Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Comprehensive regime for the taxation of "specified income" of registered non-profit organisations (...
    Special Taxation of Non-Resident Sportsmen and Entertainers : Clause 211 of the Income Tax Bill, 202...
    Special Tax Regimes for Gaming and Gambling Incomes : Clause 194 (Table: S. No. 1) of Income Tax Bil...
    Special concessional tax regime for new manufacturing co-operative societies in India : Clause 204 o...
    Concessional tax regime for resident cooperative societies in India : Clause 203 of the Income Tax B...
    Introducing a new tax regime with revised tax slabs and by eliminating various exemptions and deduct...
    Concessional tax regime for new manufacturing domestic companies : Clause 201 of the Income Tax Bill...
    Optional Concessional Taxation for domestic Companies : Clause 200 of the Income Tax Bill, 2025 Vs. ...
    Concessional Taxation for Manufacturing Domestic Companies : Clause 199 of Income Tax Bill, 2025 Vs....
    Taxation of Special Incomes in India "Profits and gains from Life Insurance Business" : Clause 194 o...
    Evolving the Taxation of Foreign Portfolio Investment : Clause 210 of the Income Tax Bill, 2025 Vs. ...
    Taxation of income from Global Depository Receipts (GDRs) earned by resident employees of Indian com...
    Legislative framework governing the taxation of income derived by non-residents from bonds and Globa...
    Evolution of Special Tax Regimes for Offshore Funds : Clause 208 of the Income Tax Bill, 2025 Vs. Se...
    Tax treatment of the accumulated balance of recognised provident funds (RPFs) : Clause 191 of the In...
    Streamline, simplify, and update the tax framework applicable to non-residents and foreign companies...
    Special procedure for calculating tax liability on income discovered during search operations : Clau...
    Recalibrating Long-Term Capital Gains Taxation : Clause 198 of the Income Tax Bill, 2025 Vs. Section...
    Reforming Long-Term Capital Gains Taxation : Clause 197 of the Income Tax Bill, 2025 Vs. Section 112...
    taxation of short-term capital gains (STCG) : Clause 196 of the Income Tax Bill, 2025 Vs. Section 11...
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Act RulesBills
    Show AI Summary
    Anonymous donations taxation: broader scope and threshold rule increase compliance and record-keeping obligations for non-profits.
    Clause 337 targets anonymous donations to registered non-profit organisations (excluding entities wholly for religious purposes) by taxing the amount of anonymous donations exceeding the higher of a specified absolute sum or a percentage of such donations in the tax year, with contemporaneous recognition of receipts. The clause broadens applicability beyond the prior enumerated institutions, omits a specified tax rate, and lacks detailed definitions and compliance mechanics, creating interpretive and administrative uncertainties for mixed purpose organisations and cross border receipts.
    Act RulesBills
    Show AI Summary
    Special taxation of non-resident sports and entertainment income: flat-rate treatment with no deductions and TDS-driven compliance.
    A flat-rate regime taxes specified India-sourced receipts of non-resident sportsmen, sports associations, and entertainers-covering participation, performances, advertisements and article contributions-with such receipts treated as ring-fenced special income taxed separately from other income; deductions are expressly disallowed for computing that special income, and proper withholding at source can exempt a taxpayer from domestic return-filing when that is the taxpayer's sole Indian income.
    Act RulesBills
    Show AI Summary
    Tax on gambling winnings: flat gross tax with no deductions, and online gaming treated separately.
    Clause 194 (Table S. No. 1) taxes winnings from lotteries, crossword puzzles, races (excluding income from owning or maintaining race horses), card games and other gambling at a flat rate on gross receipts with no deductions or set-off; tax is computed in two steps-tax on such winnings and tax on the balance of income as if winnings were excluded-and winnings from online games are expressly excluded and dealt with separately.
    Act RulesBills
    Show AI Summary
    Concessional tax regime for new manufacturing co-operative societies offers reduced tax for qualifying manufacturing income.
    A concessional tax regime grants newly formed manufacturing co-operative societies an optional, irrevocable reduced tax treatment for qualifying manufacturing income, contingent on formation and commencement within prescribed windows, exercise of the option in the prescribed manner, and compliance with anti abuse conditions. Qualifying income is computed without specified deductions or set offs, certain non manufacturing income and specified gains are taxed at higher rates, and failure to satisfy conditions withdraws the regime for the relevant and subsequent years.
    Act RulesBills
    Show AI Summary
    Concessional tax regime for resident cooperative societies: elective simplified computation in exchange for forgoing specified deductions.
    Clause 203 establishes an elective concessional tax regime for resident cooperative societies permitting computation of total income without specified deductions and without set-off of losses or depreciation attributable to those disallowed deductions; the option is exercised in the prescribed manner within the return-filing timeframe, is irrevocable, and failure to meet conditions renders the option invalid for that and subsequent years, while losses and depreciation not allowed are deemed finally given effect. An IFSC carve-out permits designated deductions for IFSC units subject to conditions.
