Dr. Rajeev Dhavan v. Assistant Commissioner Of Income-Taxcentral Circle 2, Delhi & Ors

$~109 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 12639/2024 and CM APPL. 52481/2024 DR. RAJEEV DHAVAN .....PetitionerThrough:Mr Manuj Sabharwal, Mr Drona Negiand Mr Devvrat Tiwari, Advocates. versus ASSISTANT COMMISSIONER OF INCOME-TAXCENTRAL CIRCLE 2, DELHI & ORS. .....Respondents Through:Mr Sunil Agarwal, senior standingcounsel with Mr Shivansh B. Pandya,Mr Viplav Acharya, Ms Priya Sarkarand Mr Utkarsh Tiwari, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R D E R21.04.2025 % 1.The petitioner has filed the present petition, inter alia, impugning thenotice dated 31.03.2024 issued under Section 148 [the impugned notice] ofthe Income Tax Act, 1961 [the Act] seeking to reopen the assessment inrespect of the Assessment Year 2013-14. 2.The petitioner’s case is that the impugned notice has been issuedbeyond the period of the limitation. 3.In the present case, the petitioner had filed its return of income for theAY 2013-14 on 01.10.2013 declaring the income of ₹9,37,50,220/-. On 26.09.2023, a search was conducted under Section 132 of the Act at thepremises of persons belonging to the Glenview Group, Orillia ResortsGroup, and an individual Sh. Rakesh Kumar Kashyap. During the saidsearch, certain documents had been found and it is alleged that the sameThis 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 30/04/2025 at 16:06:29 contained details of cash payments made by the petitioner to Sh. Kashyap.Based on the said material, the Assessing Officer issued the impugnednotice on 31.03.2024. 4.Although the provisions of Section 153C of the Act are inapplicablein respect of searches conducted after 31.03.2021, it is relevant to considerwhether a notice under Section 153C of the Act could be issued for therelevant AY 2013-14 for the purposes of determining whether a notice underSection 148 of the Act could be issued in view of the proviso to Section149(1) of the Act. 5.Since there is no mandatory requirement for an assessing officer of asearched person to record his satisfaction that the assets or documents foundduring the search belong to a person other than the one searched orcontained information regarding such other person. Thus, for the purposes ofconsidering the limitation under Section 153C of the Act, it is apposite toconsider the date on which the decision is taken by the AO to take steps forinitiating re-assessment proceedings as the relevant date. 6.In Dinesh Jindal v. Assistant Commissioner of Income Tax, CentralCircle 20, Delhi & Ors.: Neutral Citation No.:2024:DHC:4554-DB, thisCourt had considered a similar issue and observed as under: “8. Undisputedly, and in terms of Section 153C(3) ofthe Act, any search if conducted after 01 April 2021,would cease to be regulated by that provision. Sub-section (3), in that sense, embodies a sunset clauseinsofarastheapplicabilityofSection153Cisconcerned. The First Proviso to Section 149(1),however, bids us to go back in a point of time, and toexamine whether a reopening would sustain bearing in 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 30/04/2025 at 16:06:29 mind the timeframes as they stood embodied in Section149(1)(b) or Section 153A and 153C, as the case maybe. The First Proviso essentially requires us toundertake that consideration bearing in mind thetimeframes which stood specified in Sections 149,153Aand153Castheystoodpriortothecommencement of Finance Act, 2021. 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 30/04/2025 at 16:06:29 mind the timeframes as they stood embodied in Section149(1)(b) or Section 153A and 153C, as the case maybe. The First Proviso essentially requires us toundertake that consideration bearing in mind thetimeframes which stood specified in Sections 149,153Aand153Castheystoodpriortothecommencement of Finance Act, 2021. 9. Thus, an action of reassessment which comes to beinitiated in relation to a search undertaken on or after01 April 2021 would have to meet the foundationaltests as specified in the First Proviso to Section 149(1).A reassessment action would thus have to not onlysatisfy the time frames constructed in terms of Section149, but in a relevant case and which is concerned witha search, also those which would be applicable byvirtue of the provisions of Section 153A and 153C. 10.Undisputedly,andifthevalidityofthereassessment were to be tested on the anvil of Section153C, the petitioner would be entitled to succeed forthe following reasons. It is an undisputed fact that theproceedings under Section 148 commenced on thebasis of the impugned notice dated 30 March 2023.This date would be of seminal importance since theperiod of six AYs’ or the “relevant assessment year”would have to be reckoned from the date when actionwas initiated to reopen the assessment pertaining to AY2013-14.” 