2025 (12) TMI 1715 - HC - Income Tax

Income reassessment notices u/s153C for AY 2014-15 quashed after escapement below ?50 lakh blocked 10-year limit

HC held that reassessment proceedings initiated by notices under s.153C for AY 2014-15 were barred because the respondent sought to invoke the extended ... Validity of notices u/s 153C - scope of the action of the respondent being outside the period of ten years - HELD THAT:- As escapement of the income which is less than Rs. 50,00,000/- (i.e. Rs. 26,00,000/-), the impugned notices under Section 153C for the Assessment Year 2014-15 is required to be quashed and set aside the same is hereby quashed and set aside. Issues: Whether the notice issued under Section 153C of the Income-tax Act, 1961 for Assessment Year 2014-15 is time-barred and liable to be quashed where the period exceeds ten years and the undisclosed income is below Rs.50,00,000.Analysis: The Court analysed the effect of the proviso to Section 153C(1) as explained in the Apex Court decision in Jasjit Singh, holding that the relevant period for reckoning the limitation for third-party assessments under Section 153C begins from the date on which the books/documents/assets seized or requisitioned from the searched person are received by the jurisdictional assessing officer. Applying that principle to the undisputed facts, the Court noted that the impugned action concerned assessment beyond ten years and that the amount of escapement for the relevant year is below the statutory threshold of Rs.50,00,000. The factual position regarding receipt of seized materials and the income quantum was not controverted by the respondents.Conclusion: The notice under Section 153C of the Income-tax Act, 1961 for Assessment Year 2014-15 is time-barred and is quashed and set aside; the petition is allowed.Ratio Decidendi: For third-party assessments under Section 153C, the limitation period is calculated from the date the jurisdictional assessing officer receives books/documents/assets seized or requisitioned from the searched person; where assessment exceeds ten years and undisclosed income is below Rs.50,00,000, the notice is time-barred.