Section 153C: satisfaction note, block period and the 2021 sunset

A search happens somewhere else. Months later, sometimes years later, a notice arrives. It says that material found in that search relates to you, and it asks you to file returns for six assessment years. Nothing was found at your premises. Nothing was seized from you. You may never have met the person who was searched.

That notice is issued under section 153C of the Income-tax Act, 1961, and the single most useful thing to understand about it is that section 153C taxes nothing. It is machinery. It confers jurisdiction, and it does so only if a specific sequence of steps has actually happened, in the right order, recorded by the right officers. Every one of those steps is a jurisdictional fact. If one of them failed, the assessment fails, and it fails before anybody reaches the question of whether the money was received.

That is why section 153C litigation looks so different from ordinary assessment litigation. The strongest points are almost never about the addition. They are about the file: what the satisfaction note says, when the material was handed over, which years the officer applied his mind to, and whether the approving authority read anything before signing. Those points win because they are documentary, and because the Department frequently cannot produce the documents.

Key points

• Section 153C is machinery, not charge. It confers jurisdiction on four conditions, each of which is a jurisdictional fact: seizure in another’s search, a recorded satisfaction by the searched person’s Assessing Officer, handing over, and a recorded satisfaction that the material bears on your total income. One note can carry both where the same officer holds both files, but neither satisfaction can be missing.
• The six years run from the date your Assessing Officer received the material, not from the date of the search. An order that copies the searched person’s years is wrong on its face.
• The officer must be satisfied year by year. He cannot throw open the whole block because something was found for one year.
• For a completed and unabated assessment, the addition must be traceable to the seized material.
• Approval under section 153D is a substantive safeguard. Seven years approved in a day is not approval.
• Section 153C reaches only searches initiated up to 31 March 2021, and there is a live question whether, for the other person, that date is tested against the search or against the handover. Section 536(2)(v) of the Income-tax Act, 2025 preserves the provision for every proceeding connected with such a search, so it will govern live appeals for years yet.
• Under the 2025 Act the successor is section 295, and it is not a re-enactment. The block period is tied to the searched person, and the bearing on total income test is gone.

Which provision governs your search, and on what date?

Four regimes now sit on top of one another, and the only thing that separates them is the date on which the search was initiated. Get this wrong and every subsequent argument is aimed at the wrong statute.

Search initiated	Governing scheme	The other person provision
Up to 31 March 2021	Sections 153A to 153D of the 1961 Act	Section 153C
1 April 2021 to 31 August 2024	Reassessment under the 1961 Act	No transmission provision
1 September 2024 to 31 March 2026	Chapter XIV-B block assessment, 1961 Act	Section 158BD
On or after 1 April 2026	Income-tax Act, 2025	Section 295

The cut-off for section 153C is in the section itself. Sub-section (3), inserted by the Finance Act 2021, provides that nothing contained in the section shall apply in relation to a search initiated under section 132, or books of account, other documents or any assets requisitioned under section 132A, on or after 1 April 2021. Section 153A has a matching cut-off, but it sits in a different place: it is in the opening words of sub-section (1), which confine the section to a search initiated, or a requisition made, after 31 May 2003 but on or before 31 March 2021. The two are drafted differently, and only the section 153C cut-off sits in a sub-section of its own. That drafting difference decides the argument in the section on the sunset below.

The middle window is the awkward one. Between 1 April 2021 and 31 August 2024 there was no transmission provision at all. A search on a third party produced no route by which the material travelled to your Assessing Officer with a deemed date attached to it. What it produced instead was information, and the Department proceeded by way of reassessment. That is not a statutory vacuum. Explanation 2 to section 148 deems the Assessing Officer to have information suggesting escapement where a search is initiated, and expressly reaches material seized or requisitioned from another person which belongs to the assessee, or documents which pertain to him, subject to the approval of the Principal Commissioner or Commissioner. Limitation then runs under section 149, whose first proviso preserves the time limits as they stood before the Finance Act 2021. What is absent is a transmission provision carrying a deemed date with it.

The Delhi High Court addressed the consequence for a non-searched entity in Dinesh Jindal v. ACIT (2024 LiveLaw (Del) 721), holding that because no transmission occurs under section 153C any more, the years available have to be reckoned from the date the reassessment action was initiated against the non-searched entity rather than from the date of the search, and quashing the notice as barred.

From 1 September 2024 the block assessment scheme in Chapter XIV-B was revived by the Finance (No. 2) Act 2024, and with it section 158BD, which had performed the other person function before section 153C existed. One thing about that window should be said here rather than at the end, because it decides cases. Section 158BD as it now stands does not carry the section 153C fiction. Its provisos align the other person’s block period with the specified person’s, and where there is more than one specified person, with the one whose block period ends later. So for a search on or after 1 September 2024 the handover date no longer moves the block, and Jasjit Singh does not help.

From 1 April 2026 the Income-tax Act, 2025 applies, and the equivalent is section 295, which continues that design rather than inventing a new one. The last section of this note deals with what changed.

Is section 153C still worth understanding, if it stopped applying in 2021?

Yes, and for longer than most people assume.

Section 536(2)(v) of the Income-tax Act, 2025 provides that where a search has been initiated under section 132, or a requisition made under section 132A, prior to the commencement of that Act, the provisions of the repealed Income-tax Act shall continue to apply to any proceedings connected in respect of such search or requisition as if the 2025 Act had not been enacted. The Board’s own frequently asked questions on the transition say the same thing in plainer words: the answer dealing with post-search enquiries in a pre-2026 search records that section 536(2)(v) allows the powers under the repealed Act to continue to be exercised for the post-search enquiry and for the assessment.

So the governing regime is fixed by the date the search was initiated. It is not affected by the date of the notice, the date of the assessment order, the date of the appeal, or the fact that the 2025 Act is now in force. A search in January 2021 is a sections 153A to 153D matter for as long as the litigation runs, through the Commissioner (Appeals), the Tribunal, the High Court and beyond. Given that section 153C notices were still being issued in 2023 for searches conducted in 2021, and that a first appeal and a Tribunal appeal together routinely take five years, section 153C will be argued well into the 2030s.

There is a second reason. The interpretive questions section 153C has thrown up, in particular what a satisfaction must contain and how far a deeming fiction travels, do not disappear with the provision. They reappear in a different form under section 158BD and section 295, and the reasoning built up over twenty years is the material the courts will reach for.

What must exist before an Assessing Officer has jurisdiction under section 153C?

Four things, in this order. Treat them as a checklist, because that is how a Tribunal will treat them.

