Delhi ITAT Quashes Section 153C Assessment for AY 2014-15: Six-Year Limitation Bar Upheld Following Ojjus Medicare Ruling
Case Reference
DCIT Vs Vinod Gupta (ITAT Delhi)
Order pronounced: 03.06.2026
Assessment Year in dispute: AY 2014-15
Assessment Order: Dated 28.03.2024 passed under Section 153C of the Income Tax Act, 1961
Background and Context
The Delhi Income Tax Appellate Tribunal delivered a significant ruling reinforcing the temporal limitations governing assessments under Section 153C of the Income Tax Act, 1961. The Tribunal dismissed the Revenue's appeal and affirmed the CIT(A)'s decision to annul the assessment framed against the assessee, Vinod Gupta, for AY 2014-15, holding that such assessment was clearly time-barred and could not be sustained in law.
The proceedings originated from a search operation conducted on the Alankit Group, during which certain documents allegedly connected to the assessee came to light. On the basis of these seized materials, a satisfaction note under Section 153C was drawn up on 24.06.2022, and assessment proceedings were subsequently initiated against the assessee for AY 2014-15.
Proceedings Before CIT(A)
The First Appellate Authority — CIT(A)-25, Delhi — carefully examined the facts and applied the legal principles laid down by the Delhi High Court in PCIT v. Ojjus Medicare Pvt. Ltd. (2024) 465 ITR 101. The CIT(A) passed its order on 19.08.2025, quashing the assessment, and the Revenue thereafter filed the present appeal before the ITAT.
Key Factual Findings of CIT(A)
The CIT(A) made the following critical determinations, as recorded in paragraphs 15 to 19 of the impugned order:
"The period of six assessment years as per the aforesaid decisions of the Hon'ble jurisdictional High Court of Delhi thus means six years prior to the assessment year in which the seized material was handed over to the AO of the 'other' (non-searched) person/satisfaction note u/s 153C was recorded by the concerned AO. As per record, the Satisfaction note was recorded by the AO on 24.06.2022, on which date the seized documents were also handed over to the AO of the other person (appellant) by the AO of the searched person/s. This date falls in the F.Y. 2022-23 relevant to AY 2023-24. Therefore, by this yardstick, six years period as referred to in section 153C(1) of the Act would be from AY 2017-18 to 2022-23."
This observation established the foundational premise of the entire ruling — the starting point for computing the six-year window under Section 153C is the assessment year corresponding to the financial year in which the satisfaction note was recorded and seized documents were handed over to the non-searched assessee's Assessing Officer.
Legal Framework: How the Six-Year Block Is Computed Under Section 153C
The Trigger Point
Under Section 153C of the Income Tax Act, 1961, when documents or assets belonging to a person other than the searched person are found during a search, the Assessing Officer of the searched person is required to record a satisfaction note and hand over the seized material to the Assessing Officer of the "other person." This act of handing over and recording of the satisfaction note marks the trigger event for computing the permissible six-year block of assessment years.