Income Tax Officer vs. Vikram Sujitkumar Bhatia - (Supreme Court) (06 Apr 2023)

Amendment brought to Section 153C of the IT Act, shall be applicable to searches conducted under Section 132 of the IT Act, before the date of the amendment

MANU/SC/0336/2023

Direct Taxation

The Revenue has preferred the present appeals feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the High Court, whereby the High Court has quashed the notice under Section 153C of the Income Tax Act, 1961 (IT Act) issued to the respondent – assessee - respondents and set aside consequent Assessment Orders (where assessment stood completed) by holding that Section 153C of the IT Act, (as amended by Finance Act, 2015) would not apply to searches under Section 132 of the IT Act, initiated before the date of amendment.

As per the proviso to Section 153C as inserted vide Finance Act, 2005, and the effect of the said proviso is that it creates a deeming fiction wherein any reference made to the date of initiation of search is deemed to be a reference made to the date when the Assessing Officer of the non-searched person receives the books of account or documents or assets seized etc. Thus, in the present case, even though the search under Section 132 was initiated prior to the amendment to Section 153C w.e.f. 01.06.2015, the books of account or documents or assets were seized by the Assessing Officer of the non-searched person only on 25.04.2017, which is subsequent to the amendment, therefore, when the notice under Section 153C was issued on 04.05.2018, the provision of the law existing as on that date, i.e., the amended Section 153C shall be applicable.

The amendment brought to Section 153C of the Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted under Section 132 of the Act, 1961 before 01.06.2015, i.e., the date of the amendment. The impugned common judgment and order passed by the High Court, therefore, quashed and set aside. Appeals allowed.

Tags : AMENDMENT SEARCHES APPLICABILITY