A search was carried out on someone else and my agreements were seized. Can the department open six years of my assessments under section 153C when everything was already in my audited books?
Yes, it can start the enquiry. The Delhi High Court dismissed the writ petition and held that section 153C(1) requires the searched person's Assessing Officer to be satisfied only that the seized document belongs to another person - not that it discloses undisclosed income of that person. Unlike section 158BD, section 153C does not mention undisclosed income at all. The section is only the first step: the documents go to the other person's Assessing Officer, who then follows the section 153A procedure, and if the returns show the income was accounted for, the proceedings must be closed. Inconvenience is not a ground to strike the machinery down.
Decided by the High Court (High Court of Delhi at New Delhi - Sanjiv Khanna and R.V. Easwar, JJ. (judgment per R.V. Easwar, J.)) on 2012-03-29, reported as WPC No.309/2011 (Delhi High Court). It bears on section 153C, section 153A, section 132, section 143(3) of the Income Tax Act 1961, in Search, Survey & Block Assessment and Assessment & Scrutiny matters.
This is the leading early authority on the threshold for section 153C, and the Revenue relies on it constantly. Its force comes from the contrast the Court draws with section 158BD, which spoke of satisfaction that undisclosed income belongs to another person, against section 153C, which speaks only of documents belonging to another person. It also settles a practical point that recurs: for the non-searched person, the six years and the abatement under the second proviso to section 153A run from the date the other Assessing Officer receives the seized material, not from the date of the search. And it holds that the validity of a seizure is judged against the searched person, so the section 132 preconditions cannot be attacked by someone who was never searched. Read it with the later case law on incriminating material, which has moved considerably.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner, a Delhi company in real estate development incorporated on 8 January 2003, had filed returns for assessment years 2003-04 to 2008-09, all of which had gone beyond the section 143(2) time limit. On 5 January 2009 a search under section 132 was carried out on the Puri Group. Seized at the group's corporate office were three agreements - a collaboration agreement of 28 April 2006 between Puri Construction Ltd and the petitioner, an assignment agreement of 21 July 2006 between the petitioner and Emaar MGF Land Pvt Ltd, and an escrow agreement of 8 August 2006. They showed the petitioner had acquired development rights over 9.06 acres from the Puri Group and assigned them to Emaar MGF for Rs.86 crore, of which Rs.44 crore had been received by 31 March 2008. The petitioner's case was centralised, and on 3 November 2010 a satisfaction note under section 153C was recorded and notices issued for the six years. The petitioner said the receipts were security deposits recognised on the percentage of completion method, shown as current liabilities, with income of Rs.37.57 crore offered in assessment year 2009-10 and Rs.23.83 crore in 2010-11. The assessments for 2003-04 to 2006-07 and 2008-09 were completed at nil. For 2007-08 the Assessing Officer brought the whole Rs.86 crore to tax. The petitioner sought certiorari quashing the section 153C proceedings.
The writ petition was dismissed with all interim orders vacated and no order as to costs. The Court held the Assessing Officer had lawfully assumed jurisdiction. The only satisfaction section 153C(1) requires of the searched person's Assessing Officer is that the seized valuable article, books of account or document belongs to a person other than the searched person; he need not also conclude that it discloses undisclosed income of that other person. Section 153C is a machinery provision that only starts an enquiry, and if the other person's returns for the six years show the income has been accounted for, the proceedings must be closed. The petitioner's attack on the seizure failed because it was not the searched person: the validity of a seizure is examined with reference to the person searched, and the section 132 preconditions need not be satisfied against the non-searched person. Nor could the accounts for the year ended 31 March 2009, finalised after the search, show that the Revenue knew at the date of seizure that the income had been offered. The Court expressly expressed no opinion on the merits of the Rs.86 crore addition, which was pending before the Commissioner (Appeals) and was not for a writ court.
The Court read the Chapter XIV scheme. Section 153A obliges the searched person to file returns for the six preceding assessment years, and by the second proviso only pending assessments abate - completed assessments do not, because what can abate is only what remains pending. Section 153C applies that machinery to a person who was not searched, and the Court held that in his case the six years and the abatement date run not from the search but from the date on which his own Assessing Officer receives the seized material. On the central question it compared the language of the two provisions. Section 158BD, which governed searches before 1 June 2003, required satisfaction that undisclosed income belongs to another person. Section 153C(1) speaks only of the article, books or document belonging to another person and does not mention undisclosed income at all. That difference was deliberate: the section merely enables the authorities to investigate whether the transaction embedded in the document has been accounted for by the right person, so that income does not escape assessment simply because that person was not searched. The Assessing Officer of the searched person can do nothing more than forward the material. The Court distinguished Saraya Industries on this footing. It accepted that search powers invade privacy and must be strictly construed, but held the proposition had no application to a person who was never searched and against whom no warrant issued, where the procedure followed matched section 153C(1) and no mala fides were alleged. As to the fear of harassment through repeated scrutiny of disclosed income, the Court thought some inconvenience possible but held adequate safeguards existed, pointing out that in this very case no addition had been made in five of the six years.