One. Seizure or requisition in the search of another person. There must be money, bullion, jewellery or other valuable article or thing seized or requisitioned, or books of account or documents seized or requisitioned. A statement recorded under section 132(4) is not a seized document. It may well be admissible, and the Department will say so, but admissibility is a different question from whether the statement is material seized in the search capable of triggering section 153C. An inference, a working note prepared by the investigation wing after the search, or a spreadsheet reconstructed from a device is not the same thing as the material seized, and the distinction is worth pressing.

Two. A recorded satisfaction by the Assessing Officer of the searched person. He must be satisfied that the money or valuables belong to the other person, or that the books or documents pertain to, or the information in them relates to, the other person. The satisfaction must be recorded, it must be on the searched person’s file, and it must precede the handing over.

Three. Handing over. The material must actually be handed over to the Assessing Officer having jurisdiction over the other person. This is not a formality. The date of the handing over is the date from which the other person’s block period is computed, so the document evidencing it is the single most valuable piece of paper in the file.

Four. A separate satisfaction by the Assessing Officer of the other person. He must be satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of the other person, for the years he proposes to assess. Only then may he issue notice and proceed under section 153A.

A note on the statutory language, because it is frequently misquoted. The words requiring a bearing on the determination of the total income were inserted into section 153C(1) by the Finance (No. 2) Act, 2014, with effect from 1 October 2014, by substitution of the closing limb of sub-section (1) before the first proviso. They are not a 2017 amendment, and the statute says the books of account or documents or assets seized or requisitioned, not such books of account. What the Finance Act 2017 did, with effect from 1 April 2017, was different: it added the reference to the six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted into the same limb, and made a corresponding insertion in the second proviso.

The other amendment worth knowing is the Finance Act 2015 change, with effect from 1 June 2015, which replaced the requirement that seized books or documents belong to the other person with the wider test that they pertain to him or that information in them relates to him. Before that change the Delhi High Court had held in the Pepsi Foods line of cases that a document merely mentioning a third party did not belong to that third party, and that section 153C could not be invoked on it. The 2015 amendment was the legislative answer to those decisions. It matters for older years, and the Supreme Court held in ITO v. Vikram Sujitkumar Bhatia (2023) 453 ITR 417 that the amended provision applies even to searches conducted before 1 June 2015, which removed what had been a substantial defence.

What does sub-section (2) do about the year of the search itself?

Sub-section (2) of section 153C deals separately with the assessment year relevant to the previous year in which the search was conducted, and it is routinely overlooked because the argument tends to focus on the six preceding years. Where, on the date of receipt of the material by the other person’s Assessing Officer, the time for filing the return for that year had expired and no return was filed, or a return had been filed but the time for issuing a notice under section 143(2) had expired, or an assessment or reassessment had already been made, the provisions of sub-section (1) apply to that year as they apply to the six preceding years.

Read it in any matter where the notice covers the year of the search itself, because the test for that year is not the same as the test for the rest of the block.

What must the satisfaction note of the searched person’s Assessing Officer

record?

It must record a satisfaction, which means it must show that the officer turned his mind to the material and to the connection between that material and the other person. A note that recites the statutory words and identifies nothing is a form, not a satisfaction.

On timing, the position was settled by the Supreme Court in CIT v. Calcutta Knitwears, decided on 12 March 2014 and reported at (2014) 6 SCC 444. Although that case concerned section 158BD, the reasoning applies to the same structure in section 153C. The court held that the satisfaction may be recorded at any of three stages: at the time of, or along with, the initiation of proceedings against the searched person; in the course of his assessment; or immediately after his assessment is completed. The Board accepted the decision and directed its officers to follow it in Circular No. 24/2015 dated 31 December 2015. Three things in that circular matter. It records the three stage rule as the binding position on timing. It clarifies, in terms, that even where the Assessing Officer of the searched person and of the other person is one and the same, he is still required to record his satisfaction. And it directs that pending litigation with regard to the recording of the satisfaction note under section 158BD or section 153C should be withdrawn or not pressed if it does not meet the guidelines laid down by the Apex Court. That last direction is the one to quote when the note in your case falls outside the three stages, because it is the Department’s own instruction telling it not to defend the assessment.

Two practical consequences follow. The first is that an argument built purely on the lateness of the note will not succeed. The second, and more useful, is that Calcutta Knitwears fixes the outer limit: the satisfaction must be recorded no later than immediately after the searched person’s assessment is completed. A note recorded long after that assessment was finished, with no explanation, is vulnerable on Calcutta Knitwears itself. The Gujarat High Court so held in Parag Rameshbhai Gathani v. ITO, 2025 LiveLaw (Guj) 190, quashing section 153C proceedings begun some 22 months after the searched person’s assessment was completed. The court held that the delay ran contrary to Calcutta Knitwears, and that the expression immediate cannot be extended to an extent which defeats the purpose of cost effective, efficient and expeditious completion of search assessments. Explanations resting on COVID-19 and on the roll out of the faceless scheme were rejected as an afterthought.

The Delhi High Court’s fullest treatment of the mechanics is in Ganpati Fincap Services Pvt Ltd v. CIT, decided on 25 May 2017, which sets out seven conclusions. Two of them are worth carrying into any argument. Where the Assessing Officer of the searched person and of the other person is the same, the satisfaction qua the other person must still be recorded by that officer in his capacity as the searched person’s Assessing Officer, before proceedings against the other person are initiated. The note need spell out reasons only where the document is such that it might belong to more than one person. The same judgment also holds, and this limb cuts the other way, that a failure to record expressly that the document does not belong to the searched person will not by itself vitiate the proceedings.

Is a separate satisfaction needed when one officer holds both files?

This comes up constantly, because in a group case the same central circle usually holds everybody.

The answer is that the satisfaction is still required, but one note will do. In Super Malls Private Limited v. PCIT, decided by the Supreme Court on 5 March 2020 and reported at (2020) 423 ITR 281, the court accepted that where one officer is the Assessing Officer of both the searched person and the other person, he need not record two separate satisfactions in two files. What he must do is record the satisfaction in his capacity as the Assessing Officer of the searched person, and place it in the file of the other person, before initiating proceedings.

So the defence is not that a second note is missing. It is narrower and sharper: that no satisfaction was recorded at all in the searched person’s capacity, or that it was recorded after the proceedings against the other person had already been initiated, which is the same thing as recording it afterwards to fill a gap. The sequence is checkable from the file, and it is where these cases are frequently lost by the Department.

Must the satisfaction be recorded assessment year by assessment year?

This is the most productive line of attack available at present, and it has two related strands.

