Ten Year Look Back Under Section 153A Begins From Search

Ten Year Look Back Under Section 153A Begins From Search Year Exclude Assessment Year 2008-09

Issue

How is the ten-year look-back period under Explanation 1 to Section 153A(1) of the Income-tax Act, 1961 to be computed following a search operation.
Whether an assessment order passed under Section 153A for Assessment Year 2008-09 pursuant to a search conducted on July 27, 2017 (AY 2018-19) is invalid and barred by jurisdiction.

Facts

A search operation under Section 132 was conducted on the premises of the assessee on July 27, 2017 (relevant to Assessment Year 2018-19).
The Assessing Officer issued a notice under Section 153A for Assessment Year 2008-09.
Subsequently, the Assessing Officer passed a reassessment order for AY 2008-09 making additions on account of alleged under-invoicing of iron ore exports.
The assessee challenged the jurisdiction and validity of the notice and order on the ground that Assessment Year 2008-09 fell beyond the maximum outer limit of ten assessment years permitted under Explanation 1 to Section 153A(1).

Decision

Computation of Ten-Year Block: The ten-year look-back period under Explanation 1 to Section 153A must be computed backwards from the end of the assessment year relevant to the previous year in which the search was conducted.
Exclusion of AY 2008-09: Since the search took place on July 27, 2017, falling within Assessment Year 2018-19, counting ten assessment years backward covers up to Assessment Year 2009-10 only.
Invalidity of Notice and Order: Because Assessment Year 2008-09 lies outside the statutory ten-year block period, the notice issued and the assessment framed under Section 153A were declared invalid, without jurisdiction, and quashed.
Outcome: The issue was decided in favor of the assessee.

Key Takeaways

Search Year as the Baseline: The starting point for computing the permissible 6-year or 10-year block under Section 153A is strictly the assessment year relevant to the previous year in which the search occurred.
Strict Outer Temporal Limits: The statutory outer limit for re-opening past assessment years under search assessments cannot be stretched beyond the explicit 10-year look-back period allowed by law.
Jurisdictional Defect: Any assessment initiated or completed under Section 153A for an assessment year prior to the legally permissible 10-year block is inherently void ab initio for want of jurisdiction.

IN THE ITAT PANAJI BENCH ‘DB’

Salgaocar Mining Industries (P.) ltd.

Deputy Commissioner of Income-tax

Vinay Bhamore, Judicial Member
and Manish Borad, Accountant Member

IT Appeal Nos.301 and 303 (PAN) of 2025
[Assessment year 2008-09]

SEPTEMBER 8, 2026

Percy Pardiwalla and Sukhsagar Syal for the Appellant. Smt. Poonam Sharma for the Respondent.

ORDER

Vinay Bhamore, Judicial Member.- These appeals filed by the different assessee are directed against the separate orders dated 29.07.2025 passed by Ld. CIT(A)-2, Panaji [‘Ld. CIT(A)’] for the assessment year 2008-09 respectively.

2. Since the facts are identical and both the appeals were heard together, therefore, we proceed to dispose of the same by this common order.

3. First, we shall take up the appeal of the assessee in ITA No.301/pAN/2025 for adjudication as the lead case.

ITA No.301/pAN/2025 :

4. The appellant has raised the following grounds of appeal :-

“1. On the facts and circumstances of the case and in law, the ld. CIT(A) ought to have held that the impugned order is barred by limitation.

2. The notice issued u/s. 153A of the Income-tax Act, 1961 (‘ITA’) beyond a period of 6 years is bad in law and beyond the jurisdiction of the Assessing Officer since the appellant has not been found to be the owner of any asset as defined in explanation 2 to section 153A of the ITA.

3. The Id. CIT(A) ought to have held that no order u/s. 153A could have been passed for the subject assessment year as it is not a ‘relevant assessment year’ for the purpose of section 153A of the Act.

4. Without prejudice to the above, the notice issued u/s. 153A of the ITA for the A.Y. 2008-09 is bad in law and beyond the jurisdiction of the Assessing Officer since it pertains to an assessment year which is beyond ten years from the end of the assessment year relevant to the previous year in which search is conducted as per explanation 1 to section 153A(1) of the ITA.

5. The Id. CIT(A) erred in holding that incriminating material was found in the course of the search u/s. 132 of the Act.

6. The Id. CIT(A) ought to have held that the impugned order is invalid in terms of Circular no. 19/2019 as the same does not bear a Document Identification Number (DIN).

7. The Id. CIT(A) erred in dismissing the additional ground raised by the Appellant on a technical defect, without giving the Appellant an opportunity to correct such defect before dismissal and without appreciating that the ground was purely legal in nature and could have also been raised orally by the authorised representatives of the Appellant.

8. The Id. CIT(A) erred in sustaining the assessment order passed by the Id. AO which is based on the statement of Mr. Madanmohan Rajendrarao Narsapur, inspite of the anomalies apparent in such statement, which were repeatedly pointed out by the Appellant in the course of the proceedings and without according the Appellant an opportunity to cross examine the deponent.

9. The Id. CIT(A) ought to have held that the proceedings were invalid as they were carried out in violation of principles of natural justice.

10. The Id. CIT(A) erred in not deleting the addition made by the AO on account of alleged under-invoicing of sales.

11. The Id. CIT(A) failed to appreciate that in the absence of any evidence or even allegation that the Appellant had received any consideration, other than that recorded in its books, no addition on account of any under-invoicing could have been made in its hands.

12. The Id. CIT(A) ought to have appreciated that such addition was made solely on the basis of loose papers and documents, which lacked any credibility or authenticity, and not on the basis of any substantive evidence.

13. The Id. CIT(A) ought to have appreciated that even the basis of quantifying the addition had not been provided to the Appellant.

14. Without prejudice to the aforesaid grounds, if the Id. CIT(A) was of the opinion that the profits of the foreign companies were to be assessed as the Appellant’s income, then it ought to have held that non-accrual of such income to the Appellant should have been allowed as a business loss u/s. 28 of the Act.

15. The Id. CIT(A) erred in holding that the Hon’ble Bombay High Court had not considered the issue of under-invoicing while disposing of the writ petition filed by the Appellant.

16. The Id. CIT(A) erred in holding that the foreign companies were conduits/front companies of the Appellant and its group companies in India and that their existence was to be disregarded by lifting the corporate veil.

17. The Id. CIT(A) erred in holding that the under invoicing had resulted in shifting of profits outside India which were used to purchase assets abroad, and failing to appreciate that even if it is so, it is nobody’s case that the Appellant is the owner of such assets.

18. Without prejudice to the above, the Id. CIT(A) failed to appreciate that even if it is assumed that the foreign companies are conduits, their tax liability could not be shifted to the Appellant, who has only sold iron ore to such companies.

19. The Id. CIT(A) erred in opining on the control and management of the foreign companies, even though the said companies were not appellants before it, nor could any determination on this count have any bearing on the appeal before it.

20. While placing reliance on the judgement of the Singapore High Court in Suit no. 821/2015, the Id. CIT(A) failed to appreciate that the dispute therein was regarding ownership of foreign assets between late Mr. Anil Salgaocar and Mr. Darshan Jhaveri, and that in no circumstance could any addition on that count be made in the hands of the Appellant company.

21. The Id. CIT(A) failed to appreciate that the AO grossly erred in ignoring the statements of Shri Darsan Jhaveri and Madanmohan Narsapur wherein they accepted that they were the shareholder/director/signing authority of the BVI entities.

22. The Id. CIT(A) ought to have appreciated that in any event, no addition on account of the alleged under-invoicing could have been made in the impugned proceedings as the same income has already been assessed in the proceedings under the Black Money Act, 2015.

23. The Appellant craves leave to add, alter, modify or amend any ground(s) of appeal.”

5. Facts of the case, in brief, are that the assessee is a private limited company engaged in the business of iron ore mining and has filed its return of income on 30.09.2008 declaring income of Rs.99,35,41,100/-, which was processed u/s 143(1) of the IT Act. Subsequently, the case was selected for scrutiny through CASS and assessment u/s 143(3) of the IT Act was completed on 28.12.2010 by determining the income at Rs.1,53,28,46,068/-.

6. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A), who allowed substantial relief and second appeal against this order filed by the Revenue was also dismissed. Department went in further appeal before Hon’ble High Court which was also dismissed in favour of assessee. Vide order giving effect dated 16.12.2013 of CIT(A), Panaji, total income was assessed at Rs.1,01,66,34,621/-.

7. Subsequently, on 27.07.2017, search and seizure action u/s 132 of the IT Act was carried out in the case of the assessee and notice u/s 153A of the IT Act was issued on 28.08.2019, in response to which, the assessee furnished its return of income on 11.09.2019 by declaring income of Rs.99,45,65,010/-. During the course of the search action, various documents were seized and evidences were collected. On the basis of one of such document i.e. copy of Suit No.821 filed in the High Court of Singapore by Late Anil Vasudev Salgaonkar, the Managing Director of the assessee company and Key Person of Salgaonkar Group of Company, it was discovered that various special purpose vehicles companies were formed in BVI i.e. British Virgin Island and a person named Shri Darshan Jhaveri was made shareholder /director /bank signatory of those SPVs for the benefit of Late Anil Vasudev Salgaonkar, who was in full control of the entire transactions involved in the export of iron ore from India to China on behalf of Salgaonkar Group of Companies. The Assessing Officer was of the view that assessee company has diverted its profit by under invoicing during iron ore export since the assessee company has sold iron ore first to the companies created in British Virgin Islands on lesser rates and through them sold the iron ore to China on higher rates. And the money generated in this process was used to purchase assets by Late Anil Vasudev Salgaonkar who is the Managing Director of the assessee company has acted secretly but with knowledge of all the implications of his actions & taking into confidence of all other directors & shareholders being his own family members & Salgaonkar Group of Companies in India under his control in order to conceal the income by under invoicing of iron ore export & using so concealed income for investing in assets in various foreign jurisdictions. It is also observed by the Assessing Officer that the corroborative evidences proves beyond doubt that all the offshore entities were beneficially owned & under full control of Late Anil Vasudev Salgaonkar. After considering the reply and submissions of the assessee, the Assessing Officer vide order dated 18.06.2021 completed the assessment proceedings u/s 143(3) r.w.s. 153A of the IT Act by determining the income of the assessee company at Rs.11,29,17,29,949/- against income of Rs.99,45,65,010/- returned by the assessee. The above assessed income includes addition of Rs.10,27,50,95,328/- being addition on account of under invoicing of iron ore export and also includes the addition of Rs.1,01,66,34,621/- sustained by Ld. CIT(A) in earlier round of assessment.

