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
    Legal and Practical Implications of TDS on Goods Purchases in India : Clause 393(1)[Table: S.No. 8(i...
    Compliance relief for a specific class of senior citizens : Clause 393(1)[Table: S.No. 8(iii)] of th...
    Legal Framework for TDS on E-commerce in India : Clause 393(1)[Table: S.No. 8(v)] and Clause 393(4)[...
    Clause 393(3)[Table: S.No. 5] & Clause 393(4)[Table: S.No. 18] of Income Tax Bill, 2025 Vs. Section ...
    Tax Deduction at Source on Contractual and Professional Payments : Clause 393(1)[Table: S.No. 6(ii)]...
    Legal and Practical Implications of TDS on Interest Withholding Tax on Foreign Borrowings : Clause 3...
    Tax Deduction at Source on Securitisation Trust Distributions : Clause 393(1)[Table: S.No. 4(iv)] an...
    Legal Commentary on TDS Provisions for Investment Funds : Clause 393(1) [Table: S.No. 4(iii)], Claus...
    Evolving Tax Deduction at Source Framework for Business Trusts in India : Clause 393(1)[Table: S.No....
    Transitioning TDS on Infrastructure Debt Fund Interest : Clause 393(2)[Table: S.No. 5] of the Income...
    Tax Deduction at Source on Land Acquisition Compensation : Clause 393(1)[Table: S.No. 3(iii)] and Cl...
    Transformation of TDS Provisions on Income from Units : Clause 393(1)[Table: S.No. 4(i)] and 393(4)[...
    Clear, consolidated, and modernized framework of TDS on payments relating to professional and techni...
    Evolution of TDS Provisions for Real Estate Development Agreements : Clause 393(1)[Table: S.No. 3(ii...
    Expand and rationalize the scope of TDS on rental payments : Clause 393(3)[Table: S.No. 2(ii)] of In...
    Analysis of TDS on Immovable Property Transfers : Clause 393(1)[Table: S.No. 3(i)] of the Income Tax...
    Evolution of TDS on Rent: Implications, Continuities, and Reforms : Clause 393(1)[Table: S.No. 2(i) ...
    Comparative Legal Analysis of TDS on Commission and Brokerage : Clause 393(1)[Table: S.No. 1(ii)] an...
    Unifying TDS on Lottery-Related Payments : Clause 393(3)[Table: S.No. 4] of the Income Tax Bill, 202...
    Harmonizing TDS Provisions for National Savings Instruments in India : Clause 393(3)[S.No. 6] of the...
❯❯
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
    TDS on purchase of goods: buyer withholding required, with precedence rules to avoid overlap with other withholding provisions.
    Clause 393(1)[Table: S.No. 8(ii)] imposes a TDS obligation on the buyer to deduct tax on purchases of goods from resident sellers once aggregate purchases from a seller in a financial year exceed the specified threshold, with deduction due at credit or payment, and a broad exclusionary clause preventing application where tax is deductible or collectible under any other provision of the Act.
    Act RulesBills
    Show AI Summary
    TDS on specified senior citizens centralises tax deduction at banks, relieving return filing when tax is correctly deducted at source.
    Specified banks are required to compute a specified senior citizen's total income after allowing Chapter VIII deductions and rebate, deduct tax at rates in force with a nil threshold, and remit TDS; an express precedence clause ensures this provision overrides other TDS provisions. The mechanism centralises compliance with banks obtaining declarations, maintaining evidence and records, thereby relieving eligible senior citizens from return filing provided the bank correctly applies deductions and remits tax.
    Act RulesBills
    Show AI Summary
    TDS on e-commerce: operators must withhold on gross platform-facilitated sales, with a small-seller exemption on conditions.
    E-commerce operators must withhold TDS on the gross amount of sales or services facilitated through their platforms, with withholding due at the earlier of credit or payment and including direct buyer payments as deemed payments by the operator. Deductions apply on a gross basis without netting fees, exclude operator receipts for unrelated services such as advertising, and take precedence over other TDS provisions. Individual and HUF participants with annual turnover below the legislated threshold who furnish PAN or Aadhaar are exempt from withholding.
    Act RulesBills
    Show AI Summary
    TDS on large cash withdrawals: deduction at payment with exemptions for banks and regulated intermediaries, non filer rule absent here.
    Clause 393(3) requires banks, co operative societies engaged in banking and post offices to deduct two per cent TDS at the time of cash payment where aggregate withdrawals from one or more accounts of a recipient exceed prescribed thresholds, with a higher threshold for co operative societies; Clause 393(4) exempts payments to the Government, banks, post offices, regulated business correspondents and authorised white label ATM operators. The Bill mirrors the existing framework but, in the extracted text, omits an explicit non filer regime and express central government notification powers, creating potential operational and interpretive uncertainty.
