The Delhi High Court has held that the date of ao’s receipt of material under section 153C of the Income Tax Act to be deemed as date of search or requisition.
The bench of Justice Vibhu Bakhru and Justice Tejas Karia has observed that in terms of proviso to Section 153C of the Act, the date of receiving of the documents or material by the AO having jurisdiction over the other person [the person other than the one searched] from the AO having jurisdiction over the searched person is required to be considered as the date of initiation of search under Section 132 of the Act or the date of requisition under Section 132A of the Act. The date is required to be considered as 24.06.2022.
The petitioner/assessee has filed the present petition, inter alia, impugning the proceedings initiated pursuant to the notice issued under Section 153C of the Income Tax Act, 1961 in respect of Assessment Year 2015-16.
The Assessee had filed the return of income for the relevant AY 2015- 16 declaring a total income of Rs. 32,61,010. The search and seizure operation were conducted under Section 132 in respect of persons belonging to the Alankit Group. Thereafter, on 19.12.2023, the notice under Section 153C was issued.
The Assessing Officer [AO] of the searched person had recorded a satisfaction note dated 24.06.2022 to the effect that he was satisfied that the documents belonging or containing information relating to the assessee, were found during the course of search. The satisfaction note also records that the documents in question were handed over to the AO exercising jurisdiction in the case of the assessee.
The 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.
The department contended 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 24.06.2022.
The plain reading of Sub-section (1) of Section 153C of the Act 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 of the Act 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 of the Act, 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).
The court observed 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) of the Act read with third proviso to said Section, in case of the search executed during the financial year commencing on or after 01.04.2019, the period of limitation for assessment or reassessment under Section 153C of the Act has been specified as twelve months from the end of financial year during which the last authorisation to search under section 132 of the Act or requisition under section 132A of the Act, was executed.
The court allowed the petition and held that the date on which the petition was filed, the time for passing the assessment order, had expired.
Case Details
Case Title: Carol Infrastructure Private Limited Versus ACIT
Case No.: W.P.(C) 3927/2025 CM APPL. 18231/2025
Date: 23.04.2025
Counsel For Petitioner: Sumit Lalchandani
Counsel For Respondent: Gaurav Gupta
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