    Act RulesBills
    Show AI Summary
    New tax regime narrows exemptions and denies related loss carry-forwards, requiring strict opt-in procedures and electronic compliance.
    Clause 202 creates a consolidated new tax regime for individuals, HUFs, AOPs, BOIs and certain artificial juridical persons pairing a graded slab structure with the denial of most specified exemptions, deductions and loss set-offs. Total income is computed without the benefit of listed deductions and without carry-forward or set-off of losses and depreciation attributable to those disallowed items. The clause prescribes an option procedure with strict withdrawal and re-entry limits for business/professional assessees and contemplates procedural electronic filing requirements and an IFSC carve-out.
    Act RulesBills
    Show AI Summary
    Concessional tax regime for new manufacturing companies limits exemptions and binds firms to an irrevocable option for preferential taxation.
    Concessional tax regime for new manufacturing domestic companies grants a lower corporate rate to qualifying manufacturers while disallowing most exemptions and deductions. The regime requires an irrevocable option, exercised in the prescribed manner by the due date for the first return; failure to meet conditions causes permanent loss of eligibility. Income computation is exemption free, with no carry forward for losses or depreciation attributable to disallowed deductions. Benefits can continue on amalgamation if conditions are met. Procedural and definitional details are expected to be specified in subordinate rules.
    Act RulesBills
    Show AI Summary
    Optional concessional corporate tax regime requires companies to forgo specified deductions and accept irrevocable tax treatment.
    Optional concessional corporate tax regime requires domestic companies to compute taxable income without specified deductions and to forgo set-off or carry forward of losses or depreciation attributable to those disallowed items, treating such losses and depreciation as having been given full effect; the option must be exercised in the prescribed manner by the filing due date, is irrevocable and applies to subsequent tax years, with modified treatment for IFSC units and procedural details to be provided by subordinate rules.
    Act RulesBills
    Show AI Summary
    Concessional tax regime for manufacturing companies requires irrevocable option and prohibits set off of attributable losses.
    Clause 199 creates a concessional tax regime for qualifying domestic manufacturing companies, available at the taxpayer's option, conditioned on exclusive engagement in manufacturing related activities and computed without specified deductions. It precludes set off of losses attributable to those disallowed deductions by deeming such losses to have been fully given effect to. The option must be exercised in the prescribed manner by the due date for the first return and, once exercised, is irrevocable for subsequent years except where a statutory switch is permitted, thereby trading lower tax rates for forfeiture of targeted incentives and necessitating clear procedural compliance.
    Act RulesBills
    Show AI Summary
    Taxation of special incomes: consolidated flat-rate regime covering life insurance profits and emerging digital income streams.
    Clause 194 creates a consolidated flat-tax framework for specified special incomes-winnings, patent royalties, carbon credits, VDAs, online game winnings, and life insurance profits-providing category-specific rates, comprehensive definitions, and an overriding application. For life insurance business it preserves a concessional 12.5% flat tax and the aggregate computation method but omits the prior temporary deposit requirement and lacks detailed computation rules, potentially causing interpretive issues on measuring ''profits and gains.'' Clause 194 modernises taxation of emerging income streams while centralising special-income treatment under one provision.
    Act RulesBills
    Show AI Summary
    Taxation of foreign portfolio investment: concessional rates tied to strict attribution and compliance requirements.
    Clause 210 creates a consolidated tax framework for FIIs and specified funds on securities income and capital gains, setting concessional rates by income category and conditioning those rates on prescribed attribution to non resident unit holders (excluding permanent establishments). It restricts specified deductions where income consists solely of securities receipts, disapplies certain loss set off provisions for securities gains, and anticipates rule based mechanisms for daily AUM attribution and digital filing requirements, aligning and refining the policy and operational features previously governed by Section 115AD and Rules 21AJ/21AJAA.
    Act RulesBills
    Show AI Summary
    Taxation of GDR income: concessional treatment for ESOP dividends and capital gains with notification based eligibility.
    Clause 193 of the Income Tax Bill, 2025 continues the concessional tax regime for dividends and long term capital gains on Global Depository Receipts acquired in foreign currency by resident employees under government notified ESOPs, limits deductions where gross total income consists solely of such GDR income, updates statutory cross references and definitions to current corporate law and IFSCs, and excludes certain computation benefits for GDR capital gains while preserving the notification requirement to restrict eligibility to approved schemes.
    Act RulesBills
    Show AI Summary
