+ W.p.(C) 7917/2025 Evergreen Infrasolutions Pvt Ltd v. Assistant Commissioner Of Income Tax Central Circle 7 1 Delhi & Anr

$~64 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 7917/2025EVERGREEN INFRASOLUTIONS PVT LTD.....PetitionerEVERGREEN INFRASOLUTIONS PVT LTD.....Petitioner Through:Mr Aditya Kumar Garg, Advocate. versus ASSISTANT COMMISSIONER OF INCOMETAX CENTRAL CIRCLE 7 1 DELHI & ANR.TAX CENTRAL CIRCLE 7 1 DELHI & ANR. .....Respondents Through:Mr Sanjay Kumar, SSC with MsMonica Benjamin, Advocate.Monica Benjamin, Advocate. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R D E R%29.05.2025 CM APPL. 34876/2025 1.Exemption is allowed, subject to all just exceptions. 2.The application stands disposed of. W.P.(C) 7917/2025 and CM APPL. 34877/2025 3.Issue notice. 4.The learned counsel appearing for the Revenue accepts notice. 5.The petitioner [Assessee] has filed the present petition, inter alia,impugning a notice dated 31.08.2024 [impugned notice] issued underSection 148 of the Income Tax Act, 1961 [the Act] in respect of theAssessment year 2014-15.impugning a notice dated 31.08.2024 [impugned notice] issued underSection 148 of the Income Tax Act, 1961 [the Act] in respect of theAssessment year 2014-15. 6.The Assessee is a private limited company and is engaged in thebusiness of construction and other related activities. The Assessee had filedits return of income on 21.10.2014 for AY 2014-15, declaring a total incomeof Rs.1,32,26,910/-. 7.The return was picked up for scrutiny and the assessment proceedingsculminated in an assessment order dated 29.12.2016, whereby the Assessing Officer assessed the petitioner’s income at ₹1,81,20,540/-. 8.As per the information received from the insight portal, a search underSection 132 of the Act was conducted in the premises of Kala Rathi, RSWSteel Limited on 10.10.2021. During the search proceedings, a pen drivewas seized which contained “Tally Software” data, which included ledgeraccounts. During the search, a statement of Mr. Rajesh Rathi was recorded.Apparently, he accepted that the ledgers were of beneficiaries who hadremitted money through banking channels and recovered cash in lieu of theamounts remitted. The transactions between Rajesh Rathi and the Assesseewere to the tune of ₹5,02,93,683/-. Allegedly, these were fictitious purchases. It is alleged that the said amount had escaped assessment for AY2014-15. 9.A notice dated 20.08.2024 was issued under Section 148A(b) to theAssessee to furnish relevant information, documents and evidence by27.08.2024. Since, no response was received from the Assessee to the saidnotice, the AO proceeded to pass an order under Section 148A(d) deemingthe case fit for issuance of notice under Section 148 of the Act. 10.The learned counsel for the Assessee submits that in the present case,the satisfaction note of the Assessing Officer exercising jurisdiction inrespect of the Assessee was recorded on 27.08.2024 for AY 2014-15.Therefore, the Petitioner submits that the impugned order and the impugnednotices issued under Section 148A/148 for the AY 2014-15 have been issuedbeyond the block period of ten assessment years as set out under Section153C read with Section 153A of the Act. 11.Therefore, it is contended on behalf of the Assessee that the impugnednotices and the impugned order are barred by limitation. 12.Since the satisfaction note was recorded during Financial Year 2024-25, which is relevant to the AY 2025-26, the period of ten years isrequired to be considered from the end of the AY 2025-26. The issueregarding the calculation of the block of ten years is covered by the decisionof a Coordinate bench of this Court in Principal Commissioner of IncomeTax-Central-1 v. Ojjus Medicare Pvt. Ltd. : 2024 SCC OnLine Del 2439.The relevant extracts of the said judgment is set out below: 11.Therefore, it is contended on behalf of the Assessee that the impugnednotices and the impugned order are barred by limitation. 12.Since the satisfaction note was recorded during Financial Year 2024-25, which is relevant to the AY 2025-26, the period of ten years isrequired to be considered from the end of the AY 2025-26. The issueregarding the calculation of the block of ten years is covered by the decisionof a Coordinate bench of this Court in Principal Commissioner of IncomeTax-Central-1 v. Ojjus Medicare Pvt. Ltd. : 2024 SCC OnLine Del 2439.The relevant extracts of the said judgment is set out below: “86. In the present batch, List I pertains to writ petitions which haveSatisfaction Notes recorded or Section 153C notices issued betweenthe period 01 April 2021 to 31 March 2022. Undisputedly, the FirstProvisotoSection153C,andwhichhasbeenconsistentlyrecognized to also embody the commencement point for reckoningthe six or the ten AYs’, shifts the relevant date from the date ofinitiation of search or a requisition made to the