ITAT Delhi Quashes Time-Barred Assessments: Limitation Period Under Section 153C Commences from AO's Receipt of Seized Documents
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, recently delivered a pivotal ruling regarding the computation of the limitation period for assessments framed against non-searched entities. In the matter of DCIT Vs Maharaja Agarsain Builders Private Limited, the Tribunal dismissed the Revenue's appeals, affirming that the statutory clock for proceedings under Section 153C of the Income Tax Act 1961 begins ticking only when the jurisdictional Assessing Officer (AO) of the non-searched entity receives the seized materials, not on the date the search was originally conducted.
This summary analyzes the factual matrix, the disputed tax additions, the core legal controversy surrounding the jurisdictional time window, and the precedents relied upon by the Tribunal to arrive at its conclusion.
Factual Matrix of the Dispute
The genesis of the litigation traces back to a search and seizure operation executed on 18 October 2019. This operation targeted the Alankit Group and its associated entities. Subsequent to this search, the tax department initiated proceedings against a non-searched entity, the assessee (Maharaja Agarsain Builders Private Limited), on 16 September 2022.
The Assessing Officer proceeded to frame assessments for Assessment Years (AYs) 2011-12 and 2012-13 under Section 153C read with Section 144 of the Income Tax Act 1961.
Aggrieved by the assessment orders, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. On 15 December 2025, the CIT(A) passed separate orders quashing the assessments for both years. The appellate authority determined that the assessment years in question fell outside the permissible statutory window, relying heavily on the jurisdictional High Court's ruling in PCIT Vs Ojjus Medicare (P.) Ltd.