Section 153C — Assessment of Income of Any Other Person
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live (for the section 153A window). Where, in the course of a search, money, bullion, jewellery or other valuable article or thing, or books of account or documents, seized or requisitioned, are found to belong to / pertain to / relate to a person other than the person searched, the Assessing Officer of the searched person records satisfaction and hands over the material to the Assessing Officer of such other person, who then proceeds to assess that other person under section 153A.
FA 2026: No amendment by the Finance Act, 2026. The trigger words were widened by the Finance Act, 2015 (from 'belongs/belong to' for books/documents to 'pertains/pertain to' or 'relates/relate to'); the section does not apply to searches initiated on or after 1 April 2021.
Window: Searches/requisitions from 1 June 2003 to 31 March 2021 (block-assessment 158B+ revived by FA 2025 for searches on/after 1 September 2024).
A. SECTION COMMENTARY
Section 153C extends the search-assessment machinery to a third person whose assets or documents surface in another's search. It is a two-Assessing-Officer mechanism: the AO of the searched person must be 'satisfied' that the seized money/valuables belong to (or, for books/documents, pertain to or relate to) the other person, record that satisfaction in a note, and transmit the material to the AO having jurisdiction over the other person, who issues notice and assesses that person under section 153A. The recording of a valid 'satisfaction note' is the jurisdictional foundation; its absence, or a mechanical recording, vitiates the entire proceeding.
The litigation under section 153C is dense and section-specific, and clusters around four questions: (i) the necessity and quality of the satisfaction note (Calcutta Knitwears; Super Malls; SSP Aviation); (ii) the jurisdictional trigger — 'belongs to' (pre-2015) vs 'pertains/relates to' (post-2015), and the retrospective reach of the 2015 widening (Pepsico India Holdings; Vikram Sujitkumar Bhatia); (iii) the block period and abatement for the other person — reckoned from the date the seized material is received by his Assessing Officer (RRJ Securities; Jasjit Singh); and (iv) the confinement of additions to the years to which the material relates and, for completed years, to incriminating material (Sinhgad; Abhisar Buildwell). The Tribunal authority is to the same effect.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025), including the satisfaction requirement and the date-of-receipt provisions.
(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or
(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A :
Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person :
Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated.
(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year—
(a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or
(b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or
(c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.
(3) Nothing contained in this section shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021.
C. AUTHORITIES
The authorities below are section-153C specific (with a single cross-reference to the search-assessment incriminating-material rule), arranged by the recurring issues, and now include Tribunal authority.
1. The satisfaction note — mandatory and reasoned
CIT v. Calcutta Knitwears (2014) 362 ITR 673 (SC)
Court: Supreme Court of India.
Held: A satisfaction note is a sine qua non and must be prepared by the AO of the searched person before transmitting records to the AO of the other person; the Court identified the stages at which it may validly be recorded. Decided under the predecessor section 158BD, it applies to section 153C; CBDT accepted it in Circular No. 24/2015.
Significance: The leading authority that the satisfaction note is the jurisdictional foundation; absence or defect is fatal.
Super Malls (P) Ltd. v. PCIT (2020) 423 ITR 281 (SC)
Held: Reiterating the satisfaction-note requirement: where the AO of the searched and the other person is the same, it suffices that he records that the seized documents belong/pertain to the other person; where different, both the transmitting and receiving satisfaction must be discernible.
Significance: Clarifies the satisfaction-note mechanics for 'same AO' and 'different AO' situations.
Held: The satisfaction to be recorded is that the seized material 'belongs to' the other person; at that stage it need not reflect undisclosed income. But the satisfaction must be real and reasoned; a mechanical recording, not showing how the documents belong to the other person, is no satisfaction and the assessment fails for want of jurisdiction.
Significance: Defines the content of the satisfaction at the handing-over stage while insisting it be non-mechanical.
Held: Under the predecessor section 158BD, recording of satisfaction and handing over of the material are mandatory conditions precedent; non-compliance renders the assessment of the third person invalid.
Significance: The doctrinal forerunner of the section 153C satisfaction requirement.
