the Act. (18) Though, the Assessing Officer had an opportunity to record the satisfaction note at two stages i.e. stage (a) and (b) as specified in the Circular, the same is not done. The next state which was available was stage (c) on immediate completion of proceedings of the searched person in August 2021, however, the satisfaction note was recorded on 6th June, 2023, after a period of 22 months. The satisfaction note was drawn by the Assessing Officer of the petitioner on 17th October, 2023. The satisfaction note of 17th October, 2023 of the petitioner (paragraph No.2.7) mentions that during the course of the assessment proceedings under Section 153C of the Act in the case of Shri Rushisinh Thakor and Shri Randhirsinh Thakor, concluded in March 2023, the transactions pertain to the sale, i.e., purchase of land by one Smt. Bharti Dharmesh Gathani, w/o. Dharmesh Gathani, vide sale deed dated 24th July, 2020, for a registered value of Rs.3,80,00,000/-. Thus, the Assessing Officer of the searched person prepared the satisfaction note on 6th June, 2023, after completion of the assessment in August 2021, i.e., almost after a period of 22 months. We may, at this stage, refer to the decision of the Coordinate Bench of this Court in the case of Jitendra H. Modi (supra), wherein this Court, by placing reliance on the decision of the Supreme Court in the case of Calcutta Knitwears (supra), has held that satisfaction recorded after 09 months could not be said to be immediate action and hence, the Coordinate Bench of this Court set aside the notices issued under Section 158BD of the Act. In the instant case, there has been a delay of 22 months in recording the satisfaction, which runs contrary to the decision in Calcutta Knitwears (supra) as well as provision ‘(c)’ of Circular No.24/2015 dated 31.12.2015, which uses the expression “immediately after the assessment procedure is completed”. (19) Twin reasons are assigned by the respondents in the affidavit in reply for delay in recording the satisfaction note, (a) COVID-19 pandemic; and, (b) adoption of Faceless Scheme. So far the reason of COVID-19 is concerned, the same runs contrary to the action of the respondents, since the assessment of the searched person was itself done during the pandemic, and in the affidavit-in-reply, the respondent has mentioned that the Omicron variant commenced in December 2021 and continued until February 2022. Thus, even after February, 2022, the satisfaction note has been recorded on 17.10.2023. The second reason of workload due to Faceless Scheme is also a lame excuse, since indubitably the exercise under sections 153A and 153C of the Act falls outside the purview of the said scheme. Hence, both the reasons assigned appear to be an afterthought, hence the same are rejected. (20) The reliance placed by the learned advocate Mr. Patel on the decision of Bhupinder Singh Kapur (supra) will not come to the rescue of the Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 14 respondents, since in the present case, there is 22 months delay in recording the satisfaction. There was no restricting factor on the Assessing Officer to record the satisfaction earlier. The expression “immediate”, though is impossible to quantify in period, however, the same cannot be extended to such an extent which defeats the purpose of cost effective, efficient and expeditious completion of search assessments. The intention of using such term is to reduce and avoid long drawn proceedings and to bring certainty to the assessment. (21) Thus, both the writ petitions succeed. The impugned notices issued under Section 153C of the Act for the respective assessment years are hereby quashed and set aside. RULE is made absolute. There shall be no order as to costs.” 9.4. Respectfully following the above judicial precedents, we have no hesitation in upholding the order passed by Ld. CIT(A) quashing the assessment made for the Asst. Year 2009-10 under section 153C of the Act as barred by limitation. Thus we do not find any merits in the grounds raised by the Revenue. 10. In the result, the appeal filed by the Revenue in quantum appeal in IT(SS)A No. 94/Ahd/2025 is hereby dismissed. 11. Since the quantum appeal itself is dismissed, the appeal filed against the penalty order, by the Revenue in ITA No. 1563/Ahd/2025 has no legs to stand and the same is also hereby dismissed. 12. The Cross Objection filed by the assessee is on the ground of non-consideration of the appeal on merits of the case. Since the very assessment itself is quashed, therefore the Grounds raised by the assessee in the C.O. are hereby devoid of merits and the same is also dismissed. Printed from counselvise.com I.T.(SS)A Nos. 94/Ahd/2025 and ITA No. 1563/Ahd/2025 and C.O. 87/Ahd/2025 A.Y: 2009-10 DCIT Vs. Falguni Suryakant Thakar 15 13. In the combined result, both the appeals filed by the Revenue and Cross Objection filed by the Assessee are hereby dismissed. Order pronounced in the open court on 30-12-2025 Sd/- Sd/- (NARENDRA PRASAD SINHA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 30/12/2025 Rajesh आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "