Allowed

Vikram Garg v. Assistant Commissioner of Income Tax Circle 19 1 Delhi and Anr.

Delhi HC19 Jul 2024W.P.(C)/4171/2024

Case brief

AI extract

What is this about?

Writ petitions challenged Section 153C notices dated 02 February 2024 for AYs beyond the ten-year limit prescribed by the Income Tax Act's proviso. Following its own decision in Ojjus Medicare, the Delhi High Court quashed the notices and all consequential proceedings.

What did the court decide?

Writ petitions allowed; impugned notices dated 02 February 2024 under Section 153C and all consequential proceedings quashed.

Vikram Garg Vs Assistant Commissioner of Income Tax Circle 19 1… — Income Tax | Delhi HC (2024)

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$~43 & 44

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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W.P.(C) 4165/2024 & CM APPL. 16976/2024 (Stay) VIKRAM GARG .....Petitioner Through: Mr. Sumit Lal Chandani & Ms. Ananya Kapoor, Advocates.

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versus

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ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19(1), DELHI & ANR .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar, Mr. Rishabh Nangia & Mr. Nikhil Jain, Advocates.

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- W.P.(C) 4171/2024 & CM APPL. 17000/2024 (Stay)

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VIKRAM GARG .....Petitioner Through: Mr. Sumit Lal Chandani & Ms. Ananya Kapoor, Advocates.

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versus

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ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 19 1 DELHI AND ANR .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar, Mr. Rishabh Nangia & Mr. Nikhil Jain, Advocates.

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CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA

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O R D E R 19.07.2024

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The present writ petitions have been preferred against the impugned notices dated 02 February 2024 issued under Section 153C of the Income Tax Act, 1961 [“ Act ”] for Assessment Year [“ AY ”] 2012-2013 [W.P(C) 4165/2023] and AY 2010-2011 [W.P(C)

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 04/07/2025 at 01:44:45

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4171/2024], and all consequential proceedings.

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Bearing in mind the undisputed fact that notices under Section 153C were dated 02 February 2024, it is ex facie evident that the aforenoted AY would fall beyond the maximum window of ten years as prescribed.

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The issue in any case stands answered and covered in favour of the writ petitioner in light of the judgment rendered in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd [2024 SCC OnLine Del 2439]. The relevant paragraphs of the aforesaid decision read as under:-

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“D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “ relevant assessment year ” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO of the non-searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia . The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted.

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E. The reckoning of the six AYs’ would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs’ would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of

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accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A.

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F. While the identification and computation of the six AYs’ hinges upon the phrase “ immediately preceding the assessment year relevant to the previous year ” of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “ from the end of the assessment year ”. This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of the assessment year” while speaking of the ten year block.”

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Accordingly, and for reasons assigned in our decision in Ojjus Medicare , we allow the instant writ petitions and quash the impugned notices dated 02 February 2024 issued under Section 153C of the Act and all consequential proceedings arising therefrom.

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YASHWANT VARMA, J

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RAVINDER DUDEJA, J

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JULY 19, 2024 sk

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Vikram Garg v. Assistant Commissioner of Income Tax Circle 19 1 Delhi and Anr.

Case brief

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Vikram Garg v. Assistant Commissioner of Income Tax Circle 19 1 Delhi and Anr.

Case brief

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