8. Being aggrieved with the above assessment order dated 18.06.2021, the assessee preferred an appeal before Ld. CIT(A). Not being satisfied with the reply and submissions of the assessee and also placing reliance on the order dated 28.02.2023 passed by High Court of Singapore wherein it was ordered that Mr. Darshan Jhaveri shall transfer shares of ten companies registered in Singapore and/or British Virgin Islands (SPV Companies) to the estate of late Mr. Anil Vasudev Salgaocar, currently administered by the administratrix Mrs. Laxmi Salgaocar, Ld. CIT(A) dismissed the appeal filed by the assessee by observing as under :-

“5.1 The appellant contended that the Ld. AO has erred in passing order u/s 153A of the IT Act because the order is passed beyond 6 years of time period as prescribed u/s 153A of the IT Act. The appellant contended that the appellant is not found to be owner of asset as defined in explanation 2 to section 153A. The appellant also contended that late Mr.Anil Vasudev Salgaocar was owner of alleged offshore assets and the appellant company was not owner of assets. Thus, the order passed for the assessment year beyond 6 years to the assessment year in which search is conducted is bad in law.

5.2 The contention of the appellant is considered but not found to be acceptable. The provisions Section 153A are reproduced hereunder:

“Section 153A,

(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall-

(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice. the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be apply accordingly as if such return were a return required to be furnished under section 139,

(b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made 25 [and for the relevant assessment year or years]:

Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years)

Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment year or years) referred to in this subsection pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate:

Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years).

[Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless-

(a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years:

(b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and

(c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017.

Explanation 1. For the purposes of this sub-section, the expression “relevant assessment year shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.

Explanation 2-For the purposes of the fourth proviso, “asset” shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.]”

5.3 In the aforesaid provision, the 4th proviso to section 153A clearly mentioned any income exceeding Rs. 50/- lakhs should have escaped assessment and as per explanation 2 to Section 153A, the definition of asset is inclusive and not the exhaustive definition. Thus, the sprit of proviso 4 indicates that if any sort of income which is escaped assessment and such income exceeds Rs. 50 lakhs, shall be assessed upto 10 years.

5.4 In the impugned case, the Ld AD has carried out assessment and addition to total Income of the appellant on account of under-invoicing, which is nothing but income of the appellant which ought to have been offered to tax in India. Thus, the income of appellant is escaped from assessment.

5.5 The appellant as contested that the alleged assets belong with Mr.Anil Saigaocar and not to appellant, is incorrect for simple reason that income has been shifted to foreign companies out of said income from which the assets were acquired. This is situation of ‘Cause and Effect wherein the cause is non-offering correct income to tax in India and effect of which is creation of undeclared asset by Mr.Anil Salgaocar.

5.6 Moreover, Mr.Anil Salgaocar in capacity of director, was decision maker as he had effective control on day today matters of the appellant Company including decision making. Due to which he diverted the funds belonging to appellant, to overseas shell companies, in which investments were made as ascertained in Suit 821 of Singapore HC

5.7 In view of the above, I am of the considerate opinion that the asset belongs to Mr.Anil Salgaocar and hence the reassessment of appellant Company is valid. Therefore, the invoking section 153A and carrying out assessment proceedings beyond 6 years is found to be appropriate and being upheld.

Accordingly, Ground 1 of the appellant is Dismissed.

6.0 Ground 2

6.1 The appellant contended that the notice issued u/s. 153A of the ITA for the AY 2008-09 is bad in law and beyond the jurisdiction of the Assessing Officer since it pertains to an assessment year which is beyond ten years from the end of the assessment year relevant to the previous year in which search is conducted as per explanation 1 to section 153A(1) of the ITA

6.2 In this regard, it is held that as per section 153A, explanation 1 relevant assessment year shall mean an assessment year.

“For the purposes of this sub-section, the expression “relevant assessment year shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.”

In the instant case, the date of Search being 17 July 2017 which is relevant for AY 2018-19, not later than 10 assessment years, includes till AY 2008-09.

6.3 In the instant case, the date of Search being 17 July 2017 which is relevant for AY 2018-19, not later than 10 assessment years, includes till AY 2008-09.

The appellant contends that the notice issued under Section 153A for AY 2008-09 is invalid on the ground that it falls outside the 10-year reassessment block as per Explanation 1 to Section 153A, arguing that the block should begin from AY 2018-19 and go back only up to AY 2009-10. However, this interpretation is overly restrictive and fails to consider the broader legislative framework and intent of the provisions introduced by the Finance Act, 2017.

Section 153A must be read not only with its Explanation but also with its provisos, particularly those which permit reassessment beyond six years where assets or income representing undisclosed income are found. If the search conducted on 27.07.2017 yielded incriminating material specifically related to AY 2008-09, then the extension of the reassessment period to ten years is justified. In such a scenario, the presence of such material satisfies the statutory condition for invoking reassessment for that year, irrespective of a rigid computation of the block period.

The reliance placed by the appellant on the Ojjus Medicare Pvt. Ltd. decision of the Delhi High Court is misplaced and not applicable to the facts of the present case. The Ojjus judgment primarily addresses reassessments under Section 153C, which pertains to cases involving other persons”, not the person searched.

In contrast, the present proceedings against appellant arise directly under Section 153A, as the company itself was the subject of the search conducted on 27.07.2017. Therefore, the computation of the ten-year block in Ojjus, which hinges significantly on the date of handover of seized material under the first proviso to Section 153C(1), is irrelevant to the facts here, where the search was conducted directly on the appellant. The assessment and validity of the notice depend on the presence of relevant material for AY 2008-09 discovered during the search. which the cited judgments do not negate.

Additionally, the legislative intent behind the amendment to expand the reassessment period was to empower authorities to uncover concealed income effectively, not to impose technical year-counting limitations. A contextual reading of the statute suggests that if the statutory requirements are met, particularly discovery of income or assets pertaining to an earlier year-the assessment can be validly reopened.

Therefore, the appellant’s argument that the notice is “bad in law” purely due to a mechanical backward calculation lacks merit. The determination must rest on the existence of incriminating material and compliance with statutory thresholds, both of which override the appellant’s narrow interpretation. Hence, the reassessment for AY 2008-09 remains valid and within the scope of the law.

Accordingly, Ground 2 of the appeal is Dismissed.

7.0 Ground 3

7.1 The appellant contended that the assessment order passed by Ld. AO is time barred. As per provisions of Section 153B the assessment order ought to be have been passed within 21 Months from the end of financial year in which the last authorization was executed. The date of search was 27 July 2017 and the date of centralization of case was 14 November 2017, according to this, the order should have been passed by 31 December 2019. However, the impugned assessment order was passed on 18th June 2021.

7.2 The contention of the appellant was considered and a clarification vide letter dated 25 November 2024 was sought from the Ld. AO regarding stipulation to statutory timelines.

In this regard, the Ld. AO informed vide letter dated 17 December 2024 that a reference to FT & TR for exchange of information was made on 19 December 2019 vide Competent authority office reference number ‘1912-0591-OE-VG-078’ and the said information was received by office of assessing officer on 25 October 2020. As per clause X of Explanation – I of section 153, the aforesaid period commencing from 19 December 2019 to 25 October 2020 was to be excluded. In view of this, the revised time barring date was 31 December 2020. However, due to COVID 19 Pandemic, CBDT issued Notification No. 35/2020 dated, 24.06.2020 for extension of limitation date to 31 March 2021 for completion of assessment, if due dates were falling during 20th March 2020 to 31 December 2021. Said date was further extended by CBDT vide notification dated 27 February 2021 which extended the time limit to 31 September 2021.

7.3 Considering the time to be excluded for receipt of information from FT & TR and further extensions granted by CBDT due to COVID 19 Pandemic, the order passed by Ld. AO is found to be within permissible timeframe.

Thus, the contention of the appellant is found to be incorrect and being rejected.

Accordingly, Ground 3 of the appeal is Dismissed.

8.0 Ground 4

8.1 The appellant contended that none of the material relied upon by the officer was found at the premises of the appellant company. Initiation of assessment proceedings under section 153A in absence of any incriminating material being found from premises of the appellant is bad in law.

8.2 The appellant also contended that the draft suit 821 which is basis of carrying out the additions in the search proceedings, was found from the premises of Ms. Purnima Salgaocar, daughter of Late Mr. Anil Vasudev Salgaocar (related party of the appellant company) and actively involved in the affairs of group. Ms. Purnima Salgaocar was Also a shareholder of the appellant company but material found in the premises of Ms. Purnima Salgaocar it is not sufficient for assuming jurisdiction under section 153A of the Act. Appellant is a separate legal entity and it is distinct from any individual.

There is no provision in law which permits the assessing officer team or relative of a shareholder of a company to be company itself. Appellant also relied upon decision of honorable Delhi High Court in case of PCT v. N S Software (403 ITR 259). Accordingly, the appellant contended that no incriminating material was found from the premises of the appellant company and therefore proceedings completed under section 153A of IT Act are bad in law.

