2024 (4) TMI 268

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..... ngs, any adverse orders if passed against the petitioner, would not be given effect to until further orders of the Court. Whether the limit of INR 50 lakhs which is spoken of must be satisfied in each of the relevant assessment year or could the prescriptions of clause (a) be said to be satisfied if that monetary precondition is met on a cumulative calculation of the total asset value pertaining to the years opened up for assessment or reassessment as the case may be? - HELD THAT:- Prior to the insertion of Sections 153A, 153B, and 153C in the Chapter pertaining to procedure for assessment, an assessment in respect of search cases was governed and regulated by Chapter XIVB of the Act. The said Chapter comprising of Sections 158B to 158BH set out the procedure for assessment or reassessment proceedings being undertaken as a fallout of a search which may have been conducted. Chapter XIVB spoke of assessments being undertaken for a block period comprising of six AYs preceding the previous year in which the search may have been conducted or a requisition made. In terms of Section 158BA, the total undisclosed income relating to the block period as determined was to be taxed at rates spe .....

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..... e to the searched person requiring it to submit a return of income in respect of each AY falling within the six AYs as well as for the relevant assessment year . As noticed hereinabove, all pending assessments or reassessments pertaining to the period of six AYs or the relevant assessment year would abate in light of the Second Proviso to Section 153A(1). Identifying the point of origin for the purposes of computation of the six AYs and then ten year block and the relevant assessment year as defined by Section 153A - As is manifest from a plain reading of Section 153C, the six AYs are ordained to be those which immediately precede the AY relevant to the previous year in which the search may have been conducted or requisition made. The block of six AYs would thus have to be identified bearing in mind the AY pertaining to the FY in which the search had been conducted or requisition made. The aforesaid AY would thus constitute the anchor point for the purposes of identification of the six AYs . The statute envisages a similar process to be adopted for the purposes of computation of the relevant assessment year and where applicable constructs a block of ten AYs . The significant differ .....

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..... vant assessment year which could have possibly formed the basis for initiation of action under that provision. Similarly, the Section 153C notices impugned by the writ petitioners placed in List II and insofar as they pertain to AYs 2010-11, 2011-12, 2012-13 and 2013-14 and which have been found to fall outside the net of relevant assessment year , being the ten year block, would be liable to be set aside on this score alone. Thresholds as per the fourth proviso of section 153A - The notice u/s 153C would have to clearly reflect due application of mind by the AO in this respect and be prima facie sustainable. The formation of opinion in this respect would have to be based not on mere ipse dixit but reflective of being based on a fair assessment of the quantum of income likely to have escaped assessment as opposed to being speculative and conjectural. In case the AO intends to reopen assessment for the ten year block period, it would have to be shown that the formation of opinion in that respect is referenced to the material obtained in the search and in its possession and the same having the prospect or likelihood of escaped income being pegged at INR 50 lakhs or more. The Fourth P .....

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..... it applying to the relevant assessment year computed in accordance with Explanation 1 placed in Section 153A. We also bear in mind the pertinent observations of the Supreme Court in S.C. Prashar, Income Tax Officer [ 1962 (12) TMI 53 - SUPREME COURT ] when it had observed that finality which may ordinarily come to imbue an order of assessment does not result in the creation of a corresponding vested right in the assessee. In any case and for reasons aforenoted, we are of the firm opinion that the judgements rendered in the context of Sections 145-151 would not constitute a prudent basis to interpret Sections 153A and 153C insofar as the argument of closure as canvassed by the writ petitioners is concerned. We consequently find ourselves unable to hold in favour of the writ petitioners insofar as this aspect is concerned. Order:- A. Prior to the insertion of Sections 153A, 153B and 153C, an assessment in respect of search cases was regulated by Chapter XIVB of the Act, comprising of Sections 158B to 158BI and which embodied the concept of a block assessment. On a search being undertaken in terms of Section 153A, the jurisdictional AO is enabled to initiate an assessment or reassessm .....

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..... koning 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 a .....

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..... nt proceeds on the incorrect premise of the reassessment provisions controlling or cabining the power conferred by Sections 153A and 153C. Acceptance of the aforesaid contention would amount to ignoring the plain and evident intent of the Legislature for Sections 153A and 153C operating above and beyond the reassessment powers. K. The submission of closure and finality also fails to bear in consideration the indubitable fact that a search is an eventuality which is inherently unpredictable, a circumstance which would defy prophecy and it consequently being wholly irrational to read the time frames pertaining to reassessment as regulating or controlling the period within which an assessment predicated on that event may be initiated. It would be wholly illogical to conceive of a connection between the statutory time frames which are otherwise embodied in the Act and search assessments. In fact the acceptance of this submission would amount to virtually erasing the non obstante clause contained in Sections 153A and 153C. L. The legislative intent of those provisions having retroactive application is clearly evidenced from the statue declaring that they would apply to all searches cond .....

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..... APPL. 24242/2023 (Stay), W.P.(C) 6260/2023 CM APPL. 24598/2023 (Stay), W.P.(C) 6284/2023 CM APPL. 24651/2023 (Stay), W.P.(C) 6673/2023 CM APPL. 26129/2023 (Stay), W.P.(C) 6962/2023 CM APPL. 27125/2023 (Stay), W.P.(C) 7157/2023 CM APPL. 27900/2023 (Stay), W.P.(C) 7272/2023 CM APPL. 28285/2023 (Stay), W.P.(C) 7279/2023 CM APPL. 28308/2023 (Stay), W.P.(C) 7281/2023 CM APPL. 28310/2023 (Stay), W.P.(C) 7283/2023 CM APPL. 28315/2023 (Stay), W.P.(C) 7374/2023 CM APPL. 28728/2023 (Stay), W.P.(C) 7401/2023 CM APPL. 28789/2023 (Stay), W.P.(C) 7821/2023 CM APPL. 30158/2023 (Stay), W.P.(C) 7822/2023 CM APPL. 30163/2023 (Stay), W.P.(C) 9124/2023 CM APPL. 34707/2023 (Stay), W.P.(C) 383/2024 CM APPL. 1782/2024 (Stay) W.P.(C) 384/2024 CM APPL. 1784/2024 (Stay), W.P.(C) 400/2024 CM APPL. 1814/2024 (Stay), W.P.(C) 457/2024 CM APPL. 2097/2024 (Stay), W.P.(C) 463/2024 CM APPL. 2104/2024 (Stay), W.P.(C) 476/2024 CM APPL. 2123/2024 (Stay), W.P.(C) 477/2024 CM APPL. 2125/2024 (Stay), W.P.(C) 622/2024 CM APPL. 2734/2024 (Stay), W.P.(C) 623/2024 CM APPL. 2736/2024 (Stay), W.P.(C) 627/202 CM APPL. 2746/2024 (Stay), W.P.(C) 630/2024, CM APPL. 2752/2024 (Stay), W.P.(C) 639/2024 CM APPL. 2795/2024 (Stay), W.P .....

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..... wal, Mamta Agarwal, Ashutosh Agarwal, Indo Greenfuel Private Limited, Betsy Growth Finance Limited, Subodh Kant Sahay HUF, Naresh Mittal, Mahabir Parshad Gupta Versus Ojjus Medicare Pvt. Ltd. Vineeta Gupta, Dy. Commissioner of Income Tax Central Circle 28, Delhi, Income Tax Officer, Ward 18(3), Delhi Anr. Assistant Commissioner Of Income Tax, Central Circle 28, Delhi Ors. For the Appellant Through: Mr. Ruchir Bhatia, SSC with Ms. Deeksha Gupta, Adv. Dr. Rakesh Gupta, Mr. Somil Agarwal Mr. Dushyant Agrawal, Advs. Mr. Utkarsa Kr. Gupta, Mr. Amandeep Mehta Mr. Sanat Kapoor, Advs Dr. Rakesh Gupta, Mr. Somil Agarwal Mr. Dushyant Agrawal, Advs. Mr. Salil Kapoor, Mr. Sumit Lalchandani, Ms. Ananya Kapoor, Mr. Tarun Chanana, Mr. Shivam Yadav, Mr. Vibhu Jain, Mr. Utkarsa Kr. Gupta, Mr. Amandeep Mehta Mr. Sanat Kapoor, Advs. Mr. Vikas Pahwa, SSC with Mr. Prabhav Palli, Ms. Nimisha Jain, Mr. Aditya Shukla and Mr. Kushal Gupta, Advs. Mr. Ved Jain, Mr. Nischay Kantoor, Ms. Soniya Dodeja Mr. Animesh Tripathi, Advs. For the Respondent Through: Mr. Salil Kapoor, Mr. Sumit Lalchandani, Ms. Ananya Kapoor, Mr. Tarun Chanana, Mr. Shivam Yadav, Mr. Vibhu Jain, Mr. Utkarsa Kr. Gupta, Mr. Amandeep Mehta M .....

