Limitation under Section 153B prevents Section 153C assessment where seized documents were received outside the statutory one year completion window.

Whether assessments under Section 153C are barred by the limitation in Section 153B was decided by applying the statutory one year completion window measured from the end of the financial year in which seized documents were received by the Assessing Officer. The satisfaction note recorded delivery of relevant seized material to the Assessing Officer on 22.06.2022, so the assessment completion deadline fell at the end of the subsequent financial year; no assessment was completed within that period and the challenge notice therefore commenced proceedings that were time barred and were set aside.

---

---

Issues: Whether proceedings initiated under Section 153C of the Income-tax Act, 1961 in respect of Assessment Year 2016-17 are barred by limitation under Section 153B of the Income-tax Act, 1961, given that the seized documents were handed over to the Assessing Officer of the other person on 22.06.2022.

Analysis: Section 153B requires that assessment orders pursuant to notices under Section 153C be completed within twelve months from the end of the financial year in which the documents were received by the Assessing Officer. The satisfaction note records that the seized documents and information relating to the other person were handed over to the Assessing Officer on 22.06.2022. Reckoning the limitation period from the end of the financial year 2022-23 yields a last date for completion of assessment of 31.03.2024. No assessment order had been passed by that date and no response to the petition was filed by the Revenue contesting the limitation computation. The impugned notice dated 19.12.2023 therefore led to proceedings that could not result in a valid assessment order after the statutory limitation expired.

Conclusion: Proceedings commenced pursuant to the impugned notice are time-barred and are set aside; conclusion in favour of the assessee.

---