In a petition impugning the proceedings initiated pursuant to the notice issued under Section 153C of the Income Tax Act, 1961, the Delhi High Court held that the date of receiving of the documents by the AO having jurisdiction over the other person from the Assessing Officers (AO) having jurisdiction over the searched person is required to be considered as the date of initiation of search under Section 132 or the date of requisition under Section 132A of the Act.
Facts of the case:
Consequent to the filing of a return by the petitioner declaring a total income of Rs.32,61,010, a search & seizure operation was conducted under Section 132 in respect of persons belonging to the Alankit Group, which resulted in the issuance of a notice under Section 153C. Later, this culminated into AO of the searched person having recorded a satisfaction note regarding documents belonging to the assessee found during the course of the search.
Submissions of the Petitioner:
The counsel for Assessee/ Petitioner contended that no proceedings under Section 153C can be continued pursuant to the impugned notice in respect of AY 2015-16 because an assessment order cannot be passed pursuant to the notice as the time limit for framing an assessment order has since lapsed.
Submissions of the Respondent:
The counsel for the Department/ Respondent argued that the material and documents were received by the AO exercising jurisdiction in the case of the assessee and, therefore, the time for passing the assessment order had not elapsed as on the date the present petition was filed. However, the position would not hold true as there is no ground to disbelieve the facts as recorded in the satisfaction note, which was recorded on June 24, 2022.
Observations of the Court:
Referring to Section 153C(1) of the Act, the Court explained that in case the AO having jurisdiction in respect of a person in respect of which search and seizure operations have been conducted under Section 132 or the assets and/or books of accounts have been requisitioned under Section 132A of the Act is satisfied that any money, bullion, jewellery or other valuable article, which has seized or requisitioned, belongs to or any books of account or documents, seized or requisitioned, pertain to, or containing an information which relates to the person other than the searched person, then the AO is required to hand over the same to the AO having jurisdiction over such other person.
In terms of proviso to Section 153C, in respect of such other person (a person other than the searched person) the date of the search is required to be construed in reference to the date of receiving the books of account or documents or assets seized or requisitioned by the AO having jurisdiction over such other person (person other than the one searched), observed the Court.
The Court also explained that the main body of Section 153C(1) and the proviso do not contemplate a hiatus between the handing over of the documents by the AO having jurisdiction over such a person and receipt of the same by the AO having jurisdiction over a person other than the searched person.
In terms of Section 153B(1) read with third proviso to said Section, in case of the search executed during the financial year commencing on or after April 01, 2019, the period of limitation for assessment or reassessment under Section 153C has been specified as twelve months from the end of financial year during which the last authorisation to search under Section 132 or requisition under Section 132A, was executed, added the Court.
The decision of the Court:
The Court, therefore, allowed the petition and held that the date on which the petition was filed, the time for passing the assessment order, had expired.
Case Title: Carol Infrastructure Pvt Ltd vs Assistant Commissioner of Income Tax
Case Number: Writ Petition (C) No. 3927/2025
Coram: Hon’ble Justice Vibhu Bakhru and Hon’ble Justice Tejas Karia
Counsel For Petitioner: Adv Sumit Lalchandani
Counsel For Respondent: Adv Gaurav Gupta
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