NARENDRA MANEKCHAND SHETH vs. THE INCOME TAX OFFICER WD 2(1)(1)

Facts

The petitioner, Narendra Manekchand Sheth, filed a writ application before the Gujarat High Court challenging notices issued under Section 153C of the Income Tax Act, 1961. The notices pertained to Assessment Years 2009-10 to 2015-16. The High Court was considering a batch of similar writ applications concerning the legality and validity of Section 153C notices. A coordinate bench had previously dealt with these issues and disposed of a batch of writ applications on April 2, 2019. The current petition sought to quash the impugned notices and stay further assessment proceedings. The respondent was the Income Tax Officer.

Held

The High Court, following the decision of a coordinate bench, held that the writ applications were maintainable. Regarding the applicability of the amended Section 153C, the Court ruled that the amended provisions were prospective and not applicable to searches initiated before June 1, 2015, as applying them retrospectively would affect substantive rights. On the issue of limitation, the Court held that if the statute provides an alternative period of limitation, the notice is not barred merely because the period under the first part has elapsed. For 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 September 4, 2013, the relevant assessment years were 2013-14 to 2008-09. For searches on December 4, 2014, and March 13, 2015, the relevant assessment years were 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

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 June 1, 2015, was applicable 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 mixed law and fact) 4. What are the relevant Assessment Years contemplated under Section 153A of the Act for the purpose of issuing notices under Section 153C? Assessee's Contention: The petitioner sought to quash the notices issued under Section 153C, implying they were illegal or beyond jurisdiction. The specific arguments are not detailed in the provided text, but the reliefs sought indicate a challenge to the validity and timeliness of the notices. Revenue's Contention: The revenue, represented by the Income Tax Officer, would have defended the validity of the notices issued under Section 153C. Their arguments are not explicitly recorded in the judgment excerpt.