    Concessional tax regime for non resident bond and GDR income ensures specified rates, filing exemptions, and notification based eligibility.
    Clause 209 creates a concessional tax regime for non resident income from specified bonds and GDRs purchased in foreign currency, requiring purchase through an approved intermediary for GDRs under government notified schemes; it prescribes specific tax rates for interest, dividends and long term capital gains, restricts deductions where specified income is sole income, ring fences capital gains by disallowing set off provisions for computation, exempts non residents from return filing when TDS is applied, and preserves treatment on amalgamation or demerger.
    Act RulesBills
    Show AI Summary
    Taxation of offshore fund income: concessional rates for unit income and segregated treatment to prevent double deductions.
    Clause 208 establishes a special tax regime for overseas financial organisations investing in units purchased in foreign currency: concessional rates apply to income from such units and to long term capital gains, other income is taxed at normal rates with aggregation across heads, deductions are disallowed where gross total income consists solely of such concessional income while in mixed income cases concessional income must be segregated and deductions allowed only against the non concessional portion, and eligibility requires specified investment arrangements with prescribed Indian institutions plus SEBI approval with ''unit'' defined by cross reference to the schedule or UTI.
    Act RulesBills
    Show AI Summary
    Tax on provident fund accumulations: retrospective, year wise recalculation imposed when exemption conditions fail and tax withheld at payment.
    Clause 191 charges tax on an accumulated balance of a recognised provident fund when schedule exemption conditions are unmet, directing the Assessing Officer to perform a retrospective, year wise calculation of the notional tax that would have applied had the fund not been recognised and to charge the excess over tax actually paid in the year of payment, with trustees required to withhold tax at source on the taxable portion.
    Act RulesBills
    Show AI Summary
    Tax rates for non residents clarified: consolidated withholding regime, gross basis taxation, and filing exemptions streamlined.
    Clause 207 consolidates tax treatment of specified Indian source incomes of non residents and foreign companies by prescribing rates for dividends, interest, royalties and fees for technical services, preserving concessional rates for IFSC incomes and infrastructure debt funds, and treating residual income at normal rates. It mandates gross basis taxation by denying deductions under specified sections, excludes specified incomes from deduction computations under Chapter VIII (with an IFSC exception), streamlines approval requirements for royalties and FTS, and exempts non residents from return filing where such incomes alone are subject to prescribed withholding tax.
    Act RulesBills
    Show AI Summary
    Block assessment tax imposes a flat punitive rate on total income from search-derived block periods, broadening the tax base.
    Clause 192 taxes the total income of the block period as determined under section 294, replacing the narrower concept of "undisclosed income," and prescribes a flat 60% tax rate with applicable surcharge, thereby broadening the tax base for block assessments while aiming to simplify rate and surcharge determinations.
    Act RulesBills
    Show AI Summary
    Long-term capital gains taxation recalibrated to a higher concessional rate with STT linkage and IFSC carve-outs.
    Clause 198 establishes a revised LTCG regime for transfers of equity shares, equity oriented fund units, and business trust units where STT conditions are met, prescribing a codified concessional tax on specified LTCG with an IFSC exemption for foreign currency trades; it preserves marginal relief for resident individuals and HUFs, restricts the order of applying deductions and rebates against LTCG, defines equity oriented fund investment thresholds and averaging rules, and grants government power to notify exceptions to STT requirements.
    Act RulesBills
    Show AI Summary
    Long term capital gains taxation reformed: uniform lower rate, limited indexation grandfathering, and exemption limit relief retained.
    Clause 197 restructures long term capital gains taxation by imposing a uniform flat rate for most LTCG, removing indexation except for formulaic transitional relief for land and buildings acquired before the specified cut off, preserving basic exemption relief for resident individuals and HUFs by reducing LTCG by any shortfall in other income, excluding certain equity related instruments from its scope, and requiring deductions to be computed on gross total income excluding LTCG.
    Act RulesBills
    Show AI Summary
    Short-term capital gains tax regime tightened: higher flat rate for STT-eligible securities alters investor incentives and compliance obligations.
    Clause 196 targets short term capital gains from equity shares, equity oriented fund units and business trust units that are chargeable to STT, imposing a flat tax on such gains while preserving normal taxation of remaining income. It limits concessional treatment to exchange based STT transactions, provides relief by reducing eligible STCG where other income falls below the basic exemption, excludes IFSC foreign currency transactions, and allows Chapter VIII deductions only after reducing gross total income by the specified STCG.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Section 153C (Finance Act, 2015) and Third-Party Search Assessments: Interplay of Belongs To and Pertains/Relates To

