Income Tax Act | S.153C Trigger Starts On Handing-Over Date, Not Search Date: Delhi High Court

The Delhi High Court has dismissed an appeal filed by the Principal Commissioner of Income Tax (Central), Gurugram, upholding the Income Tax Appellate Tribunal's order which had rejected a reassessment notice issued under Section 153C of the Income Tax Act for AY 2013-14. A Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar held that the six-year block period under Section 153C must be computed from the date when seized documents were handed over to the Assessing Officer of the “other person,” and not from the date of search on the original assessee. The Bench held that under Section 153C's proviso, the handover date is the deemed search date for the assessee, limiting proceedings to AY 2016-17 to 2021-22. AY 2013-14 was thus outside jurisdiction, affirming ITAT's dismissal of Revenue's appeal with no substantial question of law found. The case in hand arose from a search conducted under Section 132 in 2017, at the premises of entities forming part of the Rajesh Jain Group, the authorities seized certain documents which were found to pertain to the Respondent/Assessee, Deepak Kumar Aggarwal. The seized documents were handed over to the Assessing Officer in 2021, and satisfaction under Section 153C was recorded on the same date. Notice was thereafter issued for AY 2013-14, leading to additions in assessment order dated 31.12.2022. The CIT(A) allowed the assessee's appeal relying on RRJ Securities, Singbad Technical Education Society and Ojjus Medicare. The ITAT affirmed the deletion of additions in favour of the assessee. The core issue before the High Court was whether the six-year period for issuing notice under Section 153C should be reckoned from the date of search or from the date of handing over seized documents to the AO of the other person. The Bench rejected the Revenue's contention that notice for AY 2013-14 was valid on the basis that the search was in 2017. Referring to the first proviso to Section 153C, the Bench held that for the “other person,” the relevant date is date of receipt/handing-over of documents. Also held that the six assessment years must be counted backwards, and AY 2013-14 therefore fell outside the permissible six-year window, making the notice invalid In view of the above, the Bench held that no substantial question of law arose and dismissed the appeal of the Revenue. Case Title: Pr. Commissioner of Income Tax (Central) Gurugram Vs. Deepak Kumar AggarwalCitation: 2025 LiveLaw (Del) 1743 Case No.: ITA No. 742/2025 CM APPL. 78543/2025 CM APPL. 78544/2025 Appearance for Appellant/Revenue: Mr. Puneet Rai,SSC, Mr. Ashvini Kumar, Mr. Gibran, JSCs, and Mr. Rishabh Nangia Appearance for Respondnet/Assessee: Mr. Divyansh Jain, Mr. Paritosh Jain and Mr. Apoorb Saini.Click Here To Read/Download Order

Income Tax Act | S.153C Trigger Starts On Handing-Over Date, Not Search Date: Delhi High Court

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Income Tax Act | S.153C Trigger Starts On Handing-Over Date, Not Search Date: Delhi High Court

Rajnandini Dutta

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