8.3 Contention of the appellant are considered but found to be incorrect. The appellant has not alleged that incriminating material was found or not. Appellant has merely contended that such material was not found from premises of the appellant.

8.4 It is worth noting that the assessment under section 153A is triggered by conducting of a valid search under Section 132 of the Act or requisition made under section 132A of the Act The very purpose of the search, which is a prerequisite for invoking the provisions of sections 153A/153C, is detection of undisclosed income i.e., the income which cannot be detected in ordinary course of regular assessment. Accordingly, it can be construed that the prerequisite of making assessment under section 153A of the Act is valid conduct of search under section 132 or requisition under section 132A.

8.5 The reliance is placed on decision of Hon’ble Supreme Court in case of Principal Commissioner of Income Tax-IV v. Abhisar Buildwell Private Limited, wherein it has been held that as per true interpretation of section 153A of the Act, 1961, if during the search any incriminating material is found, the AO would have jurisdiction to assess or reassess the ‘total income taking into consideration such incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income.

8.6 In view of the above, presence of incriminating material is sufficient to exercise jurisdiction u/s 153A irrespective of fact that such incriminating material is found from premises of registered office of appellant company or its shareholders or related parties.

8.7 It is also pertinent to mention that a company is an artificial legal entity which operates through its employees, including directors and other key personnels.

In this impugned case a document pertaining to suit 821 was found from the premises of related party, which belongs to the appellant. The appellant cannot deny the content of said document just because it was found from the premises of it’s related party.

8.8 The appellant contended that said suit 821 was a draft document which is a unsigned document and not maintainable. The said contention is also not accepted for the fact that High Court of Singapore has pronounced its judgment in favour of late Mr.Anil Salgaocar vide order dated 28 February 2023. This proves beyond reasonable doubt that suit called as unsigned or draft Suit 821 was actually filed and pursued in the court of law.

8.9 In view of the above, suit 821 is very well an incriminating material coupled with bank entries and other documents including various statement recorded by key personnel in salgaocar group of companies. The assessing officer relying on state incriminating material has correctly exercised has jurisdiction under section 153A of the IT act.

Accordingly, Ground 4 of the appeal is Dismissed.

9.0 Ground 5

9.1 The appellant contended that the order is passed relying heavily on statement given by Mr. Madanmohan Narsapur but the opportunity to cross examine was not provided to appellant. Thus, principle of natural justice was not followed.

9.2 The contention of the appellant is considered but not found to be acceptable. The Ld. AO has carried out addition primarily relying on incriminating material found during the course of search. Suit 821 and other bank entries which clearly demonstrated that the intermediary entities which were controlled by Mr.Anil Salgaocar were conduit and there was no substance in those entities. Therefore, they were not actually entitled to retain any profit as such. Said material was very well provided to the appellant.

9.3 Statement of Mr. Madanmohan Narsapur was not primary basis to carry out the addition in appellant’s case. Thus, non-provision of cross examination does not lead to breach of principle of natural justice in the underlined case. In this regard, reliance is placed on following judicial pronouncement of Hon’ble Bombay High Court.

9.4 GTC Industries Ltd. v. Assistant Commissioner of Income-tax [65 ITD 380 (BOM))]

…. As regards the dictum Audi Alteram Partem’ the assessee’s basic contention was that the statements of witnesses and materials which were relied upon by the Assessing Officer in the assessment order to reach the conclusions and findings which were adverse to the assessee should have been disclosed to the assessee and the witnesses should have been offered for cross-examination.

The right to cross-examine the witness who made adverse report is not an invariable attribute of the requirement of the said dictum. The principles of natural justice do not require formal cross-examination. Formal cross-examination is a part of procedural justice. It is governed by the rules of evidence, and is the creation of Court.

It is part of legal and statutory justice, and not a part of natural justice, therefore, it cannot be laid down as a general proposition of law that the revenue could not rely on any evidence which had not been subjected to cross-examination. However, if a witness has given directly incriminating statement and the addition in the assessment is based solely or mainly on such statement, in that eventuality it is incumbent on the Assessing Officer to allow cross- examination. Adverse evidence and material, relied upon in the order to reach the finality, should be disclosed to the assessee. But this rule is not applicable where the material or evidence used is of collateral nature.

From the aforesaid discussion, it was clear that addition was not made merely on the basis of findings given apropos the secret bank accounts, disbursement made out of such accounts or on the strength of havala entries, by which the bogus commission and trading income said to have been reintroduced in the books of the assessee. Those aspects were only secondary, subordinate and were used to buttress the main matter connected with the amount of addition. The violation or otherwise of any rule of natural justice must be a matter of substance not of mere form. Natural justice should always be used for the furtherance of the cause of justice.

The palladium of justice requires, that law suits be not protracted, otherwise great oppression might be done under the colour and pretence of law (interest republica at sit finis litum). These loafty principles which are harbinger of justice cannot be used for dragging the justice in the labyrinth. As already pointed out adverse evidence and material, relied upon in the order to reach the finality, should be disclosed to the assessee. But that rule is not applicable where he material or evidence used was of collateral nature. Having regard to the facts and circumstances of the case, it was to be held that there was no denial of the principles of natural justice.

We have examined the facts. We have discussed in detail the principles in our order for the assessment year 1985-86. Having regard to the precedent available on the point, we have taken a view that adverse evidence and material, relied upon in the order, to reach the finality should be disclosed to the assessee. But this rule is not applicable where the material or evidence used is of collateral nature. We have also taken a view that right to cross-examine the witness, who made adverse reports is not an invariable attribute of the requirement of the dictum, ‘audi alteram partem

Accordingly, Ground 5 of the appeal is Dismissed.

After adjudicating the technical grounds of appeal raised by the appellant, we move to deal with the appeal on merits of the case.

********

10.28 The Singapore HC vide order dated 28 February 2023 bearing no [2023] SGHC 47, has adjudicated that Mr.Darshan Jhaveri shall transfer shares of ten companies registered in Singapore and/or British Virgin Islands (SPV Companies) to the estate of late Mr. Anil Vasudev Salgaocar, currently administered by the administratrix Mrs. Laxmi Salgaocar.

From the above extracts of Suit 821, following aspects do emerge.

a. The suit 821 relied by Ld.AO is legitimate and reliable document. It is an incriminating material which was not available with the assessing officer while carrying out original assessment.

b. Initially operation of BV Island Companies were carried out from Goa, India.

c. Mr.Anil Salgaocar was sole person responsible to float overseas companies and take all business related decision such as pricing of supply of Iron Ore from India to BV Island and price chargeable from BV Island to end customer in China.

d. All Indian and overseas Investment related decisions were also taken by Mr.Anil Salgaocar.

e. BV Island Companies were not allowed to procure Iron Ore from any other player in the market.

f. Singapore and BV Island companies were not independent and their place of effective management was controlled and decisions implemented by Anil Salgaocar from India only.

g. The under invoicing has been done to invest in assets made by through BVI Companies. The cost of ore has been under invoiced to the extent that the profits have been shifted to BVI and Singapore Companies. Resulting into tax base erosion in India by way of shifting profits overseas.

h. The foreign assets, ownership of which is claimed by Mr.Anil Salgaocar was acquired from trading profit of BV Island Companies.

i. Mr.Anil Salgaocar was signatory to bank accounts and all payments required his approval.

j. The employees of BV Island and Singapore Companies were reporting to Mr.Anil Salgaocar.

k. BV Island and other intermediary companies were merely formed to record the transactions in their books of accounts. Such companies were not independently functioning companies having own set of employees/ management. In other words, there was no substance in BV Island Companies. They were merely a pass through entities.

1. The appellant has not brought anything on the record to demonstrate that BV Island Companies were genuine and were actually operating independent Companies.

10.29 In view of the above, I am of the considerate opinion that the appellant Company was controlled by Mr.Anil Salgaocar, so as BVI Companies. Thus, the claim of appellant that transaction between BVI Companies and Indian companies were based on principle to principle approach is not acceptable. All the transactions were undertaken in a control environment. In order to remunerate the counterpart, it is essential to understand functions performed by BVI entity along with Risk undertaken by them and level of assets employed by them. In the above paragraphs, it was very well established that BVI entities are not carrying out any functions. Moreover, at given point in time guarantees were given by Mr Anil Salgaocar which indicates that said BVI entities do have capacity to bear financial related risk as well. Therefore, for carrying out insignificant activity of maintaining book of account in BV Island, sharing profit of the transaction of sale of iron ore is not an appropriate pricing policy

10.30 During the appellate proceedings as well the appellant could not demonstrate the role, responsibility and independence of BVI entities. Thus pricing policy adopted in the instant case does not commensurate with level of functionality and no independent and rationale business man would adopt similar pricing policy.

10.31 Also, the arrangement adopted by Salgaocar group is a colourable device wherein the true income of Indian taxpayers is artificially shifted in a tax heaven country to avoid taxes. Thus, Corporate veil ought to be lifted in the impugned case which is rightly done by the Ld. AO to see substance over form.

10.32 Moreover, the findings of Ld.AO are based on incriminating material and also supported by statements recorded by various parties. In absence of any contradictory demonstration by appellant, the conclusion drawn by Ld.AO is found to be correct

Therefore, the contention of Ld.AO that profit on sale of iron ore is artificially parked in overseas SPVs by way of under invoicing is found to be correct and upheld.

Accordingly, Ground 6 to 19 of the appeal are dismissed.

11 .0 Ground 20

The appellant contended that Ld.AO has erred in invoking interest u/s 234C of IT Act.

In this regard, it is held that interest is consequential to addition carried out. Therefore, the same is being upheld.

Accordingly, Ground 20 of the appeal is dismissed.