The machinery provided in Sections 153C read with 153A merely facilitates an enquiry regarding the existence or otherwise of undisclosed income in the hands of the person other than the searched person.
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Handle my notice → Ask a CA on WhatsAppYes, it can start the enquiry. The Delhi High Court dismissed the writ petition and held that section 153C(1) requires the searched person's Assessing Officer to be satisfied only that the seized document belongs to another person - not that it discloses undisclosed income of that person. Unlike section 158BD, section 153C does not mention undisclosed income at all. The section is only the first step: the documents go to the other person's Assessing Officer, who then follows the section 153A procedure, and if the returns show the income was accounted for, the proceedings must be closed. Inconvenience is not a ground to strike the machinery down. This was decided by the High Court (High Court of Delhi at New Delhi - Sanjiv Khanna and R.V. Easwar, JJ. (judgment per R.V. Easwar, J.)) and bears on section 153C, section 153A, section 132, section 143(3) of the Income Tax Act 1961. It is reported as WPC No.309/2011 (Delhi High Court). This is the leading early authority on the threshold for section 153C, and the Revenue relies on it constantly. Its force comes from the contrast the Court draws with section 158BD, which spoke of satisfaction that undisclosed income belongs to another person, against section 153C, which speaks only of documents belonging to another person. It also settles a practical point that recurs: for the non-searched person, the six years and the abatement under the second proviso to section 153A run from the date the other Assessing Officer receives the seized material, not from the date of the search. And it holds that the validity of a seizure is judged against the searched person, so the section 132 preconditions cannot be attacked by someone who was never searched. Read it with the later case law on incriminating material, which has moved considerably. If it applies to you, the first step is this: Get the satisfaction note and the seized documents; the Assessing Officer supplied both here, and the note must identify what belongs to you.
The petitioner, a Delhi company in real estate development incorporated on 8 January 2003, had filed returns for assessment years 2003-04 to 2008-09, all of which had gone beyond the section 143(2) time limit. On 5 January 2009 a search under section 132 was carried out on the Puri Group. Seized at the group's corporate office were three agreements - a collaboration agreement of 28 April 2006 between Puri Construction Ltd and the petitioner, an assignment agreement of 21 July 2006 between the petitioner and Emaar MGF Land Pvt Ltd, and an escrow agreement of 8 August 2006. They showed the petitioner had acquired development rights over 9.06 acres from the Puri Group and assigned them to Emaar MGF for Rs.86 crore, of which Rs.44 crore had been received by 31 March 2008. The petitioner's case was centralised, and on 3 November 2010 a satisfaction note under section 153C was recorded and notices issued for the six years. The petitioner said the receipts were security deposits recognised on the percentage of completion method, shown as current liabilities, with income of Rs.37.57 crore offered in assessment year 2009-10 and Rs.23.83 crore in 2010-11. The assessments for 2003-04 to 2006-07 and 2008-09 were completed at nil. For 2007-08 the Assessing Officer brought the whole Rs.86 crore to tax. The petitioner sought certiorari quashing the section 153C proceedings. The matter was decided on 2012-03-29 by the High Court (High Court of Delhi at New Delhi - Sanjiv Khanna and R.V. Easwar, JJ. (judgment per R.V. Easwar, J.)). On those facts the High Court held as follows. The writ petition was dismissed with all interim orders vacated and no order as to costs. The Court held the Assessing Officer had lawfully assumed jurisdiction. The only satisfaction section 153C(1) requires of the searched person's Assessing Officer is that the seized valuable article, books of account or document belongs to a person other than the searched person; he need not also conclude that it discloses undisclosed income of that other person. Section 153C is a machinery provision that only starts an enquiry, and if the other person's returns for the six years show the income has been accounted for, the proceedings must be closed. The petitioner's attack on the seizure failed because it was not the searched person: the validity of a seizure is examined with reference to the person searched, and the section 132 preconditions need not be satisfied against the non-searched person. Nor could the accounts for the year ended 31 March 2009, finalised after the search, show that the Revenue knew at the date of seizure that the income had been offered. The Court expressly expressed no opinion on the merits of the Rs.86 crore addition, which was pending before the Commissioner (Appeals) and was not for a writ court.
The Court read the Chapter XIV scheme. Section 153A obliges the searched person to file returns for the six preceding assessment years, and by the second proviso only pending assessments abate - completed assessments do not, because what can abate is only what remains pending. Section 153C applies that machinery to a person who was not searched, and the Court held that in his case the six years and the abatement date run not from the search but from the date on which his own Assessing Officer receives the seized material. On the central question it compared the language of the two provisions. Section 158BD, which governed searches before 1 June 2003, required satisfaction that undisclosed income belongs to another person. Section 153C(1) speaks only of the article, books or document belonging to another person and does not mention undisclosed income at all. That difference was deliberate: the section merely enables the authorities to investigate whether the transaction embedded in the document has been accounted for by the right person, so that income does not escape assessment simply because that person was not searched. The Assessing Officer of the searched person can do nothing more than forward the material. The Court distinguished Saraya Industries on this footing. It accepted that search powers invade privacy and must be strictly construed, but held the proposition had no application to a person who was never searched and against whom no warrant issued, where the procedure followed matched section 153C(1) and no mala fides were alleged. As to the fear of harassment through repeated scrutiny of disclosed income, the Court thought some inconvenience possible but held adequate safeguards existed, pointing out that in this very case no addition had been made in five of the six years. In the words reproduced by the source cited on this page: "The machinery provided in Sections 153C read with 153A merely facilitates an enquiry regarding the existence or otherwise of undisclosed income in the hands of the person other than the searched person."