The first is Saksham Commodities Ltd v. ITO, a Delhi High Court decision of 9 April 2024 reported at (2024) 464 ITR 1, delivered on a batch of writ petitions. The court held, in its conclusions at paragraph 68, that the jurisdictional Assessing Officer “would have to firstly be satisfied that the material received is likely to have a bearing on or impact the total income” of the years forming part of the block, and only then place the assessee on notice under section 153C. The power to assess, it held, would “stand confined to those years to which the material may relate or is likely to influence”. Where there is no material casting doubt on the estimation of total income for a particular year, the officer is not justified in invoking section 153C for that year.

The court had earlier observed, at paragraph 55, that unless the material recovered is found to have relevancy to the assessment year sought to be subjected to action under section 153C, it would be legally impermissible to invoke the provision for that year. The practical result is that the block is not a licence. A document relating to one financial year does not open six.

The second strand is the Karnataka High Court’s decision in DCIT v. Sunil Kumar Sharma (2024) 469 ITR 197, where the court held that a satisfaction note is required to be recorded under section 153C for each assessment year, and that a consolidated satisfaction note recorded for different assessment years vitiates the entire proceedings. The Revenue’s special leave petition was dismissed, reported at Dy. CIT v. Sunil Kumar Sharma (2024) 469 ITR 271 (SC).

Two cautions belong with that authority, and they matter if you are going to rely on it in a submission. The Karnataka judgment decided several things, and the Supreme Court’s order, so far as the reports record it, engages with the loose sheets reasoning rather than the satisfaction note reasoning. A dismissal of a special leave petition is in any event not a declaration of law under article 141. There is a third point worth knowing before it is put to you: the same proposition appears earlier in the judgment, at paragraph 36, as the submission of Senior Counsel, before reappearing at paragraph 53 in the court’s own concluding passage. The consolidated note point is therefore a High Court holding, persuasive and increasingly followed, not a Supreme Court rule. Cite it as what it is.

Against both strands the Department will argue that there is no requirement in the section that the note say anything year specific, and that what matters is whether the substance of the note answers the purpose of the provision. That argument is not frivolous on the bare text. The answer to it is Saksham, and the answer to Saksham has not yet been supplied by the Supreme Court.

What happens when the satisfaction note is never produced?

The note is the source of the jurisdiction, so an assessee who has never seen it is defending an assessment whose foundation is invisible to him.

The ITAT Jaipur confronted this directly in Anshu Sahai (HUF) v. ACIT (ITA Nos. 466 to 468/JP/2025, order dated 3 November 2025). The assessee had asked repeatedly for the satisfaction note of the searched person’s Assessing Officer and for the satisfaction recorded by his own Assessing Officer. Neither was supplied, and the Revenue did not produce either before the Tribunal. The Bench held that without the satisfaction note being provided, the order lacked jurisdiction.

Two things should be said honestly about how far that carries.

First, the distinction between non-existence and non-production. If no note was ever recorded there is no jurisdiction, and that is uncontroversial. If a note exists but was not given to the assessee, the question is different. We have not found a High Court holding that non-supply on demand is by itself fatal, and there is at least one decision pointing the other way: in Shyamlal Rupchand Parwani v. ACIT the Gujarat High Court, on 6 February 2024, declined to interfere at the threshold on the footing that the satisfaction note had not been furnished with the notice. The proposition is widely stated and is probably right in principle, because the note is a jurisdictional document and the assessee cannot meaningfully challenge what he cannot see. But it is not nailed down, and it has to be pleaded with the Gujarat decision anticipated rather than ignored.

Second, what the Department will say. It will argue, as the Commissioner (Appeals) did in that very case, that a ground complaining the note is improper implies the assessee has seen it; that he identified nothing wrong in its contents; that he never formally applied for a copy; and that a natural justice complaint succeeds only on demonstrable prejudice. Those arguments are answerable, but only if the record answers them.

Which dictates the practice. Ask for the satisfaction note in writing, in the first reply to the first notice, before filing anything else. Ask for both notes by name. If nothing comes, seek inspection of the assessment records and record that you did. Repeat the request before the Commissioner (Appeals). By the time the matter reaches the Tribunal the record should show a series of unanswered written requests, not an argument invented in appeal.

Does participating in the assessment cure a jurisdictional defect?

The Department says yes, and it has a settled way of putting it. In Anshu Sahai the Commissioner (Appeals) held that once having accepted the notice and having participated in the proceedings, thereby submitting to the jurisdiction of the Assessing Officer, the assessee cannot take a position that there is a jurisdictional defect. On the prejudice limb he relied on Veena Estate (P) Ltd v. CIT (2024) 461 ITR 483, a decision of the Bombay High Court, and on Natwar Singh v. Director of Enforcement (2010) 13 SCC 255 for the proposition that there is no such thing as a technical infringement of natural justice. Those are the authorities to expect, and it is worth noting that the Commissioner (Appeals) three times described Veena Estate as a decision of the Supreme Court, which it is not.

That proposition is wrong as a matter of principle, and it is worth knowing why rather than merely asserting it. Jurisdiction over subject matter is conferred by statute and cannot be conferred by consent, acquiescence or waiver. An assessee who files a return in response to an invalid notice does not thereby supply the satisfaction the statute required an officer to record. What participation can affect is a procedural irregularity, and the line between the two is exactly where these cases are fought.

So the framing matters. A complaint that a copy of a statement was not furnished is procedural, and prejudice will have to be shown. A complaint that no satisfaction was recorded, or that the years assessed were not open on the handover date, goes to jurisdiction, and prejudice is beside the point. Do not let a jurisdictional point be re-characterised as a natural justice point in the grounds, because the answer to it changes completely.

From which date are the six years counted for the other person?

From the date the Assessing Officer of the other person receives the seized material. Not from the date of the search.

The first proviso to section 153C(1) substitutes, for the date of initiation of the search referred to in section 153A, the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over the other person. The Supreme Court confirmed the consequence in CIT v. Jasjit Singh (2023) 458 ITR 437, holding that for the non-searched person the block is reckoned from the date the material is received by his Assessing Officer.

The practical effect is large and is routinely missed on both sides. Take a search on 19 January 2021, in financial year 2020-21, and a handover on 17 October 2022, in financial year 2022-23. For the searched person the six years preceding assessment year 2021-22 run from assessment year 2015-16 to assessment year 2020-21. For the other person the relevant assessment year is 2023-24, and the six preceding years run from assessment year 2017-18 to assessment year 2022-23. Those are not the same block. An assessment order for assessment year 2015-16 against the other person, on that chronology, is outside the block altogether.

