Date of Satisfaction Controls 153C Limitation: ITAT Delhi Follows Ojjus Medicare & Jasjit Singh

Delhi ITAT, in DCIT Vs Goldline International Finvest Limited, has once again reaffirmed that in cases of a non-searched person, the time-limit for issuing notice and framing assessment under Section 153C must be calculated from the date of handover/recording of satisfaction, and not from the date on which search was conducted under Section 132. As a result, assessment years falling beyond the backward span of ten assessment years are outside the permissible reach of Section 153C read with Section 153A.

The Tribunal dismissed the Revenue’s appeals and upheld the Commissioner of Income Tax (Appeals)’ orders which had annulled assessments for AY 2011-12 and AY 2012-13 as barred by limitation, following the binding decisions in:

  • PCIT Vs. Ojjus Medicare Pvt. Ltd. [2024 SCC OnLine Del 2439] (Delhi High Court), and
  • CIT Vs. Jasjit Singh [2023 SCC OnLine SC 1265] (Supreme Court).

Background Facts of the Case

Search on Alankit Group & Trigger for 153C

  1. A search and seizure action under Section 132 took place on 18.10.2019 in the case of Alankit group, including Shri Alok K Agarwal, his son Shri Ankit Agarwal and related persons.
  2. During this search, the Department allegedly found incriminating material said to pertain to Goldline International Finvest Limited (the assessee), a non-searched person.
  3. Based on that material, the jurisdictional Assessing Officer (AO) initiated proceedings under Section 153C against the assessee.

Key Dates Relating to Satisfaction & Notices

As recorded and also reiterated by the CIT(A), the critical dates in this case were:

  • Date of recording of satisfaction note by AO of searched person: 21.06.2022
  • Date of recording of satisfaction note by AO of assessee: 25.06.2022
  • Date of issue of notice under Section 153C: 25.06.2022
  • Date of assessment order under Section 153C r.w.s. 153A: 14.02.2024

Based on these, assessments were framed for:

  • AY 2011-12
  • AY 2012-13

The AO made certain additions and completed assessments under Section 153C read with Section 153A, treating them as validly covered within the permissible block of years.

The assessee carried the matter in appeal before the CIT(A) and raised both merits and technical/legal grounds. One of the primary legal challenges was that the proceedings under Section 153C were time-barred because the instant assessment years lay beyond the maximum period of ten assessment years, as contemplated under Section 153C read with Section 153A.

Assessee’s Key Contention

The assessee argued:

  • For a non-searched person, the starting point for computing both the six-year block and the extended ten-year block under Section 153C is not the date of search (18.10.2019), but the date of recording of satisfaction/handing over of seized material to the AO having jurisdiction over the non-searched person.
  • Since the relevant satisfaction/notice dates fall in FY 2022-23 (date being 25.06.2022), the relevant assessment year becomes AY 2023-24.
  • Once AY 2023-24 is accepted as the reference year, counting backward for a period of ten assessment years would terminate at AY 2014-15.
  • Consequently, any attempt to reopen or assess AY 2011-12 and AY 2012-13 under Section 153C is beyond the ten-year cap and hence without jurisdiction.

The assessee relied extensively on:

  • CIT Vs Jasjit Singh 2023 SCC Online SC 1265 (Supreme Court), and
  • Principal Commissioner of Income Tax-1 Vs. Ojjus Medicare Pvt. Ltd [2024 SCC OnLine Del 2439] (Delhi High Court).

CIT(A)’s Decision: Assessments Held Time-Barred