date of receipt ofbooksofaccountordocumentsandassetsseizedbythejurisdictional AO of the non-searched person. Consequently, theblock of six or ten AYs’ would have to be reckoned bearing theaforesaid date in mind. Although in the present batch of writpetitions, the date of actual handing over has not been explicitlymentioned in a majority of the writ petitions, learned counsels forrespective sides had addressed submissions based on the assumptionthat it would be the date of issuance of the Satisfaction Note by theAO of the non-searched person and in the case of nonavailability ofsuch a note, the date of issuance of the Section 153C notices whichwould be pertinent for the purposes of the First Proviso to Section153C. 87. Assuming, therefore, that the handover of material gathered inthe course of the search and pertaining to the non-searched personoccurred between 01 April 2021 to 31 March 2022, the same wouldessentially constitute FY 2021-22 as being the previous year ofsearch for the purposes of the non-searched entity. As a necessarycorollary, the relevant AY would become AY 2022-23. AY 2022-23would thus constitute the starting point for the purposes ofidentifying the six years which are spoken of in Section 153C. Thesix AYs’ are envisaged to be those which immediately precede theAY so identified with reference to the previous year of search. Itwould thus lead us to conclude that it would be the six AYs’ immediately preceding AY 2022-23 which could have formed thebasis for initiation of action under Section 153C. Consequently, andreckoned backward, the six relevant AYs’ would be: – Consequently, AY 2021-22 would become the first of the sixpreceding AYs’ and would as per the table set out hereinaboveterminate at AY 2016-17. 88. Section 153A replicates the basis on which the six AYs’ are to beidentified and computed with the solitary distinction being that in thecase of the searched person, the six AYs’ are liable to be computedfrom the AY pertaining to the FY in which the search wasconducted. The starting point for the purposes of identifying the sixAYs’ in the case of Section 153A would thus turn upon the year ofsearch as opposed to the handover of material which is spoken of inthe First Proviso to Section 153C. If one were to therefore assumethat a search took place on a person between 01 April 2021 to 31March 2022, the pertinent AY would become AY 2022-23 and thecorresponding six AYs’ would be as follows: - 89. That takes us then to the issue of identifying the “relevant 88. Section 153A replicates the basis on which the six AYs’ are to beidentified and computed with the solitary distinction being that in thecase of the searched person, the six AYs’ are liable to be computedfrom the AY pertaining to the FY in which the search wasconducted. The starting point for the purposes of identifying the sixAYs’ in the case of Section 153A would thus turn upon the year ofsearch as opposed to the handover of material which is spoken of inthe First Proviso to Section 153C. If one were to therefore assumethat a search took place on a person between 01 April 2021 to 31March 2022, the pertinent AY would become AY 2022-23 and thecorresponding six AYs’ would be as follows: - 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 theentire ten AY period is to be computed. While the computation of sixAYs’ follows the position as enunciated and identified above,Explanation 1 prescribes that the ten AYs’ would have to becomputed from the end of the AY relevant to the FY in which thesearch was conducted or requisition made. The ten AY periodconsequently is to be reckoned from the end of the AY pertaining tothe previous year in which the search was conducted as distinct fromthe preceding year which is spoken of in the case of the six relevantAYs’. 90. Viewed in that light, and while keeping the period of 01 April2021 to 31 March 2022 as the constant, the relevant AY would beAY 2022-23. The ten AYs’ would have to be computed from 31March 2023 with the said date indubitably constituting the end of theAY relevant to the previous year of search. Viewed in light of theabove, the block period of 10 AYs’ would be as follows: - 13.The learned counsel for the petitioner has furnished a tabularstatement, which clearly indicates that the AY 2014-15 falls beyond the ten-year block period. The said chart is reproduced as under: RelevantAYfor Computationof 10 years 14.In view of the above decision, it is apparent that the AO cannotproceed to take any steps for assessment in relation to AY 2014-15, as thesame is barred by limitation. 15.The petition is accordingly allowed and the impugned notice issuedunder Section 148 of the Act and the proceedings initiated pursuant theretoare set aside. Pending application also stands disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MAY 29, 2025RK/YBClick here to check corrigendum, if any