Section 153C limitation runs from recorded satisfaction and handover of seized material, making the assessment time-barred.

Proceedings under section 153C were treated as time-barred because the limitation period had to be computed with reference to the year in which the satisfaction note was recorded and the seized material was handed over for third-party action. On that basis, the 10-year window did not extend to assessment year 2009-10, so the initiation for that year was beyond the permissible period. The Tribunal therefore quashed the assessment as barred by limitation.

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Issues: Whether proceedings under section 153C of the Income-tax Act, 1961 could validly be initiated for assessment year 2009-10 on the basis of a search conducted on 29.05.2018 and satisfaction recorded on 14.07.2021.

Analysis: The search and seizure action was conducted under section 132, and the satisfaction note in the case of the assessee was recorded on 14.07.2021. The Tribunal applied the principle that the period for initiating proceedings under section 153C is to be computed with reference to the year in which satisfaction is recorded and the material is handed over for third-party proceedings. On that basis, the relevant 10-year window did not extend so far back as assessment year 2009-10. The Tribunal therefore held that the impugned assessment year lay beyond the permissible period and the initiation was hit by limitation.

Conclusion: Proceedings under section 153C for assessment year 2009-10 were barred by limitation and the assessment was quashed.

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