2. The jurisdictional trigger — 'belongs to' vs 'pertains/relates to'
Pepsico India Holdings (P) Ltd. v. ACIT (2014) 367 ITR 112 (Delhi)
Court: Delhi High Court.
Held: Under section 153C as it stood before the Finance Act, 2015, the seized document had to 'belong to' the other person; the AO must not confuse 'belongs to' with 'relates to' or 'refers to'. A document that merely mentions or refers to the other person does not, on that account, 'belong to' him; the satisfaction note must disclose the basis for the conclusion that it belongs to the other person.
Significance: The leading pre-2015 authority on the 'belongs to' threshold, curbing loose invocation of section 153C.
ITO v. Vikram Sujitkumar Bhatia (2023) 453 ITR 417 (SC)
Court: Supreme Court of India; judgment dated 6 April 2023.
Held: The Finance Act, 2015 amendment widening the section 153C trigger (for books/documents, from 'belongs to' to 'pertains to / relates to') applies also to searches conducted before 1 June 2015 whose proceedings were pending; being a machinery provision, it is construed to effectuate the statutory purpose. The contrary Gujarat High Court view was reversed.
Significance: Settles the temporal reach of the 2015 widening; captures pre-amendment searches with pending proceedings.
3. Block period and abatement for the 'other person' — date of receipt
CIT v. RRJ Securities Ltd. (2015) 380 ITR 612 (Delhi)
Court: Delhi High Court.
Held: For the other person, the reference in the proviso to section 153A to the 'date of initiation of the search' is read as the date on which the seized material is handed over to (received by) the AO having jurisdiction over that other person; the six years (and abatement) are reckoned from that date, and additions must rest on the seized material relatable to the other person.
Significance: The leading High Court authority on the date-of-receipt rule (proviso to section 153C(1)); it shifts the relevant block of years forward for the non-searched person.
Court: Supreme Court of India; judgment dated 26 September 2023.
Held: Affirming RRJ Securities, the relevant date for reckoning the block period (and abatement) for the other person is the date on which his AO receives the seized material — not the date of search; any delay in assigning the documents cannot compel the third person to preserve records beyond the prescribed period.
Significance: The Supreme Court's affirmation of the date-of-receipt rule for the other person.
4. AY-correlation of seized material; incriminating-material requirement
CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC)
Court: Supreme Court of India.
Held: The seized material must pertain to, and correlate document-wise with, the assessment year(s) in question; section 153C notices for years to which the seized documents do not relate are without jurisdiction. The satisfaction must be year-specific.
Significance: Confines section 153C additions to the years to which the seized material actually relates.
Pr. CIT v. Abhisar Buildwell (P) Ltd. (2023) 454 ITR 212 (SC) — cross-reference
Held: For completed/unabated years, no addition can be made absent incriminating material; the rule settled for section 153A applies equally to the assessment of the other person under section 153C. In its absence the remedy, if any, lies under sections 147/148.
Significance: Imports the incriminating-material safeguard into section 153C for completed years. (Full treatment under section 153A.)
Held: Under the proviso to section 153C, the date of receiving the books/documents by the AO of the other person is treated as the date of search; the six assessment years for the other person are reckoned from that date, and a notice/assessment for years outside that block is without jurisdiction.
Significance: A Tribunal application of the RRJ Securities / Jasjit Singh date-of-receipt rule. (Confirm the exact ITA No./date.)
All Cargo Global Logistics (2012) 137 ITD 287 (Mum)(SB) / LMJ International 119 TTJ 214 (Kol) — cross-reference
Relevance: The incriminating-material requirement settled at Tribunal level for section 153A applies equally to the assessment of the other person under section 153C. (Full treatment under section 153A.)
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed. Citations stated as reported; High Court / Tribunal orders flagged. For professional reference; not legal advice.
CHAPTER XIV — PROCEDURE FOR ASSESSMENT
Section 153C — Assessment of Income of Any Other Person
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Live (for the section 153A window). Where, in the course of a search, money, bullion, jewellery or other valuable article or thing, or books of account or documents, seized or requisitioned, are found to belong to / pertain to / relate to a person other than the person searched, the Assessing Officer of the searched person records satisfaction and hands over the material to the Assessing Officer of such other person, who then proceeds to assess that other person under section 153A.
