Income Tax Appellate Tribunal - Delhi
Assistant Commissioner Of Income Tax, ... vs Sukhija Restaubar Private Limited, ... on 10 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH, 'C': NEW DELHI
BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER
AND
SHRI M. BALAGANESH, ACCONTANT MEMBER
ITA No.2969/Del/2025
Assessment Year 2017-18
Asstt. Commissioner of Vs. Sukhija Restaubar Private
Income Tax, Limited
Central Circle -30 Flat no.55,
New Delhi FF and SF Khan Market,
PAN No.AAPCS5293M New Delhi-110003
Appellant Respondent
Appellant Sh. Kranti, CIT DR
Respondent Sh. Anil Sethi, CA(virtual)
Date of Hearing 27.01.2026
Date of Pronouncement 10.03.2026
ORDER
PER C.N. PRASAD, JM,
This appeal is filed by the revenue against the order of the Ld. CIT(A)-30, New Delhi dated 17.01.2025 for the A.Y.2017-18.
2. The revenue has raised following grounds of appeal :-
"1. Whether on the frets and in the circumstances of the case and in the provisions of the law, the Ld. CIT(A) is correct in allowing the appeal of the assessee without appreciating the facts of the case.
2. Whether the Ld. CIT(A) is correct in allowing the appeal in accordance with the provision of section 153C instead of section 143(3) of the Act by considering the additional grounds.
3. Whether the Ld. CIT(A) is correct in allowing the appeal of the assessee ignoring the fact that in this case, search was conducted on 22.10.2016 ie, during F.Y. 2016- 17, therefore assessment proceedings were initiated u/s 143(2) of the Act for the year under consideration and six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted assessment proceedings were initiated in accordance with the legal framework provided under Section 153C of the Act.
4. Whether the Ld. CIT(A) is correct in not adjudicating the appeal without considering the merits of the case."
3. The DR placed reliance on the order of the AO and the Ld. Counsel for the assessee placed reliance on the decision of the Ld.CIT(A).
4. Heard rival submissions and perused the orders of the authorities below. On perusal of the order of the Ld. CIT(A) it is noticed that the Ld. CIT(A) following the decisions of the Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh (458 ITR 437) and the decision of the Hon'ble Jurisdictional High Court in the case of PCIT vs. Ojjus Medicare Pvt.Ltd. (161 taxmnan.com 160) Page | 2 held that the impugned assessment year i.e. 2017-18, the assessment should have been completed by issue of notice u/s.153C and not u/s.143(3) of the Act as was done by the AO observing as under :-
"9.1 The assessee submitted that the issue of the "terminal date or "relevant date," being the date of handing over the seized documents or the date of recording satisfaction by the JAO, for computing the six-year block period in the case of a non-searched person, is no longer res integra.
Appellant mainly relied on the Hon'ble Supreme Court judgment in the case of CIT 14 vs. Jasjit Singh [2023] 458 ITR 437 (SC)[26-09-2023] which has interpreted the legislative intent behind inserting the first proviso to Section 153C(1) of the Act and stated that 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 Hon'ble Supreme Court has finally concluded that in case of non-searched person, the date of receipt of books of accounts by the jurisdictional officer of such other person shall be the date of reference for calculation of six assessment years for which the Assessing Officer may initiate assessment in terms of section 153C of the Act.
9.2 the case Further, appellant relied on the very recent decision of Hon'ble of OJJUS MEDICARE PVT. LTD. [2024] Delhi in 161 taxmann.com 160 (Delhi)[03-04- 2024] which has dealt this issue in length after considering the history of amendments made in Section 153A and 153C by various Finance Acts including the Finance Act, 2017 and also took into consideration the various decisions on this issue including the decision of the Hon'ble Supreme Court in Page | 3 the case of Jasjit Singh (2023 SCC Online SC 1265) and held that Block period of six preceding AYs u/s 153C shall be computed from the date of receipt by the AO of the non-searched person of the books or documents or assets seized or requisitioned.
9.3 In view of the aforesaid decisions of the Hon'ble Supreme Court and the Jurisdictional Hon'ble High Court of Delhi, the assessee submitted that the terminal date for counting six preceding assessment years for the purpose of making assessment u/s 153C in the case of person other than searched person shall be the date of handing over of the seized documents/date of recording satisfaction by the AO of that other person.
9.4 In the case of the assessee, such date of handing over the seized material by the AO of searched person is on 26.09.2018. Therefore, the six preceding assessment years for the purpose of making an assessment under Section 153C will be counted from this date, i.e., 26.09.2018 and the six preceding assessment years will cover the AY 2013-14 to AY 2018-19.
9.5 The assessee, thus, submitted that since AY 2017- 18, the year under consideration, falls within the block of six preceding assessment years, the assessment for this year should have been conducted in accordance with the provisions of Section 153C, rather than Section 143(3) of the Act.
