Genins India Insurance TPA Ltd. Vs DCIT (ITAT Delhi)
WHEN DEEMED SEARCH DATE CROSSES 01.04.2021, SECTION 153C CLOCK STOPS -SEVEN YEARS OF ASSESSMENTS QUASHED
The Delhi ITAT has held that, for a person other than the searched person, the date on which seized material is handed over to his jurisdictional AO constitutes the deemed date of search under the proviso to section 153C(1). Where such deemed date falls after 01.04.2021, section 153C(3) prohibits issuance of notice u/s 153C. The Department could proceed, if permissible, only under the reassessment provisions. Consequently, assessments u/s 153C for seven assessment years were quashed.
Facts of the case
The assessee, Genins India Insurance TPA Ltd., had filed its return for AY 2014-15 on 29.09.2014 declaring an income of ₹3,98,63,830.
A search action u/s 132 was conducted in the Alankrit Group cases. Certain documents allegedly incriminating in nature & relating to the assessee were stated to have been found at the searched premises.
The assessee’s case was thereafter centralised & a notice u/s 153C was issued on 16.12.2022.
In response, the assessee filed its return on 14.01.2023 declaring the same income of ₹3,98,63,830. The AO completed the assessment u/s 153C on 30.03.2024 at a total income of ₹7,78,17,317 after making several additions u/ss 69A & 69C.
Similar assessments were framed for AYs 2015-16 to 2020-21.
The CIT(A) dismissed the assessee’s appeals by separate orders dated 29.08.2025. The assessee carried all seven years in appeal before the ITAT.
Multiple challenges to section 153C proceedings
Before the Tribunal, the assessee raised several jurisdictional as well as factual challenges.
It questioned the recording of satisfaction u/s 153C, mechanical approval u/s 153D, absence of DIN in the proposal & approval, lack of incriminating material for completed assessments, reliance on electronic data without compliance with section 65B of the Evidence Act, use of retracted statements without permitting cross-examination & additions allegedly travelling beyond the satisfaction note.
However, the Tribunal first examined the fundamental issue whether, having regard to the deemed date of search, proceedings could at all have been initiated u/s 153C after 01.04.2021.
Assessee’s argument on deemed date of search
The assessee relied upon the proviso to section 153C(1) & the Delhi High Court’s decision in PCIT v. Ojjus Medicare Pvt. Ltd. [2024] SCC OnLine Del 2439.
It contended that in the case of a person other than the searched person, the date on which the seized books, documents or assets are handed over to his jurisdictional AO must be regarded as the deemed date of search.
A common satisfaction note u/s 153C for AYs 2014-15 to 2020-21 was recorded by the AO of the searched person on 22.06.2022. The assessee’s AO recorded his satisfaction on 16.12.2022.
Though the precise date on which the seized material was physically handed over was not stated, it necessarily had to be on or after 22.06.2022. Therefore, the deemed date of search in the assessee’s case fell after 01.04.2021.
The assessee invoked section 153C(3), which provides that section 153C shall not apply in relation to a search initiated u/s 132 or books, documents or assets requisitioned u/s 132A after 31.03.2021.
Reliance was also placed on the Madras High Court’s decision in Harigovind v. ACIT [2025] 180 taxmann.com 197 (Mad), which held that where the deemed date of search for the other person fell after 01.04.2021, proceedings u/s 153C could not be initiated.
ITAT accepts the jurisdictional challenge
The Tribunal observed that the record did not disclose the exact date on which the seized material was handed over to the assessee’s AO.
However, the satisfaction by the AO of the searched person was recorded on 22.06.2022 & the satisfaction by the assessee’s AO was recorded on 16.12.2022. Therefore, the date of handing over could only fall during or after that period & would necessarily be after 01.04.2021.
Applying the proviso to section 153C(1), the Tribunal held that the deemed date of search in the assessee’s case was after 01.04.2021.
In view of the express restriction contained in section 153C(3), no notice u/s 153C could legally have been issued. If the statutory conditions were otherwise satisfied, the Department could have resorted to the reassessment provisions u/s 148, but it could not continue under the discontinued section 153C regime.
The notice u/s 153C & consequential assessment order for AY 2014-15 were therefore held invalid & quashed.
All seven assessments fall together
The facts & legal issue in the remaining appeals for AYs 2015-16 to 2020-21 were identical.
Accordingly, the ruling for AY 2014-15 was applied mutatis mutandis to all six remaining years. Proceedings u/s 153C & the consequential assessments for all seven assessment years were quashed.
Since the assessments failed at the threshold of jurisdiction, the Tribunal considered the remaining legal grounds & challenges to the additions on merits to have become infructuous. All seven appeals were allowed.
Author’s comments
The decision demonstrates the unintended consequence of delay in transmitting seized material. For the searched person, the actual search may have occurred before 01.04.2021. But for an “other person”, the proviso creates a distinct deemed date linked to the receipt of seized material by his AO.
