Alok Agarwal And Sons –Huf v. Income Tax Officer Ward 34-1 & Anr

$~64 & 65 IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2655/2024 & CM APPL. 10891/2024 (stay) ALOK AGARWAL AND SONS –HUF ..... Petitioner Through:Mr. Sumit Lalchandani, Mr. Tarun Chanana, Ms. Ananya Kapoor and Mr. Shivam Yadav, Advs.Through:Mr. Sumit Lalchandani, Mr. Tarun Chanana, Ms. Ananya Kapoor and Mr. Shivam Yadav, Advs. Versus INCOME TAX OFFICER WARD 34-1 & ANR. ..... Respondents Through: Mr. Vipul Agrawal, Sr.SC with Mr. Gibran Naushad and Mr. Sakashi Shairwal, Jr.SCs. 65 + W.P.(C) 2656/2024 & CM APPL. 10893/2024 (stay) ALOK AGARWAL AND SONS –HUF ..... Petitioner Through: Mr. Sumit Lalchandani, Mr. Tarun Chanana, Ms. Ananya Kapoor and Mr. Shivam Yadav, Advs. Versus INCOME TAX OFFICER WARD 34-1 & ANR. ..... Respondents Through: Mr. Vipul Agrawal, Sr.SC with Mr. Gibran Naushad and Mr. Sakashi Shairwal, Jr.SCs. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMAHON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV O R D E R % 05.04.2024 1.Bearing in mind the undisputed fact that the impugned notices under Section 153C of the Income Tax Act, 1961 [“Act”] are dated 28 June 2022 and relate to Assessment Years’ [“AYs’”] 2012-13 [W.P.(C) 2655/2024] and AY 2013-14 [W.P.(C) 2656/2024], it is ex facie evident that it would fall beyond the maximum window of ten years as prescribed. 2.The issue in any case stands answered and covered in favour of the writ petitioner in light of the judgment rendered in W.P.(C) 3907/2023 - Vineeta Gupta v. Income Tax Officer Ward 46(4) Delhi and Anr [2024:DHC:2629-DB]. The relevant paragraphs of the aforesaid decision read as under:- " 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 constitutes the basis for an assessment under Section 153A. 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 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 Vineeta Gupta, we allow the instant writ petitions and quash the impugned notices dated 28 June 2022 issued under Section 153C of the Act, insofar as it relates to AYs’ 2012-13 and 2013-14. YASHWANT VARMA, J. PURUSHAINDRA KUMAR KAURAV, J. APRIL 5, 2024/p