9.6 The assessee also submitted that the assessment order for the relevant assessment year was passed under Section 143(3) without recording satisfaction note or without issuing notice u/s 153C, which are the primary statutory conditions for making assessment u/s 153C, therefore, the impugned assessment order passed u/s 143(3) of the Act is suffered from jurisdictional defect and the same is ball in law and hence, deserves to be quashed.
Page | 4 9.7 The assessee also placed heavy reliance on the recent decision of the Hon'ble Delhi ITAT in the case of Akansha Gupta vs ACIT Central Circle-04, Delhi vide ITA no. 3074/Del/2023; dated 10.07.2024:
"The facts of this case are par-materia to the case of the assessee. A search and seizure operation took place on 06.01.2021 concerning the Hans Group, Praveen Jain, and Janco Limited. During the search, the AO seized certain documents, including clone data from Praveen Kumar Jain's mobile, which revealed evidence of unaccounted cash receipts of Rs.94 lakhs and a commission payment of Rs.2.50 lakhs related to a property sale by the assessee to Ms. Navita Malhotra and Mr. Gurdeep Singh Before the ITAT, the assessee raised an additional ground, challenging the validity of the assessment order under Section 143(3) dated 29.12.2022, which followed a notice under Section 143(2) issued on 30.06.2022. The assessee argued that the assessment for the relevant year should have been made under Section 153C, as the satisfaction note was recorded on 30.06.2022. The six-year block for assessments under Section 153C thus runs from this date, encompassing AY 2018 19 to AY 2022-23. Since the impugned AY 2021-22 falls within this block, the assessment should have been conducted under Section 153C rather than Section 143(3).
The ITAT accepted the additional ground, referencing a similar case (Jasjit Singh) that relied on the precedent set by V.K. Fiscal Services Pvt. Ltd. (ITA Nos. 5460 to 5465/Del/2012), which determined that the date of receiving seized documents serves as the date of the search, establishing the six- year period from that date.
Page | 5 Therefore, the ITAT concluded that the assessment for AY 2021-22 should have been initiated with a notice under Section 1530 instead of Section 143(2) as performed by the AO. The Ld. DR did not present any contrary evidence or decisions.
Consequently, the assessment order Hated 29.12.2022, issued under Section 143(3) following the notice under Section 143(2) dated 30.06.2022, is deemed invalid. Both the notice and the assessment order are hereby quashed."
9.8 1 have considered the facts of the case, the legal contentions raised by the assessee through the additional grounds, the written submissions made in this regard, and the order passed by the Assessing Officer.
9.9 The following dates and events are relevant to resolve this controversy. The primary issue raised by the assessee through the additional grounds is whether the assessment order for the relevant assessment year (AY 2017-18) should have been passed under Section 153C of the Act, supported by a recorded satisfaction note and a notice under Section 153C.
9.10 Another important fact is that the AO calculated the six-year block period for assessments under Section 153C of the Act from the date of the search on 22.10.2016, which is clearly not the correct position in law.
9.11 This issue as to what will be the terminal date for computing six assessment years block period in case of a non-searched person is no longer res integra. The Hon'ble Supreme Court in the case of CIT-14 vs. Jasjit Singh [2023] 458 ITR 437 (SC)[26-09-2023] has in very clear terms held that in case of non-searched person, the date of receipt of books of accounts Λ.Υ. 2017-18, Appeal No.30/10524/2019-20 by the jurisdictional officer of such other person shall be the date of Page | 6 reference for calculation of six assessment years for making assessment under section 153C of the Act.
9.12 The relevant extract of the judgement is reproduced herewith for reference:
9. It is evident on a plain 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-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third-party assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law, Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain Page | 7 reading of Section 153-C supports the interpretation which this Court adopts.
11. For the foregoing reasons, the Court finds no merit in these appeals; they are accordingly dismissed, without order on costs."
9.13 Further, the Hon'ble Jurisdictional High Court of Delhi also in the case of OJJUS MEDICARE PVT. LTD. [2024] 161 taxmann.com 160 (Delhi)[03-04-2024] after taking into consideration the various decisions on this issue including the decision of the Hon'ble Supreme Court in the case of Jasjit Singh (supra) held that Block period of six preceding AYs u/s 153C shall be computed from the date of receipt by the AO of the non- searched person of the books or documents or assets seized or requisitioned which falls under A.Y. 2023-24 for year under consideration (present case).
Relevant conclusion para of this decision is reproduced as below:
*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 1530, 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 of Page | 8 Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sufitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted.