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..... handover of the requisite material to the Assessing Officer [AY] of the other person , with the said phrase being an allusion to the non-searched entity. The petitioners additionally challenge the impugned notices insofar as they purport to commence assessment/reassessment in respect of AYs 2010-11 and 2011-12 on the ground that since the period within which the respondents could have reopened or reassessed as per the provisions of the Act as it stood prior to 01 April 2017 had come to an end, therefore the respondents would stand denuded of the jurisdiction of reopening those assessments. The contention essentially was that the enlarged period of ten years which could become subject to reopening or reassessment in cases emanating from a search, introduced by virtue of the amendments made by the Finance Act, 2017 [2017 Amending Act] would not apply to AYs 2010-11 and 2011-12. 3. For the purposes of facilitating disposal of the present batch of writ petitions, the petitioners have classified individual matters dependent upon the date when the Satisfaction Note, as contemplated under Section 153C of the Act, came to be recorded in the case of the non-searched entity and the same is .....

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..... Tina Organic Ltd. 5240/2023 2011-12 Not Provided Not Provided 21.03.2022 Pratishtha Images Ltd. 5249/2023 2011-12 Not Provided 24.12.2021 (Annexure P 7) 28.12.2021 (Annexure P 2) Alankit Finsec Ltd. 5252/2023 2011-12 Not Provided 24.12.2021 (Annexure P 7) 28.12.2021 (Annexure P 2) Tina Organic Ltd. 5368/2023 2010-11 Not Provided Not Provided 21.03.2022 Alankit Forex India Pvt. Ltd. 5370/2023 2011-12 Not Provided 24.12.2021 (Annexure P 6) 28.12.2021 (Annexure P 2) Pratishtha Images Ltd. 5626/2023 2010- 11 Not Provided 24.12.2021 (Annexure P 7) 28.12.2021 (Annexure P 2) Alankit Insurance TPA Ltd. 5643/2023 2010-11 Not Provided 24.12.2021 (Annexure P 7) 28.12.2021 (Annexure P 2) Tarun Kumar Sahay 5662/2023 2010-11 20.12.2021 (Annexure P 5) 24.12.2021 (Annexure P 10) 28.12.2021 (Annexure P 2) Vikas Promoters Pvt. Ltd. 5789/2023 2010-11 Not Provided 17.02.2022 (Annexure P 9) 22.03.2022 (Annexure P 2) Vinod Maheshwari 5790/2023 2011- 12 10.03.2022 (Annexure P 8) Not Provided 23.03.2022 (Annexure P 2) Vinod Maheshwari 5794/2023 2010-11 10.03.2022 (Annexure P 7) Not Provided 23.03.2022 (Annexure P 2) Shanti Kumar Aggarwal HUF 6160/2023 2011- 12 Not Provided 28.02.2022 (Annexure P 6) 02.05 .....

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..... ided 29.06.2022 (Annexure P 9) Sunjog Engineering Pvt. Ltd. 476/2024 2010-11 24.06.2022 (Annexure P 9) 08.08.2022 (Annexure P 13) 24.08.2022 (Annexure P 5) Shanti Kumar Aggarwal through Legal Heir Ankit Agarwal 477/2024 2011-12 10.05.2022 (Annexure P 14) Not Provided 29.06.2022 (Annexure P 9) Saksham Investors Service Pvt. Ltd. 622/2024 2012-13 24.06.2022 (Annexure P- 10) 10.08.2022 (Annexure P- 17) 10.08.2022 (Annexure P-7) Pack Plast - India- Private Limited 623/2024 2011-12 11.05.2022 (Annexure P-9) 01.09.2022 (Annexure P- 10) 01.09.2022 (Annexure P-6) Saksham Commodities Limited 627/2024 2012- 13 24.06.2022 (Annexure P- 10) 10.08.2022 (Annexure P- 17) 10.08.2022 (Annexure P-7) Pack Plast - India-Private Limited 630/2024 2012- 13 11.05.2022 (Annexure P-9) 01.09.2022 (Annexure P- 10) 01.09.2022 (Annexure P-6) Pack Plast - India-Private Limited 639/2024 2013-14 11.05.2022 (Annexure P-9) 01.09.2022 (Annexure P- 10) 01.09.2022 (Annexure P-6) Pack Plast - India- Private Limited 697/2024 2010-11 11.05.2022 (Annexure P-9) 01.09.2022 (Annexure P-10) 01.09.2022 (Annexure P-6) Sunoj Engineering Pvt. Ltd. 704/2024 2011-12 24.06.2022(Annexure P-9) 08.08.2022(Annexure P-13) 24.08.2022(Annexu .....

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..... (Annexure A- 5) 29.09.2022 (Annexure A-2) Vikas Wahi 733/2024 2010-11 24.06.2022 (Annexure A- 5) Undated (Annexure A-5) 10.11.2022 (Annexure - 2) Vikas Wahi 734/2024 2011-12 24.06.2022 (Annexure -5) Undated (Annexure A- 5) 10.11.2022 (Annexure A-2) Vikas Wahi 731/2024 2012-13 24.06.2022 (Annexure A- 4) Undated (Annexure A- 4) 10.11.2022 (Annexure A-2) Vikas Wahi 728/2024 2013-14 24.06.2022 (Annexure A- 6) Undated (Annexure A- 6) 10.11.2022 (Annexure A-2) Indo Greenfuel Private Limited 1049/2024 2010-11 24.06.2022 (Annexure A- 5) 22.08.2022 (Annexure A- 8) 28.09.2022 (Annexure A-2) Indo Greenfuel Private Limited 1050/2024 2011-12 24.06.2022 (Annexure A- 5) 22.08.2022 (Annexure A- 8) 28.09.2022 (Annexure A-2) Betsy Growth Finance Limited 1063/2024 2010-11 12.05.2022 (Annexure A- 11) Undated (Annexure A- 11) 30.06.2022 (Annexure A-2) Mamta Aggarwal 829/2024 2010-11 24.06.2022 (Annexure A- 6) Undated (Annexure A- 9) 18.08.2022 (Annexure A-1) Mamta Aggarwal 861/2024 2011-12 24.06.2022 (Annexure A- 7) Undated (Annexure A-10) 18.08.2022 (Annexure A-2) Mamta Aggarwal 873/2024 2012-13 24.06.2022 (Annexure A-7) Undated (Annexure A- 10) 18.08.2022 (Annexure A-2) Ashutosh Aggarwal 991/2024 201 .....

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..... enience, we propose to notice the facts as they obtain in WP(C) 5217/2023. The petitioner submitted a Return of Income [ROI] on 30 September 2011 for AY 2011-12. On 18 October 2019, a search and seizure operation is stated to have been carried out in respect of the Alankit Group of Companies [Alankit Group]. On 22 March 2022, the petitioner was served with a notice purporting to be under Section 153C of the Act requiring it to submit a true and correct return of its total income for AY 2011-12. The aforesaid notice was followed by a communication dated 22 December 2022 under Section 142(1) requiring the petitioner to produce accounts and documents as per the annexure appended thereto. A follow-up notice under Section 142(1) of the Act was thereafter issued on 01 February 2023. It is alleged by the respondents that since the petitioner did not respond to the aforesaid communications, they were constrained to issue notices under Section 144 of the Act and which were dated 22 February 2023 and 03 March 2023. In response to the aforesaid, the petitioner submitted its response on 15 March 2023. 8. In order to appreciate the challenge which stands raised, we deem it apposite to extract t .....

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..... of section 153C(2) is being issued for A.Ys 2010-11 to A.Y. 2020-21. 9. On culmination of the proceedings so initiated, an assessment order came to be framed on 25 March 2023. The aforesaid order discloses the following facts. The AO refers to various ledgers which were obtained in the course of the subject search as well as digital data retrieved from the laptop belonging to one Mr. Sunil Kumar Gupta. It proceeds to refer to the statements of various individuals recorded in the course of that search and ultimately comes to the following conclusions: 11. Thus, Sh. Sunil Kumar Gupta has explained entire modus operandi by which unaccounted cash is received and utilized to provide accommodation entry. He has also explained in detail the manner in which he records these transactions in his Hand written diary/Excel Sheets/Tally books. 12. The transactions entered into by the assessee with various entities/companies controlled by Alok K Agarwal against unaccounted cash or otherwise to take accommodation entries, are as tabulated below: Name of beneficiary F.Y. Transaction done with Amount debited to beneficiary Amount credited to beneficiary Nature of Transactions Vikas Surya Developer P .....

