TaxTMI 
TaxTMI 
2025 (12) TMI 1644
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....n sustaining the addition of Rs. 55,74,960/- towards alleged undisclosed salary income said to have been earned by the appellant from M/s. MuruganIdli Pte Ltd., Singapore, for the Assessment Year 2017-18, in proceedings initiated under Section 153C of the Income-tax Act, 1961. * The ld. CIT(A)-19 failed to appreciate that no incriminating material whatsoever was found during the search that pertained to foreign salary income or that supported the addition made. Consequently, the assumption of jurisdiction for making an addition towards alleged undisclosed salary income under Section 153C is invalid and bad in law. Therefore, the addition sustained by the CIT(A)-19 relating to foreign salary income, in the absence of any incriminating evidence found during the search, is wholly unsustainable and deserves to be deleted. * The ld. CIT(A)-19 ought to have appreciated that determination of whether an assessment year is "abated" or "unabated" for the purpose of assessment under Section 153C must be based on the date of issuance of notice under Section 153C, and not the date of the search conducted on another person. In the present case, the search under Section 132 was ....
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....he Ld. AR for the assessee raised a jurisdictional ground No.4. 5. The primary issue requiring adjudication is whether the notice issued under Section 153C on 08.09.2022 complies with the requirements prescribed under Section 153C(3) of the Act? 6. Before us, the Ld. AR for the assessee pointed out that in the present case, the search was conducted on third Party on 05.02.2020 and notices u/s. 153C issued on the assessee on 08.09.2022 which does not complies with the provisions of Section 153C(3) of the Act. To bolster the arguments, the ld.AR for the assessee has referred the judgment of the Hon'ble Jurisdictional High Court in the case of Harigovind vs. Assistant Commissioner of Income-tax Non-corporate [2025] 180 taxmann.com 197 (Madras)[28-10-2025], wherein in similar situation the Hon'ble High Court has quashed the notices issued u/s. 153C, where search was conducted at third-party premises and seized materials were handed over to assessee's Assessing Officer on 25.11.2022, same was to be construed as date of initiation of search against assessee and since initiation of search was subsequent to 01.04.2021, provisions of section 153C would not apply. 7. Per contra,....
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....................................................... ............ 27. Now, the main issue that is required to be decided is as to whether the issuance of notice, under Section 153C on 07.02.2023, is in accordance with the provision of Section 153C(3) of the Act? 28. According to the petitioner, the initiation of search for the petitioner is the date, on which the materials were handed over by the Assessing Officer of the searched person to the JAO of the petitioner herein. In this regard, a reference was made to the first proviso to Section 153C(1), wherein it was stated that the initiation of search shall be the date, on which the materials were handed over to the concerned JAO, which means, in this case, the date of initiation of search in terms of first proviso to Section 153C(1) is on 25.11.2022, i.e., the date on which the materials were handed over to the JAO of the petitioner. 29. Further, by referring to Sub-Section (3) of Section 153C of the Act, it was contended by the petitioner that if any search was initiated on or after 01.04.2021, no proceedings can be initiated in terms of Section 153C of the Act. 30. In the case on hand, ....
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.... Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in subsection (1) of section 153A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in subsection (1) has or have been received by the Assessing Officer having ju....
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....notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years refer....
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....he other person. 40. Thus, as far as the searched person is concerned, the date of initiation of search is the date, on which the search was conducted in his premises. The said date would be the date of initiation of search for searched person for all purposes. As far as the other person is concerned, the date of initiation of search would be the date, on which the materials, books of accounts, etc., are handed over to the JAO of the other person and this date would be considered as the date of initiation of search for other person for all purposes. Thus, there cannot be two different date of initiation of search, either for the searched person or for the other person. 41. The provisions of Sub-Section (3) of Section 153C states that "153C(3).nothing contained in this Section shall apply in relation to a search initiated under Section 132 or books of account, other documents or any assets requisition under Section 132A on or after the 1st day of April, 2021" which means, if the search is initiated subsequent to 01.04.2021, the provision of Section 153C will not apply and accordingly, no proceedings can be initiated against the other person. ....