DEPUTY COMMISSIONER OF INCOME TAX, DELHI V. PIONEER DEALTRADE PVT. LTD., DELHI

ITA 4519/DEL/2024

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The case involves the Deputy Commissioner of Income Tax, Central Circle-6, as the appellant, contesting the decision of the Commissioner of Income Tax (Appeals)-24, New Delhi, which quashed the assessment order against Pioneer Dealtrade Pvt. Ltd. for the Assessment Year 2012-13. The primary legal issue was the interpretation of the block period for assessments under section 153C of the Income Tax Act, 1961, particularly whether it should be calculated from the date of receipt of seized documents by the jurisdictional AO of the non-searched person or from the date of initiation of the search. The CIT(A) had ruled in favor of the respondent, leading to the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314654 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. M/s RRJ Securities Pvt. Ltd, CIT vs. Jasjit Singh, Plaza Fincap (P) Ltd. vs. DCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAYANK PATAWARI
• Assessee Lawyers: HARPREET KAUR HANSRA
• Keywords: Search and seizure
• Section: 143(3); 132; 153A; 68

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No. 4519/Del/2024, A.Y. 2012-13 Dy. Commissioner of Income Tax, Central Circle-6, 344, ARA Center, Jhandwalan, New Delhi Vs. Pioneer Deal trade Pvt. Ltd. 9 LSC, Masjid Moth, Greater Kailash Part-II, New Delhi PAN: AAECP9746R (Appellant) (Respondent) Appellant by Shri Mayank Patawari, Advocate Shri Akash Ojha, Advocate Respondent by Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 20/02/2025 Date of Pronouncement 09/05/2025 ORDER PER AVDHESH KUMAR MISHRA, AM This appeal of the Revenue for the Assessment Year (hereinafter, the ‘AY’) 2012-13 is directed against the order dated 31.07.2024 passed by the Commissioner of Income Tax (Appeals)-24, New Delhi [hereinafter, the ‘CIT(A)’]. 2. The revenue has questioned the Ld. CIT(A)’s finding by raising five grounds as under: - “1. Whether on the facts and circumstances of the case and in law, Id. CIT(A) was justified in holding that block periods for assessment u/s 153C of the Income-tax Act, 1961, have to be calculated from the ITA No.4519/Del/2024 Pioneer Dealtrade Pvt. Ltd. 2 date of receipt of the books of accounts, documents or assets seized, by the jurisdictional AO of the non-searched person and not from the date of initiation of search by relying on First Proviso to Section 153C, even when this Proviso specifically deals only with the abatement of proceedings (as referred to second proviso of Section 153A) and does not deal with the calculation of block periods? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in quashing the assessment order u/s 153C on the grounds that the amended provision w.e.f. 01.04.2017 are not relevant in this case when the satisfaction was recorded on 20.09.2018 and by the time the amendment to the section 153C was already into effect (01.04.2017), which clarified that the relevant assessment years have to be calculated according to the date of search. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that block periods for assessment u/s 153C of the Income-tax Act, 1961, have to be calculated from the date of receipt of the books of accounts, documents or assets seized, by the Jurisdictional AO of the non-searched person, even when the position of law is clarified after the amendment introduced by Finance Act, 2017, that the block period of 6AYs and 10AYs as mentioned in Section 153C and Section 153A have same meaning and have to be calculated from the \"assessment year relevant to the previous year in which search is conducted? 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in ignoring that the implementation provisions have to be interpreted in consonance with the charging provision and there cannot be any anomalous situation created by the interpretation of the implementation provision. The provisions u/s 153A and 153C of the Act have to be construed in such a harmonious way that there will not be any different sets of 6 years for reopening of the assessments in case of the person searched and the other person? 5. The appellant craves leave to add, amend, alter or withdraw any or all grounds of appeal at any time before and during the course of hearing.” ITA No.4519/Del/2024 Pioneer Dealtrade Pvt. Ltd. 3 3. The issue in dispute here is purely legal in nature challenging the impugned appellate order quashing the assessment order reads as under: “4. I have considered the material con record including written submission of the AR of the appellant filed in course of appellate proceedings. I have also perused the assessment order u/s 153C r.w.s. 143(3) of the Act passed by the Assessing Officer in the present appeal the appellant has raised following grounds of appeal and additional ground of appeal. 4.1.1 In Additional Ground of appeal, the appellant has contended that the Assessing Officer has erred in law in issuing notice u's 153C of the Act for the year under consideration as it is beyond the block of six years, hence, making such issuance beyond jurisdiction. 