The Department has an answer to this, and it should be anticipated rather than discovered at the hearing. It argues that the Finance Act 2017 insertion of the six years phrase into section 153C(1) clarified that the date of search referred to in section 153A is the relevant date for computing the block; that Jasjit Singh concerned an assessment year long before that amendment; and that reading the proviso as fixing the block renders the 2017 amendment otiose. The answer is that Jasjit Singh construes the proviso itself, which the 2017 amendment did not touch, and that the amendment inserted a reference to the six years without disturbing the words that tell you which date those six years run from.

This is the first computation to do in any section 153C matter, and it requires one document: the letter or memo by which the material was handed over, with its date. Ask for it at the same time as the satisfaction notes. If the Department cannot produce it, the block cannot be established, and the burden of establishing the jurisdictional fact is not yours.

A related point, covered in more detail in our note on Section 153C time limit when the Assessing Officer is the same person, is that the date which fixes the block is not necessarily the date which starts limitation for completing the assessment. The third proviso to section 153B(1) has its own trigger, and where one officer holds both files the question of what counts as handing over becomes genuinely difficult.

When does the ten-year window open in a section 153C case?

The extended window is not freely available, and its conditions are cumulative.

The fourth proviso to section 153A(1), inserted by the Finance Act 2017 with effect from 1 April 2017, provides that no notice for the relevant assessment year or years shall be issued unless three conditions are met. The Assessing Officer must have in his possession books of account or other documents or evidence revealing that income represented in the form of an asset which has escaped assessment amounts to, or is likely to amount to, fifty lakh rupees or more, in that year or in aggregate across the relevant years. That income must have escaped assessment for the year or years in question. And the search under section 132 must have been initiated, or the requisition under section 132A made, on or after 1 April 2017.

Explanation 1 to section 153A(1) defines the relevant assessment year as one falling beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which the search is conducted. Explanation 2 defines asset to include immovable property, being land or building or both, shares and securities, loans and advances, and deposits in bank accounts. The narrowness of that definition is the point; it is not a list of everything of value.

Three points follow for a section 153C case. The fifty lakh threshold is not a threshold of alleged income at large; it is income represented in the form of an asset, which is a narrower thing, and the assessment order should be read to see whether the Assessing Officer addressed that distinction at all. Clause (c) is a hard date cut-off: for a search initiated before 1 April 2017 the block is six years and no more, whatever the amount involved. And the interaction between clause (c) and the first proviso to section 153C(1) is unresolved. If the deeming fiction substitutes the handover date for the date of search, does clause (c) test the original search or the handover? We have found no authority deciding it. It is the same structural problem as the one in the next section, and it deserves to be pleaded wherever the dates make it live.

Is the handover date also the date for the 1 April 2021 cut-off?

This is the most consequential open question in section 153C at present, and it can decide a case outright. If the answer is yes, then in every matter where the search was before 1 April 2021 but the material reached your Assessing Officer after it, section 153C was never available at all.

The case for the assessee. The first proviso to section 153C(1) substitutes the handover date for the date of initiation of the search. If that fiction operates generally, then for the other person the search is deemed to be initiated on the handover date, and where that date falls on or after 1 April 2021, sub-section (3) switches the section off.

The Madras High Court accepted precisely this in Harigovind v. Assistant Commissioner of Income-tax (Non-Corporate), W.P. Nos. 23014, 23019, 23023, 23024 and 23033 of 2023 and connected matters, decided by Krishnan Ramasamy J on 28 October 2025, 2025 LiveLaw (Mad) 492. The court held that for a non-searched person the date of initiation of search is the date on which the material is handed over to his jurisdictional Assessing Officer, and that this is so for all purposes. On the facts the material reached the petitioner’s officer on 25 November 2022, after 1 April 2021, so section 153C did not apply, and the notices were quashed for want of jurisdiction. Tribunal benches have begun to follow it, among them the Delhi Bench in Smt. Geetanjali Bhayana v. DCIT (ITA Nos. 2227, 2228 and 2252/Del/2025), where the search was in July 2019 but the satisfaction was recorded in December 2021, and the assessments were quashed.

The case for the Department. It is textual and it is not weak. Sub-section (3) is a separate sub-section and it contains no deeming language. It speaks of a search initiated under section 132, or a requisition made under section 132A, on or after 1 April 2021. The deeming fiction lives in the proviso to sub-section (1), and a fiction is confined to the purpose for which it was created. On the Department’s reading the proviso was inserted, by the Finance Act 2005 with retrospective effect from 1 June 2003, for one purpose only: to fix the date by reference to which pending assessments of the other person abate. That, it says, is what the Memorandum and the Notes on Clauses to that Finance Act address, and what Circular No. 3 of 2006 explains when it records that in a section 153C case the assessments of the preceding six years pending on the date of receipt shall abate. It was not inserted to compute the block, and it was not inserted to decide whether the section applies at all.

The Department adds a reductio. If the handover date were the date of search for every purpose, a search conducted in the last week of March 2021, with transmission in April 2021, would put section 153C permanently out of reach, even though the search itself was squarely within the old regime and Calcutta Knitwears expressly permits the satisfaction to be recorded after the searched person’s assessment is complete. On the same reading, the ten-year block would sweep in years for which seized material could not possibly exist.

There is one difficulty with the Department’s premise that has to be faced. The proposition that the proviso is confined to abatement is not new, and it has been rejected once already. In Jasjit Singh the Revenue argued precisely that, and the Supreme Court declined to read the proviso so narrowly, treating it instead as a substantive protection for a person drawn into search proceedings involuntarily, who would otherwise be prejudiced by a delay he had no part in. That does not decide sub-section (3), which was not before the court. But it means the Department cannot simply assert that the fiction is an abatement device, because the Supreme Court has held that it is more than that.

Where this stands. Harigovind is a single judge writ decision of one High Court. We have not found any record of an appeal or a special leave petition against it, and we have found no contrary High Court ruling squarely on sub-section (3). So the position today is that the only High Court to have decided the point has decided it in the assessee’s favour, and the Department has a textual answer that no court has yet had to rule on.

The two High Court decisions in this area also sit awkwardly together, and the Department will say so. Dinesh Jindal proceeds on the footing that the reassessment route is what applies to a non-searched entity after 31 March 2021, and works out limitation on that basis. Harigovind’s logic produces a category of cases in which neither section 153C nor a timely notice under section 148 is available at all. That is not a reason the argument is wrong, but it is the shape of the answer to expect.

The ITAT Jaipur had the argument squarely before it in Anshu Sahai (HUF). The assessee pleaded that the deemed date of search was 17 October 2022 and that section 153C was therefore unavailable. The Bench reproduced the contention word for word, said nothing further about it, and decided the appeal on other grounds. It never mentioned sub-section (3). That is worth knowing if you intend to cite the order: it is not authority on this point, and citing it as though it were will invite a correction.

