Supreme Court on Section 153C: Why One-Year Incriminating Material Cannot Justify Six-Year Reassessments

| Last updated: 25 October 2025

Quick Summary
The Supreme Court has clarified the application of Section 153C of the Income Tax Act, stating that incriminating material found for only one assessment year cannot justify reassessments for a block of six years. This ruling emphasises that the material discovered must have a direct bearing on the determination of total income for the specific assessment years being reassessed. The court's decision highlights the distinction between Section 153A and 153C, particularly the conditions required for issuing notices under Section 153C.

Section 153A and 153C of The Income Tax Act 1961 were in force till 31-3-2021. The trigger for section 153C is the discovery of incriminating materials in the course of a search [by the AO of the search party - AO1] that pertain or belong to a third party and which may have a bearing on the determin
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Vivek Jalan

About the Author

DESIGNATED PARTNER

Mr. Vivek Jalan is a FCA, Qualified LL.M (Constitutional Law) and LL.B. He is the Chairman of The Fiscal Affairs and Taxation Committee of The Bengal Chamber of Commerce and Industry. He is the Convenor on Indirect Taxes of the CII- Economic Affairs and Taxation Committee (ER); He is also a visiting faculty for Indirec ... Read more

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