Delhi ITAT Upholds Annulment of Time-Barred Section 153C Assessment for AY 2010-11 — Jurisdiction Cannot Be Assumed Beyond 10-Year Block

Case Reference

DCIT Vs Indo Greenfuel Pvt. Ltd. (ITAT Delhi)
Order Pronounced: 22.05.2026

Background and Context

The jurisdictional limits on search-related assessments under the Income Tax Act, 1961 have long been a contested battleground between the Revenue and assessees. The Delhi Income Tax Appellate Tribunal recently delivered a significant ruling in the matter of DCIT Vs Indo Greenfuel Pvt. Ltd., firmly reinforcing that the 10-assessment-year limitation embedded within Section 153C read with Section 153A is not a mere procedural formality — it is a hard jurisdictional boundary. Once crossed, any assessment order built upon such a notice collapses entirely, regardless of the merits of the underlying additions.

The case arose from an assessment framed under Section 153C of the Income Tax Act, 1961 for Assessment Year 2010-11, pursuant to a notice dated 28.09.2022. The assessee, Indo Greenfuel Pvt. Ltd., successfully challenged this notice and the consequent assessment order before the First Appellate Authority, which quashed the proceedings in their entirety. The Revenue, dissatisfied with that outcome, preferred an appeal before the ITAT Delhi — which too found no merit in the department's position and dismissed the appeal outright.

The Assessment Under Challenge

The assessment order dated 30.03.2024 was passed by the ACIT, Circle-32, New Delhi under Section 153C of the Income Tax Act, 1961 for AY 2010-11. This order arose from a notice issued on 28.09.2022, which itself was triggered in the context of search-related proceedings.

The matter came before the Principal Commissioner of Income Tax (Appeals)-25, bearing DIN No: ITBA/APL/M/250/2025-26/1081257996(1), arising from the assessment order dated 30.03.2024.

What is Section 153C and Why Does the 10-Year Limit Matter?

Scope of Section 153C

Section 153C of the Income Tax Act, 1961 governs the assessment of income belonging to persons other than those searched. When documents, assets, or incriminating material belonging to a third party are found during a search conducted against another person, the Assessing Officer may initiate proceedings against such third party under Section 153C.

The 10-Year Block Limitation

Post the Finance Act, 2021 amendment, Section 153A read with Section 153C prescribes a block of 10 assessment years within which assessments or reassessments may be made in the context of search proceedings. This limitation is not administrative in nature — it goes to the root of jurisdiction. If a notice is issued for an assessment year that falls outside this 10-year block, the Assessing Officer simply has no authority to proceed.