FA 2026: No amendment by the Finance Act, 2026. The trigger words were widened by the Finance Act, 2015 (from 'belongs/belong to' for books/documents to 'pertains/pertain to' or 'relates/relate to'); the section does not apply to searches initiated on or after 1 April 2021.
Window: Searches/requisitions from 1 June 2003 to 31 March 2021 (block-assessment 158B+ revived by FA 2025 for searches on/after 1 September 2024).
A. SECTION COMMENTARY
Section 153C extends the search-assessment machinery to a third person whose assets or documents surface in another's search. It is a two-Assessing-Officer mechanism: the AO of the searched person must be 'satisfied' that the seized money/valuables belong to (or, for books/documents, pertain to or relate to) the other person, record that satisfaction in a note, and transmit the material to the AO having jurisdiction over the other person, who issues notice and assesses that person under section 153A. The recording of a valid 'satisfaction note' is the jurisdictional foundation; its absence, or a mechanical recording, vitiates the entire proceeding.
The litigation under section 153C is dense and section-specific, and clusters around four questions: (i) the necessity and quality of the satisfaction note (Calcutta Knitwears; Super Malls; SSP Aviation); (ii) the jurisdictional trigger — 'belongs to' (pre-2015) vs 'pertains/relates to' (post-2015), and the retrospective reach of the 2015 widening (Pepsico India Holdings; Vikram Sujitkumar Bhatia); (iii) the block period and abatement for the other person — reckoned from the date the seized material is received by his Assessing Officer (RRJ Securities; Jasjit Singh); and (iv) the confinement of additions to the years to which the material relates and, for completed years, to incriminating material (Sinhgad; Abhisar Buildwell). The Tribunal authority is to the same effect.
B. STATUTORY POSITION (verbatim text)
Reproduced from the local Act (base text to the Finance Act, 2025), including the satisfaction requirement and the date-of-receipt provisions.
153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,—
(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or
(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A :
Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person :
Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated.
(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year—
(a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or
(b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or
(c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.
(3) Nothing contained in this section shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021.
C. AUTHORITIES
The authorities below are section-153C specific (with a single cross-reference to the search-assessment incriminating-material rule), arranged by the recurring issues, and now include Tribunal authority.
1. The satisfaction note — mandatory and reasoned
CIT v. Calcutta Knitwears (2014) 362 ITR 673 (SC)
Court: Supreme Court of India.
Held: A satisfaction note is a sine qua non and must be prepared by the AO of the searched person before transmitting records to the AO of the other person; the Court identified the stages at which it may validly be recorded. Decided under the predecessor section 158BD, it applies to section 153C; CBDT accepted it in Circular No. 24/2015.
Significance: The leading authority that the satisfaction note is the jurisdictional foundation; absence or defect is fatal.
Super Malls (P) Ltd. v. PCIT (2020) 423 ITR 281 (SC)
Held: Reiterating the satisfaction-note requirement: where the AO of the searched and the other person is the same, it suffices that he records that the seized documents belong/pertain to the other person; where different, both the transmitting and receiving satisfaction must be discernible.
Significance: Clarifies the satisfaction-note mechanics for 'same AO' and 'different AO' situations.
SSP Aviation Ltd. v. Dy. CIT (2012) 346 ITR 177 (Delhi)
Court: Delhi High Court.
Held: The satisfaction to be recorded is that the seized material 'belongs to' the other person; at that stage it need not reflect undisclosed income. But the satisfaction must be real and reasoned; a mechanical recording, not showing how the documents belong to the other person, is no satisfaction and the assessment fails for want of jurisdiction.
Significance: Defines the content of the satisfaction at the handing-over stage while insisting it be non-mechanical.
Manish Maheshwari v. ACIT (2007) 289 ITR 341 (SC) — predecessor principle
Held: Under the predecessor section 158BD, recording of satisfaction and handing over of the material are mandatory conditions precedent; non-compliance renders the assessment of the third person invalid.
Significance: The doctrinal forerunner of the section 153C satisfaction requirement.