12.0 Additional Ground 1

12.1 The appellant vide letter dated 7 November 2023 has raised an additional ground of appeal wherein it has contended that order passed by Ld.AO was not bearing DIN and thus the order is in valid and nonest.

12.2 In light of principle of natural justice, the contention of the appellant are considered. In this regard, this office sought a clarification vide letter dated 9 November 2023 from the Ld. AO.

12.3 The Ld. AO filed his response vide letter dated 14 December 2023 wherein he informed office of CIT(A) that DIN was generated as per guidelines of income tax department and the same was communicated to the appellant vide letter dated 19 June 2021 ie. on very next day of passing the assessment order which is integrated part of the order. The ITBA facilitates for uploading the order signed manually and generate DIN for the communication made to the assessee which in this case is the order passed u/s 153A.

The facility of DIN was introduced to check the genuineness of the communication through a prescribed mechanism which has been correctly followed by the Assessing Officer through the facility provided in the ITBA and is a mere technical and procedural aspect.

12.4 In this regard, it is pertinent to note that Hon’ble Supreme Court on this very issue has admitted an appeal in case of Commissioner of Income Tax v. Brandix Mauritius Holdings Ltd. , (SC) and has granted Interim stay on Hon’ble HC’s order dated 20.03.2023 as well as order of the ITAT dated 19.09.2022, until further orders.

12.5 However, as ITBA facilitates for uploading the order signed manually and generate DIN for the communication made to the assessee which in this case is the order passed u/s 153A, the DIN was communicated vide a separate letter to the appellant and said communication was well within the time barring limits of completing assessment proceedings. The facility of DIN was introduced to check the genuineness of the communication through a prescribed mechanism which has been followed by the Ld. AO through the facility provided in the ITBA system and is a mere technical and procedural aspect. The assessment proceedings wherein search operations were carried out and substantial additions are being made based on finding of incriminating material cannot be held to be infructuous for difference of opinion of the appellant that DIN was not mentioned on the assessment order and it is communicated separately. In view of the above, I am of the considerate opinion that the DIN related compliances are in order.

12.6 Not withstanding the above, it is pertinent to mention that the additional ground of appeal was signed by authorised representative (an employee) of the appellant and not by the authorised person as defined under section 140 of IT Act i e, a person who is authorised to sign return of income of the appellant. Thus, the additional ground of appeal ought to have been signed by Managing Director of the Company. In view of this, the additional ground of appeal is not admissible for technical reason.

Accordingly, additional ground 1 of appeal is Dismissed.

13.0 Due process of law and principles of natural justice was followed during the course of appellate proceedings, with reasonable opportunities of being heard.

14.0 Accordingly, appeal of the appellant is dismissed.”

9. It is the above order against which the assessee is in appeal before this Tribunal.

10. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the assessee has raised various grounds before us, including legal grounds as well as grounds related to the merits of the case, however, at the time of hearing of this appeal, Ld. Counsel of the assessee requested to adjudicate ground no.3 & 4 first, since these grounds are covered in favour of assessee by judgements of Hon’ble Madras High Court, Hon’ble Gujarat High Court, Hon’ble Delhi High Court and Hon’ble Calcutta High Court and also by the decision of coordinate bench of the Tribunal. Ld. DR raised no objection to the request of the assessee. Accordingly, we proceed to adjudicate ground no.3 & 4 first.

11. In this regard, we find that it is the limited argument of Ld. Counsel of the assessee that the subjected assessment year is not a relevant assessment year for the purposes of section 153A of the IT Act and without prejudice to the above it is also the argument that the notice issued u/s 153A of the IT Act for the A.Y. 2008-09 is bad in law and beyond the jurisdiction of the Assessing Officer, since it pertains to an assessment year which is beyond ten years from the end of the assessment year relevant to the previous year in which search is conducted as per Explanation 1 to section 153A(1) of the Income Tax Act. The above relevant section 153A(1) of the IT Actis reproduced hereinbelow :-

“Assessment in case of search or requisition.

153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall—

(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years 26[and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;

Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years ²⁶[and for the relevant assessment year or years] :

Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years 26[and for the relevant assessment year or years] referred to in this subsection pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate :

²⁷[Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless—

(b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and

(c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017.

Explanation 1.—For the purposes of this sub-section, the expression “relevant assessment year” shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.

Explanation 2.—For the purposes of the fourth proviso, “asset” shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.]”

12. In this regard, we find that Ld. Counsel of the assessee with regard to search dated 27.07.2017 furnished a chart in paper book regarding determination of relevant assessment year for the purposes of Explanation 1 to section 153A(1) of the IT Act, which is as under :-

Year 1	A.Y. 2018-19
Year 2	A.Y. 2017-18
Year 3	A.Y. 2016-17
Year 4	A.Y. 2015-16
Year 5	A.Y. 2014-15
Year 6	A.Y. 2013-14
Year 7	A.Y. 2012-13
Year 8	A.Y. 2011-12
Year 9	A.Y. 2010-11
Year 10	A.Y. 2009-10

13. According to above chart, it is the claim of the assessee that the assessment year 2008-09 is beyond ten years period which are required to be reopened as per Explanation 1 to section 153A(1) of the IT Act, and since the date of search is 27.07.2017 the assessment years commences from assessment year 2018-19 to assessment year 2009-10 only. Accordingly, Ld. Counsel of the assessee submitted before us that the notice issued u/s 153A of the IT Act for assessment year 2008-09 is bad in law and beyond the jurisdiction of the Assessing Officer, therefore, the consequential assessment order for assessment year 2008-09 needs to be declared as bad in law and invalid. In support of its contentions, Ld. counsel of the assessee placed reliance on following case laws :-

(i)

A.R. Safiullah v. ACIT [ W.P. No.4327 of 2021 (Mad.) order dated 24-03-2021].

(ii)

Jayantibhai Karamshibhai Maniya v. ITO (Guj.) order dated 05.01.2026.

(iii)

PCIT v. Ojjus Medicare (P.) Limited 465 ITR 101 (Delhi) order dated 03.04.2024.

(iv)

RB Jewellers Private Limited v. Union of India (Calcutta) order dated 28.11.2023.

(v)

DCIT v. Sai Kanaka Mahalakshmi Finance Private Limited (Visakhapatnam – Trib.) order dated 30.11.2023.

(vi)

CIT v. Smt. Godavari Devi Saraf [1978] 113 ITR 589 (Bombay) order dated 27.09.1977 (relied on since no order passed by Hon’ble Jurisdictional High Court of Bombay).

14. On the other hand, Ld. Departmental Representative strongly opposed the contentions of the assessee and furnished a written submission in his support, which reads as under :-

“The following respectful submissions are made in response to the grounds no.3 and 4 raised by the appellant challenging the validity of the reassessment proceedings and assessment order for A.Y. 2008-09:

1. Validity of AY 2008-09 being beyond the 10 years block as given in the Explanation 1 to Section 153A of the Act:

The appellant challenges the Ground no.3 and 4 on the ground that no order under section 153A of the Act could have been passed for the subject AY as it is not the relevant Assessment year for the purpose of the section 153A of the Act. It is beyond the jurisdiction of the AO since it pertains to the Assessment year which is beyond ten years from the end of the assessment year relevant to the previous year in which search is conducted as per the Explanation 1 to Section 153A of the Act.

(1) The appellant has wrongly construed the word, “end” used in the Explanation 1 to section 153A of the Income Tax Act. For the purpose of calculating the 10 Assessment years “end” is to be construed as 1″ April. The Search Year is to be excluded and it was always considered 6 plus 4 assessment years. The purpose of introducing this amendment was to extend the reach of the Assessing Officer and therefore while interpreting this provision apart from 6 Assessment years the authority of the AO includes another 4years otherwise the Legislative intent and purpose of the Fourth Proviso to Section 153A is defeated. The relevant extract from the Notes to the Finance Bill 2017 reads as under:

“Clause 59 of Bill seeks to amend section 153A of the Income Tax Act, 1961 relating to assessment in case of search or requisition.

It is proposed that issuance of notice and assessment for reassessment under the said section can also be made for an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not beyond ten assessment years from the assessment year relevant to the previous year in which search is conducted or requisition is made provided that;

(i) The Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that income which has escaped assessment amounts to or is likely to amount to fifty lakhs rupees or more in one year or in aggregate in the relevant assessment years

(ii) Such income escaping assessment is represented in the form of asset which shall include immovable property being land or building, or both, shares and securities, deposits in bank accounts, loans and advances

(iii) The income escaping assessment or part thereof relates to such year or years and

(iv) Search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April 2017.

It is further proposed to make consequential amendment to the provisions of said sub section.

It is also proposed to define the expression ‘relevant assessment year ‘and assets’ the form of Explanation.””

According to the 2017 Memorandum, Explanation 1 was designed as an extraordinary anti avoidance tool. It empowers the Revenue to trace deeply hidden high value assets up to a decade in the past. Because of the strict 6-year cap under section 153A the Revenue was legally barred from taxing these older, newly unearthed assets during the search assessments. To the bridge this gap, the Finance Act 2017 extended the assessment window from 6 to 10 years in specific high value assets.

(2) How the “Excluding Search Year “logic fits the Explanatory notes to Finance Bill 2017.

The language used in the Explanatory notes for Explanation 1 acts as primary anchor that Search year is excluded from the 10-year backward reach. The notes state that block consists of standard 6 assessment years plus the relevant assessment years. It defines the relevant assessment years as those that “fall beyond six assessment years.” Crucially the mathematical starting point for calculating these 10 years looks backward from the end of the assessment year of the search. Since the 4 extended years simply stack on top of these 6 years, the entire block is interpreted as a 6 plus 4 historical blocks. Because the next 4 years must fall ‘beyond’ those 6 years, they are intended to be a sequential extension(years 7,8,9,10 of past history.) If the Search Year is dragged into the 10 year calculation to serve as “Year 1” it shrinks the historical window to just 9 years prior to search and this directly contradicts the legislative mandate of the Finance Act 2017 which explicitly intended to give Revenue 10 full years of historical data to look back into deep tax evasion.

