Loading...

⚠ ✕
❮ 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 characters 0/2000
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 ✕
🔎 Filters / Advanced Search ❯
TEXT

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.
Relevance Default Date
    Act Rules Income Tax
    Comparison of Section 90 "Meaning of "adjusted", "cost of improvement" and "cost of acquisition." be...
    Act Rules Income Tax
    Comparison of Section 88 "Exemption of capital gains on transfer of assets in cases of shifting of i...
    Act Rules Income Tax
    Comparison of Section 87 "Exemption of capital gains on transfer of assets in cases of shifting of i...
    Act Rules Income Tax
    Comparison of Section 86 "Capital gains on transfer of certain capital assets not to be charged in c...
    Act Rules Income Tax
    Comparison of Section 85 "Capital gains not to be charged on investment in certain bonds." between t...
    Act Rules Income Tax
    Comparison of Section 84 "Capital gains on compulsory acquisition of lands and buildings not to be c...
    Act Rules Income Tax
    Comparison of Section 78 "Special provision for full value of consideration in certain cases." betwe...
    Act Rules Income Tax
    Comparison of Section 74 "Special provision for computation of capital gains in case of depreciable ...
    Act Rules Income Tax
    Comparison of Section 73 "Cost with reference to certain modes of acquisition" between the Income-Ta...
    Act Rules Income Tax
    Comparison of Section 72 "Mode of computation of capital gains" between the Income-Tax Act, 2025 (as...
    Act Rules Income Tax
    Comparison of Section 70 "Transactions not regarded as transfer" between the Income-Tax Act, 2025 (a...
    Act Rules Income Tax
    Comparison of Section 66 "Interpretation" between the Income-Tax Act, 2025 (as passed) and the Incom...
    Act Rules Income Tax
    Comparison of Section 62 "Maintenance of books of account" between the Income-Tax Act, 2025 (as pass...
    Act Rules Income Tax
    Comparison of Section 61 "Special provision for computation of income on presumptive basis in respec...
    Act Rules Income Tax
    Comparison of Section 58 "Special provision for computing profits and gains of business or professio...
    Act Rules Income Tax
    Comparison of Section 53 "Full value of consideration for transfer of assets other than capital asse...
    Act Rules Income Tax
    Comparison of Section 52 "Amortisation of expenditure for telecommunications services, amalgamation,...
    Act Rules Income Tax
    Comparison of Section 51 "Amortisation of expenditure for prospecting certain minerals" between the ...
    Act Rules Income Tax
    Comparison of Section 49 "Site Restoration Fund" between the Income-Tax Act, 2025 (as passed) and th...
    Act Rules Income Tax
    Comparison of Section 48 "Tea development account, coffee development account and rubber development...
❮
❯
❯❯
Maximize Maximize Maximize
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 Summaries Hide All Summaries
Act Rules Income Tax
Show AI Summary
Cost of acquisition rules clarify valuation and allocation for capital gains, with special treatment for intangibles and pre-existing equity holdings.
The provision defines cost of improvement and cost of acquisition for capital gains, treating improvements to specified intangibles as nil, excluding deductible expenditures, and reducing acquisition cost by prior depreciation on goodwill. It prescribes allocation rules for acquisitions by purchase, allotment, bonus, subscription and renunciation, and provides alternative valuation anchors-including an option to adopt a historic fair market value, exchange quotes, net asset value and the Cost Inflation Index-for certain pre-existing and unlisted equity holdings.
Act Rules Income Tax
Show AI Summary
Exemption of capital gains for relocation to SEZs: reinvestment within prescribed window defers taxation, subject to deposit and scheme compliance
Exemption applies to capital gains from transfer of assets when shifting an industrial undertaking from an urban area to a Special Economic Zone, functioning as a reinvestment relief if gains are applied to acquire or construct specified new assets in the SEZ within one year before to three years after transfer. Unutilised amounts must be deposited with a specified institution by the return filing due date and later utilised under a notified scheme; any portion unutilised after three years is charged as income. Cost basis of the new asset is adjusted for subsequent transfers within three years.
Act Rules Income Tax
Show AI Summary
Capital gains exemption on industrial relocation: reinvestment in new assets prevents taxation, subject to deposit and proof rules.
A reinvestment linked exemption for capital gains applies where assets used in an industrial undertaking situated in a urban area are transferred as part of shifting the undertaking outside urban limits. The assessee must, within one year before or three years after transfer, acquire specified new assets or incur notified scheme expenses; reinvestment equal to or exceeding the gain prevents charging of the gain, shortfalls are charged as income, and unutilised proceeds must be deposited under a notified scheme with proof filed by the return due date.
Act Rules Income Tax
Show AI Summary
Capital gains relief for reinvestment into residential property requires timely deposit and triggers recapture if proceeds remain unutilised.
Provision grants a proportionate exemption from long term capital gains where individuals/HUFs reinvest proceeds from sale of a non residential long term asset into one residential house in India, subject to purchase/construction time windows. Unutilised proceeds must be deposited under a notified scheme by the return filing due date with proof; recapture applies if deposits are not used within three years. The enacted text ties deposit triggers to net consideration, shortens the disqualification window for subsequent purchases, and imposes monetary caps and heightened compliance obligations.
