DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI V. SHREE VARDHMAN DEVELOPERS PRIVATE LIMITED, NEW DELHI

ITA 4009/DEL/2025

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax (DCIT) against Shree Vardhman Developers Pvt Ltd concerning the assessment year 2011-12. The core issue was the determination of the block period for assessment under section 153C of the Income-tax Act, 1961, following a search operation at a third party. The Assessing Officer had initiated proceedings based on materials seized during the search, but the CIT(A) ruled that the assessment year in question was outside the permissible block period, leading to the Revenue's appeal to the Tribunal. The Tribunal, referencing decisions from the Supreme Court and Delhi High Court, affirmed the CIT(A)'s decision, emphasizing that the block period should be calculated from the date the seized materials were received by the Assessing Officer of the non-searched person.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782170 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 19-06-2025
• Other Referred Cases: CIT Vs. Jasjit Singh 458 ITR 437(SC), Ojjus Medicare Pvt Ltd & Others [2024] 161 taxmann.com 160 (Delhi), SSP Aviation Ltd v. Dy.CIT (2012) 346 ITR 177 ( Delhi)( HC), CIT v. RRJ Securities Ltd 2015 SCC Online Del 13085, CIT v Jasjit Singh 2023 SCC Online SC1265, ITO v. Vikram Sujitkumar Bhatia 2023 SCC Online SC 370
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH KUMAR
• Assessee Lawyers: VED JAIN

