Facts of the Case

The petitioner, Indian National Congress, filed multiple writ petitions challenging the initiation of proceedings under Section 153C of the Income‑tax Act, 1961 for Assessment Years 2014‑15, 2015‑16, and 2016‑17. The impugned notices dated 07 March 2023 were based on material gathered during search operations conducted in April 2019 on certain third parties.

The Assessing Officer of the searched persons recorded satisfaction notes indicating that the seized material pertained to the petitioner and warranted proceedings against it as a “person other than the searched person.” Subsequent orders disposing of the petitioner’s objections were also challenged.

Issues Involved

1. Whether initiation of proceedings under Section 153C based on third‑party search material was legally valid.
2. Whether the notices were barred by limitation or suffered from delay.
3. Whether consolidated satisfaction notes covering multiple assessment years were permissible.
4. Whether the High Court should exercise writ jurisdiction to halt ongoing assessment proceedings at a late stage.

Petitioner’s Arguments

The petitioner contended that the proceedings were invalid as they were initiated after an inordinate delay following the search. It was argued that assessments for the relevant years were time‑barred and that the statutory preconditions for invoking Section 153C were not satisfied.

The petitioner also challenged the use of a common satisfaction note for multiple assessment years and asserted that the material relied upon did not establish the required nexus with its income for each specific year.

Respondent’s Arguments

The Revenue argued that the proceedings were initiated strictly in accordance with law based on incriminating material recovered during search operations. It maintained that the satisfaction recorded by the Assessing Officer met statutory requirements and that the petitioner had approached the Court at the final stage of the assessment process.

Court Order / Findings

The Delhi High Court dismissed the writ petitions and refused to interfere with the ongoing assessment proceedings. The Court held that the satisfaction note forms the foundation for initiation under Section 153C and need only demonstrate that incriminating material pertaining to the assessee was found. Composite satisfaction notes covering multiple years are permissible if based on relevant search material. The petitioner approached the Court at the final stage of the assessment process, leaving insufficient justification for intervention under Article 226 of the Constitution.

Important Clarification

The Court clarified that delay in initiating proceedings does not automatically invalidate action under Section 153C if undertaken within a reasonable period. A writ court should not ordinarily interfere with assessment proceedings when statutory remedies are available. The legality of the assessment itself may still be challenged after completion through appropriate legal channels.

Sections / Provisions Involved

Income‑tax Act, 1961 — Section 153C; Sections 132, 153A, 153B; Article 226 of the Constitution of India.

Link to download the order -

https://delhihighcourt.nic.in/app/showFileJudgment/YVA22032024CW42642024_151638.pdf 

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