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..... ntralized pursuant to orders made under Section 127 of the Act. The Satisfaction Note dated 17 March 2022 as penned by the AO in the case of the petitioner is reproduced hereinbelow: Satisfaction note for initiating proceedings u/s 153C of the Income Tax Act 1961 in the case of Smt. Vineeta Gupta (PAN- AEIPG1608L), by AO of other than the searched person 1. A search and seizure operation was carried out in the Alankit Group of cases on 18.10.2019 subsequently the said group was centralized to the jurisdiction of the undersigned. Accordingly, during the course of assessment proceedings u/s 153A of Alankit Group, material /documents related to case of Smt. Vineeta Gupta have been found. 2. Ledgers related to Sh. Vinod Gupta and Ms. Loveleen have been obtained from laptop of Sh. Sunil Kumar Gupta found and seized from the residence of Sh. Sunil Kumar Gupta, at 3584/4, Narang Colony, Gali No. 4 Tri Nagar Delhi ( Path: F:\SKGR A- 32\SUNIL KUMAR GUPTA HP LAPTOP EXTRACTED DATA\Tally\[root].1\Local Disk ANARKALI\BACKUP\ DATA24\DATA24). There are four ledgers related to Sh. Vinod Gupta ● VINOD GUPTA ● VINOD GUPTA- New Account ● VINOD GUPTA- Old Account Vinod Gupta (Anarkal .....

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..... income chargeable to tax pertaining to four years preceding the 6 year period has escaped assessment in this case, hence, the case has been rightly opened u/s 153C of the Act for the A.Y. 2011-12 to 2020-21. It is submitted that on the basis of seized material confronted to the assessee as well, it is revealed that the assessee was found to be involved in unaccounted Cash Transactions, receiving and providing accommodation entries, which requires proper verification. Satisfaction recorded in the case of the assessee is fairly detailed and is backed by supporting evidences in form of ledgers containing both bank and cash entries which prove the veracity of the said ledgers, which form an integral part of the satisfaction note drafted by the AO of the searched party and the jurisdictional AO of the assessee. xxxx xxxx xxxx In the present case, the live link between the material provided by the Investigation Wing/AO and the reasons for belief that income has escaped assessment has been sufficiently demonstrated. In view of the above facts, it is clear that the before opening the case u/s 153C of the Act, provision of section 153C have been duly complied with. In view of the above, the .....

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..... ce satisfactorily within the limitation date of this notice, assessment will be finalized based on incriminating material and information available on record, further, penalty of Rs. 10,000/- will be imposed upon you under section 272A(1 )(d)/ 271(1 )(b) of the Income-tax Act, 1961. 12. The writ petition thereafter came to be instituted on 27 March 2023. On the first date of consideration and more particularly on 28 March 2023, an interim order was passed to the effect that while the AO would have liberty to continue the reassessment proceedings, any adverse orders if passed against the petitioner, would not be given effect to until further orders of the Court. 13. For the sake of completeness, we also propose to take note of the salient facts pertaining to two cases which have been placed in List III. In WP(C) 400/2024, a reading of the Satisfaction Note would appear to indicate that multiple transactions pertaining to Financial Year [FY] 2012- 13 and 2014-15 were noticed from the documents and material gathered in the course of the search. Dealing with the aforesaid, the AO of the petitioner/ assessee observed as under: 3. As per satisfaction note dated 20.06.2022, during the cou .....

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..... and M/s Alankit Assignments Limited wherein it has been found that the transactions entered into by various beneficiaries with various shell entities controlled by Alok K Agarwal, against the unaccounted cash or otherwise to take accommodation entries, are tabulated below: Name of beneficiary F.Y. Transactions done with Amount debited to beneficiary Amount credited to beneficiary Anul Sharma 2012-13 DCPL 25,00,000/- 32,96,549 NCPL 15,00,000/- 2014-15 CASH 40,00,000/- DCPL 25,00,000 NCPL 15,00,000 2014-15 Sunil Bhala 64,33,562/- 2012-13 Cash 21,00,000 4. As AO of the person other than the searched person, I have carefully perused the above referred satisfaction note and other related documents. Hence, I am satisfied that the above material/documents pertain to Shri Anuj Sharma (PAN: BEBPS2370N) and the entries appearing therein have a bearing on the determination of the income of Shri Anuj Sharma (PAN: BEBPS2370N). 5. In view of the above, I am satisfied that it is a fit case for initiating proceeding u/s 153C r.w.s. 153A of the I.T. Act 1961, for the period relevant to the A.Ys. 2010-11 to 2020-21. Accordingly, notice u/s 153C r.w.s. 153A of the Act, for the A.Ys. 2010-11 to 2020- .....

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..... uently any search conducted after 31 March 2016 would not empower the respondents to assume jurisdiction over AY 2010-11. This since, according to learned counsel, the aforenoted AY would fall beyond the six year period. Proceeding along those lines, Mr. Kapoor submitted that in the case of a search which may have been conducted on or between 01 April 2016 to 31 March 2017, the AYs for which assessment could have been reopened would extend up to AY 2011-12 and not beyond. Therefore, the power to assume jurisdiction for AY 2011-12 would not arise in case a search was conducted after 31 March 2017, i.e., after the 2017 Amending Act, since the aforenoted AY had attained finality before the insertion of the amended provisions. The submission in essence proceeded on the basis of the time frames for reopening which existed in the statute prior to 2017 and those expiring before the amendments came to be introduced in that year. In all such cases, according to Mr. Kapoor, the introduction of the concept of a ten year block period would not empower the respondents to reassess or reopen those years which had acquired a state of repose. In support of his argument of closure, Mr. Kapoor placed .....

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..... the relevant time. The petitioner's return for assessment year 1998-99 became barred by limitation on March 31, 2005. The question of revival of the period of limitation for reopening assessment for the assessment year 1998-99 by taking recourse to the subsequent amendment made in section 149 of the Act in the year 2012, i. e., more than 8 years after expiration of limitation on March 31, 2005, has been dealt with by the Supreme Court in K. M. Sharma (supra). xxxx xxxx xxxx 16. It has been said that the Government in all its actions is bound by rules fixed and announced beforehand rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances, and to plan one's affairs on the basis of this knowledge (Ref. F. A. Hayek, Road to Serfdom , 1944). In this case, the interpretation proposed by the Revenue has the potential of arming its authorities to re- open settled matters, in respect of issues where the citizen could genuinely be sanguine and had no obligation of the kind which the Revenue seeks to impose by the present amendment. All the more significant, is the fact that in the absence of a clear indication, .....

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..... ce to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. In CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC) ; AIR 1961 SC 1633 , it was held that as the liability to pay tax is computed according to the law in force at the beginning of the assessment year, i.e., the first day of April, any change in law upsetting the position and imposing tax liability after that date, even if made during the currency of the assessment year, unless specifically made retrospective, does not apply to the assessment for that year. These principles were reiterated in CIT v. Vatika Township (P.) Ltd. [2014] 367 ITR 466 (SC). 18. Mr. Kapoor in this respect also drew our attention to the decision of the Supreme Court in S.S. Gadgil vs. Lal Co. (1964) 8 SCR 72 and K.M. Sharma v. Income-Tax Officer, Ward 13(7), New Delhi (2002) 4 SCC 339. The relevant passages from the judgment in S.S. Gadgil, are reproduced hereinbelow: 9. A proceeding for assessment is not a suit for adjudication of a civil dispute. That an income tax proceeding is in the nature of a judicial proceeding bet .....

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..... and the taxpayer is brought within the jurisdiction of the said machinery by reason of a new power. This is, of course, subject to the condition, either expressly or by clear implication. If the language of the law has that clear meaning, it must be given that effect and where the language expressly so declares or clearly implies it, the retrospective operation is not controlled by the commencement clause. 11. Counsel for the Commissioner sought to derive some support from Income Tax Officer, Companies District I, Calcutta v. Calcutta Discount Co. Ltd. [23 ITR 471] in which Chakravarti, C.J., dealing with the effect of the Income Tax and Business Profits Tax (Amendment) Act, 1948, observed: The plain effect of the substitution of the new Section 34 with effect from 30th March, 1948 is that from that date the Income Tax Act is to be read as including the new section as a part thereof and if it is to be so read, the further effect of the express language of the section is that so far as cases coming within clause (a) of sub-section (1) are concerned all assessment years ending within eight years from 30th March, 1948 and from subsequent dates, are within its purview and it will appl .....