    Act RulesBills
    Show AI Summary
    TDS on high-value payments by individuals/HUFs expands withholding obligations for contractual, professional and commission disbursements.
    Clause 393(1)[Table: S.No. 6(ii)] requires TDS by individuals or HUFs (not otherwise liable under specified TDS entries) on payments to a resident for carrying out work (including supply of labour), fees for professional services, or commission/brokerage (excluding insurance commission) where aggregate payments to the payee in a tax year exceed a prescribed threshold; deduction is at the time of credit or payment and the clause is integrated into a tabular TDS framework necessitating aggregation, with definitions and certain procedural relaxations left to rules or guidance.
    Act RulesBills
    Show AI Summary
    TDS on interest for foreign borrowings consolidated under new clause, keeping concessional framework but raising definitional and transition issues.
    Clause 393(2) consolidates concessional TDS treatment for interest to non residents on foreign currency borrowings, rupee denominated bonds and IFSC listed bonds, aligning mechanics and cut off windows with Section 194LC while differing in presentation and reliance on external definitions; Central Government approval remains a condition for specified instruments and drafting gaps on limits, definitions and transitional treatment may require subordinate rules to avoid interpretive disputes.
    Act RulesBills
    Show AI Summary
    TDS on securitisation trust distributions: uniform 10% for residents, treaty rates for non-residents, no threshold.
    Clause 393 mandates TDS on distributions by a securitisation trust: Clause 393(1) imposes 10% TDS on any income paid to resident investors with no threshold, deducted at the earlier of credit or payment by the trust; Clause 393(2) requires withholding on non-resident investors at rates in force, permitting treaty relief. Both provisions treat credits (including to suspense accounts) as TDS events and require trusts to maintain documentation of payee status and treaty claims.
    Act RulesBills
    Show AI Summary
    TDS on investment fund distributions: withholding applies, with treaty relief and exemptions for non taxable income.
    TDS on distributions by investment funds requires withholding at applicable resident and non resident rates at the earlier of credit or payment, excluding any portion of income that is statutorily exempt. Funds must determine and segregate taxable versus exempt portions of mixed income, apply treaty or domestic rates for non residents upon proper documentation, and maintain records to support exemptions or reduced rates, while coordinating these obligations with other TDS provisions to avoid double deduction.
    Act RulesBills
    Show AI Summary
    TDS on business trust distributions: differentiated resident/non resident rates and SPV contingent exemptions under the Income Tax Bill, 2025.
    Clause 393 of the Income Tax Bill, 2025 mandates 10% TDS on distributed income to resident unitholders, differentiated rates for non-resident unitholders (including lower rates for certain interest-type distributions and "rates in force" for others), and exempts specified distributions from TDS where the underlying SPV has not opted for the concessional tax regime, thereby tying withholding obligations to the SPV's tax-regime choice.
    Act RulesBills
    Show AI Summary
    TDS on infrastructure debt fund interest: concessional withholding retained for non-resident investors, deducted at credit or payment.
    Clause 393(2)[Table: S.No. 5] retains a concessional TDS regime for any income by way of interest paid by an infrastructure debt fund listed in Schedule VII to a non resident (including foreign companies), requiring deduction at source at the specified concessional rate at the earlier of credit or payment, with no monetary threshold, and integrated within the Bill's harmonised TDS framework that addresses procedural rules, exceptions, grossing up, and interaction with double taxation treaties.
    Act RulesBills
    Show AI Summary
    TDS on land acquisition compensation maintained; threshold and RFCTLARR Act exemptions preserved, procedural consolidation introduced.
    Clause 393 of the Income Tax Bill, 2025 mandates TDS at 10% on any sum in the nature of compensation or enhanced compensation, or consideration or enhanced consideration, for compulsory acquisition of immovable property (other than agricultural land), when amounts paid or credited to a resident exceed Rs. 5,00,000 in a financial year; Clause 393(4) exempts awards or agreements exempt from income-tax under the RFCTLARR Act, and deduction is required at the earlier of payment or credit.
    Act RulesBills
    Show AI Summary
    TDS on mutual fund distributions: withholding required at source with exclusion for capital gains, subject to threshold rules.
    Clause 393 consolidates TDS on income from units of specified mutual funds and analogous instruments, requiring deduction by any payer at the prescribed rate at the time of credit or payment, subject to an aggregate threshold, while expressly excluding receipts that are of the nature of capital gains; the provision retains deeming rules for suspense accounts and links to cross referenced exemptions and schedules for definitions, thereby centralising administrative obligations and necessitating payer systems to characterise payments and aggregate receipts for threshold application.
