Assessment notices under section 153C and amended procedure: writ remedy upheld for notices issued beyond jurisdiction

Notices issued under section 153C must conform to the trigger and temporal limits of section 153A; where a notice extends beyond the six assessment years computed from the assessment year relevant to the previous year of the search, it is beyond jurisdiction and may be quashed. An amendment to section 153C given prospective effect cannot be applied to searches concluded before its commencement; the amendment affects substantive rights by enlarging persons covered. Where proceedings are wholly without jurisdiction, petition under Article 226 remains available despite alternative statutory appeal remedies. Notices barred by limitation must be tested against the alternative periods provided in section 153B.

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Issues Involved:
1. Whether the amended provisions of Section 153C of the Income Tax Act, 1961, which came into effect from 1st June 2015, apply to searches conducted prior to that date.
2. Whether the notices issued under Section 153C are barred by limitation.
3. Determination of the relevant assessment years under Section 153A in connection with Section 153C.
4. The validity of the satisfaction notes recorded by the Assessing Officer.

Issue-wise Detailed Analysis:

1. Applicability of Amended Provisions of Section 153C:
The court examined whether the amended Section 153C, effective from 1st June 2015, applies to searches conducted before this date. The court noted that the amendment expanded the scope of Section 153C to include documents that "pertain to" or "relate to" a person other than the searched person. The court held that the relevant date for applying the amended provisions is the date of the search, not the date of the satisfaction note or the issuance of the notice. Since the searches in these cases were conducted before 1st June 2015, the amended provisions do not apply. The court emphasized that applying the amended provisions to pre-amendment searches would result in an anomalous situation and affect substantive rights, which cannot be done retrospectively unless expressly stated by the legislature.

2. Limitation for Issuance of Notice under Section 153C:
The petitioners contended that the notices under Section 153C were barred by limitation as the period for assessment under Section 153A had expired. The court clarified that Section 153B provides for the time limit for completion of assessment under Section 153A, and the proviso to Section 153B(1) provides an alternative limitation period for assessments under Section 153C. The court held that the statute does not prescribe a limitation period for the issuance of notices under Section 153C, and therefore, the notices cannot be considered time-barred. The court referred to the Supreme Court's decision in Commissioner of Income Tax v. Calcutta Knitwears, which held that the satisfaction note under Section 158BD (analogous to Section 153C) could be prepared at various stages and does not have a prescribed limitation period.

3. Relevant Assessment Years under Section 153A:
The court addressed the determination of relevant assessment years for which proceedings could be initiated under Section 153C. It held that the six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted should be considered. For the HN Safal Group, the search conducted on 4th September 2013 meant the relevant assessment years were 2008-09 to 2013-14. For the Barter Group and Venus Group, searches conducted on 4th December 2014 and 13th March 2015 meant the relevant assessment years were 2009-10 to 2014-15. Notices issued for assessment years beyond these periods were deemed beyond jurisdiction.

4. Validity of Satisfaction Notes:
The petitioners argued that the satisfaction notes recorded by the Assessing Officer were not valid as they merely reproduced the satisfaction of the Assessing Officer of the searched person without independent application of mind. The court refrained from delving into the specifics of each satisfaction note, given its primary finding on the jurisdictional issue. However, it emphasized that the satisfaction note must be recorded immediately after the assessment proceedings in the case of the searched person, as per the Supreme Court's guidelines in Calcutta Knitwears.

Final Order:
The court allowed the petitions, quashing the impugned notices issued under Section 153C and the assessment orders where applicable, on the ground that the initiation of proceedings under Section 153C was without jurisdiction.

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