Therefore the 10 years mentioned in the Explanatory notes represent 10 full historical years prior to the search, while the Search year itself is dealt with a separate, current assessment year under the main body of section 153A.

(3) The Standalone treatment of the Search Year.

The Search Year and the historical Block are treated under entirely different assessment mechanics. The Search Year is an active ongoing liability period that is capture naturally because the search occurred during it. It does not need to be “reopened” because its assessment window hasn’t closed yet. The 10-year block is explicitly an antievasion lookback window to resurrect dead/completed assessments. Therefore, counting the active Search Year as part of 10-year retrospective limitation block is a structured misalignment of the Act.

Historically across the Act, the Legislature has consistently used the phrase, “from the end of the relevant assessment year. ‘To establish limitation periods as also in section 149 of the Act. In this framework the year from which the calculation for the 3 or 10 years is counted for Section 149 is forward calculation from start of “March”, i.e. for example for AY 2018-19 the reopening can be done up to 31/3/2022 for 3 years block or 31/3/2029 for 110-yearblock. The AY 2018-19 i.e. the anchor year is excluded from the counting of the elapsed block. If the interpretation of the assessed is accepted meaning. “from the end of the relevant assessment year”, means to count the Anchor year as “Year 1” then under section 149, the department could issue a notice within 3 or 10 years and if anchor year is included, a notice issued in the 3rd year would actually be considered the 4th year and therefore time barred. This would render all past settled assessments invalid. The “excluding the anchor year” methodology has legally governed section 149 and the exact same logic must protect the 10-year block under section 153A of the Act. If the phrase “from end of the relevant assessment year”, is interpreted to include the anchor year within its limitation count it creates an irreconcilable conflict with the identical legislative phrasing used in section 149. The Explanatory notes to Finance Act 2021. clause 38 to amend section 149 relating to the time limit of notice states, “it is proposed to substitute the said section so as to provide that 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 b,

(b) if three years but not more than ten years from the end of the relevant assessment year.”

Unlike the Finance Bill 2017, here the legislature has not used the words “beyond”.

Therefore the term has to be interpreted uniformly, the anchor year ie. “Search year” is starting point from which 10 year historical block is measured backward thereby excluding it from 10year count for Section 153A assessments and for reopening under section 149, the anchor year for which reassessment notice is to be issued, the starting point is measured forward from March thereby thereby excluding it to determine the time barring date of notice.

II. While referring to the Explanation 1 to section 153A the, relevant assessment year also in the provisions of section 153 A(b), cannot be construed by adopting two methods of calculation, first 6 Ays as per section 153A(b) by excluding the Search year and second for 10 AYs by including the search year for the very same assessee if it is found income of Rs.50lakhs or more has escaped assessment. While interpreting the provisions of the Act, the Rule of Harmonious Construction is followed. A statute must be read as a whole and every clause should be construed in the context of other clauses. The Legislature could not have intended to create an anomaly where the same, ‘Search Year’ is treated under two different clashing definitions for the exact same assessment proceedings. The Explanation 1 of Section 153A does not redefine or conflict with the main section, it merely clarifies the mechanics of how the relevant block is calculated. Section 153A (1)(b) clearly mandates the Assessing Officer to assess or reassess the total income of 6 AY immediately preceding the assessment year relevant to the previous year in which the search is conducted. It merely provides a mathematical tool to count backwards from the year of search and does not create a separate, parallel legal fiction that includes the search year into the preceding six years. The year of Search remains ‘current year’ and the six years are strictly preceding years. If the assessee’s argument is accepted that two different methods exist it would lead to an absurd legal anomaly where Search Year is simultaneously treated as regular assessment year and a ‘preceding’ Search Year. There is only one uniform method, the Search Year is the Anchor Year. The Explanation simply secures the boundaries of the 6 year or extended period of 10 years. For the same assessee the date of initiation of search is a singular event and computation of time flowing from it must also be singular. Interpreting the Statute as having two conflicting definitions of Search Year defeats the purpose of a streamlined search assessment. The word ‘preceding’ in the section 153A(1)(b) is absolute, the year of search itself can never logically be part of those 6 preceding years and Explanation 1 cannot be read to include what the main section explicitly defines as preceding.

III. The judgements of the various Hon’ble High Courts of Delhi, Madras and Gujarat on the issue of the interpretation of the Explanation 1 to Section 153A of the Act though are in favour of the assessee but not being the binding Jurisdictional High Courts, a different interpretation is open for adjudication. In this respect the reliance is placed on the judgement of the Hon’ble Gujarat High Court in the case of Bhavin Kishorebhai Zinzuwadia v. ACIT on 2/12/2024 in special civil application no.22170 of 2019. Though the decision is with respect to the provisions of Section 153C of the Act, where the block. of 10 years calculation has been accepted excluding the year in which the incriminating material is received by the AO of the other person. Para 34 of the order read, We are therefore of the opinion that the impugned notices cannot be said to be time barred considering the extended period of 10 years from the AY 2018-19 up to the AY 2009-10 considering the previous year in which, considering the date of receiving of books of accounts or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction being 24/10/2019 from the end of the Assessment year relevant to the previous AY 2019-20. “The Hon’ble High Court in its judgement has further relied on the decision of the Hon’ble High Court of Delhi in the case of Indian National Congress v. DCIT, W.P. 4264/2024 & CM no. 17433/2024 & 17435/2024 dated 22 march 2024, Para 32, decision of the Hon’ble High Court of Delhi in the case of Indian National Congress v. DCIT would also be applicable in the facts of the case wherein it is held as under;

13. It would be thus wholly incorrect to read the First Proviso to Section 153C of the Act as constituting a bar of limitation or disabling the respondents from initiating assessment/reassessment for the entire block period of ten assessment years. Consequently, and in our considered opinion, the submission that the power to assess would stretch only up to AY 2017-18 is misconceived. In light of the plain language and text in which section 153C is couched, we are of the considered opinion that the material gathered in the course of the search would have empowered and enabled the respondent to undertake an assessment for six assessment years immediately preceding the assessment year pertaining to the previous year in which the search was conducted and would also extend to the four additional AYs which would stand included by the virtue of Explanation 1 to Section 153A of the Act. The aforesaid position cannot possibly be doubted bearing in mind Section 153C incorporating the phase and for the relevant assessment year or years referred to in sub-section 1 of section 153A.”

Conclusion:

In view of the above submissions, your Honours may kindly note the following:

The Section 153A(1)(b) and Explanation 1 to Section 153A of the Act work in tandem not in opposition. There is only one uniform method of calculation. The Search Year is the base year or anchor year excluded from the block of 6 plus 4 years while the Search Year’s own income is assessed as part of the same proceedings under the mandate of Section 153A. Any interpretation suggesting two different method violates the principles of statutory interpretation and render the Search mechanism unworkable.

Thus, the assessment order passed is valid both on facts and law.

We respectfully pray that the objections raised by the appellant in Grounds no.3 and 4 may be rejected, and the validity of the reassessment and assessment order may be upheld.”

15. In rejoinder, Ld. counsel of the assessee also furnished written submission, which reads as under :-

“1. This has reference to the captioned appeals which were heard by the Hon’ble Bench on 11th June 2026.

2. Grounds 3 and 4 challenge the validity of the impugned assessment order which relates to the assessment year 2008-09 on the ground that the said assessment year is beyond the purview of section 153A of the Act inasmuch as it is not a relevant assessment year as defined in Explanation 1 thereto.

3. It is submitted that the question which arises for consideration as to the anchor point for the determination of ‘relevant assessment years for the purpose of section 153A of the Income-tax Act, 1961 (‘the Act’) and its interplay with the anchor point for the determination of ‘assessment years’ has now been considered by several High Courts. It has been consistently held that in light of the language employed in Explanation 1, the determination of anchor point for the determination of the *relevant assessment years’ has to start from the end of the assessment year pertaining to the previous year in which the search is conducted. In the present case, the search was conducted on 27 July 2017. The relevant financial year is F.Y. 2017-18 and the corresponding assessment year is A.Y. 2018-19. The end of the assessment year 201819 is 31st March 2019 and this date forms the anchor point for determination of the ‘relevant assessment years’. Seen in that light, the period of ten years going backwards from 31st March 2019 (i.e., the end of the assessment year), ends with A.Y. 2009-10. Consequently, A.Y. 2008-09 is beyond the purview of section 153A of the Act in the facts of the present case. This position has been laid down and accepted by four different High Courts-

•

AR Safiullah v. ACIT (2021) WP No. 4327 of2021 (Mad); (pg. 2 of case law compilation)

•

RB Jewellers Pvt Ltd v. UOI (Cal); (pg. 101 of case law compilation)

•

PCIT v. Ojjus Medicare Private Limited (2024) 465 ITR 101 (Del), (pg. 26 of case law compilation)

•

Jayantibhai Karamshibhai Maniya v. ITO (Guj) (pg. 16 of case law compilation)

4. The judgement of the Hon’ble Gujarat High Court in Jayantibhai (supra) has subsequently been followed by the High Court in two more cases- Nilay Desai v. DCIT (2026) R.S.C.A. 1093 of 2026 (Exhibit-1) and Ashish Khurana v. ACIT (2026) R.S.C.A. 3994 of 2026. (Exhibit-2)

5. In all the above judgements, it has been unequivocally held by the Hon’ble High Courts that in view of the clearly distinct language employed in clause (b) vis-a-vis Explanation 1, it has to be held that the anchor point for the 6-year block and the 10-year block are different.