7.We also consider it apposite to refer to the decision in the case ofPrincipal Commissioner of Income Tax- Central-1 v. Ojjus Medicare Pvt.Ltd.: Neutral Citation No.:2024:DHC:2629-DB, where this Court hadexplained the manner for calculating the block of six years and ten years forthe purpose of computing the limitation for issuance of a notice underSection 153C of the Act read with Section 153A of the Act as under: “D. The First Proviso to Section 153C introduces a 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 30/04/2025 at 16:06:29 legal fiction on the basis of which the commencementdate for computation of the six year or the ten yearblock is deemed to be the date of receipt of books ofaccounts by the jurisdictional AO. The identification ofthe starting block for the purposes of computation ofthe six and the ten year period is governed by the FirstProviso to Section 153C, which significantly shifts thereference point spoken of in Section 153A(1), whiledefining the point from which the period of the“relevant assessment year” is to be calculated, to thedate of receipt of the books of accounts, documents orassets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in thecase of a non-searched person being regulated by theFirst Proviso of Section 153C (1) is an issue which isno longer res integra and stands authoritatively settledby virtue of the decisions of this Court in SSP Aviationand RRJ Securities as well as the decision of theSupreme Court in Jasjit Singh. The aforesaid legalposition also stood reiterated by the Supreme Court inVikram Sujitkumar Bhatia. The submission of therespondents, therefore, that the block periods wouldhave to be reckoned with reference to the date ofsearch can neither be countenanced nor accepted. E. The reckoning of the six AYs’ would require one tofirstly identify the FY in which the search wasundertaken and which would lead to the ascertainmentof the AY relevant to the previous year of search. Theblock of six AYs’ would consequently be those whichimmediately precede the AY relevant to the year ofsearch. In the case of a search assessment undertakenin terms of Section 153C, the solitary distinction wouldbe that the previous year of search would standsubstituted by the date or the year in which the booksof accounts or documents and assets seized are handedover to the jurisdictional AO as opposed to the year ofsearch which constitutes the basis for an assessmentunder Section 153A. 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 30/04/2025 at 16:06:29 F. While the identification and computation of the sixAYs’ hinges upon the phrase “immediately precedingthe assessment year relevant to the previous year” ofsearch, the ten year period would have to be reckonedfrom the 31st day of March of the AY relevant to theyear of search. This, since undisputedly, Explanation 1of Section 153A requires us to reckon it “from the endof the assessment year”. This distinction would have tonecessarily be acknowledged in light of the statutehavingconsciouslyadoptedthephraseology“immediately preceding” when it be in relation to thesix year period and employing the expression “from theend of the assessment year” while speaking of the tenyear block.” 8.Bearing in mind the aforesaid principles, the block of ten assessmentyears is required to be reckoned from the end of the AY 2024-25 being theassessment year relevant to the financial year in which the impugned noticeunder Section 148 was issued. A tabular statement setting out the block often years as set out in the petition is reproduced below: 9.Concededly, the issue involved in the present case is covered by the 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 30/04/2025 at 16:06:29 earlier decisions of this court in Dinesh Jindal v. Assistant Commissionerof Income Tax, Central Circle 20, Delhi & Others: Neutral Citation: 2024:DHC:4554-DB, KAD Housing Private Limited v. Deputy Commissioner ofIncome Tax Central Circle-6, Delhi : Neutral Citation : 2024:DHC:8214-DB and Pankaj Jain v. Assistant Commissioner of Income Tax, CentralCircle 3, Delhi & Anr. : Neutral Citation : 2025:DHC:157-DB. 10.The learned counsel appearing for the Revenue concurs with theaforesaid proposition. 11.In view of the above, the present petition is allowed. The impugnednotice is set aside as being barred by limitation. 12.The petition is disposed of in the aforesaid terms. The pendingapplication also stands disposed of. VIBHU BAKHRU, J APRIL 21, 2025RK TEJAS KARIA, J Click here to check corrigendum, if any 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 30/04/2025 at 16:06:29