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TMI Blog2025 (1) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval, the same would be required to be computed from the end of the assessment year relevant to the financial year in which such satisfaction note was prepared. The petitioner has set out a tabular statement in support of his contention that the AY 2015-16 is beyond the period of ten years. In view of the above, the present petition is allowed. The impugned notice and the proceedings pursuant thereto are set aside. - HON BLE THE ACTING CHIEF JUSTICE VIBHU BAKHRU AND HON BLE MR. JUSTICE TUSHAR RAO GEDELA For the Petitioner Through: Mr Deepanshu Jain and Mr Shaantanu Jain, Advocates. For the Respondents Through: Mr Sunil Aggarwal, SSC, Mr Shivansh B Pandya, Mr Viplav Acharya, JSCs and Mr Utkarsh Tiwari, Advocate for the Revenue. Mr Atul Kumar Pandey, Advocate for R2. VIBHU BAKHRU, ACJ. (ORAL) 1. The petitioner has filed the present petition, inter alia, impugning a notice dated 30.08.2024 (hereafter the impugned notice) issued under Section 148 of the Income Tax Act, 1961 (hereafter the Act) in respect of the assessment year (AY) 2015-16. The petitioner also challenges the constitutional validity of Explanation 2 to Section 148 of the Act. 2. Mr Jain, the learned counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that sense, embodies a sunset clause insofar as the applicability of Section 153C is concerned. The First Proviso to Section 149 (1), however, bids us to go back in a point of time, and to examine whether a reopening would sustain bearing in mind the timeframes as they stood embodied in Section 149 (1) (b) or Section 153A and 153C, as the case may be. The First Proviso essentially requires us to undertake that consideration bearing in mind the timeframes which stood specified in Sections 149, 153A and 153C as they stood prior to the commencement of Finance Act, 2021. 9. Thus, an action of reassessment which comes to be initiated in relation to a search undertaken on or after 01 April 2021 would have to meet the foundational tests as specified in the First Proviso to Section 149 (1). A reassessment action would thus have to not only satisfy the time frames constructed in terms of Section 149, but in a relevant case and which is concerned with a search, also those which would be applicable by virtue of the provisions of Section 153A and 153C. 10. Undisputedly, and if the validity of the reassessment were to be tested on the anvil of Section 153C, the petitioner would be entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets 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 adopted the phraseology immediately preceding when it be in relation to the six year period and employing the expression from the end of the assessment year while speaking of the ten year block . 12. Viewed in that light, it is manifest that AY 2013-14 would fall beyond the block period of ten years. It becomes pertinent to note that the First Proviso to Section 149 (1) compels us to test the validity of initiation of action for reassessment commenced pursuant to a search, based upon it being found that the proceedings would have sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial to the and the whole line of precedents rendered by our High Court which were noticed in Ojjus Medicare Private Limited. Those decisions have consistently held that in the case of a non-searched entity, it is the date of hand over of material, as opposed to that of the actual search which would constitute the starting point for reckoning the block of six or ten jurisdictional AO, that does not convince us to revert to Section 153A and hold that the block period is liable to be computed from the date of search. That, in our considered opinion, would amount to rewriting Section 153C which would clearly be impermissible. [emphasis added] 8. In ATS Township Pvt Ltd v. Assistant Commissioner of Income Tax Circle 1(1) Delhi Others: Neutral Citation : 2024: DHC: 9978-DB , this court had noted the decision in Dinesh Jindal v. Assistant Commissioner of Income Tax, Central Circle 20, Delhi Others: (supra) in regard to the aspect of computation of the period, which could be covered under Section 153C of the Act in the context of search conducted under Section 132 of the Act or requisition made under Section 132A of the Act, and had observed as under:- 10. The learned counsel for the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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