Davander Rawat v. Assistant Commissioner of Income Tax Central Circle 16, Delhi

1. For the reasons stated in the application, the delay of 56 days in filing the counter affidavit stands condoned. The counter affidavit is taken on the record.

2. The application stands disposed of. W.P.(C) 7391/2025 & CM APPL. 33170/2025 (Stay)

3. With the consent of the learned counsel for the parties, we have heard this petition for disposal.

4. The present petition has been filed by the petitioner, inter alia, with the following prayers:-

5. This petition concerns the Assessment Year (AY) 2014-15. The submission of the learned counsel for the petitioner is that the impugned notice 26.03.2025 under Section 148 of the Income Tax Act, 1961 (the Act) is beyond the period of limitation as prescribed in proviso to Section 149(1) of the Act. According to him, applying the pre-amended provisions, considering that the impugned proceedings were initiated pursuant to search under Section 132, the limitation provisions contained in erstwhile Section 153A shall be applicable. In terms of the erstwhile provisions of Section 153A read with Explanation-I to fourth proviso thereof, the impugned assessment falling beyond 10th assessment years i.e., AY 2024-25 in which search took place, that is 15.02.2024, the proceedings for AY 2014-15, are barred by limitation.

6. The learned counsel for the petitioner has relied upon various judgments, for which he has filed compilation, including the decision of this Court in Principal Commissioner of Income Tax-Central-1 v. Ojjus Medicare Pvt. Ltd.: Neutral Citation No.2024:DHC:2629-DB, which had explained the block period of ten years as required to be computed from the end of the assessment year relevant to the Financial Year in which the Assessing Officer (AO) of the searched person has recorded his satisfaction and handed over the material and books of account to the AO of the assessee.

7. On the other hand it is submitted by the learned counsel for the Revenue that provisions of Section 147 to 151 as they stood before the commencement of the Finance Act 2024 are applicable in this case. Under the pre-amended law Notice could be issued to the non-searched person for a period upto ten years from the end of relevant assessment year in which search was conducted as per Section 153C read with Section 153A of the Act. In the present case AY 2014-15 would be covered within the period of ten years and hence action is justifiable. He states during the course of the search, certain incriminating material was found, which was received by the AO exercising jurisdiction in the case of the petitioner.

8. Thus, an issue has arisen, as to how the block period of ten years, is required to be computed. As per the chart filed by the learned counsel for the petitioner, the following position is depicted: Computation of the ten-year block period as provided under Section 153A of the Act – date of Search 15.02.2024 No. of years AY 2024-25 [Assessment year relevant to the 1 year of search] AY 2023-24 2 AY 2022-23 3 AY 2021-22 4 AY 2020-21 5 AY 2019-20 6 AY 2018-19 7 AY 2017-18 8 AY 2016-17 9 AY 2015-16 10 AY 2014-15 Barred by Limitation

9. The learned counsel for the Revenue does not dispute the tabular chart/statement, as reproduced above. He however, submits that the Revenue has not accepted the manner of calculating the block of ten years as has been explained in Principal Commissioner of Income Tax-Central-1 v. Ojjus Medicare Pvt. Ltd (supra) and has preferred an Special Leave Petition against the said decision. We may note in Principal Commissioner of Income Tax, Central-I v. Ojjus Medicare Pvt. Ltd., (supra), this Court has held as under:- “....89. That takes us then to the issue of identifying the “relevant assessment year” for the purposes of computing the ten year block. Explanation 1 to Section 153A specifies the manner in which the entire ten AY period is to be computed. While the computation of six AYs’ follows the position as enunciated and identified above, Explanation 1 prescribes that the ten AYs’ would have to be computed from the end of the AY relevant to the FY in which the search was conducted or requisition made. The ten AY period consequently is to be reckoned from the end of the AY pertaining to the previous year in which the search was conducted as distinct from the preceding year which is spoken of in the case of the six relevant AYs’......”

10. In view of the above, it is apparent that the AO cannot proceed to take any steps for assessment in relation to AY 2014-15 as the same is barred by limitation. The present petition is allowed and the impugned notice dated 26.03.2025 issued under Section 148 of the Act, is set aside. The pending application is also disposed of

V. KAMESWAR RAO, J

VINOD KUMAR, J JULY 29, 2025 M