2025 (9) TMI 175 - SCH - Income Tax

Section 153C notice requires incriminating material tied to specific assessment year(s) before income reassessment can be issued

SC dismissed the special leave petitions and declined to interfere with the HC order. The Court affirmed that for assessment under section 153C ... Assessment u/s 153C - incriminating material found or not? - HC [2024 (5) TMI 1608 - DELHI HIGH COURT] as held the “incriminating material” which is spoken of would have to be identified with respect to the AY to which it relates or may be likely to impact before the initiation of proceedings u/s 153C. The jurisdictional AO would have to firstly be satisfied that the material received is likely to have a bearing on or impact the total income of years or years which may form part of the block of six or ten AYs' and thereafter proceed to place the assessee on notice under Section 153C. The power to undertake such an assessment would stand confined to those years to which the material may relate or is likely to influence. Absent any material that may either cast a doubt on the estimation of total income for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C. HELD THAT:- Having heard the learned counsel appearing for the petitioners and having gone through the materials on record, we see no reason to interfere with the impugned order passed by the High Court. Special Leave Petitions are, accordingly, dismissed. Pending application(s), if any, stands disposed of. 'Delay condoned.' After hearing counsel for the petitioners and perusal of record, the Court stated that 'we see no reason to interfere with the impugned order passed by the High Court.' Consequently, 'The Special Leave Petitions are, accordingly, dismissed.' Pending application(s), if any, 'stands disposed of.' The decision reflects a refusal to re-examine the High Court's order on the present record and disposition of the petition on merits/procedural grounds as articulated.