The seized documents say nothing about the years being assessed. Can s.153C still be used for them?
No. The incriminating material must pertain to the assessment years in question, with a document-wise correlation to each. That is a jurisdictional requirement, and without it the notice for those years cannot stand.
Decided by the Supreme Court (A.K. Sikri J and Ashok Bhushan J) on 2017-08-29, reported as (2017) 397 ITR 344 (SC); (2018) 11 SCC 490. It bears on section 132, section 153A, section 153C of the Income Tax Act 1961, in Search, Survey & Block Assessment matters.
Section 153C notices routinely sweep in six or ten years on the strength of a handful of documents. This is the authority that forces the department to match document to year — and it is a jurisdictional point, so it can be raised late.
Binding on every court and authority in India.
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The assessee was an educational society registered under the Bombay Public Trusts Act 1950 and the Societies Registration Act 1860, and registered under s.12AA since assessment year 1994-95. A search under s.132 was conducted on 20 July 2005 at the premises of M.N. Navale, the society's president and a trustee, and his wife. The Revenue said the seized documents contained notings of cash entries for capitation fees received by the institutions the society ran. A Satisfaction Note was recorded on 18 April 2007 and notice under s.153C issued the same day for assessment years 2000-01 to 2005-06, with a s.143(2) notice for 2006-07. Registration was cancelled under s.12AA(3) on 9 October 2007, the society was treated as an Association of Persons, a special audit under s.142(2A) was ordered, and an assessment order of 7 August 2008 covering 1999-2000 to 2006-07 assessed income of about Rs 3.54 crore. Before the Tribunal the society raised for the first time an additional ground challenging the s.153C notice, which the Tribunal admitted and allowed for assessment years 2000-01 to 2003-04. The Bombay High Court dismissed the Revenue's appeals and the Revenue appealed to the Supreme Court on those four years.
The Revenue's four appeals were dismissed. The Court endorsed the Tribunal's reasoning that under s.153C the incriminating material seized must pertain to the assessment years in question, that here the seized documents established no correlation, document-wise, with the four years in issue, and that because this requirement is essential to an assessment under the provision it is a jurisdictional fact - which is why the Tribunal was entitled to let the point be raised for the first time before it. The Court then expressly limited what it had decided. Only four of the eight assessment years covered by the assessment order were before it, and those were set aside on this technical ground alone. The decision has no bearing on assessment years 2004-05, 2005-06, 1999-2000 or 2006-07, and does not affect the Assessing Officer's conclusions that the trust's activities were not genuine, the cancellation of its registration, or the denial of ss.11 and 12 benefits. The Court said in terms that it had not dealt with the merits of the incriminating material and had given the assessee no clean chit on the finding that it had been profiteering and collecting capitation fee. The alternative ground that the notices for 2000-01 and 2001-02 were time barred was left undecided.
The assessment order covered eight assessment years, of which only 2000-01 to 2003-04 were in appeal. The Revenue's first objection was that the Tribunal should not have allowed the validity of the s.153C notice to be raised for the first time before it, the assessee having taken no jurisdictional objection before the Assessing Officer. The Court held the Tribunal was right: the point was a jurisdictional issue taken on facts already on the record. On the substance, s.153C requires the seized incriminating material to pertain to the assessment years in question; it was undisputed that the seized documents established no correlation, document-wise, with these four years, and the Tribunal had scanned the Satisfaction Note and found the material disclosed in it to belong to assessment year 2004-05 or later, with the Department unable to point to anything to the contrary. Since that requirement is essential to an assessment under s.153C it is a jurisdictional fact, and the Court found the Tribunal's reasoning logical and valid. The Gujarat decision the Revenue relied on was held to state the law correctly but to have gone in the Revenue's favour on its own facts, where the seized documents did pertain to the third party; the Delhi decision was decided on different facts and had been rightly distinguished below.
Pithily put, this Court has not given any clean chit to the assessee insofar as the finding of the AO to the effect that the assessee had been indulging in profiteering and collecting capitation fee is concerned.
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Handle my notice → Ask a CA on WhatsAppNo. The incriminating material must pertain to the assessment years in question, with a document-wise correlation to each. That is a jurisdictional requirement, and without it the notice for those years cannot stand. This was decided by the Supreme Court (A.K. Sikri J and Ashok Bhushan J) and bears on section 132, section 153A, section 153C of the Income Tax Act 1961. It is reported as (2017) 397 ITR 344 (SC); (2018) 11 SCC 490. Section 153C notices routinely sweep in six or ten years on the strength of a handful of documents. This is the authority that forces the department to match document to year — and it is a jurisdictional point, so it can be raised late. If it applies to you, the first step is this: Ask for the satisfaction note and the list of documents said to relate to each year.