E. The reckoning of the six AYs' would require one to 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."
Further, similar controversy arose before the Hon'ble ITAT Delhi in the case of Akansha Gupta vs ACIT Central Circle 04 Delhi in ITA no. 3074/Del/2023; dated
10.07.2024 where the facts were exactly similar as present in the case of the assessee. A search and seizure operation occurred on 06.01.2021 involving the Page | 9 Hans Group, Praveen Jain, and Jainco Limited. During the search, the AO seized various documents, including cloned data from Praveen Kumar Jain's mobile phone, which provided evidence of unaccounted cash receipts amounting to ₹94 lakhs and a commission payment of Rs.2.50 lakhs related to a property sale by the assessee to Ms. Navita Malhotra and Mr. Gurdeep Singh.
Before the ITAT, the assessee presented an additional ground, contesting the validity of the assessment order under Section 143(3) dated 29.12.2022, which followed a notice under Section 143(2) issued on 30.06.2022. The assessee contended that the assessment for the relevant year should have been conducted under Section 153C, as the satisfaction note was recorded on 30.06.2022.
Consequently, the six-year block for assessments under Section 153C runs from this date, covering AY 2018-19 to AY 2022-23. Since the assessment year in question, 2021-22, falls within this block, the assessment should have been carried out under Section 153C rather than Section 143(3).
The ITAT accepted the additional ground and concluded that the assessment for AY 2021-22 should have been conducted under Section 153C instead of Section 143(3). As a result, the ITAT quashed both the notice under Section 143(2) and the assessment order issued under Section 143(3) of the Act.
Page | 10 Relevant paras of the decision are reproduced as follows:
"4. The assessee is an individual and filed her return of income on 24.12.2021 declaring total income of Rs.63,67,760/-. The return was processed u/s 143(1) of the Act on 29.03.2022. A search and seizure action was carried out on 06.01.2021 in the cases of Hans Group/Praveen Jain/Janco Limited and the close associates and few transacting parties with whom the assessee Ms. Akansha Gupta had entered into unaccounted cash transactions, According to the AO, during the course of search action u/s 132 of the Act, conducted at C-42, C block, Preet Vihar, Delhi- 110092, certain documents/digital evidences in from of clone data of Praveen Kumar Jain's mobile were seized. In this clone data, a Kachi Parchi was found from where the AO found evidence of receipt of unaccounted cash of Rs.94 lakhs and payment of commission of Rs.2.50 lakhs in respect of sale of a property situated at E-92, 2nd Floor, Preet Vihar, Delhi- 110092 by the assessee to Ms. Navita Malhotra and Shri Gurdeep Singh. This property was registered on 28.01.2021. After considering the submissions of the assessee, the Assessing Officer passed an assessment order u/s 143(3) of the Act on 29.12.2022 determining total income at Rs. 1,60,17,760/- after making an addition of Rs. 94,00,000/- towards undisclosed sales consideration and Rs.2.50 lakhs as unexplained expenditure.
8. We have considered the rival submissions and perused the material available on record. We find merit in the submission of the assessee that the legal ground raised by way of additional ground goes to the root of the matter as it challenges the legal validity of the order u/s 143/3) dated 29.12.2022 passed in pursuance of notice u/s 143(2) of the Act issued on 30.06.2022. Therefore, first take up the additional ground for adjudication. These Page | 11 additional grounds were not raised before the Ld. CIT(A) nor any similar plea was taken before the AO, but since the additional grounds are purely legal ground and all the facts relating to the same are already part of record, therefore, the same is admitted in view of the decision of the Hon'ble Apex Court in the case of National Thermal Power Corporation [1998] 229 ITR 383(SC) and is hereby adjudicated.
8.1. On perusal of the satisfaction note, it is seen that the same was recorded on 30.06.2022 by the AO after giving a finding that the clone data of Pravin Kumar Jain's Mobile marked as Annexure-5 belongs to the assessee, which has bearing on the determination of total income of the assessee for the relevant assessment years referred to in sub section-1 of section 153A of the Act and it was a fit case for initiating proceedings in the case of the assessee for AY 2015-16 to 2020- 21 u/s 153C of the Act and for AY 2021-22 u/s 143(2) of the Act. Thereafter, he issued a notice u/s 143(2) on 30.06.2022 for AY 2021-22. On similar facts, the Coordinate Bench of the Tribunal in the case of Jasjit Singh (supra referred to the decision in the case of Co- ordinate Bench in the case of V.K. Fiscal Services Pvt. Ltd. ITA Nos.5460 to 5465/Del/2012, wherein, it was held that the date of receiving of the seized documents would become the date of search and six years period would be reckoned from this date........
