Case Note & Summary
The petitioner, an individual with agricultural income, rental income, and partnership income from M/s. Popular Developer, was subjected to a search under Section 132 of the Income Tax Act, 1961 on 08.10.2020 along with the Popular Group. Subsequently, on 18-03-2022, the respondent issued a notice under Section 153A for Assessment Year 2011-12. The petitioner filed a return on 20-03-2022 and complied with subsequent notices under Sections 143(2) and 142(1). The Assessing Officer finalized the assessment under Section 153A(1)(b) read with Section 143(3) on 31.03.2020, making additions of Rs.36,23,855/- and Rs.2,80,50,000/-, and issued a demand notice for Rs.2,44,32,508/-. The petitioner challenged the notice on the ground that it was barred by limitation, as the search was conducted on 08.10.2020 and the six-year period under Section 153A(1)(a) would cover assessment years 2015-16 to 2020-21, not 2011-12. The respondent opposed, arguing wide ramifications. The Court, relying on the coordinate bench decision in Special Civil Application No. 16615 of 2025 and allied matters dated 05.01.2026 and the Delhi High Court decision in Principal Commissioner of Income-tax (Central-1) vs. Ojjus Medicare (P) Ltd., [2024] 161 taxmann.com 160, held that the notice was beyond the permissible period. The Court quashed the notice and the consequential assessment order and demand notice, allowing the petition.
Headnote
A) Income Tax - Search Assessment - Limitation under Section 153A - The issue was whether a notice under Section 153A for Assessment Year 2011-12 was within limitation when the search was conducted on 08.10.2020. The Court held that the six-year period immediately preceding the assessment year in which the search is conducted (2021-22) would cover AYs 2015-16 to 2020-21, and AY 2011-12 falls outside this period. Following the coordinate bench decision in Special Civil Application No. 16615 of 2025 and allied matters dated 05.01.2026, the notice was quashed. (Paras 1-5)
Issue of Consideration
Whether the notice under Section 153A of the Income Tax Act, 1961 for Assessment Year 2011-12, issued on 18-03-2022, is barred by limitation when the search was conducted on 08.10.2020?
Final Decision
The petition is allowed. The notice under Section 153A dated 18-03-2022 for Assessment Year 2011-12 is quashed and set aside. Consequently, the assessment order dated 31.03.2020 and the demand notice dated 31.03.2022 are also quashed.
Law Points
- Limitation for issuing notice under Section 153A
- Interpretation of 'six years immediately preceding the assessment year in which the search is conducted'
- Applicability of Section 153A(1)(b) read with Section 143(3)
- Binding precedent of coordinate bench
Case Details
R/Special Civil Application No. 15806 of 2022
A.S. Supehia, Pranav Trivedi
Ketan H Shah, Aman K Shah, Varun K Patel
Dy Commissioner of Income Tax
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Nature of Litigation
Writ petition challenging notice under Section 153A of the Income Tax Act, 1961 for Assessment Year 2011-12 as barred by limitation.
Remedy Sought
Quashing of notice dated 18-03-2022 under Section 153A and consequential assessment order and demand notice.
Filing Reason
The notice under Section 153A for AY 2011-12 was issued beyond the six-year period from the assessment year in which the search was conducted.
Previous Decisions
Coordinate Bench decision in Special Civil Application No. 16615 of 2025 and allied matters dated 05.01.2026; Delhi High Court decision in Principal Commissioner of Income-tax (Central-1) vs. Ojjus Medicare (P) Ltd., [2024] 161 taxmann.com 160.
Issues
Whether the notice under Section 153A for Assessment Year 2011-12 is barred by limitation when the search was conducted on 08.10.2020?
Submissions/Arguments
Petitioner: The issue is covered by the coordinate bench decision in Special Civil Application No. 16615 of 2025 and allied matters dated 05.01.2026 and the Delhi High Court decision in Ojjus Medicare (P) Ltd. The notice is beyond the six-year period.
Respondent: If the issue is answered in favour of the assessee, it will have wide ramifications.
Ratio Decidendi
Under Section 153A(1)(a) of the Income Tax Act, 1961, for a search conducted after 31.05.2003 but before 31.03.2021, the Assessing Officer may issue notice to furnish returns for each assessment year falling within six years immediately preceding the assessment year in which the search is conducted. The assessment year in which the search is conducted is the year relevant to the previous year in which the search takes place. Here, the search was on 08.10.2020, which falls in the previous year 2020-21, so the assessment year is 2021-22. The six years immediately preceding AY 2021-22 are AYs 2015-16 to 2020-21. AY 2011-12 is outside this period, hence the notice is barred by limitation.
Judgment Excerpts
Heard learned advocate Mr. Ketan Shah for the petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the respondent.
Learned advocate Mr. Ketan Shah for the petitioner at the outset has submitted that the issue is squarely covered by the decision of the Co-ordinate Bench of this Court rendered in Special Civil Application No. 16615 of 2025 and allied matters dated 05.01.2026 and in the case of Principal Commissioner of Income-tax (Central-1) vs. Ojjus Medicare (P) Ltd., [2024] 161 taxmann.com 160 (Delhi).
Procedural History
Search under Section 132 conducted on 08.10.2020. Notice under Section 153A for AY 2011-12 issued on 18-03-2022. Petitioner filed return on 20-03-2022. Assessment finalized under Section 153A(1)(b) read with Section 143(3) on 31.03.2020 (appears to be a typo, likely 31.03.2022). Demand notice issued on 31.03.2022. Writ petition filed challenging the notice.
Acts & Sections
- Income Tax Act, 1961: 132, 142(1), 143(2), 143(3), 153A, 153A(1)(a), 153A(1)(b)
