BHAVESH VINODRAI SHETH vs. ASST. COMMISSIONER OF THE INCOME TAX CIRCLE 2 (1) (1)

Facts

The petitioner, Bhavesh Vinodrai Sheth, filed a writ petition before the Gujarat High Court challenging notices issued under Section 153C of the Income Tax Act, 1961. The notices pertained to Assessment Years (AY) 2009-10 to AY 2015-16. The petitioner 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 issued under Section 153C. The present petition was identical in nature, and the court proposed to apply the same principles laid down in the earlier judgment.

Held

The coordinate bench, whose decision was followed by the present bench, held the following: 1. The writ applications were maintainable. 2. The amended provisions of Section 153C would apply prospectively from 01.06.2015. Applying the amended provisions to searches conducted prior to this date would affect substantive rights. 3. Notices under Section 153C were not barred by limitation merely because the general period of limitation had elapsed, especially when the statute provided an alternative period. 4. Regarding the relevant assessment years under Section 153A, the trigger point is a search under Section 132 or requisition under Section 132A. The notice is to be issued for the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. For a search on 04.09.2013 (previous year 2013-14, AY 2014-15), the relevant six AYs are 2013-14 to 2008-09. For searches on 04.12.2014 and 13.03.2015 (previous year 2014-15, AY 2015-16), the relevant six AYs are 2014-15 to 2009-10. Notices issued for assessment years beyond these six years were held to be beyond jurisdiction. Consequently, the petitions were allowed, and the impugned notices under Section 153C were quashed and set aside.

Key Issues

The Tribunal had to decide the following questions, as addressed by a coordinate bench in a previous, similar batch of writ applications: 1. Whether the writ applications challenging notices under Section 153C of the Income Tax Act, 1961, were maintainable. 2. Whether Section 153C of the Act, as amended effective from 01.06.2015, was applicable to cases where the search was initiated prior to that date. 3. Whether the notices issued under Section 153C of the Act were barred by limitation. 4. What were the relevant Assessment Years contemplated under Section 153A of the Act in relation to notices issued under Section 153C. Assessee's contentions: The petitioner sought to quash the notices under Section 153C, implying they were illegal or beyond jurisdiction. The judgment does not explicitly record the assessee's specific arguments beyond the reliefs sought. Revenue's contentions: The judgment does not explicitly record the revenue's specific arguments in response to the issues raised.