It was decided by the High Court on 2012-03-29 and is reported as WPC No.309/2011 (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, section 143(3), 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 department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The writ petition was dismissed with all interim orders vacated and no order as to costs. The Court held the Assessing Officer had lawfully assumed jurisdiction. The only satisfaction section 153C(1) requires of the searched person's Assessing Officer is that the seized valuable article, books of account or document belongs to a person other than the searched person; he need not also conclude that it discloses undisclosed income of that other person. Section 153C is a machinery provision that only starts an enquiry, and if the other person's returns for the six years show the income has been accounted for, the proceedings must be closed. The petitioner's attack on the seizure failed because it was not the searched person: the validity of a seizure is examined with reference to the person searched, and the section 132 preconditions need not be satisfied against the non-searched person. Nor could the accounts for the year ended 31 March 2009, finalised after the search, show that the Revenue knew at the date of seizure that the income had been offered. The Court expressly expressed no opinion on the merits of the Rs.86 crore addition, which was pending before the Commissioner (Appeals) and was not for a writ court. It arises in Search, Survey & Block Assessment and Assessment & Scrutiny matters, on section 153C, section 153A, section 132, section 143(3) of the Income Tax Act 1961, and was decided by High Court of Delhi at New Delhi - Sanjiv Khanna and R.V. Easwar, JJ. (judgment per R.V. Easwar, 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. Work out the six-year block from the date your Assessing Officer received the material, not from the date of the search, and check which pending proceedings abate on that date. Do not build your case on the section 132 preconditions - the seizure is tested against the searched person, not you. Put on record, year by year, that the transaction is in your audited accounts and that the income was offered, and produce the later returns showing it; that is the answer the section contemplates. Take the merits to the Commissioner (Appeals), not to a writ court - the High Court refused to look at the percentage of completion question for exactly that reason.
Still good law. A citedby search returns 369 later decisions, 201 of them from the Supreme Court and High Courts, and the Supreme Court has now approved the reading of s.153C this judgment adopted. In CIT-14 v Jasjit Singh (26 September 2023) the Revenue relied on it for the narrow proposition that the proviso to s.153C(1) goes only to abatement; the Court set out its reasoning at para 8, held at para 9 that 'the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned' for the third party, and at para 10 rejected the Revenue's contrary argument as 'insubstantial and without merit', reasoning that 'without the kind of interpretation which SSP Aviation adopted' the third party would suffer disproportionate prejudice. The appeals were dismissed. Note the limit on that endorsement: it is the reckoning of the six-year block from the date the documents reach the third party's Assessing Officer that the Supreme Court has approved. On a different point, the Bombay High Court held that 'Reliance on the judgment of the Division Bench of the High Court of Delhi reported in case of SSP Aviation Ltd. Vs. Deputy Commissioner of Income Tax (2012) 346 ITR 177 is misplaced', a passage the Supreme Court reproduced in CIT-III v Sinhgad Technical Education Society (29 August 2017) while dismissing the Revenue's appeals. Nothing overruling it was found. 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 Court expressly declined to decide whether the percentage of completion method was correctly applied or whether the Rs.86 crore was rightly assessed in assessment year 2007-08, so nothing here bears on those questions. The judgment itself is inconsistent about the date of the collaboration agreement, giving 28 April 2006 in the satisfaction note it reproduces and 24 August 2006 in paragraph 18. No reporter citations were supplied, so the writ petition number is used. 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 writ petition was dismissed with all interim orders vacated and no order as to costs. The Court held the Assessing Officer had lawfully assumed jurisdiction. The only satisfaction section 153C(1) requires of the searched person's Assessing Officer is that the seized valuable article, books of account or document belongs to a person other than the searched person; he need not also conclude that it discloses undisclosed income of that other person. Section 153C is a machinery provision that only starts an enquiry, and if the other person's returns for the six years show the income has been accounted for, the proceedings must be closed. The petitioner's attack on the seizure failed because it was not the searched person: the validity of a seizure is examined with reference to the person searched, and the section 132 preconditions need not be satisfied against the non-searched person. Nor could the accounts for the year ended 31 March 2009, finalised after the search, show that the Revenue knew at the date of seizure that the income had been offered. The Court expressly expressed no opinion on the merits of the Rs.86 crore addition, which was pending before the Commissioner (Appeals) and was not for a writ court.
TaxSphere, “SSP Aviation Ltd v DCIT”, https://taxnotice.vittsphere.com/caselaw/case/ssp-aviation-ltd-v-dcit/ (validity last checked 2026-08-29)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
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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?
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?