      28 January, 2026

      Contents
      Acts
      Plus +
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      This article analyses the judicial decision reproduced below, focusing on the legal reasoning adopted by the Court and its practical implications for practitioners. The judgment is analysed in the context of its factual background, issues framed, and conclusions reached by the Court.

      2023 (4) TMI 296 - Supreme Court

      At a Glance

      A dispute arose on whether the post-amendment text of Section 153C of the Income-tax Act, 1961 (as substituted by the Finance Act, 2015) can be invoked where the underlying search under Section 132 was initiated before the amendments effective date, but the satisfaction/transfer of material and issuance of notice under Section 153C occurred after that effective date.

      The court held that the amended Section 153C applies even to searches initiated before the amendments effective date. The court relied heavily on (i) the deeming fiction in the first proviso to Section 153C, and (ii) the legislative technique and legal effect of substitution, coupled with purposive construction of a machinery provision.

      For practice, the decision clarifies that the relevant legal regime for Section 153C action is not frozen on the date of search alone; where the statutory deeming fiction anchors timelines to the date of receiving seized material by the Assessing Officer having jurisdiction over the other person, the amended framework may govern subsequent Section 153C proceedings.

      Factual Background

      A search under Section 132 was conducted at the premises of a searched person/group. During the search, electronic material was seized, including data that contained references to a person other than the searched person (the other person/assessee).

      Proceedings were initiated against the other person under Section 153C. The other person objected, contending that, under the pre-amendment Section 153C, the statutory trigger required seized books/documents/assets to belong to the other person, and mere references or information relating to the other person would not satisfy the jurisdictional condition. Objections were rejected by the Assessing Officer.

      Multiple writ petitions were filed challenging notices under Section 153C (and in some cases, consequent assessment orders). The High Court quashed the Section 153C notices and consequential proceedings on the premise that the Finance Act, 2015 amendment to Section 153C could not be applied to searches initiated before the amendments effective date, treating the amendment as affecting substantive rights by expanding the class of persons covered.

      The revenue appealed, asserting that Section 153C is a machinery provision; that the amendment was by substitution and intended to remedy a restrictive interpretation of belongs to; and that, in any event, the deeming fiction in the proviso to Section 153C makes the date of receiving the seized material determinative for the other person.

