2025 (12) TMI 1183 - HC - Income Tax

Six-year assessment block u/s153C after seized documents handed over and satisfaction recorded; older year excluded, appeal dismissed

The dominant issue was limitation for assessments under s.153C, specifically the date from which the six assessment years are to be computed based on ... Assessment u/s 153C - Period of limitation - date of satisfaction and handing over the seized material - calculation of six Assessment Years - HELD THAT:- Concedingly the documents pertaining to the respondent/Assessee were handed over to the A.O. of the Assessee on 24.06.2021 and the A.O. has recorded satisfaction on the same date. If that be so, the six years must be counted from 24.06.2021, which shall not include the Assessment Year 2013-14. We are of the view that the Tribunal is justified in dismissing the appeal filed by the appellant. We do not see any substantial question of law arising for consideration in this appeal. The appeal is dismissed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether, for proceedings against a person other than the searched person under Section 153C, the six assessment years that can be assessed/reassessed are to be computed with reference to the date of the original search under Section 132, or with reference to the date on which the seized material is received by the Assessing Officer having jurisdiction over such other person (and satisfaction is recorded). (ii) Whether, on the facts found (handover of material and recording of satisfaction on 24.06.2021), proceedings under Section 153C could validly cover Assessment Year 2013-14. (iii) Whether any substantial question of law arose from the Tribunal's view that the impugned assessment year fell outside the permissible six-year block under Section 153C. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i) & (ii): Reference point for computing the six assessment years under Section 153C for 'such other person', and applicability to Assessment Year 2013-14 Legal framework (as discussed and applied by the Court): The Court considered Section 153C(1) along with the first proviso thereto. The proviso requires that, in the case of the 'other person', the reference to the date of initiation of search is to be construed as the date of receiving the seized books/documents/assets by the Assessing Officer having jurisdiction over such other person. Interpretation and reasoning: The Revenue argued that the six-year period should be reckoned with reference to the date of search (02.11.2017), which would bring Assessment Year 2013-14 within the permissible block. The Court rejected this construction because the first proviso specifically shifts the operative date, for the 'other person', from the search date to the date of receipt of seized material by that person's Assessing Officer. The Court treated the handover date and the satisfaction date (both recorded as 24.06.2021) as determinative for computation of the relevant six assessment years for action under Section 153C against the other person. Conclusions: Since the seized material pertaining to the other person was handed over on 24.06.2021 and satisfaction was recorded on the same date, the six assessment years had to be counted with reference to 24.06.2021. On that basis, Assessment Year 2013-14 was not covered within the permissible block, rendering Section 153C action for that year unsustainable. The Court affirmed the Tribunal's conclusion that the assessment year in question fell outside the scope of Section 153C. Issue (iii): Existence of a substantial question of law Interpretation and reasoning: The Court found the Tribunal's approach consistent with the statutory proviso governing computation of the relevant period for the 'other person'. Given the conceded dates of handover and satisfaction (24.06.2021), the Court held the outcome followed directly from the applied statutory construction. Conclusions: The Court held that no substantial question of law arose for consideration and therefore dismissed the appeal, upholding the Tribunal's dismissal of the Revenue's challenge.