CHARMY SANKET NAIK vs. ASST. COMMISSIONER OF THE INCOME TAX, CIRLCE 2(1)(1)

Facts

The assessee, Charmy Sanket Naik, filed a writ petition before the Gujarat High Court challenging notices issued under Section 153C of the Income Tax Act, 1961, for Assessment Years (AY) 2009-10 to 2015-16. The petition sought to quash these notices and stay further assessment proceedings. The High Court noted that a coordinate bench had previously dealt with a batch of similar writ applications concerning the legality and validity of notices under Section 153C. The present petition was identical in its issue to those previously decided.

Held

The High Court, following the decision of a coordinate bench in a batch of similar writ applications, held that the writ applications were maintainable. Regarding the applicability of the amended Section 153C, the Court ruled that the amended provisions would only apply prospectively from 01.06.2015, as applying them retrospectively to searches conducted prior to that date would affect substantive rights. On the issue of limitation, the Court found that the notices were not barred by limitation, especially when the statute provides an alternative period. Concerning the relevant assessment years under Section 153A, the Court clarified that the six assessment years preceding the assessment year relevant to the previous year in which the search was conducted are to be considered. For a search on 04.09.2013, the relevant AYs are 2013-14 to 2008-09. For searches on 04.12.2014 and 13.03.2015, the relevant AYs are 2014-15 to 2009-10. Notices issued for assessment years beyond these six years were held to be without jurisdiction. Consequently, the petitions were allowed, and the impugned notices under Section 153C, and any consequential assessment orders, were quashed and set aside.

Key Issues

1. Whether the writ applications challenging notices under Section 153C of the Income Tax Act, 1961, were maintainable? (Question of law) 2. Whether Section 153C of the Act, as amended effective from 01.06.2015, would apply to cases where the search was initiated prior to that date? (Question of law) 3. Whether the notices issued under Section 153C of the Act were barred by limitation? (Question of law) 4. What are the relevant Assessment Years contemplated under Section 153A of the Act for the purpose of issuing notices under Section 153C? (Question of mixed law and fact) Assessee's Contentions: The assessee sought to quash the notices under Section 153C and stay further proceedings. The specific arguments are not detailed in the judgment, but the relief sought implies challenges to the validity and legality of the notices. Revenue's Contentions: The revenue, represented by the Assistant Commissioner of Income Tax, Circle 2(1)(1), waived service of notice. Their specific arguments are not recorded in the judgment.