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..... under the old Act and the commencement of the amending Act. The legislature has given to Section 18 of the Finance Act, 1956, only a limited retrospective operation i.e. up to April 1, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income Tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided, become barred. 19. In K.M. Sharma, the Supreme Court while reiterating the view which was taken in S.S. Gadgil, had held as under: 14. A fiscal statute, more particularly, on a provision such as the present one regulating period of limitation must receive strict construction. Law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to a litigant for an indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended p .....

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..... under Section 43 in respect of certain non- residents. The case of the assessee, inter alia, was that the proposed action was barred by limitation as the right to commence proceedings of assessment against the assessee as an agent of non-resident for Assessment Year 1954-55 ended on 31- 3-1956, under the Act before it was amended in 1956. This Court in the case of S.S. Gadgil [(1964) 53 ITR 231 : AIR 1965 SC 171] accepted the contention of the assessee and held as under: (ITR p. 240) The legislature has given to Section 18 of the Finance Act, 1956, only a limited retrospective operation i.e. up to 1-4- 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income Tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred. 21. On a proper construction of the provisions of Section 150(1) and the effect of its operation from 1-4-1989, we are clearly of the opinion that the provisions cannot be give .....

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..... ut this is not the issue or question in the present case. The issue or question in the present case relates to assessment i.e. initiation of re-assessment proceedings and whether the time/limitation for initiation of the re-assessment proceedings specified by the Finance Act, 2001 is applicable. We are not determining/deciding the liability to tax but have to adjudicate and decide whether the re-assessment notice is beyond the time period stipulated. This is a matter/issue of procedure i.e. the time period in which the assessment or re-assessment proceedings can be initiated. Thus, the time period/limitation period prescribed on the date of issue of notice will apply. In our opinion, the answer is clear and has to be in affirmative, i.e. in favour of the assessee. 13. This question is not debatable or res integra and was examined and answered with lucid and clear reasoning in the opinion expressed by Hidayatullah, J. on behalf of himself and Raghubar Dayal, J. in S.C. Prashar, Income Tax Officer v. Vasantsen Dwarkadas, AIR 1963 SC 1356; 1963 (49) ITR 1 (SC). The relevant portion reads: - 93. .. .. If the 1948 Amendment could be treated as enabling the Income Tax Officer to take act .....

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..... heir revival but with the enforcement of a liability to the State which though existing remained to be enforced ... XXX 95. It says that the limit of time mentioned in Section 34 is removed in certain cases that is to say, action can be taken at any time in these cases. In our judgment, each case of a notice must be judged according to the law existing on the date the notice was issued or served, as the law may require. So long as the notice where the notice is in question, and the assessment, where the assessment is in question, are within the time limited by the law, as it exists when the respective actions are taken, the actions cannot be questioned provided the law is clearly retrospective. The only case in which no further action can be taken is one in which action was not taken under the old law within the period prescribed by that law and which is not also within the period mentioned in the new law if its operation is retrospective. All other cases are covered by the law in force at the time action is taken. It is from these viewpoints that these appeals, in our opinion, should be judged. 14. In the said case, question of validity of notice had arisen because of repeated/fre .....

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..... titled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit : law looks forward not backward. As was observed in Phillips v. Eyre [(1870) LR 6 QB 1], a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. 29. The obvious basis of the principle against retrospectivity is the principle of fairness , which must be the basis of every legal rule as was observed in L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd. [(1994) 1 AC 486 : (1994) 2 WLR 39 : (1994) 1 All ER 20 (HL)] Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a .....

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..... presumption, and thus could be displaced by outweighing factors. In view of the above, Mr. Kapoor submitted that the respondents would have no jurisdiction to issue a notice or frame an assessment for AYs 2010-11 and 2011-12, since the period for reopening of those assessments had lapsed before the 2017 Amending Act came into force. According to learned counsel, since those assessments had attained finality, the amended Section 153C could not be resorted to and that conclusiveness effaced. 22. Mr. Kapoor then proceeded to the principal provision itself and submitted that by virtue of the First Proviso to Section 153C(1), the relevant AYs would have to be reckoned with reference to the date on which documents pertaining to the non-searched person are received by the AO of that person. According to learned counsel, the aforesaid position is manifest from a plain reading of that Proviso and which bids us to recognize the date of receiving of the books of account, documents or assets by that AO as being the date relevant for the purposes of the Second Proviso to Section 153A(1). According to learned counsel, the aforesaid position in law can no longer be doubted bearing in mind the jud .....

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..... n interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. 10. This Court is of the opinion that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials - of the search party, under Section 132 - would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually relate back as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportio .....

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..... e of the searched person, the date with reference to which proceedings for assessment or reassessment of any assessment year within a period of six assessment years shall abate, is the date of initiation of the search under section 132 or requisition under section 132A. .. However, in the case of other person. .. such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date xxxx xxxx xxxx 24. As discussed hereinbefore, in terms of the proviso to section 153C of the Act, a reference to the date of the search under the second proviso to section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the assessee (being the person other than the one searched) to the Assessing Officer having jurisdiction to assess the said assessee. Further proceedings, by virtue of section 153C(1) of the Act would have to be in accordance with section 153A of the .....

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..... assumes the possession of the seized assets would be the relevant date for applying the provisions of section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for the assessment year 2003-04 and the assessment year 2004-05 were outside the scope of section 153C of the Act and the Assessing Officer had no jurisdiction to make an assessment of the assessee's income for that year. 25. According to learned counsel, the aforesaid position becomes further evident when one views the Memorandum to Finance Bill 2005 which while inserting the First Proviso with retrospective effect from 01 June 2003 had explained the intent of that provision in the following terms: MEMORANDUM EXPLAINING THE PROVISIONS RELATING TO DIRECT TAXES (i) Prescribing the rates of income-tax .. Rationalisation of procedure for assessment in cases of search and seizure. .. It is proposed to amend the said section so as to provide that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiv .....

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..... date of receipt of the books of accounts or documents seized by the AO having jurisdiction over such other person and the six earlier AYs would have to be reckoned with reference to such postponed date of search. The first proviso to Section 153 B (1) does not support the case sought to be canvassed by the Revenue. It refers to and acknowledges that the date of search qua the 'other person', in terms of the first proviso to Section 153 C (1), gets postponed to the date on which documents are handed over to the AO of the 'other person'. Consequently, the question of referring the case to a larger Bench does not arise. 27. Proceeding then to the statutory position which came into effect post the 2017 Amending Act, Mr. Kapoor submitted that the provisions in question construct separate and independent principles for the purposes of identifying the six preceding AYs or the block of ten AYs as defined by the phrase relevant assessment year . It was in this regard and at the outset submitted that the judgment of the Court in RRJ Securities would continue to constitute good law and would remain unimpacted by the amendments which came to be introduced by virtue of the 2017 .....

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..... . 2/2018 are set out hereinbelow: Explanatory Notes to the provisions of the Finance Act, 2017 80. Rationalisation of provisions of the Income Declaration Scheme, 2016 and consequential amendment to section 153A and 153C 80.4 However, in order to protect the interest of the revenue in cases where tangible evidence(s) are found during a search or seizure operation (including section 132A cases) and the same is represented in the form of undisclosed investment in any asset, section 153A of the Income-tax Act relating to search assessments has been amended to provide that notice under the said section can be issued for an assessment year or years beyond the sixth assessment year already provided up to the tenth assessment year if- (i) the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in one year or in aggregate in the relevant four assessment years(falling beyond the sixth year); (ii) such income escaping assessment is represented in the form of asset; (iii) the income escaping assessment or part thereof relates to such yea .....

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..... placed strong reliance on the following observations as appearing in the decision of the Madras High Court in A.R. Safiullah vs ACIT WP(MD) No. 4327/2021. 9. Explanation-I is clear as to the manner of computation of the ten assessment years. it clearly and firmly fixes the starting point. It is the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. There cannot be any doubt that since search was made in this case on 10.04.2018, the assessment year is 2019-20. The end of the assessment year 2019-20 is 31.03.2020. The computation of ten years has to run backwards from the said date ie., 31.03.2020. The first year will of course be the search assessment year itself. In that event, the ten assessment years will be as follows : 1st Year 2019-20 2nd Year 2018-19 3rd Year 2017-18 4th Year 2016-17 5th Year 2015-16 6th Year 2014-15 7th Year 2013-14 8th Year 2012-13 9th Year 2011-12 10th Year 2010-11 The case on hand pertains to AY 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous yea .....