2. The jurisdictional trigger — 'belongs to' vs 'pertains/relates to'
Pepsico India Holdings (P) Ltd. v. ACIT (2014) 367 ITR 112 (Delhi)
Court: Delhi High Court.
Held: Under section 153C as it stood before the Finance Act, 2015, the seized document had to 'belong to' the other person; the AO must not confuse 'belongs to' with 'relates to' or 'refers to'. A document that merely mentions or refers to the other person does not, on that account, 'belong to' him; the satisfaction note must disclose the basis for the conclusion that it belongs to the other person.
Significance: The leading pre-2015 authority on the 'belongs to' threshold, curbing loose invocation of section 153C.
ITO v. Vikram Sujitkumar Bhatia (2023) 453 ITR 417 (SC)
Court: Supreme Court of India; judgment dated 6 April 2023.
Held: The Finance Act, 2015 amendment widening the section 153C trigger (for books/documents, from 'belongs to' to 'pertains to / relates to') applies also to searches conducted before 1 June 2015 whose proceedings were pending; being a machinery provision, it is construed to effectuate the statutory purpose. The contrary Gujarat High Court view was reversed.
Significance: Settles the temporal reach of the 2015 widening; captures pre-amendment searches with pending proceedings.
3. Block period and abatement for the 'other person' — date of receipt
CIT v. RRJ Securities Ltd. (2015) 380 ITR 612 (Delhi)
Court: Delhi High Court.
Held: For the other person, the reference in the proviso to section 153A to the 'date of initiation of the search' is read as the date on which the seized material is handed over to (received by) the AO having jurisdiction over that other person; the six years (and abatement) are reckoned from that date, and additions must rest on the seized material relatable to the other person.
Significance: The leading High Court authority on the date-of-receipt rule (proviso to section 153C(1)); it shifts the relevant block of years forward for the non-searched person.
CIT v. Jasjit Singh (2023) 458 ITR 437 (SC) [2023 LiveLaw (SC) 878]
Court: Supreme Court of India; judgment dated 26 September 2023.
Held: Affirming RRJ Securities, the relevant date for reckoning the block period (and abatement) for the other person is the date on which his AO receives the seized material — not the date of search; any delay in assigning the documents cannot compel the third person to preserve records beyond the prescribed period.
Significance: The Supreme Court's affirmation of the date-of-receipt rule for the other person.
4. AY-correlation of seized material; incriminating-material requirement
CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC)
Court: Supreme Court of India.
Held: The seized material must pertain to, and correlate document-wise with, the assessment year(s) in question; section 153C notices for years to which the seized documents do not relate are without jurisdiction. The satisfaction must be year-specific.
Significance: Confines section 153C additions to the years to which the seized material actually relates.
Pr. CIT v. Abhisar Buildwell (P) Ltd. (2023) 454 ITR 212 (SC) — cross-reference
Held: For completed/unabated years, no addition can be made absent incriminating material; the rule settled for section 153A applies equally to the assessment of the other person under section 153C. In its absence the remedy, if any, lies under sections 147/148.
Significance: Imports the incriminating-material safeguard into section 153C for completed years. (Full treatment under section 153A.)
5. Tribunal authority on section 153C
R.L. Allied Industries v. ITO (ITAT, Delhi)
Tribunal / Bench: Income-tax Appellate Tribunal, Delhi.
Held: Under the proviso to section 153C, the date of receiving the books/documents by the AO of the other person is treated as the date of search; the six assessment years for the other person are reckoned from that date, and a notice/assessment for years outside that block is without jurisdiction.
Significance: A Tribunal application of the RRJ Securities / Jasjit Singh date-of-receipt rule. (Confirm the exact ITA No./date.)
All Cargo Global Logistics (2012) 137 ITD 287 (Mum)(SB) / LMJ International 119 TTJ 214 (Kol) — cross-reference
Relevance: The incriminating-material requirement settled at Tribunal level for section 153A applies equally to the assessment of the other person under section 153C. (Full treatment under section 153A.)
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced from the local Act (base text amended up to the Finance Act, 2025), with the publisher footnote apparatus and amendment-marker brackets removed. Citations stated as reported; High Court / Tribunal orders flagged. For professional reference; not legal advice.