The seized material shows a cash payment made in an earlier year. Can six later years be reopened under s.153C on the strength of it?
No. A s.153C notice can be issued for an assessment year only if the Assessing Officer is satisfied that the seized books, documents or assets have a bearing on the determination of the total income for that year. Material about a transaction in one financial year says nothing about the years that follow, and notices for those years cannot stand.
Decided by the High Court (Vibhu Bakhru J and Tejas Karia J) on 2025-07-14, reported as W.P.(C) 3979/2025, 3980/2025, 3981/2025, 3982/2025, 3984/2025 and 3985/2025 with connected matters (Delhi High Court). It bears on section 153C, section 153A, section 132 of the Income Tax Act 1961, in Search, Survey & Block Assessment matters.
This is recent Delhi High Court authority, from July 2025, on the point that arises in almost every s.153C matter: the department finds one document, and issues notices for the whole block. It also disposes of the Revenue's argument that the third limb of s.153C, information relating to the other person, escapes the requirement that the material bear on total income.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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A search and seizure operation under s.132 was carried out on 7 April 2019 at premises at Okhla Phase-III, New Delhi, in the case of the Moser Baer group and connected parties. The material seized concerned the purchase in December 2013 of two parcels of agricultural land at Village Bandhwadi, Sohna, District Gurgaon, of 8 kanal and of 17 kanal 13 marlas, the purchasers being the petitioner and Ms. Sabena Puri. The material was said to show consideration paid over and above the amounts recorded in the sale deeds, cash of Rs. 2,30,00,000 against Rs. 90,00,000 shown by cheque on the first parcel and cash of Rs. 5,51,56,250 against Rs. 1,98,56,250 shown by cheque on the second, the cash having been paid between 6 December 2013 and 3 January 2014. The satisfaction note was recorded by the Assessing Officer of the searched persons on 6 July 2023 and notices under s.153C were issued on 24 June 2024 for assessment years 2015-16 to 2020-21. The petitioner's case was that the transactions fell in financial year 2013-14, relevant to assessment year 2014-15, and had no bearing on the years for which notices had been issued. The Revenue argued that s.153C has three distinct limbs and that the third, information relating to the other person, is not qualified by any requirement that the material bear on income.
The petitions were allowed and the notices under s.153C for assessment years 2015-16 to 2020-21, all dated 24 June 2024, were set aside. On the plain language of s.153C(1) a notice can issue only where the Assessing Officer is satisfied that the seized or requisitioned books, documents or assets have a bearing on the determination of the total income of the other person, and the Revenue's contention that the requirement does not attach where the information merely relates to that person is contrary to that language. Material about cash payments made in financial year 2013-14 could bear on assessment year 2014-15 but not on the later years for which the notices had been issued.
The Court set out the satisfaction note and observed that even taking the allegation of cash payment at its highest, the payments fell in financial year 2013-14, relevant to assessment year 2014-15, so the information in the note gave no ground for issuing notices for assessment years 2015-16 to 2020-21 (paras 5 to 7). It stated the requirement that the Assessing Officer must have incriminating material belonging to, or documents pertaining to, the assessee which have a bearing on the assessee's income, and drew on Sinhgad Technical Education Society for the proposition that a correlation between the seized documents and the particular assessment years is a jurisdictional fact (paras 8 and 9). It then went through Abhisar Buildwell, under which no addition can be made in respect of completed assessments in the absence of incriminating material (paras 10 to 12), U.K. Paints, where s.153C assessments were set aside for want of incriminating material (para 13), RRJ Securities, that concluded assessments are not reopened merely because a document belonging to an assessee has been seized from another person (para 14), and Saksham Commodities, that conferral of jurisdiction under s.153C does not licence its mechanical exercise across a block of years where the material is not likely to affect the total income of those years (paras 15 and 16). It then rejected the Revenue's construction of the third limb on the plain language of the provision (paras 17 to 19), set aside the notices (para 20) and allowed the petitions (para 21).