    Act RulesBills
    Show AI Summary
    TDS on professional and technical services clarified: consolidated rates, threshold and personal-payment exemption streamline withholding obligations.
    Clause 393(1) requires TDS by a specified person on resident payments for professional services, technical services, director's fees (non-salary), royalty and related sums, with distinct lower rates for certain technical, cinematographic and call-centre payments and a higher rate for other cases, deductible at the earlier of payment or credit and applicable only above the prescribed threshold. Clause 393(4) exempts individuals and HUFs from TDS where payments are made exclusively for personal purposes.
    Act RulesBills
    Show AI Summary
    TDS on monetary consideration under development agreements - deduction at credit or payment with no threshold.
    Clause 393(1)[Table: S.No. 3(ii)] requires TDS on any monetary consideration under agreements referred to in section 67(14), applying to any payer, excluding in-kind consideration, with deduction at the earlier of credit or payment, no monetary threshold, and an explicit rule that where both general immovable property TDS and S.No. 3(ii) apply, deduction is to be made only under S.No. 3(ii).
    Act RulesBills
    Show AI Summary
    TDS on rent expanded to include equipment and furnished premises, increasing withholding scope and compliance for individuals and HUFs.
    Clause 393(3)[Table: S.No. 2(ii)] expands TDS on rent by subjecting payments for use of land, buildings, furniture, fittings, machinery, plant and equipment to withholding by specified persons where monthly payments exceed the threshold; it prescribes asset based rates and requires deduction at the earlier of credit or payment for the last month of the tax year or tenancy, while providing a declaration mechanism for nil deduction and procedural reliefs for small non business payers.
    Act RulesBills
    Show AI Summary
    TDS on immovable property transfers requires deduction on the higher of consideration or stamp duty value at payment or credit.
    Clause 393(1)[Table: S.No. 3(i)] requires TDS on transfers of immovable property (excluding agricultural land) where either the consideration or the stamp duty value exceeds the threshold. The transferee is the payer required to deduct tax at a fixed percentage of the higher of consideration or stamp duty value, with deduction at the time of credit or payment. Aggregation of amounts across multiple transferees and transferors applies, and the table provides tie breaker rules and specific exclusions such as compulsory acquisition.
    Act RulesBills
    Show AI Summary
    TDS on rent: payer-based uniform and differentiated withholding alters withholding obligations and REIT exemption treatment.
    Clause 393 requires TDS on rent to residents where monthly rent exceeds the threshold, with deduction at the earlier of credit or payment. Non-specified payers withhold at a uniform low rate for all asset types, while specified persons withhold at differentiated rates for machinery/plant/equipment versus land/building/furniture/fittings. The Bill maintains an exemption from TDS for payments to REITs in respect of directly owned real estate assets and preserves rules treating suspense-account credits as payment for withholding purposes.
    Act RulesBills
    Show AI Summary
    TDS on commission and brokerage: Bill preserves current threshold and rate and maintains targeted exemptions for telecom franchisees.
    Clause 393(1) mandates that a specified person deduct TDS at two percent on resident commission or brokerage payments (excluding insurance commission) when aggregate payments exceed the statutory threshold, with deduction at the earlier of credit or payment and anti avoidance deeming for suspense accounts. Clause 393(4) preserves a targeted exemption for certain telecom franchisee payments, maintaining continuity with existing sectoral relief and reducing compliance burdens.
    Act RulesBills
    Show AI Summary
    TDS on lottery-related payments: unified withholding on commissions and prizes with harmonized threshold and deduction rate.
    Clause 393(3)[Table: S.No. 4] consolidates TDS on payments to persons engaged in stocking, distributing, purchasing or selling lottery tickets, requiring any person making payments of commission, remuneration or prize to deduct tax at the earlier of credit or payment; it includes a deeming fiction treating credits to suspense or intermediary accounts as credit to the payee and imposes standard deductor duties of deposit, certification and return-filing, while leaving aggregation rules and characterization of complex incentive structures unclear.
    Act RulesBills
    Show AI Summary
    TDS on national savings withdrawals: mandatory deduction at source with defined threshold and exemptions for individuals and heirs.
    Clause 393(3)[Table: S.No. 6] requires any person responsible for paying amounts referred to in section 80CCA(2)(a) to deduct income-tax at the rate of 10% at the time of payment where the amount or aggregate amount paid during the tax year exceeds Rs. 2,500; the Table under sub-section (4), Sl. No. 19, exempts payments made to an assessee who is an individual and to the heirs of an assessee, and payers must deposit TDS, file returns, and issue certificates in accordance with the procedural framework.

    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