The practical advice is straightforward. Where the handover date falls on or after 1 April 2021, take the point, take it first, and plead it fully rather than in a sentence. In the Jaipur case the assessee’s entire pleading on it ran to two lines with no statute, no proviso and no authority cited, while the Commissioner (Appeals) answered it across some forty pages and a dozen separate limbs. A point that good deserves better treatment than that.

Does the Abhisar Buildwell rule apply to section 153C?

Yes, and the authority is precise enough to be quoted.

PCIT v. Abhisar Buildwell P. Ltd. (2023) 454 ITR 212, decided on 24 April 2023, held that in respect of completed or unabated assessments no addition can be made by the Assessing Officer in the absence of incriminating material found during the search. Where no assessment was pending on the date of search, the assessment does not abate, and the jurisdiction to disturb it depends on the material.

Abhisar itself was argued on section 153A. The Supreme Court decided the section 153C counterpart the very next day, on 25 April 2023, in Dy. CIT v. U.K. Paints (Overseas) Ltd. (2023) 454 ITR 441, where no incriminating material was found either from the assessee or from the third party and the High Court’s order setting aside the section 153C assessment was upheld. The Board’s own Instruction No. 1 of 2023 dated 23 August 2023 records that the Abhisar appeal pertained to the scope and ambit of sections 153A and 153C, and that U.K. Paints dealt with the same issue in regard to section 153C. So the Department is not in a position to argue that Abhisar is confined to section 153A.

The practical shape of the argument is this. Identify, year by year, whether any assessment was pending on the relevant date, so that it abated. For every year where nothing was pending, the addition must be traceable to the seized material and to nothing else. An item the Assessing Officer examined on the merits in an earlier regular assessment cannot be revisited simply because a section 153C proceeding is open. The Jaipur Bench applied exactly that logic to a claim under section 54B and to an indexed cost of acquisition which had already been considered and adjusted in a section 143(3) order, holding that the claim could not be disturbed in the section 153C proceeding because it rested on no incriminating material.

If the addition goes for want of incriminating material, what can the

Department do next?

This is the question a client asks the moment the point is explained, and the answer is less comfortable than it looks.

Abhisar Buildwell did not leave the Revenue without a remedy. Its final limb expressly saved the reassessment powers, holding that the completed or unabated assessments can be reopened subject to fulfilment of the conditions envisaged under sections 147 and 148. U.K. Paints put the same thing more weakly, that it would be open to the Revenue to initiate reassessment proceedings in accordance with law and if it is permissible under the law. The difference in wording is not accidental and it is worth quoting the weaker formulation in a section 153C case.

The Board acted on the wider reading. Instruction No. 1 of 2023 directs officers, in completed or unabated assessments where no incriminating material was found, to initiate reassessment under sections 147 and 148 following the section 148A procedure, and set a timetable for doing so.

Whether that fallback is actually available in a given case is a different question, and it is unsettled. Where the ordinary limitation under section 149 has already expired, the argument is that a saving in a judgment cannot revive a time-barred power, and the Delhi High Court has quashed post-Abhisar reassessment notices on the footing that the Revenue cannot coax life into notices otherwise barred by limitation. So a win on incriminating material is frequently a final win, but it should not be described to a client as one until the limitation position for each year has been worked out.

Must the material relate to the specific assessment year in question?

Yes, and this is older law than Saksham.

In CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344, decided on 29 August 2017, the Supreme Court held that the incriminating material must pertain to the assessment years in question, and that a document-wise correlation has to be established. The court treated this as a jurisdictional requirement rather than a matter of appreciation of evidence, which is what gives it its force: a jurisdictional fact can be raised at any stage, including for the first time before the Tribunal.

Sinhgad and Saksham do different work and both are worth pleading. Sinhgad says the material must relate to the year. Saksham says the officer must have formed a satisfaction to that effect before issuing the notice, and that the power is confined to the years the material touches. The first is about the material; the second is about the officer’s mind and the record of it. An assessment can satisfy neither, and frequently satisfies neither.

What does approval under section 153D require, and when is it mechanical?

Section 153D provides that no order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of sub-section (1) of section 153A, or the assessment year referred to in clause (b) of sub-section (1) of section 153B, except with the prior approval of the Joint Commissioner.

It does not name section 153C. It reaches a section 153C assessment because section 153C(1) requires the Assessing Officer of the other person to assess or reassess in accordance with the provisions of section 153A, so the order is one passed under section 153A read with section 153C, and the approval requirement attaches to it. That is worth stating precisely, because the proposition is often asserted as though section 153D mentioned section 153C, and it does not. It is a separate and independent attack on the order.

The purpose of the requirement is not administrative tidiness. A search assessment is built on seized material that the Assessing Officer has selected and interpreted, and the approving authority is expected to bring experience and distance to bear on that selection before the order goes out. An approval that is given without reading anything supplies none of that protection, and the courts have treated it as no approval at all.

What makes an approval mechanical is almost always visible from the file rather than from the language of the approval letter. The strongest facts are temporal and numerical:

• the number of assessment years approved, and of assessees, in a single letter or on a single day
• the gap between the date the draft orders were sent and the date approval was given
• whether the approval refers to any seized document, any specific addition, or any reasoning at all, as opposed to reciting that approval is accorded
• whether the approving authority was simultaneously discharging his regular functions and other approvals in the same window

In Anshu Sahai the drafts for seven assessment years were sent for approval on 22 March 2024 and all seven were approved on 23 March 2024. The Tribunal held that completing the process for all those years in a day, with the volume of seized record involved, was not humanly possible, that the approval was accordingly mechanical and without application of mind, and that the consequential assessments framed under section 153C read with section 153D could not be sustained and were quashed.

That is now a well populated line of authority. The Orissa High Court in ACIT v. Serajuddin and Co. (2023) 454 ITR 312 and the Delhi High Court in PCIT v. Anuj Bansal (2024) 466 ITR 251 both declined to interfere with findings that the approval was given without application of mind, and the Revenue’s special leave petitions were dismissed in Asst. CIT v. Serajuddin and Co. (2024) 463 ITR 698 (SC) and PCIT v. Anuj Bansal (2024) 466 ITR 254 (SC).

How much do the Supreme Court orders on section 153D actually decide?

Less than they are usually said to decide, and this is worth getting right because overstating it is an easy way to lose credibility with a bench.

Neither Serajuddin nor Anuj Bansal is a reasoned Supreme Court judgment on section 153D. Both are dismissals of the Revenue’s special leave petitions. In Anuj Bansal the High Court had itself declined to interfere on the ground that the Tribunal’s conclusion was a finding of fact raising no substantial question of law, so the Supreme Court’s dismissal is a dismissal of an appeal against a refusal to interfere with a finding of fact. A dismissal of a special leave petition is not a declaration of law under article 141 and does not convert the High Court judgment into binding Supreme Court precedent.

