Rishi Kesh Chopra v. Income Tax Officer Ward 70(1), Delhi & Anr

$~39 & 40 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2949/2024 & CM APPL. 12147/2024 (Stay) RISHI KESH CHOPRA ..... Petitioner Through: Mr. Sumit Lalchandani, Mr. Tarun Chanana & Mr. Salil Kapoor, Advs. versus INCOME TAX OFFICER WARD 70(1), DELHI & ANR. ..... Respondents Through: Mr. Puneet Rai, SSC with Mr. Rishabh Nangia, Mr.Ashvini Kumar & Mr. Nikhil Jain, Advs. + W.P.(C) 2950/2024 & CM APPL. 12152/2024 (Stay) RISHI KESH CHOPRA ..... Petitioner Through: Mr. Sumit Lalchandani, Mr. Tarun Chanana & Mr. Salil Kapoor, Advs. versus % INCOME TAX OFFICER WARD 70(1), DELHI & ANR. ..... Respondents Through: CORAM:HON'BLE MR. JUSTICE YASHWANT VARMAHON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV O R D E R06.05.2024 1. 1.These writ petitions have been preferred against the impugned notices dated 18 November 2022 issued under Section 153C of the Income Tax Act, 1961 [“Act”] for Assessment Year [“AY”] 2011-12 [W.P.(C) 2949/2024] and AY 2010-11 [W.P.(C) 2950/2024] and all consequential proceedings. 2.Bearing in mind the undisputed fact that notices under Section 153C were dated 18 November 2022, it is ex facie evident that the aforenoted AYs’ would fall beyond the maximum window of ten years as prescribed. 3.The issue in any case stands answered and covered in favour of the writ petitioner in light of the judgment rendered in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd [2024 SCC OnLine Del 2439]. The relevant paragraphs of the aforesaid decision read as under:- “D. The First Proviso to Section 153C introduces a legal fiction onthe basis of which the commencement date for computation of thesix year or the ten year block is deemed to be the date of receipt ofbooks of accounts by the jurisdictional AO. The identification of thestarting block for the purposes of computation of the six and the tenyear period is governed by the First Proviso to Section 153C, whichsignificantly shifts the reference point spoken of in Section 153A(1),while defining the point from which the period of the “relevantassessment year” is to be calculated, to the date of receipt of thebooks of accounts, documents or assets seized by the jurisdictionalAO of the non-searched person. The shift of the relevant date in thecase of a non-searched person being regulated by the First Proviso ofSection 153C(1) is an issue which is no longer res integra and standsauthoritatively settled by virtue of the decisions of this Court in SSPAviation and RRJ Securities as well as the decision of the SupremeCourt 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 firstlyidentify the FY in which the search was undertaken and whichwould lead to the ascertainment of the AY relevant to the previousyear of search. The block of six AYs’ would consequently be thosewhich immediately precede the AY relevant to the year of search. Inthe case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of searchwould stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to thejurisdictional AO as opposed to the year of search which constitutesthe basis for an assessment under Section 153A. E. The reckoning of the six AYs’ would require one to firstlyidentify the FY in which the search was undertaken and whichwould lead to the ascertainment of the AY relevant to the previousyear of search. The block of six AYs’ would consequently be thosewhich immediately precede the AY relevant to the year of search. Inthe case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of searchwould stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to thejurisdictional AO as opposed to the year of search which constitutesthe basis for an assessment under Section 153A. F. While the identification and computation of the six AYs’ hingesupon the phrase “immediately preceding the assessment yearrelevant to the previous year” of search, the ten year period wouldhave to be reckoned from the 31st day of March of the AY relevantto the year of search. This, since undisputedly, Explanation 1 ofSection 153A requires us to reckon it “from the end of theassessment year”. This distinction would have to necessarily beacknowledged in light of the statute having consciously adopted thephraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of theassessment year” while speaking of the ten year block.” 4. Accordingly, and for reasons assigned in our decision in Ojjus Medicare, we allow the instant writ petitions and quash theimpugned notices dated 18 November 2022 issued under Section 153C of the Act and all consequential proceedings arising therefrom. YASHWANT VARMA, J. PURUSHAINDRA KUMAR KAURAV, J.MAY 06, 2024/kk