OM TRANS LOGISTICS LTD and VIKAS ASSOCIATES PVT. LTD V. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1) DELHI and THE INCOME TAX OFFICER, WARD-26(3)

W.P.(C)/2083/2024

AI Insights

The case involves two writ petitions filed by OM Trans Logistics Ltd and Vikas Associates Pvt. Ltd against the Assistant Commissioner of Income Tax and the Income Tax Officer, respectively. The petitions challenged the notices issued under Section 153C of the Income Tax Act, 1961, for the Assessment Year 2011-2012. The core issue was the correct interpretation of the 'relevant assessment year' as defined under Section 153C, particularly concerning the timing of the receipt of seized documents by the jurisdictional AO. The petitioners argued that the initiation of action under Section 153C was not sustainable as it did not conform to the legal precedents which dictate the computation of the assessment years should start from the date of receipt of the seized documents, not the date of search.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 818833 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 30-04-2024
• Assessment Year: misc
• Other Referred Cases: Pr. Commissioner of Income Tax-Central-1 v. 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: RUCHIR BHATIA; ANANT MANN
• Assessee Lawyers: NEETU MOHAN; MANAS RAY; SHOURYENDU RAY; ANSHUL GONDALE; VATSALA PODDAR
• Keywords: Assessment Year; Books of Accounts; Income Tax; Jurisdictional AO; Legal fiction; Section 153C
• Section: 153C

Judgement Text

"$~36 & 37 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2083/2024 & CM APPLs. 8641/2024 OM TRANS LOGISTICS LTD ..... Petitioner Through: Ms.Neetu Mohan, Dr.Manas Shankar Ray, Mr.Shouryendu Ray, Mr.Anshul Gondale and Ms.Vatsala Poddar, Advs. versus THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1) DELHI & ANR. ..... Respondents Through: Mr.Ruchir Bhatia, Sr.SC with Mr.Anant Mann, Jr.SC. 37 + W.P.(C) 2088/2024 & CM APPL. 8676/2024 VIKAS ASSOCIATES PVT. LTD ..... Petitioner Through: Ms.Neetu Mohan, Dr.Manas Shankar Ray, Mr.Shouryendu Ray, Mr.Anshul Gondale and Ms.Vatsala Poddar, Advs. versus THE INCOME TAX OFFICER, WARD-26(3) & ANR. ..... Respondents Through: Mr.Ruchir Bhatia, Sr.SC with Mr.Anant Mann, Jr.SC. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV O R D E R % 30.04.2024 1. The writ petition assails the invocation of action under Section 153C pertaining to Assessment Year [\"A.Y.\"] 2011-2012. It is the submission of the petitioner that initiation of action would not sustain 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 03/05/2024 at 13:03:54 since the concerned AYs’ would fall beyond the window of relevant assessment year as defined. 2. Learned counsels for parties are at ad idem that the challenge raised here stands concluded and answered in favour of the writ petitioners in light of the judgment rendered in Pr. Commissioner of Income Tax-Central-1 v. Ojjus Medicare Pvt. Ltd. [2024 SCC OnLine Del 2439]. The relevant paragraphs of the aforesaid decision are reproduced hereunder:- \"K. SUMMARY OF CONCLUSIONS 119. We thus record our conclusions as follows: \" 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 nonsearched 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 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 03/05/2024 at 13:03:54 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.\" 3. Accordingly, and for reasons assigned in our decision in Ojjus Medicare, we allow the instant writ petitions and quash the impugned notices dated 31 March 2023 and 29 July 2022 issued under Section 153C of the Income Tax Act, 1961 insofar as they relate to A.Y. 2011- 2012. YASHWANT VARMA, J. PURUSHAINDRA KUMAR KAURAV, J. APRIL 30, 2024/MJ 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 03/05/2024 at 13:03:54 "