It is clear from the plain reading of the language that the notice under Section 153C of the Act can be issued only if the AO is "satisfied that the books or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person".
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Handle my notice → Ask a CA on WhatsAppNo. A s.153C notice can be issued for an assessment year only if the Assessing Officer is satisfied that the seized books, documents or assets have a bearing on the determination of the total income for that year. Material about a transaction in one financial year says nothing about the years that follow, and notices for those years cannot stand. This was decided by the High Court (Vibhu Bakhru J and Tejas Karia J) and bears on section 153C, section 153A, section 132 of the Income Tax Act 1961. It is reported as W.P.(C) 3979/2025, 3980/2025, 3981/2025, 3982/2025, 3984/2025 and 3985/2025 with connected matters (Delhi High Court). This is recent Delhi High Court authority, from July 2025, on the point that arises in almost every s.153C matter: the department finds one document, and issues notices for the whole block. It also disposes of the Revenue's argument that the third limb of s.153C, information relating to the other person, escapes the requirement that the material bear on total income. If it applies to you, the first step is this: Take the satisfaction note and write down, for each transaction it mentions, the financial year in which the transaction occurred and the assessment year that corresponds to it.
A search and seizure operation under s.132 was carried out on 7 April 2019 at premises at Okhla Phase-III, New Delhi, in the case of the Moser Baer group and connected parties. The material seized concerned the purchase in December 2013 of two parcels of agricultural land at Village Bandhwadi, Sohna, District Gurgaon, of 8 kanal and of 17 kanal 13 marlas, the purchasers being the petitioner and Ms. Sabena Puri. The material was said to show consideration paid over and above the amounts recorded in the sale deeds, cash of Rs. 2,30,00,000 against Rs. 90,00,000 shown by cheque on the first parcel and cash of Rs. 5,51,56,250 against Rs. 1,98,56,250 shown by cheque on the second, the cash having been paid between 6 December 2013 and 3 January 2014. The satisfaction note was recorded by the Assessing Officer of the searched persons on 6 July 2023 and notices under s.153C were issued on 24 June 2024 for assessment years 2015-16 to 2020-21. The petitioner's case was that the transactions fell in financial year 2013-14, relevant to assessment year 2014-15, and had no bearing on the years for which notices had been issued. The Revenue argued that s.153C has three distinct limbs and that the third, information relating to the other person, is not qualified by any requirement that the material bear on income. The matter was decided on 2025-07-14 by the High Court (Vibhu Bakhru J and Tejas Karia J). On those facts the High Court held as follows. The petitions were allowed and the notices under s.153C for assessment years 2015-16 to 2020-21, all dated 24 June 2024, were set aside. On the plain language of s.153C(1) a notice can issue only where the Assessing Officer is satisfied that the seized or requisitioned books, documents or assets have a bearing on the determination of the total income of the other person, and the Revenue's contention that the requirement does not attach where the information merely relates to that person is contrary to that language. Material about cash payments made in financial year 2013-14 could bear on assessment year 2014-15 but not on the later years for which the notices had been issued.