If that deemed date falls after 31.03.2021, section 153C(3) shuts down the old search-assessment machinery. The AO must examine whether action can be taken under the post-2021 reassessment framework; he cannot revive section 153C merely because the original search occurred earlier.
The order contains an apparent interchange of the descriptions of the two satisfaction notes in paragraph 5, but the relevant dates remain clear from the preceding discussion.
The lesson is sharp: seized papers may travel from one AO to another, but if they arrive after the statutory sunset, section 153C cannot travel with them.
Cases Discussed
- PCIT v. Ojjus Medicare Pvt. Ltd. [2024] SCC OnLine Del 2439
- Harigovind v. ACIT [2025] 180 taxmann.com 197 (Mad)
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT DELHI
1. These captioned appeals are filed by the assessee directed against the orders dated 29.08.2025 of the ld. Commissioner of Income Tax (Appeals)-25, New Delhi-110055, [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Orders passed under section 153C of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the Assessing Officer, DCIT, Central Circle-28, (hereinafter referred to as the ‘AO’) pertaining to Assessment Years (A.Y.) 2014-15 to 2020-21 respectively. These appeals were heard together and are being disposed of by this common order for the sake of convenience and brevity.
2. We take up ITA No. 6024/Del/2025 for A.Y. 2014-15 as the lead case. The assessee has raised the following grounds of appeal:
“1. That the notice issued and the assessment order passed under Section 153C of the Income Tax Act, 1961 (‘the Act’) by the Assessing Officer (‘AO’) are fundamentally flawed, being without jurisdiction, barred by limitation, and passed in violation of the statutory framework governing such proceedings, thereby rendering them legally unsustainable.
2. The notice issued under Section 153C of the Act and the consequent assessment proceedings are illegal, void ab initio, and without jurisdiction, as the statutory preconditions for invoking Section 153C of the Act were not satisfied, rendering the proceedings bad in law and liable to be quashed.
3. That on the facts and in the circumstances of the case, the AO has erred in failing to record the requisite satisfaction as mandated under law, thereby rendering the impugned proceedings invalid, bad in law, and without jurisdiction.
4. That the approval granted under Section 153D of the Act for passing the assessment order under Section 153C is invalid, as it has been granted in a mechanical manner, without independent application of mind, rendering the assessment order bad in law.
5. That on the facts and in law, the approval under section 153D stands vitiated due to non-application of mind, as both the proposal and the approval are mere carbon copies across years and group entities, issued in the fag end, in breach of the statutory mandate.
6. That the approval under Section 153D of the Act is bad in law as both the proposal and the approval under Section 153D were invalid being issued without a Document Identification Number (DIN) in violation of CBDT Circular No. 19/2019 dated 14.08.2019.
7. On the facts and in law, the AO/CIT(A) failed to appreciate that, in the absence of incriminating material found during the search, the interference with a completed assessment and additions under Section 153C of the Act are unsustainable and without jurisdiction.
8. On the facts and in law, excel sheets and tally data retrieved from electronic devices are inadmissible as evidence due to non-compliance with Section 65B of the Indian Evidence Act, 1872 and the CBDT Manual, rendering the additions made by the AO liable to be deleted.
9. On the facts and circumstances of the case and in law, the AO has erred in relying upon the retracted statements and material seized from the residential premises of Mr. Sunil Kumar Gupta without providing an opportunity to cross-examine despite specific request.
10. On the facts and circumstances of the case and in law, the AO erred in passing the assessment order under Section 153C of the Act without generating, allotting, quoting, and communicating a valid DIN, in contravention of Circular No. 19 of 2019 dated 14.08.2019, rendering the entire proceedings and assessment order invalid.
11. That the CIT(A) erred in upholding the validity of the notice and assessment under Section 153C and in sustaining the additions, without independent application of mind and without properly considering the detailed submissions filed, rendering the order arbitrary and legally unsustainable.
12. On the facts and circumstances of the case, the CIT(A) failed to appreciate the fact that the additions/disallowances made by the AO are beyond the scope of the satisfaction note.
13. On the facts and circumstances of the case and in law, the AO erred in making illegal additions and completing the assessment at income of Rs. 7,78,17,317/-.
14. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 84,00,027/- under Section 69C of the Act and CIT(A) has erred in upholding the same.
15. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 2,42,000/- under Section 69C of the Act and CIT(A) has erred in upholding the same.
16. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 1,04,81,046/- under Section 69C of the Act and CIT(A) has erred in upholding the same.
17. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 3,14,432/- under Section 69C of the Act and CIT(A) has erred in upholding the same.
18. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 11,64,550/- under Section 69A of the Act and CIT(A) has erred in upholding the same.
19. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 34,936/- under Section 69C of the Act and CIT(A) has erred in upholding the same.
20. On the facts and circumstances of the case, AO has wrongly made addition of Rs. 1,73,16,496/- under Section 69A of the Act and CIT(A) has erred in upholding the same.