      Issues Before the Court

      (1) Whether the amendment brought to Section 153C of the Income-tax Act, 1961 by the Finance Act, 2015 substituting the expression belongs or belong to with pertains or pertain to, or any information contained therein, relates to applies to Section 153C proceedings arising out of searches under Section 132 initiated prior to the amendments effective date.

      (2) Whether the High Court was correct in treating the Finance Act, 2015 amendment to Section 153C as purely prospective on the footing that it enlarges the scope of persons against whom Section 153C can be invoked, thereby affecting substantive rights.

      (3) What is the operative relevance of the first proviso to Section 153C (which deems the date of initiation of search reference, for the other person, as the date of receiving the seized material by the Assessing Officer having jurisdiction over such other person) while determining the applicable legal regime.

      Courts Reasoning

      1) Statutory architecture of Section 153C and its link to Section 153A

      Section 153C is structured as a non obstante machinery enabling assessment/reassessment of a person other than the searched person, by importing the assessment mechanism of Section 153A once specified jurisdictional conditions are met. Both the pre-amendment and post-amendment versions operate on the same core idea: where seized material connects to a non-searched person, the Assessing Officer having jurisdiction over that other person proceeds under the Section 153A framework.

      2) The critical change introduced by the Finance Act, 2015: belongs to vs pertains/relates to

      Pre-amendment Section 153C(1) required the Assessing Officer to be satisfied that books of account/documents/assets seized belongs or belong to a person other than the person referred to in Section 153A. Post-amendment Section 153C(1) retains belongs to for assets such as money, bullion, jewellery or other valuable article or thing, but, for books of account and documents, expands the trigger to where such material pertains or pertain to, or any information contained therein, relates to a person other than the searched person.

      The court treated this expansion as a legislative response to a restrictive judicial reading of belongs to, which had hindered action against third parties even where incriminating documents or information were found in the searched persons possession but did not strictly belong to the third party.

      3) Deeming fiction in the first proviso to Section 153C: date of receiving as the operative reference point

      The court placed substantial weight on the first proviso to Section 153C. Under that proviso, for the other person, the statutory reference to the date of initiation of the search under Section 132 or making of requisition under Section 132A (as appearing in the second proviso to Section 153A(1)) is to be construed as a reference to the date of receiving the seized books/documents/assets by the Assessing Officer having jurisdiction over such other person.

      This deeming rule shifts the anchor point, for the other person, away from the search initiation date and towards the date when jurisdictional material is received by the Assessing Officer of the other person. On that approach, if the receipt/transfer and the subsequent notice under Section 153C occur after the amendments effective date, the provision existing as on that date governs the proceedings.

      4) Amendment by substitution and its interpretive consequence

      The Finance Act, 2015 amendment was characterised as a substitution of text in Section 153C, not a mere addition. Relying on settled interpretive principles on substitution, the court reasoned that substitution ordinarily results in the earlier text being replaced as if the substituted text were the operative text, subject to statutory context and purpose.

      In the courts analysis, reading the amended Section 153C as inapplicable merely because the search preceded the amendment would undermine the legislative cure, given that the very mischief addressed was the inability to proceed against an other person despite incriminating material being found during search.

      5) Section 153C as a machinery provision: purposive construction to avoid frustration of the mechanism

      While acknowledging that taxing statutes are generally strictly construed, the court reiterated that machinery provisions are construed so as to make them workable and to effectuate the charge and statutory purpose. Section 153C, being the machinery for assessing any other person on the basis of search material, must be interpreted to advance its manifest purpose.

      The court reasoned that if the amended phraseology (pertains to/relates to) were denied operation for pre-amendment searches, then for a significant class of situations where incriminating information about a third party exists in seized material that does not strictly belong to that third party the Section 153C mechanism would remain ineffective, contrary to the legislative objective behind the substitution.