Act Rules Income Tax
Show AI Summary
Roll over relief for capital gains: reinvestment in specified long term bonds defers tax subject to time, holding and cap conditions.
Relief defers tax on long term capital gains from transfer of land or building when reinvested within six months into notified long term bonds, with a statutory investment ceiling and a five year holding requirement; breach by transfer, conversion to money, or borrowing on the bond triggers deeming of previously exempted amounts as taxable long term capital gains and disallows a specified deduction for amounts claimed under the relief.
Act Rules Income Tax
Show AI Summary
Capital gains deferral for compulsory acquisition where reinvestment in industrial undertaking preserves tax neutrality subject to deposit and timelines.
Section 84 conditions tax neutrality for capital gains on compulsory acquisition of industrial land/buildings where the assessee reinvests proceeds in a replacement asset within the prescribed reinvestment period; excess proceeds over new-asset cost are charged as income and certain cost-basis adjustments apply for disposals within the reinvestment period. Unutilised proceeds must be deposited in a specified institution and applied per a notified scheme by the return-filing due date, with documentary proof required and residual unutilised amounts charged as income.
Act Rules Income Tax
Show AI Summary
Deemed consideration rule: stamp duty value treated as full consideration for capital gains when declared consideration is lower.
The provision deems the stamp duty value of land or building to be the full value of consideration for section 72 where declared consideration is lower, subject to a date of agreement exception conditioned on prescribed electronic/banking payment modes and a 110% safe harbour allowing actual consideration to prevail when stamp duty value does not exceed 110% of consideration; Assessing Officers may refer valuation claims to a Valuation Officer where the assessee asserts stamp duty value exceeds fair market value and the stamp duty value has not been contested.
Act Rules Income Tax
Show AI Summary
Deeming of short-term capital gains where transfers from a depreciable block exceed transfer expenses, opening WDV and acquisition cost.
Section 74 prescribes that when consideration received or accruing in a tax year for transfers of one or more assets in a depreciable block exceeds, after deducting transfer-related expenditure, the opening written-down value of the block and the actual cost of additions during the year, the excess is deemed to be capital gains arising from the transfer of short-term capital assets; if the entire block is transferred in the year, cost of acquisition is the opening WDV plus costs of additions and resulting receipts are similarly deemed short-term capital gains.
Act Rules Income Tax
Show AI Summary
Deemed cost of acquisition: prior-owner cost continuity and formulaic apportionment govern non purchase transfers and restructurings.
Section 73 prescribes deemed cost of acquisition rules for assets received by non-purchase modes: generally continuing the previous owner's cost (adjusted for improvements) and prescribing formulaic apportionment or fair market value bases for corporate reorganisations, mutual fund segregations/consolidations and specified instruments, with application guided by cross-references and delegated definitions.
Act Rules Income Tax
Show AI Summary
Indexation of acquisition costs limited to prescribed computation item, narrowing administrative discretion and clarifying taxpayer application.
Section 72 prescribes that capital gains equal the full value of consideration less specified deductions (transfer expenditures, cost of acquisition and improvements), with indexation applying in prescribed contexts as indexed equivalents; it excludes certain items from deduction, provides cost adjustments for business trust distributions, grants specified entities additional prescribed deductions, and imposes special currency conversion and rupee appreciation rules for non residents, while defining indexed cost calculations by reference to a Cost Inflation Index.
Act Rules Income Tax
Show AI Summary
Tax-neutrality for corporate reorganisations, IFSC fund relocations, non-resident transfers and conversions subject to specified conditions.
Section 70 treats specified transfers as not constituting a transfer for capital gains, rendering many corporate reorganisations, succession transfers, conversions, certain non-resident-to-non-resident transactions and relocations of foreign funds into IFSC-located resultant funds tax-neutral only where qualifying tests - including shareholding continuity, residency/domestic-company status, regulatory registration and non-taxation in the foreign jurisdiction - and documentary conditions are satisfied.
Act Rules Income Tax
Show AI Summary
Specified derivative transaction criteria change tax classification and impose documentary and platform compliance obligations for derivative trades.
The enacted Section 66 narrows and reorders interpretive definitions governing Chapter IV D, alters key terms (including shifting focus from "commodity derivative" to "commodities transaction tax"), moves some enterprise classifications to notification based criteria, and changes successor/predecessor coverage. It also revises the functional tests and documentary preconditions for specified derivative transaction and speculative transaction status - emphasising electronic execution, prescribed platforms/intermediaries and time stamped contract notes with UCI and PAN - thereby creating clear compliance triggers and greater reliance on delegated notifications and rules.
Act Rules Income Tax
Show AI Summary
Maintenance of books of account: record keeping duty for specified professions and businesses; Board to prescribe particulars and retention.
