Vikas Associates Pvt. Ltd v. The Income Tax Officer, Ward-26(3), Delhi & Anr

$~38 IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3485/2024 & CM APPL. 14201/2024 (Interim Relief), CM APPL. 23515/2024 (Amended Writ Petition) CM APPL. 29962/2024 (Stay) CM APPL. 23515/2024 (Amended Writ Petition) CM APPL. 29962/2024 (Stay) VIKAS ASSOCIATES PVT. LTD. .....Petitioner Through: Dr. Manas Shankar Ray, Mr. Shouryendu Ray, Ms. Neelu Mohan & Ms. Anshul Gondale, Advocates. Shouryendu Ray, Ms. Neelu Mohan & Ms. Anshul Gondale, Advocates. versus THE INCOME TAX OFFICER, WARD-26(3), DELHI & ANR. .....Respondents Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh & Mr. Yojit Pareek, JSCs % CORAM:HON'BLE MR. JUSTICE YASHWANT VARMAHON'BLE MR. JUSTICE RAVINDER DUDEJA O R D E R08.07.2024 1.This writ petition has been preferred against the impugned notice dated 29 July 2022 issued under Section 153C of the Income Tax Act, 1961 [“Act”] for Assessment Year [“AY”] 2013-14 and all consequential proceedings. 2.Bearing in mind the undisputed fact that notice under Section 153C was dated 29 July 2022, it is ex facie evident that the aforenoted AY 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 legalfiction on the basis of which the commencement date forcomputation of the six year or the ten year block is deemedto be the date of receipt of books of accounts by thejurisdictional AO. The identification of the starting blockfor the purposes of computation of the six and the ten yearperiod is governed by the First Proviso to Section 153C,which significantly shifts the reference point spoken of inSection 153A(1), while defining the point from which theperiod of the “relevant assessment year” is to becalculated, to the date of receipt of the books of accounts,documents or assets seized by the jurisdictional AO of thenon-searched person. The shift of the relevant date in thecase of a non-searched person being regulated by the FirstProviso of Section 153C(1) is an issue which is no longerres integra and stands authoritatively settled by virtue ofthe decisions of this Court in SSP Aviation and RRJSecurities as well as the decision of the Supreme Court inJasjit 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 tofirstly identify the FY in which the search was undertakenand which would lead to the ascertainment of the AYrelevant to the previous year of search. The block of sixAYs’ would consequently be those which immediatelyprecede the AY relevant to the year of search. In the caseof a search assessment undertaken in terms of Section153C, the solitary distinction would be that the previousyear of search would stand substituted by the date or theyear in which the books of accounts or documents andassets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basisfor an assessment under Section 153A. E. The reckoning of the six AYs’ would require one tofirstly identify the FY in which the search was undertakenand which would lead to the ascertainment of the AYrelevant to the previous year of search. The block of sixAYs’ would consequently be those which immediatelyprecede the AY relevant to the year of search. In the caseof a search assessment undertaken in terms of Section153C, the solitary distinction would be that the previousyear of search would stand substituted by the date or theyear in which the books of accounts or documents andassets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basisfor an assessment under Section 153A. F. While the identification and computation of the sixAYs’ hinges upon the phrase “immediately preceding theassessment year relevant to the previous year” of search,the ten year period would have to be reckoned from the31st day of March of the AY relevant to the year of search.This, since undisputedly, Explanation 1 of Section 153Arequires us to reckon it “from the end of the assessment”year. This distinction would have to necessarily beacknowledged in light of the statute having consciouslyadopted the phraseology “immediately preceding” when itbe in relation to the six year period and employing theexpression “from the end of the assessment year” whilespeaking of the ten year block.” 4.Accordingly, and for reasons assigned in our decision in Ojjus Medicare, we allow the instant writ petition and quash the impugned notice dated 29 July 2022 issued under Section 153C of the Act and all consequential proceedings arising therefrom. YASHWANT VARMA, J. JULY 8, 2024/sk RAVINDER DUDEJA, J.