s.153A — Assessment in case of search
The scheme under which six or ten assessment years were reopened following a search — now replaced prospectively by block assessment.
Applies only to searches initiated up to 31 March 2021. The Finance Act 2021 discontinued the scheme: searches initiated between 1 April 2021 and 31 August 2024 are dealt with under the reassessment provisions (sections 147 and 148), and searches from 1 September 2024 under block assessment. The Income-tax Act, 2025 does not re-enact section 153A in any form. It continues to govern a large volume of pending matters.
Income-tax Act, 1961
s.153A
Income-tax Act, 2025
No equivalent — see block assessment
In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.
In short
Section 153A of the Income-tax Act, 1961 required the Assessing Officer, where a search was initiated under section 132, to assess or reassess the total income of six assessment years preceding the year of search, and in specified cases up to ten. Its central limitation, settled by the Supreme Court, is that for a year where the assessment had already attained finality and no proceeding was pending on the date of search, an addition must be founded on incriminating material found during the search. Section 153A applies only to searches initiated up to 31 March 2021. The Finance Act 2021 discontinued the search-assessment scheme for later searches — those initiated between 1 April 2021 and 31 August 2024 run under the reassessment machinery of sections 147 and 148, and those from 1 September 2024 under block assessment reintroduced by the Finance (No. 2) Act 2024. The Income-tax Act, 2025 does not carry section 153A forward at all.
What the provision does
Conferred jurisdiction to assess or reassess the six assessment years immediately preceding the assessment year relevant to the year of search, extendable to ten years in specified cases, with pending assessments for those years abating.
Threshold questions
- Was the search initiated on or before 31 March 2021 — a later search falls under reassessment (to 31 Aug 2024) or block assessment (from 1 Sep 2024), not this provision
- For each year, was an assessment pending on the date of search, or had it attained finality
- Where it had attained finality, is there incriminating material found in the search referable to that year
- Was approval under section 153D obtained for each year, and was it applied to the facts
- Is the assessment within the limitation in section 153B
In practice
The recurring disputes.
Incriminating material and completed assessments
For unabated years the foundation for any addition is material found in the course of the search itself. Whether such material exists must be examined year by year — an exercise assessment orders frequently do not perform, treating a single seized document as licence to revisit every year in the block.
Mechanical approval under section 153D
Approval was required for each assessment year's order. Omnibus approvals covering many years and many assessees in a single line, granted on the day the orders were due, have been a productive line of challenge.
Extrapolation across the block
A rate or percentage derived from one year's seized material, applied across all years in the block, is an estimate rather than a finding. Its foundation, and the double counting it usually produces, is where the quantum contest sits.