Section 153C jurisdiction turns on incriminating material and the correct block-period trigger for search assessments.

Under section 153C, completed assessments can be disturbed only where incriminating material belonging to, or relatable to, the assessee is found during search; general seized material, disclosed entries or third-party ledgers are insufficient. On that principle, earlier assessment years were treated as unsustainable because no such specific material existed qua the assessee. For later years, the block period for a person other than the searched person was computed from the date the seized material reached the jurisdictional Assessing Officer, so the assessments fell within the six-year search framework and could not validly be framed under section 143(3). The challenged assessments were therefore set aside on jurisdictional grounds.

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Issues: (i) Whether the assessments framed under section 153C of the Income-tax Act, 1961 for the earlier assessment years were unsustainable in the absence of incriminating material qua the assessee; (ii) whether the assessments for assessment years 2020-21 and 2021-22 were liable to be quashed for having been framed under section 143(3) instead of the statutory scheme triggered by section 153C read with section 153A.

Issue (i): Whether the assessments framed under section 153C of the Income-tax Act, 1961 for the earlier assessment years were unsustainable in the absence of incriminating material qua the assessee.

Analysis: The assessments for the relevant years had attained finality, and the additions were founded on material arising from search proceedings in the case of a third person. The legal position applied was that completed assessments under section 153C cannot be disturbed unless incriminating material belonging to, or relatable to, the assessee is found during search. The reasoning followed the settled principle that mere ledgers, disclosed entries, or general seized material do not by themselves establish the requisite jurisdictional basis in the absence of specific incriminating material.

Conclusion: The assessments under section 153C for the earlier assessment years were held to be bad in law and were quashed in favour of the assessee.

Issue (ii): Whether the assessments for assessment years 2020-21 and 2021-22 were liable to be quashed for having been framed under section 143(3) instead of the statutory scheme triggered by section 153C read with section 153A.

Analysis: The date relevant for computing the block period in the case of a person other than the searched person was treated as the date on which the seized material was received by the jurisdictional Assessing Officer, not the date of search in the case of the searched person. On that basis, the assessments for the later years fell within the six-year block and had to proceed under the search assessment framework. Framing the assessments under section 143(3) was treated as a fatal jurisdictional error.

Conclusion: The assessments for assessment years 2020-21 and 2021-22 were quashed in favour of the assessee.

Final Conclusion: All the challenged assessments were set aside on jurisdictional grounds, and the connected grounds on merits were left academic.

Ratio Decidendi: In a case relating to a person other than the searched person, the block period under section 153C is computed from the date the seized material is received by the jurisdictional Assessing Officer, and completed assessments cannot be disturbed under section 153C without incriminating material found qua the assessee.

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