The assessee was an educational society registered under the Bombay Public Trusts Act 1950 and the Societies Registration Act 1860, and registered under s.12AA since assessment year 1994-95. A search under s.132 was conducted on 20 July 2005 at the premises of M.N. Navale, the society's president and a trustee, and his wife. The Revenue said the seized documents contained notings of cash entries for capitation fees received by the institutions the society ran. A Satisfaction Note was recorded on 18 April 2007 and notice under s.153C issued the same day for assessment years 2000-01 to 2005-06, with a s.143(2) notice for 2006-07. Registration was cancelled under s.12AA(3) on 9 October 2007, the society was treated as an Association of Persons, a special audit under s.142(2A) was ordered, and an assessment order of 7 August 2008 covering 1999-2000 to 2006-07 assessed income of about Rs 3.54 crore. Before the Tribunal the society raised for the first time an additional ground challenging the s.153C notice, which the Tribunal admitted and allowed for assessment years 2000-01 to 2003-04. The Bombay High Court dismissed the Revenue's appeals and the Revenue appealed to the Supreme Court on those four years. The matter was decided on 2017-08-29 by the Supreme Court (A.K. Sikri J and Ashok Bhushan J). On those facts the Supreme Court held as follows. The Revenue's four appeals were dismissed. The Court endorsed the Tribunal's reasoning that under s.153C the incriminating material seized must pertain to the assessment years in question, that here the seized documents established no correlation, document-wise, with the four years in issue, and that because this requirement is essential to an assessment under the provision it is a jurisdictional fact - which is why the Tribunal was entitled to let the point be raised for the first time before it. The Court then expressly limited what it had decided. Only four of the eight assessment years covered by the assessment order were before it, and those were set aside on this technical ground alone. The decision has no bearing on assessment years 2004-05, 2005-06, 1999-2000 or 2006-07, and does not affect the Assessing Officer's conclusions that the trust's activities were not genuine, the cancellation of its registration, or the denial of ss.11 and 12 benefits. The Court said in terms that it had not dealt with the merits of the incriminating material and had given the assessee no clean chit on the finding that it had been profiteering and collecting capitation fee. The alternative ground that the notices for 2000-01 and 2001-02 were time barred was left undecided.
The assessment order covered eight assessment years, of which only 2000-01 to 2003-04 were in appeal. The Revenue's first objection was that the Tribunal should not have allowed the validity of the s.153C notice to be raised for the first time before it, the assessee having taken no jurisdictional objection before the Assessing Officer. The Court held the Tribunal was right: the point was a jurisdictional issue taken on facts already on the record. On the substance, s.153C requires the seized incriminating material to pertain to the assessment years in question; it was undisputed that the seized documents established no correlation, document-wise, with these four years, and the Tribunal had scanned the Satisfaction Note and found the material disclosed in it to belong to assessment year 2004-05 or later, with the Department unable to point to anything to the contrary. Since that requirement is essential to an assessment under s.153C it is a jurisdictional fact, and the Court found the Tribunal's reasoning logical and valid. The Gujarat decision the Revenue relied on was held to state the law correctly but to have gone in the Revenue's favour on its own facts, where the seized documents did pertain to the third party; the Delhi decision was decided on different facts and had been rightly distinguished below. In the words reproduced by the source cited on this page: "Pithily put, this Court has not given any clean chit to the assessee insofar as the finding of the AO to the effect that the assessee had been indulging in profiteering and collecting capitation fee is concerned."