6. With the above background, following is a para wise reply to the written submissions filed by the Learned CIT (DR).

7. In para 1 of the written submissions, it has been averred that, for the purpose of Explanation 1, the expression “end of the assessment year” must be construed as 1st April. In this regard, it is submitted that the term “assessment year” is defined in clause (9) of section 2 of the Act to mean a period of 12 months commencing on the first day of April. In the facts of the present case, the assessment year relevant to the previous year of search is A.Y. 2018-19. It cannot be gainsaid that the first day of the assessment year is 1st April, 2018 and the end of the assessment year is 31st March, 2019. Such being the position, it is submitted that the argument that the end of the assessment year 201819 must somehow be construed as 1st April, 2018 cannot be countenanced.

8. Reliance has also been placed by the Department on the Notes on Clauses to the Finance Bill, 2017 to argue that determination of assessment years and relevant assessment years must both start from the same point in time. It is submitted that the Notes on Clauses to the Finance Bill, 2017, as reproduced on page 1 of the Ld. CIT(DR)’s written submission use the words “but not beyond ten assessment years from the assessment year relevant to the previous year in which search is conducted”. It may be observed that the language employed in the Notes on Clauses to the Finance Bill is markedly different from the final language used in the Finance Act, 2017, which employs the expression “but not beyond ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted”. The critical words ‘the end used in the Finance Act are missing in the Notes on Clauses to the Finance Bill. It goes without saying that all parties, as well as courts, are bound by the language used in the Finance Act and not by a different language used in the Notes on Clauses to the Finance Bill.

9. In para 2 of the written submission, reliance has again been placed on the Notes on Clauses to suggest that the block consists of standard six assessment years plus the 4 relevant assessment years. It has further been argued that the intention of the legislature was to extend the period of six years to ten years with the same starting point. In this regard, it is reiterated that the language employed in Notes on Clauses is different from the language employed in the Finance Act, and, therefore, the same does not bind the courts.

10. In para 3 of the submissions, it has been stated that the assessment year of search is an active ongoing assessment which need not be reopened under section 153A of the Act. It is submitted that there is no quarrel about the fact that the assessment year pertaining to the previous year of search is not reopened and assessed under section 153A of the Act. The definition of “relevant assessment year” in Explanation 1 does not state in any manner that the assessment year relevant to the previous year of search is a ‘relevant assessment year’ which would require reopening under section 153A of the Act. The definition in the Explanation only states that relevant assessment years are the four years which, looking backwards, from the end of the assessment year pertaining to the previous year of search. In the facts of the present case, applying this definition, the four ‘relevant assessment years’ will be A.Ys. 2009-10, 2010-11, 2011-12, and 201213. Therefore, it is nobody’s case that the assessment year pertaining to the previous year of search, i.e., A.Y. 2018-19 is to be reopened or that it is a ‘relevant assessment year’.

11. It has further been argued that accepting the interpretation given by the High Courts would result in a conflict with section 149 of the Act, as the said provision also requires exclusion of the relevant assessment year. In this regard, it is submitted that the manner in which the High Courts have interpreted the expression “end of the assessment year” does not result in any conflict with the interpretation of section 149 of the Act. In fact, this interpretation makes for a harmonious reading of the two provisions. Both Explanation 1 to section 153A and section 149 use the expression “from the end of the relevant assessment year”. The difference between the two, however, lies in the fact that Explanation 1 to section 153A is backward-looking, whereas section 149 is forward-looking. Therefore, the determination of the relevant assessment years’ under Explanation 1 to section 153A will start from 31st March 2019 and go back 10 years. Similarly, the determination of the three years under section 149 will also start from 31st March 2019 and go forward three years, with 31 March, 2019 acting as the anchor point in the both calculations. This would mean that 10 years counted backwards from 31st March 2019, which can be the subject matter of section 153A, will end with assessment year 200910, and three years counted forward from 31st March 2019 will end with assessment year 2021-22, which is precisely what has been done in reassessments under section 147 read with section 149 of the Act. On the contrary, if the Department’s interpretation of construing “end of the assessment year” to mean 1st April 2018 is accepted, it would mean that, under section 147 read with section 149 of the Act, the period of three years will end with assessment year 2020-21, which would upset all the reassessments that have been made in the past.

12. What is important to note is that neither Explanation 1 to section 153A nor section 149 speaks of excluding any year. Both provisions simply provide a starting point from which determination of certain years has to be made. On the contrary, clause

(b) of section 153A which deals with determination of six assessment years expressly calls for exclusion of the assessment year of search.

13 .In point (II) of para 3 of the submissions, it has been urged that a harmonious construction has to be followed and the anchor point of the ‘assessment years’ and “relevant assessment years’ should coincide. It is submitted that a harmonious construction could have been made only if the language employed for the two categories was the same. Once the language employed for “relevant assessment year” in Explanation 1 has expressly made a departure from that employed for “assessment year” in clause (b), then by no process of interpretation can the court give a go-by to such distinct language.

14. In point (III) of para 3 of the submissions, it has fairly been admitted that the judgments of various High Courts, while interpreting Explanation 1 to section 153A of the Act, have decided the issue in the manner suggested by the assessee. It has, however, been urged that, since those judgments are not rendered by the jurisdictional High Court, it is open to the Tribunal to interpret the matter differently. In this regard, it is submitted that this suggestion is in conflict with the well-settled legal position that, in the absence of a judgment of the jurisdictional High Court, a judgment rendered by a non-jurisdictional High Court is binding on the Tribunal. Reliance in this regard is placed on the judgment of the Hon’ble Bombay High Court in the case of CIT v. Smt. Godavari Devi Saraf [1978] 113 ITR 589 (Bombay).

15. Lastly, reliance has been placed by the learned CIT (DR) on the judgment of the Hon’ble Delhi High Court in the case of Indian National Congress v. DCIT (2024) and the judgment of the Hon’ble Gujarat High Court in the case of Bhavin Kishorebhai Zinzuwadia v. ACIT (2024).

16. lt is submitted that neither of the two judgments has dealt with the issue under consideration, namely, whether or not there are different anchor points for the six assessment years and the four relevant assessment years.

17. In Indian National Congress, a search took place on certain individuals in April 2019 pursuant to which satisfaction notes were recorded in 2023 and notices under section 153C of the Act were issued for the six-year block comprising assessment years 2014-15 to 2020-21. Notices for the first three years, i.e., assessment years 201415, 2015-16, and 2016-17, were challenged by way of a writ petition, inter alia, on the ground that, as the Assessing Officer had not expressly invoked the first proviso to section 153A of the Act, he could not have gone beyond six assessment years. It was further argued that no separate satisfaction notes were recorded for each of the years and also that the satisfaction notes recorded were not in accordance with the judgment of the Hon’ble Supreme Court in the case of CIT v. Calcutta Knitwears (2014) 362 ITR 673 and the Circular issued by the CBDT dated 31st December, 2015. It may, therefore, be seen that the three years under challenge were not the last three years of the ten-year block, and therefore the question of the anchor point for the ten-year block did not arise at all. Nor is any such argument or question of law regarding the determination of such anchor point and its interplay with the anchor point for the six-year block noted anywhere in the judgment. Therefore, the reliance on para 13 of the judgment, which refers to ‘four additional years’, is wholly misplaced and does not appreciate the context of the judgment. It is submitted that it is a settled position in law that a judgment is an authority only for what it decides and not for what may follow from certain observations which find place therein [Vaibhav Maruti Dombale v. ITAT (2025) (481 ITR 103); CIT v. Sudhir Jayantilal Mulji (1995) (214 ITR 154)]. Reliance is also placed on the judgment of the Hon’ble Supreme Court in the case of Sun Engineering Works (1992) (198 ITR 297), wherein it has been held that it is undesirable to pick out a word from a judgment and read it without context. A judgment has to be read as a whole, and the observations and findings therein must be read with reference to the questions that were placed before the court. It is humbly submitted that, as the question being considered in the present appeal was not before the Hon’ble High Court, nor are any arguments of the parties to that effect recorded in the judgment, the observations cannot be read out of context and applied to the present controversy. Such observations do not constitute the ratio of the judgment.

18. Insofar as the judgment of the Hon’ble Gujarat High Court in the case of Bhavin Kishorebhai Zinzuwadia (2024) is concerned, it is submitted that the said case also pertained to notices issued under section 153C for a six-year block from assessment year 2010-11 to 2015-16. In the said case, a search took place on 10th March, 2015. The satisfaction note of the Assessing Officer of the searched person was recorded on 31st March, 2018, and the satisfaction note of the Assessing Officer of the assessee was recorded on 23rd October, 2019 (paras 4 and 5). In that case also, the arguments of the assessee hinged on the applicability of the judgment of the Hon’ble Supreme Court in Calcutta Knitwears (supra), and also on the judgment of the Hon’ble Supreme Court in CII v. Jasjit Singh (2023) 458 ITR 437. Therefore, the question regarding the determination of the anchor point for the purpose of the relevant assessment years vis-a-vis its determination for the six assessment years, which is the subject matter of consideration in the present appeals, was not present before the Court at all. Consequently, no such question of law was framed by the High Court. In the said case, while the High Court did compute ten years as a block excluding the assessment year of search, the same was not in answer to the question being considered herein.

19. Subsequently, when this very question came up for consideration before the Hon’ble Gujarat High Court in the case of Jayantibhai Karamshibhai (supra), the High Court agreed with the interpretation put forth by the assessee that the anchor point for the six assessment years and the four relevant assessment years is different. The High Court reached this conclusion after noting the Department’s reliance on the judgment in Bhavin Kishorebhai Zinzuwadia (para 6.2). In fact, in two subsequent judgments rendered by the Hon’ble Gujarat High Court, namely Nilay Desai v. DCIT (supra) and Ashish Khurana v. ACIT (supra), the Department’s reliance on Bhavin Kishorebhai Zinzuwadia has been noted in paras 6.4 and 7.2, respectively, and the view taken in Jayantibhai Karamshibhai has been followed.