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..... he date from which the six year period is to be reckoned. According to Mr. Jain, the respondents appear to have proceeded on the incorrect premise of the 2017 amendments having altered or modified the aforesaid position. Adopting the submissions which were addressed by Mr. Kapoor in this respect, Mr. Jain submitted that the amendments introduced in Section 153C were only consequential and in order to attune it with Section 153A. Mr. Jain submitted that the principles which came to be propounded in Jasjit Singh, although being a judgment rendered in the context of the statutory position as existing prior to the 2017 amendments, would remain unchanged. In any case, Mr. Jain sought to highlight the fact that the decision in Jasjit Singh noticed Sections 153A and 153C as they came to exist post the 2017 amendments as well. Mr. Jain submitted that the judgment in Jasjit Singh had taken due note of the serious prejudice which would be caused to an assessee if the Revenue s contentions were to be accepted or if an inordinate delay in handing over papers and materials to the jurisdictional AO of the non-searched person was to be ignored. According to Mr. Jain, the time gap that may occur c .....

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..... ory position which came into place post the 2017 Amending Act would neither enlarge the period of limitation period nor could those amendments be viewed as empowering the respondents to reopen concluded assessments. Mr. Jain further submitted that since all proceedings for AY 2010-11 and 2011-12 had attained finality prior to 01 April 2017, the impugned notices are liable to be quashed additionally on this score. 35. Mr. Rohit Jain, learned counsel appearing in some of the writ petitions, submitted that in respect of the other person , Section 153C substitutes the date of search with the date of receipt of documents by the jurisdictional AO. This, according to Mr. Rohit Jain, is evident from that provision bidding one to construe the date of receipt of documents by the AO of the non-searched person alone being relevant. The aforesaid position, according to Mr. Jain, can no longer be doubted bearing in mind the judgments in Jasjit Singh and RRJ Securities. Mr. Jain then submitted that insofar as the ten year block period is concerned, Section 153C enables reopening of assessments for a period of ten years including the year of receipt of documents. Learned counsel laid stress upon S .....

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..... sels, the expression relevant assessment year cannot be accorded a general meaning since that expression as appearing in Section 153A is envisaged to mean the four assessment years in addition to the preceding six AYs . Learned counsels laid emphasis on Circular No. 2/2018 dated 15 February 2018 to submit that the same correctly explains the intent of the Legislature while introducing the 2017 Amending Act. According to learned counsels, the aforesaid amendments were introduced in order to rationalize the provisions of search assessment. They would contend that the amendments seek to align and harmonize the provisions of Section 153C with Section 153A and thus construct a holistic scheme of assessment pertaining to searches. It was further submitted that in the absence of Section 153C independently defining relevant assessment year , the expression would have to be necessarily understood in light of its definition as appearing in Section 153A. This position, according to learned counsels, is also manifest from para 80 of the aforenoted CBDT Circular which is extracted hereinbelow:- 80. Rationalisation of provisions of the Income Declaration Scheme, 2016 and consequential amendment .....

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..... me-tax Act. 80.7 Applicability: These amendments take effect from 1st April, 2017. 40. The respondents asserted that both Sections 153A and 153C must be read together for the purposes of calculation of six AYs . They sought to draw sustenance for the aforesaid proposition from the following observations as rendered by the Court in Principal CIT vs. Sarwar Agency P. Ltd. 2017 SCC OnLine Del 9860: 11. Mr. Ashok Manchanda, learned senior standing counsel for the appellant, sought to pursue this court to reconsider its view in RRJ Securities (supra). The court declines to do so for more than one reason. First, for reasons best known to it, the Revenue has not challenged the decision of this court in RRJ Securities (supra) in the Supreme Court. The said decision has been consistently followed by the authorities under this court as well as by this court. Thirdly, the recent amendment to section 153C(1) of the Act states for the first time that for both the searched person and the other person the period of reassessment would be six assessment years preceding the year of search. The said amendment is prospective. 41. The submission in essence was that the identification of relevant assess .....

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..... clause (i) of sub-section (1) of Section 142, setting forth his total income including the undisclosed income for the block period: Provided that no notice under Section 148 is required to be issued for the purpose of proceeding under this Chapter: Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return; (b) the assessing officer shall proceed to determine the undisclosed income of the block period in the manner laid down in Section 158-BB and the provisions of Section 142, sub-sections (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply; (c) the assessing officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) the assets seized under Section 132 or requisitioned under Section 132-A shall be dealt with in accordance with the provisions of Section 132-B. *** 158-BD. Undisclosed income of any other person. Where the assessing officer is satisfied that any undisclosed income belongs to any person other than the person with respect .....

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..... sense interpretation to the machinery provisions so that the charge does not fail. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same ( Whitney v. IRC [1926 AC 37 (HL)], CIT v. Mahaliram Ramjidas [(1939-40) 67 IA 239 : (1940) 52 LW 234 : (1940) 8 ITR 442] , Indian United Mills Ltd. v. Commr. of Excess Profits Tax [(1955) 27 ITR 20 (SC)] and Gursahai Saigal v. CIT [(1963) 48 ITR 1 (SC)] ; CWT v. Sharvan Kumar Swarup Sons [(1994) 6 SCC 623] ; CIT v. National Taj Traders [(1980) 1 SCC 370 : 1980 SCC (Tax) 124] ; Associated Cement Co. Ltd. v. CTO [(1981) 4 SCC 578 : 1982 SCC (Tax) 3 : (1981) 48 STC 466] ). Francis Bennion in Bennion on Statutory Interpretation, 5th Edn., Lexis Nexis in support of the aforesaid proposition put forth as an illustration that since charge made by the legislator in procedural provisions is excepted to be for the general benefit of litigants and others, it is presumed that it applies to pending as well as future proceedings. 35. Having said that, let us revert to the discussion of Section 158-BD of the Act. The said provision is a machinery provision and inserted in the s .....

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..... ncluding that the seized documents belong to a person other than the searched person is necessary for initiation of action under Section 158-BD. The bare reading of the provision indicates that the satisfaction note could be prepared by the assessing officer either at the time of initiating proceedings for completion of assessment of a searched person under Section 158-BC of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisition of books of accounts was made under Section 132-A of the Act. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. xxxx xxxx xxxx 41. In the result, we hold that for the purpose of Section 158-BD of the Act a satisfaction note is sine qua non and mus .....

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..... or is a defined expression, the ordinary meaning of the word is part of the material which can be used to construe the definition. Thirdly, as I have said, there is the absence of any rational purpose in giving the definitions a retrospective effect. It follows that he was a joint tenant and has become the sole tenant in section 88(1)(b) means that he was a joint tenant under a secure tenancy and has become the sole tenant under a secure tenancy. When Mrs Betty Walker became sole tenant, it was not of a secure tenancy and she was therefore not a successor. I would therefore dismiss the appeal. 45. It was further urged that Sections 153A and 153C must be interpreted in a manner that the object and purpose of search assessment is not frustrated. It was in this respect contended that by the time the impugned notices came to be issued, Section 153C existed in its amended avatar and it was the provision as it stood then which would apply. It was further submitted that the decisions in S.S. Gadgil, Brahm Dutt and C.B. Richards Ellis are clearly distinguishable since those pertained to Section 149 and not Section 153C. It was sought to be emphasized that since both the provisions stand co .....

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..... atisfaction with respect to the other person would require examination and investigation at different levels. However, they submitted that public interest requires that the right of the Department to tax income basis the seized material be preserved in the case of the searched person. 49. The respondents asserted that the submission of the writ petitioners that the six or the ten year block period is liable to be calculated from the date of handing over of documents to the AO of the non-searched person fails to take into consideration various practical difficulties which would necessarily arise. It was submitted that there would always be a time lag between examination of the seized material and recording of satisfaction in the case of the other person by the AO of the searched person and the handing over of the seized material to the jurisdictional AO of the other person . According to learned counsels, resultantly the period of six AYs as well as of the relevant assessment year of the searched person would never coincide with those in the case of the other person , even though in both scenarios the trigger for assessment is the material seized in the course of search. According t .....

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..... he AO only being prima facie satisfied that income amounting to or exceeding INR 50 lakhs may have escaped assessment. Learned counsels also underlined the words in aggregate as occurring in the Fourth Proviso to submit that even if the prescription of INR 50 lakhs or more was satisfied on a cumulative computation of the six or the ten AYs period, the precondition as placed by virtue of the Fourth Proviso would stand satisfied. E. ANALYSIS OF THE STATUTORY FRAMEWORK 51. Having noticed the rival submissions which were addressed, we now proceed with our analysis of the questions which stand posited. Prior to the insertion of Sections 153A, 153B, and 153C in the Chapter pertaining to procedure for assessment, an assessment in respect of search cases was governed and regulated by Chapter XIVB of the Act. The said Chapter comprising of Sections 158B to 158BH set out the procedure for assessment or reassessment proceedings being undertaken as a fallout of a search which may have been conducted. Chapter XIVB spoke of assessments being undertaken for a block period comprising of six AYs preceding the previous year in which the search may have been conducted or a requisition made. In terms .....

