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Delhi rules AYs , beyond for Royal Sales
The ) has dismissed the Revenue's appeals against for (AYs) and , holding that these years fall outside the permissible under of the . The Tribunal upheld the order of the ], which had quashed the assessments as , reinforcing the principle that the for non-searched persons is tied to the date of receipt of .
The Search and the
The dispute originated from a search conducted on the on . Although the search took place in 2019, the Assessing Officer (AO) of the searched person recorded only on . Following this, the relevant was handed over to the AO having over Royal Sales, who recorded his own on and issued a notice under . Royal Sales contended that the for assessment should be calculated from the date of receipt of documents by its jurisdictional AO, not from the date of the original search.
The Legal Dispute
The Revenue argued that the erred in relying on the 's decision in , despite a pending Special Leave Petition against that ruling. It maintained that the should be computed from the year of search, as per the main provision of . On the other hand, Royal Sales relied on the 's decision in and the 's ruling in Ojjus Medicare , which established that for a , the is determined from the date of handover of documents or recording of .
Precedents in Play
The noted that the facts were squarely covered by these precedents. In Jasjit Singh , the held that the shifts the commencement point from the date of search to the date of receipt of books of account or documents by the AO of the . The in Ojjus Medicare further elaborated that the six-year for a must be reckoned from that date. The Tribunal also cited the consistent line of decisions in and , which the Revenue had unsuccessfully sought to distinguish.
The Tribunal's Verdict
The observed:
"We observe that the
and
under consideration clearly fall outside the scope of application of
of the Act
, for the reason that the date of search for the unsearched parties are the date on which the documents were handed over to the Assessing Officer of such other person or from the date on which the
was recorded by the Assessing Officer of the other person."
Applying this principle, the Tribunal held that the date of constituted the relevant point for computing the . Consequently, the six-year block would cover AYs to , leaving AYs and well outside the permissible range. The assessments were therefore beyond the limitation prescribed under , and the assumed by the AO was untenable.
Key Observations
The Tribunal quoted the in
Jasjit Singh
:
"It is evident on a
of
(1)
that the
to enact the proviso was to cater not merely to the question of
but also with regard to the date from which the six year period was to be reckoned."
It further reproduced from the 's
Ojjus Medicare
decision, which clarified that the first proviso creates a shifting the commencement point to the date of receipt of documents.
Decision and Implications
The dismissed both Revenue appeals, upholding the 's well-reasoned order. The decision reinforces that the under for non-searched persons is strictly tied to the date of receipt of , providing crucial clarity on the computation of block periods in . It also underscores that pending appeals against precedents do not dilute their unless stayed by a higher court.
