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
    NewsBills
    Deduction under section 80CCD for contributions made to NPS Vatsalya
    NewsBills
    Exemption to withdrawals by Individuals from National Savings Scheme from taxation
    NewsBills
    Annual value of the self-occupied property simplified
    NewsBills
    TAX ADMINISTRATION - Obligation to furnish information in respect of crypto-asset
    NewsBills
    Increasing time limit available to pass order under section 115VP
    NewsBills
    Excluding the period such as court stay etc. for calculating time limit to pass an order
    NewsBills
    Exemption from prosecution for delayed payment of TCS in certain cases
    NewsBills
    Certain penalties to be imposed by the Assessing Officer
    NewsBills
    Removing date restrictions on framing the schemes in certain cases
    NewsBills
    Extending the processing period of application seeking immunity from penalty and prosecution
    NewsBills
    Extending the time-limit to file the updated return
    NewsBills
    Extension of exemption to Specified Undertaking of Unit Trust of India (SUUTI)
    NewsBills
    AMENDMENTS TO THE CUSTOMS ACT, 1962
    NewsBills
    AMENDMENTS TO THE CUSTOMS TARIFF ACT, 1975
    NewsBills
    AMENDMENTS TO DUTY RATES IN FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975
    NewsBills
    OTHER PROPOSALS INVOLVING CHANGES IN BASIC CUSTOMS DUTY RATES IN NOTIFICATIONS
    NewsBills
    AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS (AIDC)
    NewsBills
    SOCIAL WELFARE SURCHARGE (SWS)
    NewsBills
    Review of Customs duty Exemptions
    NewsBills
    Changes to IGCR (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Ru...
❯❯
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
    NewsBills
    Show AI Summary
    Deduction under Section 80CCD extended to NPS Vatsalya contributions, with withdrawal taxation and partial withdrawal exemption.
    Parents or guardians may claim a statutory deduction for amounts paid into a minor's NPS Vatsalya account up to a prescribed ceiling. Amounts for which a deduction is allowed, including any accretions, will be taxed on withdrawal when deposits were made to a minor's account, whereas sums received on account closure due to the minor's death will not be treated as the parent's or guardian's income. Partial withdrawals for defined contingencies are excluded from the parent's or guardian's income to the extent they do not exceed a prescribed percentage of contributions and subject to regulatory conditions.
    NewsBills
    Show AI Summary
    Exemption for National Savings Scheme withdrawals: qualifying pre-1992 deposits and accrued interest by individuals are excluded from taxation.
    Amendment to Section 80CCA exempts withdrawals by individuals of NSS deposits and accrued interest-limited to deposits made before 1 April 1992 for which a deduction was allowed-and applies to withdrawals made on or after 29 August 2024, with retrospective effect from that date.
    NewsBills
    Show AI Summary
    Annual value of self-occupied property simplified, nil deemed where owner occupies or cannot occupy for any reason.
    The annual value of a property used as the owner's residence shall be taken as nil if the owner occupies it for residence or cannot actually occupy it for any reason; the existing restriction limiting this benefit to a specified limited number of houses remains unchanged and the amendment applies prospectively under the Finance Bill.
    NewsBills
    Show AI Summary
    Obligation to furnish crypto-asset transaction information: reporting entities must file prescribed statements and correct defects promptly.
    Proposed section 285BAA mandates that prescribed reporting entities furnish statements of crypto-asset transactions to the prescribed income-tax authority in prescribed form, manner and time, allows the authority to intimate defects and permit rectification within a prescribed period, treats unrectified defects as inaccurate information, enables issuance of notices to require late filers to submit statements, requires disclosure and correction of discovered inaccuracies, and empowers the Central Government to prescribe registration, information maintenance, and due diligence obligations for identification of crypto-asset users or owners; the virtual digital asset definition is also expanded to include crypto-assets relying on cryptographically secured distributed ledgers.
    NewsBills
    Show AI Summary
    Tonnage tax option timeframe extended - order window lengthened to quarter-end for new applications, easing verification.