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..... dependent of a regular assessment and thereby not contemplating a merger of the two assessment proceedings or abatement of pending assessments. Section 158BI came to be incorporated in Chapter XIVB by virtue of Finance Act 2003 with effect from 01 June 2003 and reads as under:- 158BI. Chapter not to apply after certain date . The provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003. 54. Sections 153A, 153B and 153C were introduced by virtue of Finance Act, 2003. The trinity provisions constituted a paradigm change in the manner in which search assessments were liable to be conducted. They set up a procedure clearly distinct from that which was envisaged under Chapter XIVB and were ordained to apply in respect of all searches or requisitions made after 31 May 2003. The fact that these provisions were envisaged to now govern and regulate all search assessments came to be reinforced by virtue of the introduction of Section 158BI and thus bringing the curtains down on the block period assessment procedure set out in Chapter XIVB an .....

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..... able at the rate or rates as applicable to such assessment year. The proposed sub-section (1) of the new section 153B provides for the time-limit for completion of assessment in case of a person where a search is initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A.It provides that the Assessing Officer shall make an order of assessment or reassessment in respect of each assessment year falling within six assessment years referred to in clause (b) of section 153A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed. The Assessing Officer shall make an order of assessment or reassessment in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed. This clause also provides that in .....

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..... ll proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A.These amendments will take effect from 1st June, 2003. 56. Section 153A, when finally introduced, commenced with a non- obstante clause giving it overriding effect over Sections 139,147 to 149, 151 and 153 in case of a person where a search may have been initiated or a requisition made after 31 May 2003. It provided that where a search comes to be initiated or where books of accounts or other documents or assets come to be requisitioned, the AO would require the searched person to furnish a return of income in respect of each AY falling within six AYs immediately preceding the AY relevant to the previous year in which search may have been conducted or requisition made. The First Proviso further stipulated that the AO would assess or reassess the total income in respect of each AY falling within the block of six AYs . Of equal significance was the Second Proviso and which prescribed that if any proceedings relating to assessment or reassessment relating to the relevant assessment year spoken of earlier were .....

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..... e reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having the jurisdiction over such other person. It is further proposed to insert a new sub-section (2) so as to provide that for assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A in case of other person, where (a) no return of income has been furnished by such person and no notice under sub-section (1) of section 142 has been issued to him, or (b) are turn of income has been furnished by such person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall iss .....

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..... search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 60. Thereafter, vide the 2014 Finance Act, Section 153C was further amended to provide that the jurisdictional AO of the other person was empowered to issue notice to such other person if he was satisfied that the books of accounts or documents or assets seized have a bearing on the determination of the total income of such othe .....

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..... uced vide the 2014 Finance Act is reproduced hereinbelow: Clause 53 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person. The existing provisions contained in sub-section (1) of the aforesaid section provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person, other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. It is proposed to amend the said sub-section so as to provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, .....

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..... ets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return o .....

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..... total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this[sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso),specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made.] [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section(1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessmen .....

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..... 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso),specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made[and for the relevant assessment year or years]:] [Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for su .....

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..... longs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person ] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] :] [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub-section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned .....

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..... r such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A] :] [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub-section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person :] [Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or .....

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..... amendments appear to have been triggered by the schematic amendments which came to be introduced in Sections 145 to 151 and the procedure for reassessment inquiry being radically amended consequent to the introduction of Section 148A. The time limit for initiation of action also came to be amended with Section 149 being recast. For purposes which may be germane to the present batch, we also take note of the addition of the First and Second Provisos to Section 149 and which are extracted hereunder:- 149. Time limit for notice. xxxx xxxx xxxx Provided that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under Section 148 or Section 153-A or Section 153-C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or Section 153-A or Section 153-C, as the case may be, as they stood immediately before the commencement of the Finance Act, 2021: Provided further that the provisions of this sub-section shall not apply in a case, where a notice under Section 153-A, or Section 153-C .....

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..... and any objections connected therewith being liable to be decided before reassessment was undertaken, reassessments triggered by a search were excluded from the ambit of that provision as would be manifest from a reading of the Proviso to Section 148A and which is couched in the following terms:- 148-A. Conducting inquiry, providing opportunity before issue of notice under Section 148. xxxx xxxx xxxx Provided that the provisions of this section shall not apply in a case where, (a) a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under Section 132 or requisitioned under Section 132-A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized .....

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..... or requisitioned pertains or pertain to, or any information contained therein, relates to, be extended by twelve months. 71. Of equal significance is Section 153(8) and which makes the following provisions:- 153. Time limit for completion of assessment, reassessment and recomputation xxx xxx xxx (8) Notwithstanding anything contained in the foregoing provisions of this section, sub-section (2) of section 153A or sub- section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within a period of one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later. Sub-section (8) thus caters to situations where pending assessment or reassessment proceedings may abate by virtue of Section 153A(1) and be read in line with the timelines prescribed by Section 153B. 72. Reverting then to the principal provisions made in Section 153A and as the provision stands presently, we find that it essentially enables the AO to issue notice to the searched person requiring it to submit a return of inco .....

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..... ed notices came to be issued, proceeding along similar lines is statutorily proclaimed to override the provisions of Section 139, 147, 148, 149, 151 and 153. The said provision enables the AO of a non-searched party to commence proceedings for assessment or reassessment for six AYs immediately preceding the AY relevant to the previous year in which search is conducted or requisition made and for the relevant assessment year as defined by Section 153A. The aforenoted provision comes into play the moment the AO of the searched person comes to discover that some money, bullion, jewellery, valuable article or thing seized or requisitioned belongs to or books of account, documents seized or requisition pertain or pertains to a person other than the person searched and covered by Section 153A. The AO of the searched person, on being satisfied that the aforenoted conditions are fulfilled, is obliged to transmit the books of account or documents and assets seized or requisitioned to the AO having jurisdiction over the non-searched person. Upon receipt of that material from the AO of the searched person, the jurisdictional AO of the non-searched party becomes empowered to call upon that per .....

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..... ice to that person in order to assess or reassess the income of such other person in the manner contemplated by the provisions of section 153A. Now, a question may arise as to the applicability of the second proviso to section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search under section 132 or the requisition under section 132A. For instance, in the present case, with reference to the Puri group of companies, such date will be January 5, 2009. However, in the case of the other person, which, in the present case, is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with refe .....

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..... of the searched person and such recording/noting may be kept in the assessment folder of such other person. In case, the AO of the searched person exercises jurisdiction over the other person also, appropriate referencing should be made in the relevant assessment records of such other person. 5. It may be noted that in the present case satisfaction note was prepared by the AO on 25th February 2010. Consequently, the finding of the ITAT in the present case that the assessment made under Section 143(1) of the Act for the AY 2009-10 was not valid, calls for no interference . No substantial question of law arises in the facts and circumstances of the present case. 6. Accordingly, the appeal is dismissed. 77. A more elaborate discussion with respect to the significance of the Proviso is found in RRJ Securities. We deem it apposite to extract the following passages from that decision:- 13. The first and foremost step for initiation of proceedings under section 153C of the Act is for the Assessing Officer of the searched person to be satisfied that the assets or documents seized belong to the assessee (being a person other than the searched person). The Assessing Officer of the assessee, .....

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..... the person other than the one searched and to whom the seized documents/assets are said to belong. The relevant extract of the said decision is quoted below (page 117): On a plain reading of section 153C, it is evident that the Assessing Officer of the searched person must be 'satisfied' that, inter alia, any document seized or requisitioned 'belongs to' a person other than the searched person. It is only then that the Assessing Officer of the searched person can handover such document to the Assessing Officer having jurisdiction over such other person (other than the searched person). Furthermore, it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or reassess his income in accordance with the provisions of section 153A. Therefore, before a notice under section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step is after such satisfaction is arrived at that the document is handed over to th .....

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..... Income-tax Act leaves no doubt that, as is provided under section 158BD, where the Assessing Officer, while proceeding under section 153A against a person who has been subjected to search and seizure under section 132(1) or has been proceeded under section 132A, is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that the Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. Thus, there are two stages: The first stage comprises of a search and seizure operation under section 132 or proceeding under section 132A against a person, who may be referred as 'the searched person'. Based on such search and seizure, assessment proceedings are initiated against the 'searched person' under section 153A. .....

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..... erence to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the Assessing Officer of the assessee. In this case, it would be the date of the recording of satisfaction under section 153C of the Act, i.e., September 8, 2010. In this view, the assessments made in respect of the assessment years 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the Assessing Officer of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized .....

