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TMI Blog2024 (6) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act bearing in mind the First Proviso placed in that provision and which exempts the respondents from following the procedure prescribed by clauses (b), (c) and (d) of Section 148A in a search case and where the search is initiated on or after 01 April 2021. 2. When the writ petition was initially entertained, the Court had prima facie found that the impugned action would fall foul of Section 149 (1) of the Act bearing in mind the timeframes within which an assessment could have been reopened. It was after taking note of the aforesaid contention that we had proceeded to issue notice on the present writ petition and stayed the reassessment proceedings. 3. Appearing for the petitioner, Mr. Jain, learned counsel, drew our attention to the order dated 15 April 2024 passed in Filatex India Ltd. vs. Deputy Commissioner of Income Tax & Anr. WP(C) 12148/2023, and where while dealing with an identical question, upon taking note of the manner in which the relevant period under Section 153C is liable to be reckoned, and which we had otherwise dealt with in some detail in our decision rendered in Principal Commissioner of Income Tax-1 vs. Ojjus Medicare Pvt. Ltd 2024 SCC OnLine Del 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch 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 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. 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." 5. In view of the aforesaid, we find ourselves unable to sustain the impugned notice dated 13 March 2023 issued under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 (1) stands framed. 7. In order to appreciate the correctness of the submissions addressed on behalf of the respondents, we deem it apposite to extract the relevant parts of Section 149 (1) hereunder: "149. Time limit for notice.- (1) No notice under Section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of- (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: Provided that no notice under Section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under Section 148 or Section 153-A or Section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t pertaining to AY 2013-14. 11. The computation of the six or the block of ten AYs' was explained by us in Ojjus Medicare Private Limited in the following terms: "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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputedly was the date from when Finance Act, 2021 came into effect. 13. While it is true that Section 153C and the procedure prescribed therein had ceased to be applicable post 31 March 2021, the First Proviso to Section 149 (1) does not appear to suggest that the First Proviso to Section 153C (1) would either become inapplicable or be liable to be ignored. Undisputedly, the First Proviso to Section 153C (1), by virtue of a legal fiction enshrined therein requires one to treat the date of initiation of search, and which otherwise constitutes the commencement point for a search assessment in the case of a non-searched party, to be construed as the date when books of accounts or documents and assets seized or requisitioned are transmitted to the AO of such "other person". Resultantly, the computation of the six preceding AYs' or the "relevant assessment year" in the case of the non-searched entity has to be reckoned from the time when the material unearthed in the search is handed over to the jurisdictional AO. The import of this legal fiction is no longer res integra bearing in mind the judgment of the Supreme Court in CIT v. Jasjit Singh & Ors. 2023 SCC Online SC 1265 and the whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents as it existed prior to Finance Act, 2021 and the indubitable fact that while in the case of the searched person, the six year or the ten year block period is liable to be computed with reference to the date of search, in the case of the non-searched entity, it has to necessarily be the date when the material is handed over to the jurisdictional AO of the "other person". All that would happen in the case of a search which takes place on or after 01 April 2021, and which warrants a reassessment action being commenced in relation to an AY prior to the first day of April, 2021, since no transmission of material would have occurred, we would necessarily have to bear in mind, the date when a decision may be taken by the jurisdictional AO to proceed against the non-searched entity in terms of the amended scheme pertaining to search assessments, and which now stands merged with the larger power of reassessment which stands comprised in Sections 147 and 148 of the Act. 17. Insofar as the two Provisos to Section 149 (1) are concerned, we had in Ojjus Medicare Private Limited observed as follows: "108. We also find ourselves unable to countenance the submissions based upon the two Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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