So the accurate submission is that the High Courts have consistently held that approval under section 153D must reflect application of mind, and that the Revenue’s challenges to those decisions have failed in the Supreme Court. The inaccurate submission, which appears in written submissions more often than it should, is that the Supreme Court has held that approval under section 153D is a mandatory safeguard which cannot be granted mechanically. It has not said that in a reasoned judgment, and a Departmental representative who knows the difference will say so.

The same caution applies to CIT v. S. Goyanka Lime and Chemical Ltd, which is frequently cited in section 153D submissions. It is a section 151 sanction case about the words yes, I am satisfied. The reasoning transfers by analogy and is genuinely useful, but it should be presented as an analogy from the sanction jurisprudence rather than as a section 153D holding.

Can a third party’s spreadsheet sustain an addition against you?

This is where most section 153C cases actually live once the jurisdictional points are past. The material is a digital file, an Excel sheet or a set of loose papers recovered from the searched person, containing entries which the Assessing Officer reads as payments to you.

The starting point is that such material is third party material. It was not written by you, it was not found with you, and you have no means of testing how it came to say what it says. The law does not treat it as worthless, but it does not treat it as self-proving either.

The Supreme Court in Common Cause v. Union of India (2017) 394 ITR 220 dealt with entries in loose papers and diaries, and warned at paragraph 21 that where the material relied on is itself irrelevant and inadmissible, it is unsafe even to initiate an investigation on it. There has to be relevant and admissible evidence and some cogent reason, prima facie reliable, supported by other circumstances pointing to the involvement of the person against whom the allegation is made.

The High Courts have applied that in tax assessments. In CIT v. Sant Lal (2020) 423 ITR 1 the Delhi High Court declined to sustain an addition where the seized diary entries were not shown to be in the assessee’s handwriting and the Department produced no cogent material. In CIT v. Lavanya Land (P) Ltd (2017) 397 ITR 246 the Bombay High Court held that allegations of on-money must be supported by evidence of cash actually changing hands, and noted that not a single vendor had been examined.

And the burden does not move. K.P. Varghese v. ITO (1981) 131 ITR 597 holds that the onus of establishing that the conditions of taxability are fulfilled is always on the Revenue, and that throwing on the assessee the burden of showing there was no understatement of consideration would cast on him the almost impossible task of establishing a negative.

What turns these principles into a winning argument is the internal detail of the material itself. In Anshu Sahai the Tribunal worked through it carefully, and the list is a useful template for how to read a seized spreadsheet:

• the alleged payments continued for nineteen months after the last sale deed was registered, at a point when the seller had no legal means of enforcing any further payment
• four individuals were said to have made payments on the same dates on several occasions, and over a thirty month period, without a single acknowledgment, receipt or signature
• many of the figures were in round multiples, which is not how large cash payments are usually recorded
• the assessee’s name appeared at only three places in the data, yet the addition was made on a lump sum apportioned across sellers and years
• the sheet contained no reference to any voucher or receipt
• the tables in the assessment order did not reconcile with each other
• no proceedings were taken under section 269ST against anybody, which the Bench treated as telling against the Revenue’s own case

None of those is decisive alone. Together they establish that the document does not say what the Assessing Officer says it says, which is a stronger position than arguing about admissibility in the abstract.

Do sections 65A and 65B of the Evidence Act apply to an assessment?

The honest answer is that this is contested, and that you should not build a case on it alone.

The argument for the assessee is that where the Department relies on an electronic record, the output must be accompanied by the certificate the law requires for electronic evidence, and that in its absence the printout is not evidence of its contents. Behind the formal point lies a real one: nobody has demonstrated that the file was extracted without alteration. The Jaipur Bench in Anshu Sahai went further than most. It held in terms that the evidence relied on by the Revenue was electronic records relied on without complying with the requirements of the Information Technology Act, 2000 read with sections 65A and 65B of the Indian Evidence Act, 1872, and it separately recorded that there was no satisfaction by the Assessing Officer that the data output of the seized drives and computer records had been analysed on an as is basis with no risk of tampering. That is a Tribunal holding rather than settled law, but it is a holding, not merely an observation about tamper- proofing.

The argument against is that assessment proceedings are quasi-judicial and not governed by the Evidence Act, and that the officer is entitled to act on material which would not be admissible in a court. The Madras High Court took that view in LKS Gold House (P) Ltd v. DCIT, cited and relied on by the Commissioner (Appeals) in the Jaipur case, holding that sections 65A, 65B and 66 do not apply to quasi-judicial assessment proceedings.

Both propositions have support, and a bench is unlikely to decide a case on the certificate point alone. The productive way to use it is as a question of weight rather than admissibility. Ask what steps were taken to preserve the integrity of the device image, whether a hash value was recorded, who extracted the file, whether the extraction was witnessed, and whether the version relied on in the assessment is the version seized. Those questions go to reliability, and reliability is squarely within the officer’s remit whatever the Evidence Act says.

Does the presumption in section 292C travel to the other person?

This is the Department’s best answer to everything in the two preceding sections, and it deserves a direct response.

Section 292C provides that where books of account, documents, money or other valuable articles are found in the possession or control of any person in the course of a search, it may be presumed that they belong to that person, that the contents of the books and documents are true, and that the signatures and handwriting are those of the person they purport to be. Section 132(4A) is to similar effect for the purposes of the search itself.

The Department’s position in section 153C cases is that once the material is handed over, it is to be treated as though it had been found in the other person’s possession, so that the presumption operates against him too and the burden of displacing it is his. That position has support, and it should not be met as though it were merely asserted. The Ahmedabad Bench held in Pravinbhai Keshavbhai Patel v. DCIT (2014) 162 TTJ 171 that on a handover under section 153C the presumption in section 292C(1) applies as if the material had been found in the possession or control of the other person, and that section 132(4A) follows ipso facto. The Cochin Bench applied section 292C to a seized agreement in a section 153C assessment in DCIT v. T.G. Chandrakumar (2023) 152 taxmann.com 623. In Anshu Sahai the Commissioner (Appeals) decided the point against the assessee on exactly that reasoning.

The answer is textual, and it should be made early. The presumption is expressly attached to possession and control. The entire premise of a section 153C assessment is that the material was found in the possession of somebody else. To read the presumption as travelling with the material is to detach it from the only fact that the section makes it depend on, and to convert a presumption about the searched person into a presumption against a stranger to the search.