21. On the facts and circumstances of the case and in law, the AO erred in charging interest and initiating penalty proceedings under Section 271(1)(c) of the Act.
That in view of the facts and circumstances of the case, the appellant craves leave to add, amend or alter any of the grounds of appeal.”
3. Brief facts are that the assessee company had filed return declaring income of Rs. 3,98,63,830/- for A.Y. 2014-15 on 29.09.2014. Subsequently, a search action u/s 132 was carried out on the Alankrit Group of cases, wherein some incriminating documents were found at the searched premises in the name of the assessee. Its case was thereafter, centralized and a notice u/s 153C was issued on 16.12.2022.
3.1 In response, the assessee filed return declaring income of Rs. 3,98,63,830/- on 14.01.2023. Assessment was completed on 30.03.2024 at an income of Rs. 7,78,17,317/- vide order u/s 153C of the Act after making various additions.
3.2 Aggrieved, the assessee challenged the AO’s order by filing appeal before the CIT(A). However, the appeal was dismissed vide order dated 29.08.2025.
4. Before us, Ld. AR has submitted that the assessee had raised several legal grounds besides challenging the additions on merits before the CIT(A) as well but these were not properly adjudicated by the first appellate authority.
4.1 Before us also multiple grounds have been raised and first take up the legal grounds pertaining to the validity of proceedings u/s 153C of the Act.
4.2 Brief facts in this regard are that a common satisfaction note u/s 153C was recorded on 22.06.2022 for A.Ys. 2014-15 to 2020-21 by the DCIT, Central Circle-28, New Delhi based on which the proceedings were initiated and impugned order was passed.
4.3 Before us, the Ld. AR has placed reliance on the decision of the Hon’ble Delhi High Court in the case of PCIT vs. Ojjus Medicare Pvt. Ltd. [2024] SCC OnLine Del 2439, with regard to the date of search. It is submitted by the Ld. AR that the proviso to section 153C(1) states that the date of handing over seized material to the jurisdictional AO by the AO of the searched party is to be taken as the deemed date of search. It has been pointed out that the deemed dated of search in this case being 22.06.2022, i.e. the date of recording of satisfaction u/s 153C, notice could not be issued u/s 153C as per the provisions of section 153C(3) which states that no notice can be issued u/s 153C in respect of searches conducted after 1.4.2021.
4.4 In the instant case, there is no mention of the date of handing over of seized material. However, since the satisfaction u/s 153C by the AO of the searched person has been recorded on 22.06.2022 and based on the same, the satisfaction by the AO of the assessee has been recorded on 16.12.2022, it can be safely deducted that the date of handing over of seized material would be on or after 22.06.2022. Accordingly, as per the provisions of section 153C(3), no notice u/s 153C could have been issued and only reopening u/s 148 could have been resorted to. In support of this proposition, Ld. AR has placed reliance on the decision of the Hon’ble Madras High Court in the case of Harigovind vs. ACIT [2025] 180 taxmann.com 197 (Madras), wherein it has been held that the date of handing over of seized material to the AO was the date of search for the assessee, in view of section 153C(3) proceedings u/s 153C could not have been initiated after 1.4.2021.
4.5 Ld. DR, on the other hand, strongly relied upon the orders of the lower authorities.
5. We have heard the rival submissions and perused the material available on record. We note that as per the proviso to section 153C(1), the deemed date of search in the instant case would be somewhere between 22.06.2022 (recording of satisfaction u/s 1534C by the AO of the assessee) and 16.12.2022 (recording of satisfaction by the AO of the searched person).
5.1 Thus, in view of provisions of section 153C(3), notice u/s 153C could not be issued as the deemed date of search is after 1.4.2021, as has also been held by the Hon’ble Madras High Court in the case of Harigovind vs. ACIT (supra).
5.2 After considering the facts and circumstances discussed above, we hold that the proceedings initiated u/s 153C and the consequent assessment order is invalid and is liable to be quashed. Since the notice u/s 153C of the Act, has been quashed, remaining legal grounds as well as the grounds on merits are rendered infructuous and hence not being adjudicated upon.
6. In the result, appeal of the assessee (ITA No.6024/Del/2025) is allowed.
7. The grounds of appeal and the facts involved are identical to the above appeal in the following appeals: –
(i) In ITA No.- 6025/Del/2025 for A.Y. 2015-16,
(ii) ITA No. -6026/Del/2025 for A.Y. 2016-17
(iii) ITA No. -6027/Del/2025 for A.Y. 2017-18
(iv) ITA No. -6028/Del/2025 for A.Y. 2018-19
(v) ITA No. 6029/Del/2025 for A.Y. 2019-20
(vi) ITA No.- 6030/Del/2025, for A.Y. 2020-21
7.1 The issued involved and facts and circumstances being identical, the above order would apply mutatis mutandis to these appeals also, and hence proceedings u/s 153C are hereby quashed in all the above years.
8. In the result, all the seven appeals of the assessee are hereby allowed.
Order pronounced in the open court on 09.09.2026