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..... her person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the, manner contemplated by the provisions of Section 153A. Now a question may arise as to the applicability of the second proviso to Section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search under Section 132 or the requisition under Section 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of a .....

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..... the report:- 41. Thus, as per the proviso to Section 153C as inserted vide Finance Act, 2005, and the effect of the said proviso is that it creates a deeming fiction wherein any reference made to the date of initiation of search is deemed to be a reference made to the date when the Assessing Officer of the non-searched person receives the books of account or documents or assets seized etc. Thus, in the present case, even though the search under Section 132 was initiated prior to the amendment to Section 153C w.e.f. 01.06.2015, the books of account or documents or assets were seized by the Assessing Officer of the non-searched person only on 25.04.2017, which is subsequent to the amendment, therefore, when the notice under Section 153C was issued on 04.05.2018, the provision of the law existing as on that date, i.e., the amended Section 153C shall be applicable. 80. The aforesaid discussion thus renders a determinative quietus to the identification of the starting post from which the block of six AYs or the relevant assessment year would have to be calculated. The contention of the respondents that the said block periods would have to be reckoned with reference to the date of search .....

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..... be evident from the following extracts of that decision:- 11. Mr. Ashok Manchanda, learned Senior Standing counsel for the Appellant, sought to pursue this Court to reconsider its view in RRJ Securities (supra). The Court declines to do so for more than one reason. First, for reasons best known to it, the Revenue has not challenged the decision of this Court in RRJ Securities (supra) in the Supreme Court. The said decision has been consistently followed by the authorities under this Court as well as by this court. Thirdly, the recent amendment to Section 153 C(1) of the Act states for thefirst time that for both the searched person and the other person the period of reassessment would be six AYs preceding the year of search. The said amendment is prospective. 12. Consequently, no substantial question of law arises from the impugned order of the ITAT. The appeal is, accordingly, dismissed. We thus fail to either fathom or discern any observation rendered in that decision which may be read as lending strength or credence to the contention of the respondents. 83. Reliance was then placed on the decision rendered by a learned Judge of the Madras High Court in RKM Powergen. We note tha .....

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..... ent year or years referred to in sub-section (1) of section 153A] 13. There is thus an in-built mechanism in 153C(1) as to how the block period is to be formulated. No doubt, the portion within parenthesis has been inserted only with effect from 1- 4-2017 and has no application in the case of the petitioner seeing as the date of search in its case ranges between 21-3-2015 to 11-1-2016. However, one hardly need to refer this portion, since the construction of the block is detailed in the last portion of section 153C(1) that states 'for the relevant assessment year or years referred to in sub-section (1) of section 153(1). xxxx xxxx xxxx 15. Thus, the block is to comprise of the those assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made. Seen in this context, the inclusion of assessment year 2010-11 and 2011-12 in the case of RKM Powergen Limited and 2010-11 in the case of RK Powergen Private Limited is seen to be in order. 16. The first proviso to section 153C only deals with the date of initiation of search for the purpose of the second proviso to section 153A(1) to determine the abateme .....

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..... ch has been consistently recognized to also embody the commencement point for reckoning the six or the ten AYs , shifts the relevant date from the date of initiation of search or a requisition made to the date of receipt of books of account or documents and assets seized by the jurisdictional AO of the non-searched person. Consequently, the block of six or ten AYs would have to be reckoned bearing the aforesaid date in mind. Although in the present batch of writ petitions, the date of actual handing over has not been explicitly mentioned in a majority of the writ petitions, learned counsels for respective sides had addressed submissions based on the assumption that it would be the date of issuance of the Satisfaction Note by the AO of the non-searched person and in the case of non- availability of such a note, the date of issuance of the Section 153C notices which would be pertinent for the purposes of the First Proviso to Section 153C. 87. Assuming, therefore, that the handover of material gathered in the course of the search and pertaining to the non-searched person occurred between 01 April 2021 to 31 March 2022, the same would essentially constitute FY 2021-22 as being the prev .....

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..... Y pertaining to the previous year in which the search was conducted as distinct from the preceding year which is spoken of in the case of the six relevant AYs . 90. Viewed in that light, and while keeping the period of 01 April 2021 to 31 March 2022 as the constant, the relevant AY would be AY 2022-23. The ten AYs would have to be computed from 31 March 2023 with the said date indubitably constituting the end of the AY relevant to the previous year of search. Viewed in light of the above, the block period of 10 AYs would be as follows:- Computation of the ten-year block period as provided under Section 153C read with Section 153A of the Act No. of years AY 2022-23 1 AY 2021-22 2 AY 2020-21 3 AY 2019-20 4 AY 2018-19 5 AY 2017-18 6 AY 2016-17 7 AY 2015-16 8 AY 2014-15 9 AY 2013-14 10 91. Tested on the aforesaid precepts, it would be manifest that AY 2022-23 would form the first year of the block of ten AYs and with the maximum period of ten AYs terminating in AY 2013-14. We, in this regard also bear in consideration the following instructive passages as appearing in the decision handed down by a learned Judge of the Madras High Court in A.R. Safiullah. We deem it appropriate to extra .....

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..... rovision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically construed. 11. One other contention urged by the standing counsel has to be dealt with. It is pointed out that the petitioner has invoked the writ jurisdiction at the notice stage. Since the petitioner has demonstrated that the subject assessment year lies beyond the ambit of the provision, the respondent has no jurisdiction to issue the impugned notice. Once lack of jurisdiction has been established, the maintainability of the writ petition cannot be in doubt. In our considered opinion, the decision in A.R. Safiullah correctly expounds the legal position and the interpretation liable to be accorded to the identification of the ten AYs which are spoken of in Sections 153A and 153C. 92. List II, forming part of this batch pertains to cases where Satisfaction Notes of the AO of the non-searched per .....

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..... etitions placed in that list pertain to cases where the hand over occurred in FYs 2022-23 and 2023-24. Consequently, the relevant AYs would be AY 2023-24 and AY 2024-25 respectively. In light of the principles enunciated by us and which explain how the period of six and ten AYs is liable to be computed, the reopening of assessments pertaining to AYs 2010-11, 2011-12, 2012-13 and 2013-14 would clearly fall beyond the ambit of ten AYs as provided under Section 153C read with Section 153A. We note in this behalf that all of the writ petitions forming part of List II pertain to the aforenoted AYs 2010-11, 2011-12, 2012-13 and 2013-14. 98. We are therefore of the opinion that the Section 153C notices issued against the writ petitioners placed in List I and insofar as they pertain to AYs 2010-11, 2011-12 and 2012-13 would not sustain being beyond the relevant assessment year which could have possibly formed the basis for initiation of action under that provision. Similarly, the Section 153C notices impugned by the writ petitioners placed in List II and insofar as they pertain to AYs 2010-11, 2011-12, 2012-13 and 2013-14 and which have been found to fall outside the net of relevant assess .....

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..... fied asset at this stage be less than INR 50 lakhs, the AO must on the basis of cogent reasons so recorded be of the opinion that the ultimate computation of escaped assessment is likely to exceed INR 50 lakhs. The aforesaid satisfaction would have to be based on a valid assessment of the material gathered and the potentiality of the same being indicative of the escaped assessment exceeding INR 50 lakhs. The notice under Section 153C would have to clearly reflect due application of mind by the AO in this respect and be prima facie sustainable. The formation of opinion in this respect would have to be based not on mere ipse dixit but reflective of being based on a fair assessment of the quantum of income likely to have escaped assessment as opposed to being speculative and conjectural. In case the AO intends to reopen assessment for the ten year block period, it would have to be shown that the formation of opinion in that respect is referenced to the material obtained in the search and in its possession and the same having the prospect or likelihood of escaped income being pegged at INR 50 lakhs or more. The Fourth Proviso, when interpreted along the lines suggested by us, and which .....

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..... nlarged to cover ten AYs . It is also pertinent to note that the concept of a search assessment now stretching up to ten AYs was contemporaneously introduced both in Section 153A as well as Section 153C. The submission of the writ petitioners of the amended Section 153C not being applicable proceeds on account of the four additional AYs which have now become liable to be reassessed. According to the writ petitioners, any assessment which may have attained finality prior to 01 April 2017 and which could not have formed subject matter of assessment or reassessment, either under Sections 153A or 153C or for that matter the other cognate provisions of the Act, would be immune and cannot be subjected to a fresh assessment in accordance with Sections 153A and 153C as they came to exist on the statute book after 01 April 2017. It was in the aforesaid backdrop that the decisions of the Supreme Court in S.S. Gadgil and K.M. Sharma as well as of this Court in C.B. Richards Ellis and Brahm Dutt had been cited for our consideration. 105. We, however, find ourselves unable to sustain this leg of the challenge for reasons which are recorded hereinafter. It becomes pertinent to note at the outset .....