    The amendment extends the decision period for applications to opt into the tonnage tax scheme: where an application is received on or after 1 April 2025 the Joint Commissioner must pass the written order approving or rejecting the option before the expiry of three months from the end of the quarter in which the application was received, providing additional time for verification, inspections, and an opportunity of being heard.
    NewsBills
    Show AI Summary
    Limitation for deeming tax-collector default: exclusion of court stay periods aligns time-limit rules with reassessment principles.
    The amendment makes the limitation period for deeming a person an assessee in default for failure to collect tax subject to exclusion of periods such as court stays by applying the exclusion and suspension principles of the general reassessment framework to that time limit; the change is to take effect from the first day of April, 2025.
    NewsBills
    Show AI Summary
    Exemption from prosecution for delayed TCS payment where remittance occurs by prescribed quarterly statement deadline.
    Amendment provides that prosecution for failure to pay tax collected at source shall not be instituted if payment has been made to the Central Government on or before the time prescribed for filing the quarterly statement under the proviso to sub section (3) of the tax collected at source provision, thereby conditioning criminal liability on meeting the quarterly statement remittance deadline.
    NewsBills
    Show AI Summary
    Penalty authority of Assessing Officer expanded; prior Joint Commissioner approval required for penalties exceeding prescribed statutory limit.
    Penalties under specified sections will be levied by the Assessing Officer instead of the Joint Commissioner, subject to the prior approval requirement where penalties exceed the statutory threshold in sub section (2) of section 274; a consequential amendment to clause (n) of sub section (1) of section 246A is proposed. Section 271BB, a penalty tied to an omitted parent provision, is proposed to be omitted. The amendments are to take effect from the first day of April following enactment.
    NewsBills
    Show AI Summary
    Faceless schemes notification: Government may issue ongoing directions allowing notifications beyond the prior cutoff to operationalise schemes.
    The amendment removes the statutory end date for notifying faceless schemes so the Central Government may issue directions to notify and operationalise faceless procedures under the direct tax statute beyond the prior cut off, following prior extensions due to implementation challenges; the change takes effect from the first day of April after enactment.
    NewsBills
    Show AI Summary
    Processing period for immunity applications extended to a longer disposal timeframe for Assessing Officers, effective from April.
    The amendment extends the Assessing Officer's processing period for applications seeking immunity from penalty and prosecution from one month to three months measured from the end of the month in which the application is received. The current filing requirement that an application for immunity from penalty be made within one month from the end of the month in which the relevant order is received remains as stated. The amendment is proposed to take effect from the first day of April, 2025.
    NewsBills
    Show AI Summary
    Updated return time-limit extended to encourage voluntary compliance, with higher additional tax rates for later filings.
    Extension of the filing window for updated returns from two years to four years with a graded schedule of higher additional income-tax rates for filings after two, three, and up to four years; filing barred where a show-cause notice has been issued after thirty-six months, subject to an exception if a later determination finds the notice unwarranted. Effective 1 April 2025.
    NewsBills
    Show AI Summary
    Tax exemption for SUUTI extended to March 31, 2027, barring income and related taxes on its receipts.
    An amendment to sub section (1) of section 13 of the UTI Repeal Act, 2002 will provide that, notwithstanding the Income tax Act or any other enactment, no income tax or any other tax shall be payable by the Administrator in relation to the Specified Undertaking of Unit Trust of India for the period beginning on the appointed day and ending on the 31st day of March, 2027; the amendment takes effect from 1st April, 2025.
    NewsBills
    Show AI Summary
    Provisional assessment time-limit set with limited extension; voluntary post-clearance revision permitted; Interim Board to exercise Settlement Commission powers.
    A definite time limit is imposed for provisional assessments under Section 18: finalisation within two years with a possible one year Commissioner extension and suspension grounds; Section 18A establishes voluntary post clearance revision treated as self assessment permitting duty payment or refund claims, with refund limitation of one year from payment and the relevant date for revised entry being the date of payment. Amendments also define an Interim Board and allocate Settlement Commission powers to it.
    NewsBills
    Show AI Summary
    Tariff rationalisation compresses rate slabs and reclassifies goods to improve identification and align with international nomenclature.
