2026 Supreme(Online)(ITAT) 10933

INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
Challa Nagendra Prasad, Judicial Member, Renu Jauhri, Accountant Member
Ashutosh Agarwal – Appellant
Versus
DCIT – Respondent
ITA No. 6624/Del/2025 | ITA No. 6625/Del/2025 | ITA No. 6626/Del/2025

The period of 10 years under Section 153C is computed from the assessment year relevant to the satisfaction note date. Proceedings under Section 153C are invalid if the date of handing over seized materials is after 01.04.2021, as only Section 148 applies thereafter.

Headnote:(A) Income Tax Act, 1961 - Sections 68, 69A, 69C, 115BBE, 132, 132A, 148, 153A, 153C, 153D, 234A, 234B, 234C, 234D and 250 - Search and seizure - Assessment of other person - Block of 10 years - Satisfaction note - Limitation - Validity of proceedings under Section 153C - The relevant block of ten assessment years is to be computed from the end of the assessment year relevant to the year of search; the date of satisfaction recorded by the Assessing Officer of the non-searched person is pivotal for computing the block period - After 01.04.2021, proceedings against a non-searched person can be initiated only under Section 148, not Section 153C, as per sub-section (3) of Section 153C - The first proviso to Section 153C(1) is not confined to abatement only but determines the date of initiation of search for the other person for all purposes, including the applicability of Section 153C(3).

(B) Income Tax Act, 1961 - Section 153C(3) - Non-applicability - Search initiated on or after 01.04.2021 - The date of handing over of seized material to the jurisdictional Assessing Officer of the other person is the date of initiation of search for that other person; if that date is after 01.04.2021, Section 153C proceedings are invalid.

Facts of the case:
A search and seizure operation was conducted on the Alankit Group on 18.10.2019, during which incriminating documents belonging to the assessee were found. Consequently, the assessee's case was centralized and a notice under Section 153C was issued on 12.06.2023. The Assessing Officer completed the assessment under Section 153C for assessment years 2014-15, 2015-16, and 2016-17, making various additions under Sections 68, 69A, and 69C. The assessee appealed to the Commissioner of Income Tax (Appeals), who confirmed the additions. The assessee then appealed to the Tribunal.

Findings of Court:
For A.Y. 2014-15, following the decision of the jurisdictional High Court in PCIT vs. Ojjus Medicare Pvt. Ltd., the block of 10 years is to be computed from A.Y. 2024-25 (the year relevant to the satisfaction note dated 31.05.2023), making A.Y. 2014-15 fall outside the permissible block. Hence, the notice and assessment under Section 153C for this year were quashed. For A.Ys. 2015-16 and 2016-17, following the decision of the Madras High Court in Harigovind vs. ACIT and the coordinate bench decision in Smt. Geetanjali Bhayana vs. DCIT, since the satisfaction under Section 153C was recorded after 01.04.2021, proceedings could only be initiated under Section 148, not Section 153C(3). The notice and assessment under Section 153C for these years were also quashed.

Issues: The main issues were (i) whether the assessment year 2014-15 falls within the block of 10 years under Section 153C read with Section 153A; and (ii) whether, after 01.04.2021, proceedings under Section 153C are valid when the satisfaction note or the date of handing over of seized materials is after that date.

Ratio Decidendi: The court ruled that the block of 10 years is computed from the assessment year relevant to the year in which the satisfaction note was recorded by the Assessing Officer of the non-searched person. Furthermore, for searches initiated on or after 01.04.2021, Section 153C proceedings are not applicable; the date of handing over of the seized material to the jurisdictional Assessing Officer of the non-searched person is the date of initiation of search for that person, making Section 153C(3) a bar to such proceedings.

Result: All three appeals are allowed. The assessment orders under Section 153C for A.Y. 2014-15, A.Y. 2015-16, and A.Y. 2016-17 are quashed. Named entities excluded: Ashutosh Agarwal, Alankit Group, Delhi, New Delhi, Noida, Central Circle-28, Rakesh Gupta, Somil Aggarwal, Kumar Avikal Manu, Challa Nagendra Prasad, Renu Jauhri, PCIT vs. Ojjus Medicare Pvt. Ltd., Harigovind vs. ACIT, Smt. Geetanjali Bhayana vs. DCIT, Jasjit Singh, SSP Aviation, Madras High Court, jurisdictional High Court, coordinate bench.

Table of Content
1. case initiation and jurisdiction details. (Para 1)
2. appellant's grounds of appeal. (Para 2)
3. factual background: search and assessment. (Para 3)
4. quashing proceedings due to time bar and section 148. (Para 4 , 7)
5. common issues in remaining appeals. (Para 5)
6. factual background for a.y. 2015-16 and 2016-17. (Para 6)
7. application of decision and final order. (Para 8 , 9)

ORDER

Per Renu Jauhri, Accountant Member:

The above captioned three appeals in ITA Nos. 6624, 6625 & 6626/Del/2025 are preferred by the assessees against the order dated 09.10.2025, passed by Ld. CIT(A)-25, New Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Ys. 2014-15, 2015-16 & 2016-17, respectively.

2. The assessees has raised following grounds of appeal:

ITA No. 6624/Del/2025

“1. That having regard to the facts and circumstances of the case, ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C and that too without assuming jurisdiction as per law and without recording mandatory 'satisfaction' in accordance with law and without complying/following with the other mandatory conditions/procedure as laid down u/s 153C in accordance with law.

2. That in any case and in any view of the matter, action of ld. CIT(A) in confirming the action of Ld. AO in passing the impugned assessment order u/s 153C, is illegal, bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.36,66,880/- by treating it as alleged unexplained money u/s 69A and that too without there being any incriminating material found as a result of search and by recording incorrect facts and findings and without following the principles of natural justice and without confronting the adverse material on record and without providing the opportunity of cross examination.

4. That in any case and in any view of the matter, action of ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs.36,66,880/- u/s 69A, is bad in law and against the facts and circumstances of the case.

5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.21,117/- by treating it as alleged unexplained money u/s 69A and that too without there being any incriminating material found as a result of search and by recording incorrect facts and findings and without following the principles of natural justice and without confronting the adverse material on record and without providing the opportunity of cross examination.

6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.633/- by treating it as alleged unexplained expenditure u/s 69C and taxing the same u/s 115BBE and that too without there being any incriminating material found as a result of search and by recording incorrect facts and findings and without following the principles of natural justice and without confronting the adverse material on record and without providing the opportunity of cross examination.

7. That in any case and without prejudice to the above grounds, additions made in the impugned assessment order is beyond jurisdiction and illegal, also for the reason that such order could not have been made since no incriminating material has been found as a result of search.

8. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned assessment order dated 17-03-2024 without there being requisite approval in terms of section 153D and in any case approval, if any, is mechanical w

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