This collision has not been resolved at the level of a High Court. What exists on the Department’s side is Tribunal reasoning, in Pravinbhai Keshavbhai Patel and T.G. Chandrakumar. What exists on the other side is the text of section 292C, and the practical result in cases like Anshu Sahai, where the Jaipur Bench held that the spreadsheet was neither prepared by the assessee nor found in his control or possession, so no adverse inference could be drawn against him from it, but reached that result without mentioning section 292C, section 132(4A) or the Pravinbhai Patel construction at all. So the argument that would answer the Department head on has still not been written down in a reported decision, and the point has to be argued from the text.

What does a refusal of cross-examination do to the assessment?

Where the addition rests on a statement, and the maker of the statement is not produced for cross-examination, the Supreme Court in Andaman Timber Industries v. Commissioner of Central Excise (2015) 281 CTR 241 held that this is a serious flaw which makes the order a nullity, because it violates the principles of natural justice. The court also held that it was not for the authorities or the Tribunal to presuppose what the cross-examination might have produced.

Andaman Timber is a central excise appeal, so in a tax matter it is applied by analogy as a natural justice authority. That is how tribunals use it, and it is how it should be cited.

The Department’s answers are well worn and should be anticipated. That assessment is not a trial and the officer is not bound by the Evidence Act. That there is no absolute right to cross-examine a person whose statement was recorded in a survey or a search. That natural justice is not a matter of technical infringement and the assessee must show real prejudice. That the statement is only one of several materials. And, in section 153C cases specifically, that the searched person’s complete statement cannot be furnished because it contains the private affairs of a third party.

The weight of those answers depends entirely on one thing: whether the impugned addition stands or falls with the untested statement. Where the statement is corroborated by documents the assessee can test, the complaint achieves little. Where the statement is the evidence, Andaman Timber is close to decisive. The line is drawn by the authority the Department itself relies on. In GTC Industries Ltd v. ACIT (1998) 65 ITD 380, the Bombay Bench held that where a witness has given a directly incriminating statement and the addition is based solely or mainly on that statement, it is incumbent on the Assessing Officer to allow cross-examination, and that the rule does not apply where the material used is of a collateral nature. That is the test, and it comes from the Revenue’s own compilation, which is why it is worth putting to the bench in those words.

So the work is in the record: show, item by item, that nothing else supports the addition.

Cancellation or set aside: what follows when the defect is made out?

Winning the point is not the same as winning the appeal, and the Department’s fallback deserves a plan.

Where the defect is procedural, such as the failure to furnish a statement or to allow cross-examination, the standard Departmental submission is that the appropriate remedy is to set the assessment aside for fresh consideration after curing the defect, not to cancel it. There is respectable authority for that proposition, and it was run in Anshu Sahai itself: Canara Bank v. Debasis Das (2003) 4 SCC 557 on vacating the order rather than the proceedings, Kapurchand Shrimal v. CIT (1981) 131 ITR 451 (SC) on the appellate authority’s duty to give directions rather than merely cancel, and the Allahabad line in Bhagwat Prasad v. CIT (1998) 97 Taxman 294 and Vishwanath Prasad Bhagwati Prasad v. CIT (1993) 202 ITR 469 on non-compliance with section 144B being procedural. In a search case, where limitation for a fresh order may still be available, a set aside can hand the Department a second attempt with the defect repaired.

Where the defect is jurisdictional, there is nothing to cure. If no satisfaction was recorded, if the years assessed were outside the block computed from the handover date, or if the approval under section 153D was no approval, the order was made without authority and the only available consequence is that it goes.

This is the practical reason for keeping the two categories rigorously separate in the grounds of appeal, and for leading with the jurisdictional grounds. An appeal that is framed as a bundle of natural justice complaints invites a set aside. An appeal that is framed as an absence of jurisdiction, with the natural justice points pleaded in the alternative, does not.

What the Jaipur order decided, and what it left open

Because this note has drawn on it throughout, it is worth setting out what Anshu Sahai (HUF) v. ACIT (ITA Nos. 466 to 468/JP/2025, ITAT Jaipur, order dated 3 November 2025) actually holds, and what it does not.

The facts. A search on the Gokul Kripa Group on 19 January 2021. A satisfaction sent by the central circle to the assessee’s Assessing Officer by letter dated 17 October 2022, covering assessment years 2015-16 to 2021-22. Notice under section 153C on 18 January 2023. Draft orders sent for approval on 22 March 2024, approved on 23 March 2024, and assessments passed on 26 March 2024. Additions of Rs 16.21 crore, Rs 17.81 crore and Rs 3.40 crore across three years, based on a digital spreadsheet recovered from the searched group recording alleged cash payments for land purchased from the assessee and his family.

What it decided. Three things. That the satisfaction notes of both Assessing Officers, having been repeatedly asked for and never produced even before the Tribunal, meant the order lacked jurisdiction. That the approval of seven assessment years in a single day was mechanical, so the assessments framed under section 153C read with section 153D could not be sustained and were quashed. And that an uncorroborated spreadsheet prepared by a third party and found with a third party could not sustain the addition. It also held that a claim under section 54B already examined in a regular assessment could not be disturbed in the section 153C proceeding for want of incriminating material. On an additional ground admitted for assessment year 2017-18 it held that reopening under section 148 could not be invoked to re- examine a claim the Assessing Officer had already verified in the earlier section 143(3) proceeding, because that would be a change of opinion. The appeals were allowed.

What it did not decide, and this is the part that matters most for anyone citing it:

• The sunset argument. The assessee pleaded that the deemed date of search was 17 October 2022 and that section 153C was therefore unavailable. The Bench reproduced the contention and said nothing further. It never mentioned sub-section (3). The order is not authority on that question.
• Limitation. A plea that the proceedings covered a period beyond six years prior to the deemed date of search was pleaded and never addressed.
• The content of the satisfaction note. The Tribunal decided that the notes were not produced. It made no finding on whether a note that omits any recital about a bearing on total income is valid, which was the separate complaint before the Commissioner (Appeals).
• Whether a consolidated note was in fact recorded. The Bench adopted the Karnataka High Court’s proposition that a consolidated note vitiates the proceedings, but made no finding of fact that the satisfaction here was a single consolidated note, and the point was never pleaded. The only factual hook is that one letter covered seven years.
• Section 292C. Not mentioned, though the Commissioner (Appeals) had decided the presumption point against the assessee.
• Sections 91 and 92 of the Evidence Act. The argument that extrinsic evidence cannot contradict the terms of a registered sale deed was pressed at length and never touched. - Cancellation or set aside. The Commissioner (Appeals) had held, in the alternative, that even if the natural justice pleas succeeded the remedy would be a set aside and not cancellation. The Tribunal quashed outright without addressing that reasoning. - The privacy answer on the searched person’s statement. The Commissioner (Appeals) refused the complete statements partly on the footing that the searched person’s right to privacy had to be preserved, a piece of reasoning specific to section 153C. The Bench decided the cross-examination point without answering it. - Section 115BBE. Disposed of in a single line as consequential in nature, leaving undecided both the substantive question and the assessee’s complaint that the Commissioner (Appeals) had contradicted himself on it. - The buyer’s source of funds. That the purchaser’s source of the alleged cash was never established, and that no addition was made in the purchaser’s hands, was a ground before the Commissioner (Appeals) disposed of there as not pressed. The Tribunal did not address it. - Admissibility of the additional ground. The Departmental Representative objected that the additional ground for assessment year 2017-18 was raised for the first time. The Bench decided it on the merits without ruling on the objection.

