Limitation for assessment under Section 153C of the Income Tax Act is computed from the end of the financial year in which the seized material is handed over (or deemed handed over) to the Assessing Officer of the other person, not from the date of the original search.

ORDER

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 15th February, 2025 passed by the Ld. Commissioner of Income Tax (Appeals) - 48, Mumbai [in short, “the Ld. CIT(A)] for assessment year 2014-15 raising various grounds challenging the validity of jurisdiction, recording of satisfaction under section 153C, reference to special audit under section 142(2A), additions beyond incriminating material, and the action of the Ld. CIT(A) in remanding the matter instead of annulling the assessment. The said grounds are reproduced as under :

“1. The assessment order is null and void ab initio because the LAO had no jurisdiction over the assessee. Order passed u/s 127 is illega, without DIN and by non jurisdictional PCIT etc

2. The assessment is null and void ab initio as satisfaction recorded by LAO of searched person is belated and without DIN and therefore non est in view of Hon'ble SC decision in case of Calcutta Knitwear

3. The assessment isnull and void ab initio as the satisfaction recorded by AO of assessee is not in accordance with binding decision of jurisdictional HC of Bombay in case of Sinhgad Technical Education society.

4. The reference to special audit u/s 142(2A) is also illegal as the case of the assessee did not satisfy the conditions specifed in that section.

5. Additions on issues not covered by incriminating seized material are ultra vires and liable to be deleted.

6. The Id CIT(A) should have annulled the order isntead of sending it back to LAO”

At the outset, the Ld. Counsel for the assessee submitted that there was a delay of 20 days in filing the present appeal. It was explained that though the appeal fee was paid on 20th February, 2025 and Form No. 36 was uploaded on 21st February, 2025, the verification could not be completed as the husband of the assessee—who exclusively handled her tax matters—fell seriously ill and was hospitalized. He unfortunately expired on 9th April, 2025. Owing to these unforeseen and tragic circumstances, the appeal could not be effectively pursued within time.

Having considered the explanation and the material on record, we are satisfied that the delay was occasioned by sufficient and bona fide cause. The explanation is neither perfunctory nor lacking in credibility. In the interest of substantial justice, the delay of 20 days is condoned. The appeal is accordingly admitted for adjudication.

Before us, the assessee has also raised an additional ground challenging the limitation in passing the order u/s 153C of the Act in the case of the assessee. The said additional ground is reproduced as under:

“1) On the facts and circumstances of the case as well as in law, the Learned Assessing Officer has erred in passing the assessment order u/s 144 r.w.s 153C of the Income Tax Act, 1961, which is time barred as per the provision of the Act, therefore, the impugned assessment order is bad in law and required to be quash.”

The additional ground being purely legal in nature, going to the root of jurisdiction, and not requiring investigation into fresh facts, is admitted in view of the law laid down by the Hon’ble Supreme Court in National Thermal Power Co. Ltd. v. CIT (229 ITR 383).

Before us the Ld. Counsel for the assessee addressing the additional ground submitted that a search was conducted in the case of OPG Group on 15.11.2017. During the course of search at the residence of Shri Madhukar C. Seth, certain digital material was seized. The Assessing Officer recorded satisfaction under section 153C on 14th October, 2020, stating that the seized digital data contained books of account and financial details pertaining to the assessee, Smt. Mita Madhukar Seth.

It was further submitted that the Assessing Officer of the searched person and that of the assessee being the same, there was no physical transfer of seized material. Therefore, the date of recording of satisfaction i.e. 14.10.2020 must be treated as the date of transfer for