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘G’ BENCH, NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 4009/DEL/2025 [A.Y 2011-12] The Dy. C.I.T Vs. Shree Vardhman Developers Pvt New Delhi 301-311, Indraprakash Building 21, Barakhamba Road, Connaught Place, New Delhi PAN: AACCV 1495 M (Appellant) (Respondent) Assessee By : Shri Ved Jain, Adv Shri Pawan Garg, CA Ms. Ishika Dua, CA Department By : Shri Mahesh Kumar, CIT-DR Date of Hearing : 09.10.2025 Date of Pronouncement : 27.10.2025 PER NAVEEN CHANDRA, AM :- This appeal by the assessee is directed against the order of the ld. CIT(A)-23 dated 28.03.2025 pertaining to A.Y 2011-12. Printed from counselvise.com ITA No. 4009/DEL/2025 [A.Y 2011-12] DCIT v. Shree Vardhman Developers Page 2 of 8 2. The challenge in the grounds raised by the Revenue is in respect of the ld. CIT(A)’s action in holding that block periods for assessment u/s 153C of the Act have to be calculated from the date of receipt of the books of account, documents or assets seized by the Assessing Officer of the non-searched person and not from the date of initiation of search by relying upon the first proviso to section 153C of the Income- tax Act, 1961 [the Act, for short]. 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 4. Brief facts of the case are that the Assessing Officer initiated proceedings u/s 153C of the Income-tax Act, 1961 [the Act, for short] on the assessee due to search conducted at third party on 18.10.2019 during the previous year 2019-20. For this purpose, satisfaction note was recorded by the Assessing Officer of the searched party on 15.09.2022 and thereafter the Assessing Officer issued notice u/s 153C of the Act to the assessee on 18.09.2022. Thereafter, the Assessing Officer made additions to the tune of Rs. 7,58,01,000/-. 5. Aggrieved, the assessee went in appeal before the ld. CIT(A) who allowed the appeal of the assessee. Now the Revenue is aggrieved against the order of the ld. CIT(A) and has come in appeal before us. Printed from counselvise.com ITA No. 4009/DEL/2025 [A.Y 2011-12] DCIT v. Shree Vardhman Developers Page 3 of 8 6. Before us, the ld. counsel for the assessee vehemently stated that as the satisfaction was recorded on 15.09.2022, the assessment year relevant to the previous year in which search is conducted or requisition is made, as per the proviso of section 153C, becomes AY 2023-24. The six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, begins from AY 2023-24. 7. The ld AR vehemently argued that the impugned A.Y 2011-12, is therefore, out of the block of six assessment years for which assessment could be made. It was submitted that as the satisfaction u/s 153C of the Act was recorded on 15.09.2022, the last of the ten A.Ys for which the Assessing Officer can assume jurisdiction is A.Y. 2014-15. The impugned A.Y is 2011-12 and is therefore, out of block of six assessment years and therefore the Assessing Officer cannot assume jurisdiction for making assessment. The ld. counsel for the assessee also strongly relied upon the latest decision of the Hon'ble Delhi High Court in the case of Ojjus Medicare Pvt Ltd & Others [2024] 161 taxmann.com 160 (Delhi) order dated 03.04.2024. 9. We have heard the rival submissions and have perused the relevant material on record. We find that this issue of the date of search for persons covered under section 153C is no longer res-integra. It has now Printed from counselvise.com ITA No. 4009/DEL/2025 [A.Y 2011-12] DCIT v. Shree Vardhman Developers Page 4 of 8 been well settled by the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437(SC). The relevant law laid down by the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 458 ITR 437(SC) are read as under: “It is evident on a plain interpretation of Section 153C (1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153C was enacted. The revenue argued that the proviso [to Section 153(c)(l)] is confined in its application to the question of abatement. It is quite plausible that the AO seized of the materials….would take his own time to forward the papers and materials belonging to the third party, to the concerned AO. In that event if the date would virtually ‘relate back’ as is sought to be contended by the revenue, (to the date of 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 disproportionate.” 10. The Hon'ble Delhi High Court has further elaborated the legal dictum in the case of Ojjus Medicare Pvt Ltd [2024] [supra] wherein it has held as under: Printed from counselvise.com ITA No. 4009/DEL/2025 [A.Y 2011-12] DCIT v. Shree Vardhman Developers Page 5 of 8 “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 Ltd v. Dy.CIT (2012) 346 ITR 177 ( Delhi)( HC) and CIT v. RRJ Securities Ltd 2015 SCC Online Del 13085 as well as the decision of the Supreme Court in CIT v Jasjit Singh 2023 SCC Online SC1265. The aforesaid legal position also stood reiterated by the Supreme Court in ITO v. Vikram Sujitkumar Bhatia 2023 SCC Online SC 370. The submission of the revenue, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. 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 Printed from counselvise.com ITA No. 4009/DEL/2025 [A.Y 2011-12] DCIT v. Shree Vardhman Developers Page 6 of 8 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.” 11. The law as interpreted by the Hon'ble Supreme Court and the Delhi High Court as above, declares that as per provisions of section 153C of the Act, the commencement date for computation of the six/ten assessment years is deemed to be the date of receipt of books of account/materials/asset, belonging/pertaining to non-searched person, by the jurisdictional Assessing Officer of the non-searched person. In other words, date of recording of the satisfaction u/s 153C in the case of the searched person qua the non-searched person becomes date of search in the case of non-searched person [the assessee in the present case]. 12. In the instant case of the assessee (non-searched person), the deemed date of search would become the date of recording of satisfaction i.e., 15.09.2022. The assessment year relevant to the previous year in which the search is deemed to have been executed Printed from counselvise.com ITA No. 4009/DEL/2025 [A.Y 2011-12] DCIT v. Shree Vardhman Developers Page 7 of 8 would be AY 2023-24. In light of the decision of the Hon'ble Supreme Court and Delhi High Court [supra], the impugned A.Y 2011-12 would, therefore, fall beyond the period of six/ten assessment years as reckoned with reference to the date of recording of satisfaction by the assessing officer of the searched person. We therefore, have no hesitation in upholding the decision of the CIT(A) and quashing the impugned assessment order having been made without legal and valid assumption of jurisdiction. 13. Since we have quashed the assessment order, we do not find it necessary to dwell into the merits of the case. 14. In the result, appeal of Revenue in ITA No. 4009/DEL/2025 is dismissed. Order pronounced in open court on 27.10.2025. Sd/- Sd/- [ANUBHAV SHARMA] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27th OCTOBER, 2025. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Printed from counselvise.com ITA No. 4009/DEL/2025 [A.Y 2011-12] DCIT v. Shree Vardhman Developers Page 8 of 8 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft order is placed before the Dictating Member 3. Date on which the typed draft order is placed before the other Member [in case of DB] 4. Date on which the approved draft order comes to the Sr. P.S./P.S. 5. Date on which the fair Order is placed before the Dictating Member for sign 6. Date on which the fair order is placed before the other Member for sign [in case of DB] 7. Date on which the Order comes back to the Sr. P.S./P.S for uploading on ITAT website 8. Date of uploading, inf not, reason for not uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which the file goes for Xerox 11. Date on which the file goes for endorsement 12. The date on which the file goes to the Superintendent for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to the dispatch section for dispatch the Tribunal order 15. Date of Dispatch of the Order 16. Date on which the file goes to the Record Room after dispatch the order Printed from counselvise.com "