Prayer

20. In light of the aforesaid legal position, it is respectfully submitted that the impugned assessment order pertaining to assessment year 2008-09 ought to be quashed as bad in law, inasmuch as it falls entirely beyond the realm of the ‘relevant assessment years’ permissible under section 153A of the Act.”

16. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book & written submission along-with copy of case laws furnished by both the parties. In this regard, we find that till date there is no judgement of the Jurisdictional Hon’ble High Court of Bombay on the issue involved in the this case, however the assessee has placed reliance on judgements passed by other Hon’ble Courts on the issue involved in this case including that of Hon’ble Madras High Court passed in the case of A. R. Saifulla v. ACIT (2021) W.P. No.4327 of 2021 order dated 24.03.2021 wherein Hon’ble Court allowed the Writ Petition and accepted the contention of the assessee that for computing 10 assessment years the starting point has to be from the end of the search assessment year by observing as under :-

“2.The petitioner is an income tax assessee. His premises were searched on 10.04.2018. Pursuant to the said search, the respondent issued notices under Section 153 A of the Income Tax Act, 1961 requiring the petitioner to file his return of income for various assessment years. One such notice issued for the AY 2009-10 is impugned in this writ petition. The only question that arises for my determination is whether the assessing officer/respondent herein is possessed of the power to issue the same. The respondent has filed a detailed counter affidavit and the learned standing counsel took me through its contents.

3.The contest between the parties is as regards Explanation-I to Section 153 A (1) of the Act. It reads as under :

“For the purposes of this sub-section, the expression “relevant assessment year” shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.”

The above explanation assigns a particular meaning to the expression “relevant assessment year”. It precedes the assessment year relevant to the previous year in which the search is conducted. The search was conducted on 10.04.2018. According to Section 2(34) of the Act, “previous year” means the previous year as defined in Section 3. As per Section 3, for the purposes of the Act, “previous year” means the financial year immediately preceding the assessment year.” “Assessment year” has been defined in Section 2(9) as the period of twelve months commencing on the 1st day of April every year. As per Section 3(21) of the General Clauses Act, “financial year’ shall mean the year commencing on the 1st day of April. Since the search had taken place on 10.04.2018, the assessment year will be 2019-20. The previous year would be 2018-19.

4 .The learned standing counsel pointed out that prior to the amendment made vide Finance Act, 2017 w.e.f., 01.04.2017, Section 153 A mandated the assessing officer to issue notice for six assessment years immediately preceding the assessment year relevant to the financial year in which the search is initiated. Since the search assessment year is 2019-20, the six assessment years preceding the same would be

1	2018-19
2	2017-18
3	2016-17
4	2015-16
5	2014-15
6	2013-14

Following the changes and insertion made by the Finance Act, 2017 w.e.f., 01.04.2017, the provision reads as under :

“153A(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall—

(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139;

…

…”

The argument of the standing counsel is that since prior to 01.04.2017, the statutory provision contemplated issuance of notice for six assessment years and w.e. f., 01.07.2017, it has been extended to ten years, it obviously means four more assessment years beyond the six assessment years originally covered under Section 153 A prior to 01.04.2017. Therefore, the remaining four relevant assessment years to be covered would be

7	2012-13
8	2011-12
9	2010-11
10	2009-10

Of course, this extended period would be covered only subject to certain conditions. In the case on hand, the only dispute is as to how the period of ten years is to be computed.

5.The learned standing counsel wants me to look at the explanatory notes (Para 80.4) to Finance Act 2017 (CBDT’s Circular No.2/2018 in F.No.370142/15/2017-TPL dated 15.02.2018) to understand Explanation-I. It reads as under :

“However, in order to protect the interest of the revenue in cases where tangible evidence(s) are found during a search or seizure operation (including Section 132A cases) and the same is represented in the form of undisclosed investment in any asset, section 153A of the Income Tax Act relating to search assessments has been amended to provide that notice under the said section can be issued for an assessment year or years beyond the sixth assessment year already provided up to the tenth assessment year.”

The learned standing counsel would point out that in the provision, there are clearly two limbs. The first limb says that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which the search is conducted. The second limb enables the assessing officer to go up to ten assessment years. The stand of the respondent is that the search assessment year should not be included while computing the ten assessment years under Section 153 A. Otherwise, assessment year 2013-14 will come under both ie., under the original category of six years and also under the extended category of ten years. He would strongly urge that the very purpose of introducing the amendment was to extend the reach of the assessing officer by four more years. In other words, apart from the six assessment years already provided for, the long arm of the authority must go up to the four more years. Otherwise, the very purpose of the amendment would be lost.

6. The contention of the petitioner’s counsel is that the provision talks of two categories, namely, six years and ten years and that different yardsticks have been prescribed for computing the two periods. On the other hand, the learned standing counsel would contend that the statutory provision talks of six years and ten years, the second category “ten years” must be understood as “six plus four years”.

7. The principles of interpreting a taxation statute have been authoritatively laid down by the Constitution Bench of the Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company and others (2018) 9 SCC1. It was held therein that other tools of interpretation such as contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material in taxation statutes. There is no room for any intendment. Regard must be had to the clear meaning of the words. Equity has no place. One has to strictly look to the language used. There is no room for searching intendment nor drawing any presumption. Nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute. (Para 29). This judgment is now a leading authority for the proposition that in the event a provision of fiscal statute is obscure such construction which favours the assessee may be adopted would have no application to construction of an exemption notification, as in such a case it is for the assessee to show that he comes within the purview of exemption.

8. In fact, I am prepared to sail along with the learned standing counsel and hold that if there is any ambiguity while construing a provision meant for rooting out or investigating evasion of tax, it must be resolved in favour of the revenue and against the assessee. Jurisprudentially speaking, the very object of law is to lay down norms for general behavior and prescribe sanction to ensure their compliance. Unless sanction is strictly enforced, it will incentivise deviation. Even in criminal law, while when it comes to substantive offences, retrospective application is forbidden, contrary approach is adopted in matters of procedure. I agree with the submission that Section 153 A of the Income Tax Act is intended to unearth tax evasion. But I can endorse the stand of the respondent as regards computation of the period of ten years only if there is ambiguity or obscurity in Explanation-I. To me, there is absolutely no ambiguity.

9.Explanation-I is clear as to the manner of computation of the ten assessment years. It clearly and firmly fixes the starting point. It is the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. There cannot be any doubt that since search was made in this case on 10.04.2018, the assessment year is 2019-20. The end of the assessment year 2019-20 is 31.03.2020. The computation of ten years has to run backwards from the said date ie., 31.03.2020. The first year will of course be the search assessment year itself. In that event, the ten assessment years will be as follows :

1^st year	2019-20
2^nd year	2018-19
3^rd year	2017-18
4^th year	2016-17
5^th year	2015-16
6^th year	2014-15
7^th year	2013-14
8^th year	2012-13
9^th year	2011-12
10^th year	2010-11

The case on hand pertains to AY 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department.

10.In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153 A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 201314. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year. In other words, search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided within the scope of the provision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically construed.

11.One other contention urged by the standing counsel has to be dealt with. It is pointed out that the petitioner has invoked the writ jurisdiction at the notice stage. Since the petitioner has demonstrated that the subject assessment year lies beyond the ambit of the provision, the respondent has no jurisdiction to issue the impugned notice. Once lack of jurisdiction has been established, the maintainability of the writ petition cannot be in doubt.

12.The notice impugned in the writ petition is quashed. The writ petition stands allowed. Consequently, connected miscellaneous petitions are closed.”

17. Apart from above judgement, Ld. counsel of the assessee also placed reliance on the judgement of Hon’ble Gujarat High Court passed in the case of Jayantibhai Karamshibhai Maniya (supra) wherein Hon’ble Gujarat High Court followed the judgement passed by Hon’ble Madras High Court in the case of A. R. Saifulla (supra) and also followed the judgement passed by Hon’ble Delhi High Court in the case of Ojjus Medicare (P.) Ltd. (supra) and accepted that the statute prescribes different modes of computation for six years and ten years by observing as under :-

“9.3 Thus, it is precisely held hereinabove that the statute prescribes different modes of computation for six years and ten years. We reiterate that the provisions of Section 153A(1) (b) of the Act stipulate that the Assessing Officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which the search is conducted. However, the ten assessment year period, consequently, is to be reckoned from the end of the assessment year pertaining to the previous year in which the search was conducted, as distinct from the preceding year which is spoken of in the case of the six relevant assessment years. Thus, the contention with regard to the computation of six years as well as ten years under the provisions of Section 153A of the Act has already been gone into by the Delhi High Court as well as the Madras High Court, and we have no convincing reason to take a divergent view from the view expressed hereinabove. Applying the aforesaid computation to the facts of the present case, taking the date of the search as 09.05.2024 during the Financial Year 2024-25, the Assessment Year 2025-26 will become the first assessment year and, in the same manner, the Assessment Year 2016-17 will become the tenth assessment year. Thus, the year under consideration, namely, Assessment Year 2015-16, for which the impugned notice has been issued under Section 148 of the Act, would fall beyond the period of ten years prescribed under the statute as it stood immediately before the commencement of the Finance Act, 2021, and hence, on this count, the impugned notice can be said to be barred by limitation.”

18. Apart from above judgement, Ld. counsel of the assessee also placed reliance on the judgement of Hon’ble Delhi High Court passed in the case of Ojjus Medicare (P.) Ltd. (supra) wherein Hon’ble Delhi High Court followed the judgement passed by Hon’ble Madras High Court in the case of A. R. Saifulla (supra).