The Court set out the satisfaction note and observed that even taking the allegation of cash payment at its highest, the payments fell in financial year 2013-14, relevant to assessment year 2014-15, so the information in the note gave no ground for issuing notices for assessment years 2015-16 to 2020-21 (paras 5 to 7). It stated the requirement that the Assessing Officer must have incriminating material belonging to, or documents pertaining to, the assessee which have a bearing on the assessee's income, and drew on Sinhgad Technical Education Society for the proposition that a correlation between the seized documents and the particular assessment years is a jurisdictional fact (paras 8 and 9). It then went through Abhisar Buildwell, under which no addition can be made in respect of completed assessments in the absence of incriminating material (paras 10 to 12), U.K. Paints, where s.153C assessments were set aside for want of incriminating material (para 13), RRJ Securities, that concluded assessments are not reopened merely because a document belonging to an assessee has been seized from another person (para 14), and Saksham Commodities, that conferral of jurisdiction under s.153C does not licence its mechanical exercise across a block of years where the material is not likely to affect the total income of those years (paras 15 and 16). It then rejected the Revenue's construction of the third limb on the plain language of the provision (paras 17 to 19), set aside the notices (para 20) and allowed the petitions (para 21). In the words reproduced by the source cited on this page: "It is clear from the plain reading of the language that the notice under Section 153C of the Act can be issued only if the AO is "satisfied that the books or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person"." The decision followed or applied CIT v. Sinhgad Technical Education Society (Supreme Court) — applied; PCIT v. Abhisar Buildwell (P) Ltd. (Supreme Court) — applied; DCIT v. U.K. Paints (Overseas) Ltd. (Supreme Court) — applied; CIT v. RRJ Securities Ltd. (Delhi High Court) — applied; Saksham Commodities Limited v. Income Tax Officer (Delhi High Court) — applied; CIT v. Kabul Chawla (Delhi High Court) — referred to.
It was decided by the High Court on 2025-07-14 and is reported as W.P.(C) 3979/2025, 3980/2025, 3981/2025, 3982/2025, 3984/2025 and 3985/2025 with connected matters (Delhi High Court). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 153C, section 153A, section 132, 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 petitions were allowed and the notices under s.153C for assessment years 2015-16 to 2020-21, all dated 24 June 2024, were set aside. On the plain language of s.153C(1) a notice can issue only where the Assessing Officer is satisfied that the seized or requisitioned books, documents or assets have a bearing on the determination of the total income of the other person, and the Revenue's contention that the requirement does not attach where the information merely relates to that person is contrary to that language. Material about cash payments made in financial year 2013-14 could bear on assessment year 2014-15 but not on the later years for which the notices had been issued. It arises in Search, Survey & Block Assessment matters, on section 153C, section 153A, section 132 of the Income Tax Act 1961, and was decided by Vibhu Bakhru J and Tejas Karia 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. Set that list against the assessment years named in the notices. Every year with nothing against it is a year the notice cannot support. If the Revenue argues that information merely relating to your client is enough, point to the words 'have a bearing on the determination of the total income of such other person' in s.153C(1) and to paragraph 19 of this judgment. Where a year genuinely is supported by material, argue that year on the merits and on Abhisar Buildwell, and do not let the weak years be carried by the strong one.
Searched for later treatment; none was found. That is not the same as a source affirming it. Two searches were run and neither produced any judicial treatment. The citedby search on the doc id is empty. A name search returns 62 results, of which the only income-tax entries are earlier orders in this same batch of petitions (Delhi High Court orders of 29 May 2025, 8 July 2025 and 10 July 2025); the rest are unrelated persons of the same name. No later decision has been found applying, doubting or distinguishing the holding that a s.153C notice requires satisfaction of a bearing on the total income of the particular assessment year, and no Supreme Court matter against it was traced. The judgment is a little over a year old and is best treated as untested. 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.
The petitions were allowed and the notices under s.153C for assessment years 2015-16 to 2020-21, all dated 24 June 2024, were set aside. On the plain language of s.153C(1) a notice can issue only where the Assessing Officer is satisfied that the seized or requisitioned books, documents or assets have a bearing on the determination of the total income of the other person, and the Revenue's contention that the requirement does not attach where the information merely relates to that person is contrary to that language. Material about cash payments made in financial year 2013-14 could bear on assessment year 2014-15 but not on the later years for which the notices had been issued.
TaxSphere, “Neeraj Bharadwaj v ACIT”, https://taxnotice.vittsphere.com/caselaw/case/neeraj-bharadwaj-v-acit-year-wise-bearing-on-income/ (validity last checked 2026-09-06)
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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 seized documents say nothing about the years being assessed. Can s.153C still be used for them?
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?
