Limitation in search assessments under section 153C runs from handover of seized material, preserving annulment of the assessments.

In search-related assessments under section 153C, the limitation period is reckoned from the date seized material is handed over to the Assessing Officer or satisfaction is recorded in the case of the searched person. Applying that settled rule, the first appellate authority treated the assessments as unsustainable because the relevant period had to be computed from the transfer of seized material and centralisation of the case. The Tribunal found that approach consistent with the governing law and did not interfere, so the annulment of the assessments was maintained and the departmental appeals failed.

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Issues: Whether the assessments framed under section 153C of the Income-tax Act, 1961 were liable to be annulled on the ground that the period for reopening had to be reckoned from the date of transfer of the case and handing over of seized material, and whether the orders of the first appellate authority required interference.

Analysis: The appeals arose from search proceedings in which incriminating material relating to the assessee was found and notices under section 153C were issued. The first appellate authority treated the date of centralisation and transfer of the case as the date on which the seized material was handed over to the Assessing Officer and, applying the settled position that the six-year period for action under section 153C is to be computed from the date of handing over of seized material or recording of satisfaction in the case of the searched person, held the assessment orders to be unsustainable. The Tribunal noted that this approach was consistent with the law laid down on the reckoning of the limitation period in search-related assessments.

Conclusion: The annulment of the assessments was not disturbed and the departmental appeals failed.

Final Conclusion: The Tribunal upheld the appellate annulment of the assessments under section 153C and declined to interfere with the first appellate authority's view.

Ratio Decidendi: In proceedings under section 153C, the relevant period for initiating assessment action is to be computed from the date on which seized material is handed over or satisfaction is recorded in the case of the searched person, and assessments contrary to that settled reckoning cannot be sustained.

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