One further textual point for anyone drafting a submission around it. On the section 153C ground the Bench wrote that, following the precedent cited, it considered ground no. 1 raised by the assessee. It did not write that the ground was allowed, which is what it wrote for the other grounds. The unambiguous operative holding is the quashing under section 153D. Describing the order as having allowed the section 153C ground overstates it.

How the other person provision changed under the Income-tax Act, 2025

For searches initiated on or after 1 April 2026, the provision is section 295 of the Income-tax Act, 2025, headed undisclosed income of any other person. It is a genuinely different provision, and three changes matter.

The trigger changed. Section 295(1) applies where the Assessing Officer is satisfied that any undisclosed income belongs to or pertains to or relates to a person other than the specified person with respect to whom the search was initiated. That is the section 158BD formula. The requirement that the material have a bearing on the determination of the total income, which section 153C(1) carried from October 2014 and which is the textual foundation of Saksham Commodities, does not appear in section 295. Anyone assuming the Saksham reasoning transfers unchanged should read the section first.

The block period changed, and this is the significant one. Under section 295(2)(a), where there is one specified person, the block period for the other person is the same as that for the specified person. Where there are several, it is that of the person whose block period ends later. So the handover date no longer moves the block. The line of reasoning running through Jasjit Singh, which made the date of receipt the pivot of every section 153C computation, is legislatively displaced for searches under the new Act.

The deeming fiction survives, but only for abatement. Section 295(3) provides that for the purposes of abatement, the reference to the date of initiation of the search or the making of the requisition is to be read as a reference to the date on which the material was received by the Assessing Officer having jurisdiction over the other person. That is the fiction confined to the one purpose the Department always said it was meant for. It is a return to an older design rather than a verdict on the argument discussed earlier: the abatement-only fiction is where it sat in section 158BD before section 153C existed, and where it sits again in section 158BD today. What it does do is remove the textual foundation of that argument prospectively.

In place of the handover pivot, the section as it now stands supplies a different discipline, and a more precise one. Section 295(2)(c) cuts the block down where the other person’s undisclosed income pertains only to the part period running from the tax year immediately preceding the search year to the date of the search. Section 295(2)(d) cuts it down to a single tax year where the undisclosed income pertains only to that one year among the five tax years preceding the specified year. Both clauses were inserted by the Finance Act 2026 with effect from 1 April 2026, so they have been in force from the commencement of the new Act and there is no window in which the section operated without them. That is a statutory version of what Saksham achieved by construction: the block follows the material rather than the calendar.

None of this affects a pre-2026 search. Section 536(2)(v) preserves the repealed Act for proceedings connected with any search initiated before commencement, so a matter arising from a 2019 or 2021 search stays on section 153C for its whole life.

What is actually unsettled in section 153C

Four things, and it is worth being explicit about them rather than writing as though the law were complete:

1. Whether the handover date governs the 1 April 2021 cut-off. One High Court says yes. The Department has a textual answer that has not been ruled on. No appellate resolution.
2. Whether non-supply of an existing satisfaction note is by itself fatal, as distinct from the note never having been recorded. Widely asserted, not yet tied to a High Court holding that we can find.
3. Whether the section 292C presumption reaches the other person. Decided both ways in practice, and not squarely reasoned in the decisions that reach the right result.
4. Whether clause (c) of the fourth proviso to section 153A(1), the 1 April 2017 trigger for the ten-year block, tests the original search or the deemed date. No authority found.
5. Whether the reassessment fallback saved by Abhisar Buildwell is actually available where limitation under section 149 has already run. The saving is in the judgment; the power is in the statute; and the two do not always meet.

An adviser who tells a client any of these is settled is guessing. Each is worth pleading, and each is worth pleading as an open question, with the Department’s answer stated and met rather than ignored.

What to do about it

If a section 153C notice has arrived, the sequence below is the work, roughly in the order it should be done.

Before replying to anything, ask for four documents in writing. The satisfaction note recorded by the Assessing Officer of the searched person. The satisfaction recorded by your own Assessing Officer. The letter or memo by which the material was handed over, with its date. And the seized material relied on, in full, not in extract. Ask by name, ask in the first reply, and keep the acknowledgment.

Compute the block from the handover date, not the search date. Then check every year in the notice against it. Years outside the block are not a merits argument; they are the end of the assessment for those years.

Check the search date against 1 April 2021. If the search was before it but the handover after it, the Harigovind point is live and should be pleaded properly, with the Department’s answer anticipated.

Test each year for incriminating material. Establish which assessments were pending and abated, and which were completed. For completed years, take each addition and ask what seized document it is traceable to. Anything already examined in a regular assessment is protected.

Get the section 153D approval on record. The draft order date, the approval date, the approval letter and the number of years and assessees covered. This is often the shortest route to a quashing, and it is entirely documentary.

Read the seized material as a document, not as an allegation. Dates against sale deeds. Names, and how many times yours actually appears. Internal arithmetic. Whether the tables in the assessment order reconcile. Whether anything corroborates a single rupee changing hands. The cases that succeed on the merits succeed on this level of detail.

Keep jurisdiction and natural justice in separate grounds. Lead with jurisdiction. Plead the procedural complaints in the alternative. The remedy for the first is cancellation; the remedy for the second is usually a second attempt by the Department.

Do not overstate the authorities. The special leave petition dismissals on section 153D, and the one on the consolidated satisfaction note, are not Article 141 declarations. Cite them for what they are. A submission that inflates them invites the bench to discount everything else in it.

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Related reading: Section 153C time limit when the Assessing Officer is the same person, On-money additions and the right to cross-examine in a section 153C assessment, After an income tax search: from panchnama to block notice, Section 270A penalty: why the limb has to be specified, and the provision pages on section 153C, section 153A, section 153D and block assessment.

This note is general commentary on the law as at 27 September 2026 and is not advice on any matter. The position in a particular case depends on its own facts.