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..... ble to tax has escaped assessment in the case of the assessee for the relevant AY. While under the earlier regime, and as Section 148 stood prior to its amendment on 01 April 2021, the expression information had not been specifically defined, the power to reassess rested upon the AO having reason to believe that income chargeable to tax had escaped assessment. The unamended Sections 147 and 148 placed an added fetter upon the AO in cases where reassessment was proposed to be undertaken after the expiry of four years from the end of the relevant AY and the same being qualified by it being found that the assessee had failed to fully and truly disclose all material facts necessary for the purposes of assessment. 107. The amended Section 148 expands the meaning to be assigned to the word information , as would be evident from Explanation 1 and also incorporates deeming provisions by virtue of Explanation 2 and in cases where the said provisions were to apply, the AO is deemed to have information which suggests that income chargeable to tax had escaped assessment. While admittedly Explanation 2 to Section 148, and more particularly clause (i) thereof, speaks of material gathered in the .....

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..... s down upon search assessments liable to be made in accordance with the trinity provisions with effect from 01 April 2021. This, since Parliament by virtue of Finance Act, 2021 had merged the original reassessment power as well as those which may be predicated upon a search within the ambit of Section 148 and its family of provisions. 110. The contention with respect to retroactivity would also not sustain in light of the manifest intent of the search assessment power being statutorily intended to be invoked and available to be exercised in respect of all searches conducted between 31 May 2003 and 31 March 2021. This, coupled with the non obstante language embodied in Sections 153A and 153C, in our considered opinion, demolishes the argument of finality and AYs 2010-11 and 2011-12 being rendered invulnerable. Regard may also be had to the fact that the Fourth Proviso to Section 153A which came to be added contemporaneously with Explanation 1 and the inclusion of the concept of relevant assessment year in that provision restricted its application to searches conducted on or after 01 April 2017. This again is a clear indication of the legislative intent being to cover all searches co .....

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..... the particulars of the income. She had of course not deliberately furnished inaccurate particulars thereof. If the case was governed by the 1948 Amendment she would come within the eight-year rule because she had failed to furnish a return. Now, we do not think that we can treat the different periods indicated under Section 34 as periods of limitation, the expiry of which grant prescriptive title to defaulting tax-payers. It may be said that an assessment once made is final and conclusive except for the provisions of Sections 34 and 35 but it is quite a different matter to say that a vested right arises in the assessee. On the expiry of the period the assessments, if any, may also become final and conclusive but only so long as the law is not altered retrospectively. Under the scheme of the Income Tax Act a liability to pay tax is incurred when according to the Finance Act in force the amount of income, profits or gains is above the exempted. That liability to the State is independent of any consideration of time and, in the absence of any provision restricting action by a time limit, it can be enforced at any time. What the law does is to prevent harassment of assessees to the end .....

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..... imit of time. What we have said above about the amendment of 1948 applies mutatis mutandis also to the amendment of 1956. That provision was also to operate retrospectively as has been stated by us earlier. There is good reason to think that this is the correct view because when the Calcutta High Court in the Debi Dutta Moody case held that the 1956 amendment was not applicable to the case, Parliament passed the 1959 Act nullifying that decision. By the same Act, Parliament gave power to issue a notice at any time in all these cases in which the eight-year period under the principal Act as it stood prior to the 1956 Amendment, had expired. The words at any time mean what they say. There is no special meaning to be attributed to them. Any time thus meant action to be taken without any limit of time. A similar result was reached in certain cases under the 1953 Amendment of the second proviso to sub-section (3) of Section 34. It provided : nothing in the section limiting the time within which any action may be taken shall apply to an assessment or re-assessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order unde .....

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..... nd which may culminate in the creation of a liability coupled with the power to enforce that liability. Although we have extracted the relevant paragraphs of that decision in the preceding parts of this judgment, for the sake of continuity, we deem it apposite to reproduce the following passage from that judgment hereunder:- 12. Law of limitation does not create any right in favour of a person or define or create any cause of action, but simply prescribes that the remedy can be exercised or availed of by or within the period stated and not thereafter. Subsequently, the right continues to exist but cannot be enforced. The liability to tax under the Act is created by the charging Section read with the computation provisions. The assessment proceedings crystallize the said liability so that it can be enforced and the tax if short paid or unpaid can be collected. If this difference between liability to tax and the procedure prescribed under the Act for computation of the liability (i.e. the procedure of assessment), is kept in mind, there would be no difficulty in understanding and appreciating the fallacy and the error in the primary argument raised by the Revenue. It is a settled pos .....

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..... ose provisions override and are ordained to operate above and beyond the normal assessment or reassessment provisions. At the time when they were originally introduced in the statute in 2003, they enabled the AO to carry out an assessment exercise stretching over six AYs . In 2017, the provisions came to be amended and the AO consequently came to conferred further power to reopen ten AYs . We have already found that the power to initiate an assessment under Sections 153A and 153C is separate and distinct from the ordinary reassessment provisions comprised in Section 148. Both sets of provisions are intended to operate in separate silos. The power to assess over a larger period of ten years when introduced in the concerned provisions was made subject only to the preconditions comprised in the Fourth Proviso to Section 153A. All that the Legislature deemed appropriate to provide was to restrict the application of that power to searches conducted on or after 01 April 2017 subject of course to the fulfilment of the other stipulations placed in the provisions and the existence of the jurisdictional prerequisites. 116. The very fact that the statute in unequivocal terms provisioned for i .....

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..... erent sets of 6 years for reopening of the assessments in case of the person searched and the other person? 118. Having examined the issue of commencement point for the purposes of computation of the six and the ten year block under Section 153C of the Act in detail in the foregoing paragraphs of this judgment, we find no perversity in the findings recorded by the Income Tax Appellate Tribunal [ITAT] while passing the impugned order dated 29 July 2022. We also additionally find that the ITAT committed no error in holding that the 2017 Amending Act would not apply to the facts of the present case since the search was conducted prior to the introduction of the 2017 amendments and consequently the extended ten year block would not apply in the facts of that case. Consequently, no substantial question of law arises in the instant appeal. We see no reason to interfere with the ITAT s impugned order dated 29 July 2022. The appeal is thus liable to be dismissed. K. SUMMARY OF CONCLUSIONS 119. We thus record our conclusions as follows: A. Prior to the insertion of Sections 153A, 153B and 153C, an assessment in respect of search cases was regulated by Chapter XIVB of the Act, comprising of .....

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..... period 01 June 2003 to 31 March 2021. In terms of that provision, the AO stands similarly empowered to undertake and initiate an assessment in respect of a non-searched entity for the six AYs as well as for the relevant assessment year . The AYs , which would consequently be thrown open for assessment or reassessment under Section 153C follows lines pari materia with Section 153A. 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 non- searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso o .....

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..... of the evidence collected or come to a definitive opinion with respect to the total income which may have escaped assessment. Since the computation and assessment of income that is likely to have escaped assessment would at this stage be provisional, it would be incorrect to strike down initiation of action on a mere ex facie examination of the Satisfaction Note. We also in this regard bear in mind the Fourth Proviso using the expression amounts to or is likely to amount . The usage of the phrase likely to is indicative of the Legislature being conscious of the provisional character of the opinion that the AO may have formed at that stage. H. However, and at the same time, even if the identified asset at that stage be quantified as less than INR 50 lakhs, the AO must for reasons to be duly recorded, be of the opinion that the ultimate computation of escaped income is likely to exceed INR 50 lakhs. The aforesaid satisfaction would have to be based on an assessment of the material gathered and the potentiality of the same being indicative of the escaped assessment exceeding INR 50 lakhs. The formation of opinion in this respect would have to be based not on mere ipse dixit but reflec .....

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..... conducted between 31 May 2003 to 31 March 2021, and the Fourth Proviso in unambiguous terms extending the applicability of those provisions to all searches conducted post 01 April 2017 and Sections 153A and 153C superseding the provisions for reassessment, otherwise appearing in the Act. M. The argument of closure also fails to take note of the accepted distinction between the liability to tax under the Act and the right to assess and enforce a liability created pursuant thereto. While a statute may denude an authority of the power to enforce a liability and in that limited sense conferring finality upon an assessment, the said position would prevail only till such time as that halo of impregnability is not statutorily removed. As was eloquently observed by the Supreme Court, the deprivation of a power to enforce would not lead to the creation of a vested right. As was pertinently observed, the liability to the State exists and operates de hors a consideration of time and in the absence of the statute itself imposing a time limit. The only limitations which are introduced while enacting Sections 153A and 153C was of the period within which the search had been conducted. L. DISPOSTI .....

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