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2026 Supreme(Guj) 895
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.S. SUPEHIA, PRANAV TRIVEDI, JJ.
Sandip Bhagvanbhai Desai – Appellant
Versus
Deputy Commissioner Of Income Tax, Central Circle 2(2), Ahmedabad & Anr. – Respondent
SPECIAL CIVIL APPLICATION NO. 5311 of 2026
Decided On : 21-04-2026
Advocate Appeared:
For the Appellant : MR DHINAL A SHAH
For the Respondent: MR.VARUN K.PATEL
Proceedings initiated under Section 153C are subject to a strict ten-year limitation period, calculated backward from the end of the assessment year in which incriminating material is received. Notices issued beyond this period are ultra vires the assessing officer's jurisdiction and liable to be quashed.
Headnote:(A) Income Tax Act, 1961 - Section 153C - Search and seizure - Block period of assessment - Limitation - Reopening of assessment - The date of receipt of seized material or recording of satisfaction note by the jurisdictional officer constitutes the starting point of the search for initiation of proceedings under Section 153C. (Paras 4, 5, 7)
(B) Limitation - Computation - Block period of ten assessment years is to be reckoned from the end of the assessment year relevant to the previous year in which the search was conducted or materials were received, including the year of search in the calculation. (Paras 6, 7, 10, 11)
(C) Writ Jurisdiction - Maintainability - Challenge to notice issued without jurisdiction - A writ petition is maintainable when it is demonstrated that the subject assessment year lies beyond the statutory limitation period, thereby depriving the assessing authority of the jurisdiction to initiate or continue proceedings. (Paras 3.3, 8)
Facts of the case:
The petitioner challenged a notice issued under the relevant provision of the Income Tax Act for a specific assessment year. The petitioner contended that the notice was time-barred as the assessment year in question fell beyond the ten-year block period from the date of search or, alternatively, the date of satisfaction/receipt of incriminating material.
Findings of Court:
The court observed that the statutory framework for search assessments provides a strict limitation period. According to settled judicial precedents, the ten-year calculation must include the search year or the year of receipt of material. Upon applying this calculation, the court found that the impugned notice and resulting assessment orders were issued for an assessment year that exceeded the ten-year ceiling, rendering the actions void for lack of jurisdiction.
Issues: The primary issues were whether the initiation of proceedings under the specific section for the relevant assessment year was barred by limitation due to the ten-year restriction, and whether the petition was maintainable given the existence of alternative appellate remedies.
Ratio Decidendi: The court held that tax statutes must be strictly construed regarding limitation periods. Because the proceedings were initiated beyond the terminal point of the ten-year block, the assessing officer lacked legal authority to proceed, justifying the exercise of extraordinary writ jurisdiction to quash the proceedings.
Result: Petition allowed; impugned notice and consequential orders quashed.
| Table of Content |
|---|
| 1. overview of facts and challenge against section 153c assessment limitation. (Para 1 , 2 , 3) |
| 2. determination of the ten-year block period under section 153c based on search year. (Para 4 , 5 , 6 , 7) |
| 3. maintainability of writ petitions regarding jurisdictional assessment challenges. (Para 8) |
| 4. quashing of time-barred assessment proceedings and notice. (Para 9) |
ORAL ORDER :
MR. JUSTICE PRANAV TRIVEDI, J.
1. Heard Learned Advocate Mr. Dhinal A Shah for the petitioner and Learned Senior Standing Counsel Mr. Varun K. Patel for the Respondents.
2. The issue raised in the captioned writ petition pertains to the validity of the reopening of the assessment proceedings under Section 153C of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) beyond the block period of 6 or 10 years, more particularly whether such assessment proceedings under Section 153C for Assessment Year 2009–10 are barred by limitation.
3. The facts in brief are as under :
3.1. The petitioner has challenged the notice dated 04.06.2021 issued under Section 153C of the Act for the Assessment Years 2009-10 (hereinafter referred to as “the assessment year under consideration”) by the Income Tax Officer. The petitioner has also challenged the assessment order dated 10.02.2026 passed under Section 144 read with Section 153C of the Act and the consequential demand notice dated 10.02.2026 issued under Section 156 of the Act for the assessment year 2009-10.
3.2. In the present case, a search and seizure action under Section 132 of the Act was conducted on 06.03.2018 in the case of three parties (i.e. Satyam, Sangani, Shaligram Group Companies). Pursuant to the said search undertaken, the satisfaction note was recorded by the Assessing Officer of the searched person on 18.02.2021 and the satisfaction note was recorded by the Jurisdictional Assessing Officer (JAO) of the petitioner on 04.06.2021. It is the case of the petitioner that though the date of receipt of seized material by the Jurisdictional Assessing Officer of the assessee is not available, the impugned notice and impugned assessment order under Section 153C for A.Y. 2009-10 fall beyond the period of ten years even from the date of the satisfaction note recorded by assessing officer of searched person on 18.02.2021. The reliance was placed by the petitioner on the decision of Hon’ble Apex Court in case of CIT Vs. Jasjit Singh – [2023] 155 taxmann.com and the decision of this Hon’ble Court being judgment dated 13.02.2026 passed in Special Civil Application No.19606 of 2021 in case of Manthan Hemantkumar Lala Vs. ITO and other connected petitions.
3.3. Opposing the present writ petition, learned Senior Standing Counsel Mr. Patel appearing for the Revenue has submitted that the petitioner has alternative efficacious remedy of filing appeal before the Commissioner of Income Tax (Appeals) and the present petition does not deserve to be entertained only on this ground. Mr. Patel, further, refers to and rely on the contentions of revenue recorded in the said judgment in case of Manthan Hemantkumar Lala (supra) and submitted that for counting the period of 10 A.Ys. for the purpose of Section 153C , the search year/the year in which the incriminating material is received by Jurisdictional Assessing Officer of other person is to be excluded.
ANALYSIS AND OPINION:
4. We have heard the learned advocates for the respective parties at length. We have also perused the case laws cited, considered the provisions threadbare and have also perused the material on record. The issue that arises for the consideration in the present petition is “Whether the initiation of proceedings under Section 153C of the Act for Assessment Year 2009-10 is barred by limitation as the said year falls beyond the permissible block period of ten years or not.
5. As per the judgment of the Apex Court in the case of Jasjit Singh (supra), the date of receipt of seized material /documents/ digital data would be treated as the date of search