9. Therefore, in view of the above decision, the date of recording of the satisfaction will be the deemed date for the possession of the seized documents, which is 30,06.2022 in the present case and the date of search and six years period would be reckoned from this date te. 30.06.2022. Therefore, there is merit in the submission of the assessee that the assessment year relevant for previous year in which search was conducted in the case of the Page | 12 assessee will be AY 2023-24 and the six assessment years immediately preceding the assessment year relevant for the previous year in which search was conducted for initiating proceeding u/s 153C of the Act will be AY 2018-19 to 2022-23. Therefore, respectfully following the decision of the cited case, it is held that in the present case, the assessment for AY 2021-22 should have been carried out by issuing notice u/s 153C of the Act and not u/s 143(2) of the Act as done by the AO in this case. No other contrary facts or decision was brought on record by the Ld. DR Therefore, it is held that the assessment order dated 29.12.2022 passed u/s 143(3) of the Act by the issuance of notice u/s 143(2) of the Act dated 30.06.2022 is bad in law and hence the notice u/s 143(2) of the Act, dated 30.06.2022 and the consequent assessment order dated 29.12.2022 passed u/s 143/3) of the Act are hereby quashed. The additional grounds filled by the assessee are allowed."
9.14 Further, the above view has been affirmed by the Hon'ble Delhi High Court, where the Hon'ble Court decided the aforementioned issue in favour of the assessee and quashed the order passed for the year of search under Section 143 93) of the Act, which fell within the block period of six ssessment years from the date of recording satisfaction under Section 1530, holding that the order should have been passed under Section 153C of the Act.
9.15 In this context, it is Important to highlight the fact that the Hon'ble Delhi High Court in the case of PCIT (Central)-3 v. M/s Pavitra Realcon Pvt Ltd in ITA nos. 579, 587 & 590/2018; dated 29.05.2024 took similar view. In this case, the assessee challenged the validity of the assessment proceedings through additional ground before the ITAT that the assessment being wrongly framed u/s 143(3) of the Act, whereas assessment should have been framed u/s 153C since the period under consideration (AY 2011-12) falls in six years block period prescribed u/s 153C of the Act. The ITAT admitted the aforesaid additional ground and set aside the assessment order passed u/s 143(3) of the Page | 13 Act vide order dated 04.10.2017 by holding that the assessment proceedings should have been conducted as per the provisions of Section 153C of the Act since the AY 2011-12 fell into the block period of six years from the date of recording satisfaction on 27.07.2012, which was the deemed date of search u/s 153C of the Act. The Hon'ble High Court affirmed the order of the ITAT by holding at para 36 that we find no reason to intermeddle with the order of the ITAT which has rightly set aside the assessment order and deleted the additions made therein."
9.16 Respectfully following the decisions of the Hon'ble Supreme Court in the case of Jasjit Singh(supra) and the Hon'ble Delhi High Court in the case of OJJUS MEDICARE PVT. LTD. (supra) and M/s Pavitra Realcon Pvt. Ltd. (supra), I concur with the contention of the assessee that the six preceding assessment years in his case should be calculated from the date of recording satisfaction note by the AO on 26.09.2018 and not from the date of search. Appellant has furnished satisfaction note, wherein in appellant's case, satisfaction note and notices have been issued for on A.Y. 2011-12 to 2016-17 only. The satisfaction note of searched person and appellant is scanned as below:
satisfaction note drawn by the Id. AO of searched person and the id. AO of the appellant company is being reproduced hereinbelow:
Page | 14 However, the correct six assessment years block period for the purpose of making assessment u/s 153C in case of the assessee would be the AY 2013-14 to AY 2018-19. Admittedly, the year under consideration (A.Υ. 2017-18) falls in this correct block period of six AYs, therefore, the assessment for the impugned AY 2017-18 should have been carried out in accordance with the provisions of Section 153C of the Act and Page | 15 consequent order should be passed under that section only not under sec. 143(3) of the Act.
Accordingly, the additional ground raised by the assessee is allowed."
5. On careful perusal of the order of the Ld. CIT(A) and the findings thereon we find no infirmity in the order passed by the Ld. CIT(A) in holding that the assessment for the impugned assessment year should have been completed by way of issue of notice u/s.153C of the Act and not u/s.143(3) of the Act in view of the decision of the Hon'ble Supreme Court in the Case of CIT Vs. Jasjit Singh (supra) and the decision of the Hon'ble Jurisdictional High Court in the case of PCIT Vs. Ojjus Medicare Private Limited (supra). Ground Nos. 2 and 3 of grounds of appeal raised by the revenue are rejected.
6. In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on
10.03.2026.
Sd/- Sd/-
[M. BALAGANESH] [C.N. PRASAD]
ACCOUNTANT MEMBER JUDICIAL MEMBER
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Dated: 10.03.2026
*Neha, Sr.PS
Copy forwarded to:
1. Appellant
2. Respondent
3. PCIT
4. CIT(A)
5. DR
Asst. Registrar,
ITAT, New Delhi
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