19. Apart from above judgement, Ld. counsel of the assessee also placed reliance on the judgement of Hon’ble Calcutta High Court passed in the case of R.B. Jewellers (P.) Ltd. (supra) wherein Hon’ble Calcutta High Court followed the judgement passed by Hon’ble Supreme Court in the case of PCIT v. Abhisar Buildwell (P.) Ltd. 454 ITR 212 (SC) and also followed the judgement passed by Hon’ble Madras High Court in the case of A. R. Saifulla v. ACIT (supra) and held that the impugned proceedings u/s 153A of the IT Act relating to assessment year 2010-11 on the basis of search and seizure dated 13.04.2019 is not sustainable in law and accordingly allowed the petition filed by the assessee on both the grounds i.e. regarding absence of incriminating material and also on the ground of the proceedings being time barred in the light of judgement of A.R. Saifulla v. ACIT (supra).

20. We further find that the assessee has also placed reliance on coordinate bench decision passed in the case of Sai Kanaka Mahalakshami Finance Private Ltd. (supra) wherein the Tribunal under identical facts by relying on the judgement of A. R. Saifulla v. ACIT (supra) has dismissed the appeal filed by the Revenue & accepted the contention of the assessee by observing as under :-

“5. We have heard the rival contentions and perused the material available on record and the orders of the Ld. Revenue Authorities. Before proceeding to adjudicate the grounds raised by the Revenue, we deem it fit to adjudicate the grounds raised by the assessee by invoking the Rule 27 of the ITAT Rules, 1963. After hearing the rival submissions and on going through the facts and circumstances of the case, now the issue before us is whether the assumption of jurisdiction by the Ld. AO for the AY 2008-09 is valid or not as per the Fourth proviso to section 153A(1)(b) of the Act. We note that the relevant assessment year is 2008-09 and the date of search is 15/9/2017 which falls in the Assessment Year 2018-19.

6. In the instant case on hand, Ten years has to be calculated from the starting point, from the end of the search assessment years i.e., from the AY 2018-19. Accordingly, the 10^th Assessment Year in the instant case shall be the AY 2009-10. Section 153A(1)(b) states that the Ld. AO shall assess or re-assess the total income of six years immediately preceding the assessment year relevant to the previous year in which the search is conducted. The Fourth proviso and the Explanation-1 to Fourth Proviso defining the expression “relevant assessment year” for the purpose of this sub-section are extracted below for the sake of brevity:

Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless-

(a) The Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years:

(b)……………

(c)……………

“Explanation 1.—For the purposes of this sub-section, the expression “relevant assessment year” shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.”

From the bare reading of the above provisions we find that the Statute has prescribed a different yardstick for the computation of six years in the case of search assessments for the purpose of section 153A(1)(b) and a different yardstick in the computation of Ten years, for the purpose of fourth proviso. Accordingly, we find that the Ld. AO has jurisdiction upto the AY 2009-10 in the instant case.

From the reliance placed by the Ld. AR in the case of A.R. Saifulla (supra) we find it relevant to extract the relevant paragraphs from the said order as under:

“8. In fact, I am prepared to sail along with the learned standing counsel and hold that if there is any ambiguity while construing a provision meant for rooting out or investigating evasion of tax, it must be resolved in favour of the revenue and against the assessee. Jurisprudentially speaking, the very object of law is to lay down norms for general behavior and prescribe sanction to ensure their compliance. Unless sanction is strictly enforced, it will incentivise deviation. Even in criminal law, while when it comes to substantive offences, retrospective application is forbidden, contrary approach is adopted in matters of procedure. I agree with the submission that Section 153 A of the Income Tax Act is intended to unearth tax evasion. But I can endorse the stand of the respondent as regards computation of the period of ten years only if there is ambiguity or obscurity in Explanation-I. To me, there is absolutely no ambiguity. https://www. mhc. tn.gov. in/judis/

9. Explanation-I is clear as to the manner of computation of the ten assessment years. It clearly and firmly fixes the starting point. It is the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. There cannot be any doubt that since search was made in this case on 10.04.2018, the assessment year is 2019-20. The end of the assessment year 2019-20 is 31.03.2020. The computation of ten years has to run backwards from the said date ie., 31.03.2020. The first year will of course be the search assessment year itself. In that event, the ten assessment years will be as follows :

1st year	2019-20
2nd year	2018-19
3rd year	2017-18
4th year	2016-17
5 th year	2015-16
6th year	2014-15
7th year	2013-14
8th year	2012-13
9th year	2011-12
10th year	2010-11

The case on hand pertains to AY 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the https://www.mhc.tn.gov.in/judis/ assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department.

10. In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153 A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013-14. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year. In other words, search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided within https://www.mhc.tn.gov.in/judis/ the scope of the provision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically construed.

11. One other contention urged by the standing counsel has to be dealt with. It is pointed out that the petitioner has invoked the writ jurisdiction at the notice stage. Since the petitioner has demonstrated that the subject assessment year lies beyond the ambit of the provision, the respondent has no jurisdiction to issue the impugned notice. Once lack of jurisdiction has been established, the maintainability of the writ petition cannot be in doubt.

12. The notice impugned in the writ petition is quashed. The writ petition stands allowed.”

7. In the case on hand search operation U/s. 132 of the Act was conducted on 15/09/2017, falling in the AY 2018-19. The computation of ten years as per above explanation is as follows:

1st year	2018-19
2nd year	2017-18
3rd year	2016-17
4th year	2015-16
5 th year	2014-15
6th year	2013-14
7th year	2012-13
8th year	2011-12
9th year	2010-11
10th year	2009-10

The Ld AO has assumed jurisdiction for the AY 2008-09, which is beyond the period of limitation prescribed by statute. Considering these facts and circumstances of the case as well as respectfully following the decision of the Hon’ble Madras High Court in the case of A.R. Saifulla (supra), we are of the considered view and we deem it fit to quash the assessment order passed by the Ld. AO since the Ld. AO has no jurisdiction over the impugned assessment year. It is ordered accordingly. The decisions relied on by the Ld. DR are with respect to reopening of unabated assessment without any incriminating material therefore the case laws are of no help to the Revenue in the instant case.

8. Since the grounds raised by the assessee by invoking Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 are adjudicated by quashing the assessment order, the adjudication of other grounds raised by the assessee along with the two other grounds raised in support of the Ld. CIT(A)’s order become infructuous. Similarly, all the grounds raised by the Revenue need not be adjudicated since we have quashed the assessment as the Ld. AO has no jurisdiction to invoke the provisions of section 153A(1)(b) of the Act in the impugned assessment year. Therefore, the adjudication of all the grounds raised by the Revenue becomes infructuous.

9. In the result, appeal of the Revenue is dismissed and the petition filed by the assessee under Rule 27 is allowed as indicated herein above. “

21. Accordingly, respectfully following the judgements passed by Hon’ble Madras High Court (supra), Hon’ble Gujarat High Court (supra), Hon’ble Delhi High Court (supra) and Hon’ble Calcutta High Court (supra) and also following the coordinate bench decision passed in the case of Sai Kanaka Mahalakshami Finance Private Ltd. (supra), we are of the considered opinion that the Assessing Officer has no jurisdiction to issue notice u/s 153A of the IT Act for the impugned Assessment Year 2008-09, since the search was conducted on 27-07-2017 which falls in assessment year 2018-19 & in view of above judgements the anchor point for determination of ten assessment years will commence from the end of the assessment year relevant to the previous year in which search is conducted, therefore first year in the instant case will be Assessment Year 2018-19 & determination of relevant assessment year will be as follows :-

Year 1	A.Y. 2018-19
Year 2	A.Y. 2017-18
Year 3	A.Y. 2016-17
Year 4	A.Y. 2015-16
Year 5	A.Y. 2014-15
Year 6	A.Y. 2013-14
Year 7	A.Y. 2012-13
Year 8	A.Y. 2011-12
Year 9	A.Y. 2010-11
Year 10	A.Y. 2009-10

22. From the perusal of above chart, it is apparent that the assessment year 2008-09 is not falling in the relevant assessment year & is admittedly beyond the 10 years block, the starting point for which commences from Assessment Year 2018-19 & ends in Assessment Year 2009-10 for which the notices could be issued as per Explanation 1 to section 153A(1) of the IT Act, therefore, we deem it appropriate to declare the impugned notice issued u/s 153A of the IT Act for Asstt Year 2008-09 as bad in law & accordingly quash the reassessment proceedings and also quash the consequential reassessment order dated 18.06.2021 passed u/s 153A r.w.s. 143(3) of the IT Act. Thus, ground no.3 & 4 raised by the assessee are allowed. Since we have already quashed the impugned notice issued u/s 153A of the IT Act for Asstt Year 2008-09, as well as quashed the consequential reassessment order dated 18.06.2021 by allowing ground no.3 & 4, the other remaining grounds become academic in nature, hence not adjudicated by us.

23. In the result, the appeal filed by the assessee in ITA No.301/pAN/2025 for A.Y. 2008-09 is allowed.

ITA No.303/pAN/2025 :

24. Since the facts and issues involved in the appeal of the assessee in ITA No.303/pAN/2025 are identical to the appeal of the assessee in ITA No.301/pAN/2025 therefore, our decision in ITA No.301/pAN/2025 shall apply mutatis mutandis to the appeal of the assessee in ITA No.303/pAN/2025. Accordingly, the appeal of the assessee in ITA No.303/pAN/2025 is also allowed.

25. In the result, the appeal filed by the assessee in ITA No.303/pAN/2025 for A.Y. 2008-09 is allowed.

26. To sum up, both the above captioned appeals filed by the different assessee are allowed, as indicated above.