      6) Rejection of the substantive right/vested right objection in the given setting

      The court did not accept the contention that the amendment could not apply because it expanded coverage and affected substantive rights. It viewed Section 153C as a procedural/machinery route to assess the other person based on seized material; the issuance of notice and ensuing process does not, by itself, conclude liability. Consequently, treating the amendment as incapable of operating in such pending/future proceedings, solely due to the search being earlier, was not upheld.

      7) Procedural consequence: liberty to challenge assessments on other grounds

      Because the High Court had decided writ petitions largely on the amendment-applicability issue, other grounds to challenge notices/assessments were left undecided. The court therefore preserved the assessees liberty to pursue statutory appeals before the Commissioner of Income-tax (Appeals) on other grounds, to be considered on merits in accordance with law, subject to the stated time window (not reproduced here).

      Decision & Ratio

      The court set aside the High Courts judgment and held that the Finance Act, 2015 amendment to Section 153C applies to Section 153C proceedings even where the search under Section 132 was initiated before the amendments effective date.

      Ratio (in substance): For proceedings against an other person under Section 153C, the deeming fiction in the first proviso to Section 153C treats the relevant reference date as the date on which the Assessing Officer having jurisdiction over the other person receives the seized books/documents/assets. Where the satisfaction/receipt of material and issuance of Section 153C notice occur after the amendments effective date, the amended Section 153C widening the trigger from belongs to to pertains to/relates to for books/documents governs, and cannot be denied application solely because the search occurred earlier.

      Practical Implications

      1) Applicable law in Section 153C matters may turn on receipt/handing over rather than search initiation

      Practitioners should closely track the handover/receipt of seized material to the Assessing Officer of the other person, because the first proviso to Section 153C statutorily re-anchors the timeline for the other person to the date of receiving the material. This affects the assessment year linkage under Section 153A and, as affirmed, can also influence which version of Section 153C governs the jurisdictional trigger for documents/information.

      2) Wider evidentiary trigger post-amendment for documents and digital material

      After substitution, Section 153C(1)(b) expressly covers documents that pertain to the other person, or where any information contained therein relates to the other person. This is especially significant for electronic records and extracted datasets, where ownership/belonging may be contestable but linkage/relatability may be demonstrable.

      3) Satisfaction and bearing on determination of total income remain central

      The amended Section 153C(1) further requires that the Assessing Officer be satisfied that the seized books/documents/assets have a bearing on the determination of the other persons total income for the specified six assessment years (and the relevant years referred to in Section 153A(1)). The widened entry point does not eliminate the need for a recorded satisfaction that connects material to income determination.

      4) Writ strategy: jurisdictional challenges may not succeed solely on the pre-amendment search date

      Where the only challenge is that the search predates the amendment, the decision indicates such a challenge is unlikely to succeed if the statutory conditions (including satisfaction and receipt of material by the other persons Assessing Officer) are met post-amendment. Challenges, if any, are likely to shift toward the sufficiency of satisfaction, the nexus/bearing requirement, procedural compliance, and other statutory grounds.

      5) Appellate pathway preserved for other objections

      Even where writ petitions were disposed on the amendment point, assessees are not foreclosed from raising other grounds in statutory appeals (for example, grounds relating to the formation/recording of satisfaction, jurisdictional handover, and the nexus of seized material to income determination), subject to maintainability and limitation under the Act.

      Key Takeaways

      • Section 153C (post Finance Act, 2015) applies to proceedings against a non-searched person even if the underlying Section 132 search began before the amendments effective date.
      • The first proviso to Section 153C is pivotal: for the other person, statutory references to the search date are deemed to refer to the date of receiving seized material by the other persons Assessing Officer.
      • The substitution from belongs to to pertains to/relates to (for books of account/documents) is treated as a purposeful cure to a restrictive interpretation that hindered third-party assessments.
      • Section 153C is approached as a machinery provision; courts will prefer a construction that makes the mechanism workable and avoids frustrating legislative purpose.
      • While the amendment widens coverage, proceedings must still satisfy statutory preconditions, including satisfaction and the bearing on determination of total income requirement.

       


      Full Text:

      2023 (4) TMI 296 - Supreme Court

      Topics

      ActsIncome Tax