It was decided by the Supreme Court on 2017-08-29 and is reported as (2017) 397 ITR 344 (SC); (2018) 11 SCC 490. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 132, section 153A, section 153C, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's four appeals were dismissed. The Court endorsed the Tribunal's reasoning that under s.153C the incriminating material seized must pertain to the assessment years in question, that here the seized documents established no correlation, document-wise, with the four years in issue, and that because this requirement is essential to an assessment under the provision it is a jurisdictional fact - which is why the Tribunal was entitled to let the point be raised for the first time before it. The Court then expressly limited what it had decided. Only four of the eight assessment years covered by the assessment order were before it, and those were set aside on this technical ground alone. The decision has no bearing on assessment years 2004-05, 2005-06, 1999-2000 or 2006-07, and does not affect the Assessing Officer's conclusions that the trust's activities were not genuine, the cancellation of its registration, or the denial of ss.11 and 12 benefits. The Court said in terms that it had not dealt with the merits of the incriminating material and had given the assessee no clean chit on the finding that it had been profiteering and collecting capitation fee. The alternative ground that the notices for 2000-01 and 2001-02 were time barred was left undecided. It arises in Search, Survey & Block Assessment matters, on section 132, section 153A, section 153C of the Income Tax Act 1961, and was decided by A.K. Sikri J and Ashok Bhushan J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Test them year by year; a document with no date or no connection to a year does not support that year. Raise it as an additional ground if it was missed below — the Court allowed exactly that here.
Still good law. Followed by the Delhi High Court in Saksham Commodities (2024), which held the officer must first find that the seized material is likely to have a bearing on the total income of particular years and must confine the assessment to those years, rejecting automatic reassessment of the whole block. Section 153C does not apply to searches initiated on or after 1 September 2024. The page this note was read from was a commercial publisher's write-up and has been removed as a source; the status has not been re-verified against the judgment itself. Correction to the statement earlier in this note, and to the same statement in the editor_note: the s.153A and s.153C regime does not run to 31 August 2024. Date scope: by the closing limb of s.153A(1) that section reaches only a search initiated, or a requisition made, after 31 May 2003 and on or before 31 March 2021, and s.153C is excluded by its own sub-section (3) from any search initiated on or after 1 April 2021, so this entry is authority on the s.153A and s.153C regime and on nothing else — a search initiated between 1 April 2021 and 31 August 2024 is a reassessment under ss.147 to 151 as they stood immediately before the Finance (No. 2) Act 2024, by force of s.152(3), and a search initiated on or after 1 September 2024 falls under the substituted Chapter XIV-B. The incriminating-material requirement worked out in this line rests on the words of s.153A and s.153C, which spoke only of assessing or reassessing total income and carried no material limb of their own; s.158BB(2) of the substituted Chapter has its own and considerably wider undisclosed-income limb, and whether the same requirement holds under it has not been decided, so the point should not be assumed either way for a block assessment. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read the judgment with para 22. The Court set aside the assessment for four years only, on the s.153C ground, and said in terms that its decision does not touch assessment years 1999-2000, 2004-05, 2005-06 or 2006-07, does not disturb the findings that the trust's activities were not genuine, the cancellation of registration or the denial of ss.11 and 12 benefits, and gives the assessee no clean chit on the capitation fee findings. The limitation objection to the notices for 2000-01 and 2001-02 was raised but not decided (para 19). The judgment predates the 1 June 2015 amendment substituting 'pertains to' for 'belongs to', and s.153C does not apply to searches initiated on or after 1 September 2024. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's four appeals were dismissed. The Court endorsed the Tribunal's reasoning that under s.153C the incriminating material seized must pertain to the assessment years in question, that here the seized documents established no correlation, document-wise, with the four years in issue, and that because this requirement is essential to an assessment under the provision it is a jurisdictional fact - which is why the Tribunal was entitled to let the point be raised for the first time before it. The Court then expressly limited what it had decided. Only four of the eight assessment years covered by the assessment order were before it, and those were set aside on this technical ground alone. The decision has no bearing on assessment years 2004-05, 2005-06, 1999-2000 or 2006-07, and does not affect the Assessing Officer's conclusions that the trust's activities were not genuine, the cancellation of its registration, or the denial of ss.11 and 12 benefits. The Court said in terms that it had not dealt with the merits of the incriminating material and had given the assessee no clean chit on the finding that it had been profiteering and collecting capitation fee. The alternative ground that the notices for 2000-01 and 2001-02 were time barred was left undecided.
TaxSphere, “CIT v Sinhgad Technical Education Society”, https://taxnotice.vittsphere.com/caselaw/case/cit-v-sinhgad-technical-education-society/ (validity last checked 2026-08-25)
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A search was made on someone else and my papers were found. From which date are my six years counted - the search, or when my Assessing Officer got the papers?
The search was before June 2015 but the notice came later. Which version of s.153C applies?
The document seized is a letter our client wrote to the person searched. Does it belong to our client for s.153C?
My client was searched in May 2024 and has a section 148 notice for assessment year 2015-16. Which limitation applies, and is the notice good?