Section 62 requires maintenance of books and documents to enable computation of total income by specified professions, businesses meeting alternative income or turnover tests, and professions notified by the Board. The Board may prescribe the form, particulars, manner, place and retention periods. The enacted text repositions the Board's notification power into the definition of specified professions, corrects an apparent turnover threshold error for individuals/HUFs, and revises cross references affecting deemed profits carve outs; operational details depend on subsequent rules and the referenced tables.
Act Rules Income Tax
Show AI Summary
Presumptive taxation for non resident activities fixes taxable profits on defined receipts and narrows audit relief.
Section 61 prescribes a presumptive taxation method for six specified non resident activities, fixing taxable profits as percentages of defined receipts (A and B) and supplying definitions and examples for those receipts; it bars deductions or losses against income so computed, prescribes written down value treatment, and permits audit based claims of lower actual profits only where expressly allowed and subject to strict bookkeeping and audit compliance, while the Act narrows those reliefs and clarifies definitional and non application provisions.
Act Rules Income Tax
Show AI Summary
Presumptive taxation regime clarified for small businesses and goods carriage operators, altering computation and compliance timing.
Section 58 creates a presumptive taxation regime for small businesses, goods carriage operations and specified professions, prescribing turnover limits and fixed presumptive computation methods. Taxpayers may elect actual profits but must maintain books and obtain an audit if total income exceeds the basic exemption limit. The enacted text clarifies that receipts received by specified banking or online modes count for a lower percentage only if received during the tax year or before the due date, treats non account payee cheques/bank drafts as cash for cash tests, and expressly excludes goods carriage receipts from aggregation for monetary limits under book keeping/audit rules.
Act Rules Income Tax
Show AI Summary
Deemed consideration: stamp duty value may be treated as full value where declared consideration is lower.
The provision deems the stamp duty value to be the full value of consideration for transfers of non-capital land or buildings where declared consideration is below stamp duty value, subject to a statutory tolerance that preserves actual consideration if stamp duty value is within a specified margin; agreement date stamp valuations may be used when agreement and registration dates differ provided consideration (or part) was received by specified banking/online modes on or before the agreement date, with determination mechanics governed by cross referenced valuation rules.
Act Rules Income Tax
Show AI Summary
Amortisation rules for telecom spectrum and licence fees require time spread deductions and proceeds offset on transfer.
The section prescribes amortisation in equal instalments for four categories of expenditure-amalgamation/demerger costs, SVR payments, spectrum fees and licence fees-starting from specified initial tax years (event/payment or later of business commencement/payment) and, for spectrum/licence, running co terminous with the life of the right. Transfers of spectrum/licence rights trigger offsetting of proceeds against remaining unallowed expenditure with specified income inclusion rules and a formula for part transfers; amalgamation/demerger transfers to an Indian company preserve the section's application to the successor. Depreciation exclusion and reassessment mechanics for wrongful allowance are also provided.
Act Rules Income Tax
Show AI Summary
Amortisation of prospecting expenditure permits staged tax deduction subject to funding reductions, exclusions and audit conditions.
Amortisation allows an Indian company or resident (other than a company) engaged in prospecting for specified minerals to capitalise qualifying expenditure incurred in the year of commercial production and up to four preceding years, claim periodic instalments after reducing amounts funded by others and realizations (sale, salvage, compensation, insurance), and excluding site/deposit acquisitions and depreciable capital assets; instalments are limited so as not to reduce income from commercial exploitation below nil, unallowed amounts may be carried forward within the overall amortisation period, and audit and prescribed reporting are required for non-company assessees.
Act Rules Income Tax
Show AI Summary
Site restoration fund deductions for petroleum operations, with recapture on asset disposals governed by Schedule X.
Section 49 creates a Site Restoration Fund regime for petroleum and natural gas operations under a Central Government agreement, allowing deductions for deposits to a designated special account or site restoration account with computation governed by Schedule X. Withdrawals or transfers from those accounts are taxable in the year of withdrawal/transfer under Schedule X. The Act removes a clause in the Bill that explicitly deemed a portion of asset cost relatable to prior deductions as business income on sale within a specified holding period, instead delegating disposal and recapture rules to Schedule X.
Act Rules Income Tax
Show AI Summary
Recapture on premature disposal reverses deduction for deposits into designated tea, coffee and rubber development accounts, taxing attributable cost on disposal.
Clause 48 permits a deduction for deposits into designated tea, coffee and rubber development accounts, with computation governed by Schedule IX; withdrawals or transfers are chargeable to tax in the year of transfer/withdrawal as per Schedule IX, and disposal of assets acquired under the scheme within the protective holding period results in deeming that portion of the asset cost attributable to earlier deductions as business income in the year of sale or transfer.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Back

All TMI Notes

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

Acts Income Tax