### Computation of Ten-Year Assessment Block Includes the Search Year under Section 153A Explanation 1

In brief

The question

Whether the notice issued by the respondent under Section 148 for Assessment Year 2014-15 is barred by limitation under the provisions of Section 153A read with Explanation 1

The court held

The court held that the impugned notice for AY 2014-15 was issued beyond the permissible ten-year limitation period, as the ten-year block terminating from the search year (AY 2024-25) only extends back to AY 2015-16

It also directed

The court concluded that the respondent lacked jurisdiction to issue the notice after the expiry of the statutory time limit

The High Court quashed and set aside the Section 148 notices dated 26.03.2025 for AY 2014-15 and made the Rule absolute

01Facts

The petitioner, an individual part of the PSY Group, filed his return for Assessment Year (AY) 2014-15 on 31.07.2014

¶ 4.2

Following a search action under Section 132 of the Income Tax Act, 1961, conducted on 08.02.2024 (Financial Year 2023-24), the respondent issued a notice dated 26.03.2025 under Section 148 of the Act seeking to reopen the assessment for AY 2014-15

¶ 4, 4.2

The petitioner challenged the notice primarily on the ground that it was barred by limitation under the statutory scheme governing search assessments

¶ 4.2

02Issues

i.Whether the notice issued by the respondent under Section 148 for Assessment Year 2014-15 is barred by limitation under the provisions of Section 153A read with Explanation 1

¶ 7, 8

ii.Whether the "search assessment year" (AY 2024-25) should be included or excluded when calculating the ten-year jurisdictional block for reopening assessments

¶ 9, 12.3

03Law Applied

The court applied Section 153A(1)(b) of the Income Tax Act, which mandates the assessment of six assessment years "immediately preceding" the search year

¶ 10

It further applied Explanation 1 to Section 153A, which defines "relevant assessment year" for the extended ten-year period as years falling beyond six years but "not later than ten assessment years from the end of the assessment year" relevant to the search year

¶ 11, 12

The court relied on the precedent of Jayantibhai Karamshibhai Maniya v. ITO [2026] which established that the search year is included in the ten-year block

¶ 12.4

and followed the reasoning in Ojjus Medicare (P.) Ltd. (Delhi HC) and A.R. Safiullah v. ACIT (Madras HC) regarding the distinct computational regimes for the six-year and ten-year periods

¶ 5.4, 12.4

Provisions in the judgment · 10

Income-tax Act, 1961 10 provisions

Section 132Section 132ASection 147Section 148Section 149Section 150Section 151Section 152Section 153ASection 153C

04Reasoning

The court analyzed the linguistic distinction in Section 153A, noting that while the six-year block uses the phrase "immediately preceding" (which excludes the search year), the ten-year block is reckoned "from the end of the assessment year" of the search

¶ 12.1, 12.2

Given the search took place in FY 2023-24 (AY 2024-25), the court determined that AY 2024-25 serves as the first year in the backward-running ten-year count

¶ 8, 12.3

Consequently, the tenth year in this block is AY 2015-16

¶ 5.3, 12.4

The court rejected the Revenue's argument to exclude the search year from the ten-year calculation, holding that such an interpretation would render the specific statutory phrasing "from the end of the assessment year" redundant and violate principles of literal construction

¶ 12.2, 12.3