    Amendments compress and lower multiple tariff slabs into streamlined rate bands and tariffise effective rates, and introduce new tariff lines and supplementary notes to improve goods identification and align classifications with WCO HS 2022; new lines include distinctions by process and variety for rice, makhana product categories, PCB/PCT/PBB concentration levels in waste oils, separate precious metal purity bands, and entries for dual-use chemicals and technical-grade pesticides, with changes effective from a designated future date.
    NewsBills
    Show AI Summary
    Customs duty rate changes alter import tariffs across sectors, including immediate provisional increases and notified decreases.
    Amendments to the First Schedule revise import duty rates by specifying targeted tariff increases (immediately by provisional declaration for selected textile and electronics items), extensive tariff decreases across diverse commodities (with later effective dates subject to notification), and numerical rate adjustments for raw materials, ores, metals and industrial inputs, including reductions to nil for specified waste, scrap and ores; provisions are structured by tariff item and rely on finance measure clauses and a provisional collection mechanism for implementation.
    NewsBills
    Show AI Summary
    Customs duty adjustments recalibrate import and export tariffs to incentivise specific sectors and inputs, changing duty rates broadly.
    Proposed notifications adjust Basic Customs Duty and Export Duty effective 2 February 2025, reducing or nil rating duties on specified aquafarming inputs, wet blue leather, metal waste and lithium ion battery scrap, and numerous electronics inputs and parts; add exempted capital goods for lithium ion battery manufacture for EVs and mobile phones; and amend duty rates for motor vehicles, motorcycles and toy components to recalibrate import protection and incentivise manufacturing and exports.
    NewsBills
    Show AI Summary
    Agriculture Infrastructure and Development Cess revised to impose differentiated import cess rates on specified goods, altering tariff-stage duties.
    Notification No. 11/2021 - Customs is amended to revise the Agriculture Infrastructure and Development Cess (AIDC) rates on specified imported goods effective 02.02.2025, introducing differentiated cess where previously nil across categories including stone, footwear, motor vehicles (with special entries for concessional imports and used vehicles), solar cells and modules, PVC flex materials, electronics and parts, furniture, lighting, smart meters, yachts, bicycles, candles, platinum findings and certain laboratory chemicals.
    NewsBills
    Show AI Summary
    Social Welfare Surcharge exemptions expanded: specified imported goods excluded from SWS levy under amended customs notification.
    Amendment to Notification No. 11/2018 exempts specified imported goods from levy of the Social Welfare Surcharge (SWS) with effect from 02.02.2025. Exempted categories include solar cells and modules, specified motor vehicles (including used vehicles and vehicles for transport of goods or ten or more persons and certain high-CIF value cars), various footwear classifications, furniture and bedding articles, lighting fittings, parts of electronic toys, candles, PVC flex films, smart electricity meters, yachts and pleasure vessels, articles of gold/silver under specified entries, dutiable personal-use imports, passenger baggage articles, and certain laboratory chemicals.
    NewsBills
    Show AI Summary
    Customs duty exemptions review extends and modifies conditional exemptions, adds entries for drugs and satellite goods, and lapses one entry.
    Review of customs duty exemptions renews and recalibrates conditional BCD exemptions under Notification No. 50/2017 Customs: twenty four entries are extended with modifications and one entry lapses. Extensions and modifications preserve duty relief across sectors-ships and ship manufacture, bulk drugs and life saving medicines, testing imports, telecom optical fibre inputs, textile machinery, wind energy components and seeds for lab grown diamonds-while creating separate entries and refining lists for drugs, diagnostics and satellite and launch vehicle related imports.
    NewsBills
    Show AI Summary
    Import compliance timeframe extended; end use period lengthened and reporting shifted to quarterly filings under IGCR amendment.
    Amendments to the IGCR Rules extend the period to fulfil the specified end use under Rules 6 and 7 and change the compliance reporting requirement so importers submit a quarterly statement instead of a monthly statement, thereby adjusting both the end use timeframe and the frequency of filings for imports at concessional duty for manufacture of excisable goods.

    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