4.1.2 The brief facts of the case are that search and seizure operation u/s 132 of the IT Act, was carried out on Ashish Begwani Group on 22.10.2016. During the course of search various documents related to 'accommodation entry' were seized. From the assessment order, it was observed that the satisfaction in terms of section 153C was recorded on 20.09.2018 by the Assessing Officer of searched party and on 20.09.2018 by the Assessing Officer of appellant and notice w/s 153C was issued on 24.09.2018. However, the Assessing Officer observed \"Further, consequent to search action u/s 132 in Ashish Begwani Group on 22.10.2016, as per provisions of section 133C of the Act. satisfaction by the AO of the searched person (Ashish Begwani) was recorded on 20.09.2018 and seized material was handed over to the AO of M/s Pioneer Dealtrade Private Limited, the assessee After perusing the information available on record and documents/ Information received from the AO of searched person, satisfaction was recorded on 20. 09. 2018 on part of the AO of M's Pioneer Deal Trade Private Limited (the assessee). Thereafter, notice under section 153C of the Act, was issued on 24.09.2018 and was duly served.\" 4.1.3 The Appellant submitted that the period of six assessment years as per the decision of Jurisdictional High Court of Delhi mean six years prior to the AY in which the satisfaction note u/s 153C was ITA No.4519/Del/2024 Pioneer Dealtrade Pvt. Ltd. 4 recorded by the concerned Assessing Officer. The satisfaction note in the instant case was recorded by the Assessing Officer on 20.09.2018 i.e. in the F.Y. 2018-19 relevant to AY 2019-20 therefore six years period as referred in See 153C(1) should have been from AY 2013-14 to 2018-19. The appellant has relied on the judgment of Hon'ble High Court of Delhi in the case of CIT vs. M/s RRJ Securities Pvt. Ltd and judgment of Hon'ble Supreme Court in the case of GIT VS Jasjit Singh. 4.1.4 The submission of the appellant and the judicial position on the facts of the case have been carefully perused. The appellant submitted that the position of law has been very clearly laid down by Hon'ble High Court of Delhi in the case of CIT vs. RRJ Securities and Hon'ble Supreme Court in the case of CIT vs Jasjit Singh. In these cases, Hon'ble Courts has held that the six-year period as referred in section 153C(1) shall be computed with reference to the date of recording of the satisfaction as date of search which is 20.09.2018 i.e., AY 2019-20. The relevant extract of the decision of the Hon'ble Supreme Court and the Jurisdictional High Court are reproduced below for ready reference: ………………………………………………………………………………………. 4.1.5 In this case the search was carried out on 22.10.2016 which is prior to the amendment of section 153C(1) which is w.e.f. 01.04.2017. Relying on the judgment of Hon'ble Delhi High Court in the case of RRJ Securities (Supra) and Hon'ble Supreme Court in the case of CIT vs. Jasjit Singh, I hold that A.Y. 2012-13 is not covered within six block AYs in section 153C of the Act and the Additional Ground of appeal is allowed. Accordingly, the addition made by the AO is deleted.” 4. The relevant facts giving rise to this appeal are that the search and seizure operations under section 132 of the Income Tax Act, 1961 (hereinafter ‘The Act’) were carried out in the Ashish Begwani Group of cases on 22.10.2016. The Assessing Officer (hereinafter, the ‘AO’) having jurisdiction over the searched person passed on the said information to ITA No.4519/Del/2024 Pioneer Dealtrade Pvt. Ltd. 5 the AO of the respondent assessee in September, 2018. Thereafter, the AO of the respondent assessee initiated proceedings under section 153C of the Act on 20.09.2018. The consequential assessment was completed at income of Rs.2,47,60,320/- as against the returned income of Rs.60,320/-. The AO made addition of Rs.2,47,00,000/- under section 68 of the Act. Aggrieved, the assessee filed appeal before the CIT(A), who allowed the appeal as above. Now, the Revenue is before us in this appeal. 5. The Ld. Counsel for the assessee has submitted that the issue involved herein is squarely covered by the decisions of the Hon’ble Supreme Court in the case of Jagjit Singh, 155 taxmann.com 155 and the Hon'ble Delhi High Court in the case of Ojjus Medicate Pvt. Ltd. 161 taxmann.com 160 (Delhi) as the present case does not fall within 06 assessment years as the period of 06 years has to be reckoned from 31 day of March of the AY relevant to the year of search. In the instant case, year of search is Financial Year 2018-19 relevant to the AY 2019-20. Therefore, 06 years have to be reckoned from 31 March 2020. Going backwards 06 years would end with assessment year 2013-14. Therefore, the assessment made under section 153C of the Act in the case of assessee for the impugned AY is barred by limitation. 6. The Ld. Sr. DR argued the case vehemently and defended the assessment order. ITA No.4519/Del/2024 Pioneer Dealtrade Pvt. Ltd. 6 7. We have heard both parties at length and have perused the material available on the record. We are of the considered view that this case is squarely covered by the decision of the Co-ordinate Bench of the Tribunal in ITA No. 36/Del/2024, Plaza Fincap (P) Ltd. vs. DCIT order dated 07.05.2025. We therefore, following the reasoning given by the Co- ordinate bench of the Tribunal in the decision of the case of Plaza Fincap (P) Ltd. (supra), hold that there is no infirmity in the finding of the Ld. CIT(A). Thus, this appeal is decided against the Revenue. 8. In the result, the appeal of the Revenue is dismissed. Order pronounced in open Court on 09 May, 2025. Sd/- Sd/- (VIKAS AWASTHY) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 09/05/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "