Rajib Mukhopadhyay Vs DCIT (Bombay High Court)
Section 153C Notices Quashed Where Satisfaction Was Recorded Ten Months After Completion of the Searched Person’s Assessment
Issue Before the Court
Whether proceedings under Section 153C of the Income-tax Act, 1961 could be sustained when the satisfaction notes were recorded approximately ten months after completion of the assessment proceedings of the searched person.
Following its earlier decision in the same assessee’s case, the Bombay High Court held that the delay did not satisfy the requirement of recording satisfaction “immediately” after completion of those proceedings and quashed the notices.
Facts of the Case
The petitioner challenged notices dated 10 August 2023 issued under Section 153C for AYs 2019–20 and 2020–21, together with the connected satisfaction notes.
The relevant assessment proceedings of the searched person had been completed on 27 September 2022. However, the searched person’s Assessing Officer recorded satisfaction only on 3 August 2023.
The petitioner’s jurisdictional Assessing Officer recorded the corresponding satisfaction on 10 August 2023, when the impugned notices were also issued.
Thus, the initiation of proceedings followed a gap of approximately ten months from completion of the searched person’s assessment.
Identical Proceedings for Other Years Had Already Been Quashed
The petitioner pointed out that identical notices had been issued for AYs 2015–16, 2016–17, 2017–18, 2018–19 and 2021–22.
By its order dated 24 June 2026, the High Court had already allowed the petitioner’s challenges for those years. The Court had held that the satisfaction notes were not recorded within the time contemplated by Commissioner of Income-tax–III v. Calcutta Knitwears, (2014) 362 ITR 673 (SC).
The petitioner therefore submitted that the same conclusion necessarily followed for the two assessment years presently before the Court.
Revenue Accepted That the Earlier Decision Governed
The Revenue fairly acknowledged that the relevant notices and satisfaction notes bore the same dates as those considered in the earlier proceedings.
It also accepted that the present petitions were governed by the High Court’s decision dated 24 June 2026 in the petitioner’s own case.
Consequently, there was no factual distinction requiring a different result for AYs 2019–20 and 2020–21.
Ten Months Was Not Considered a Reasonable Interval
The Court reiterated its earlier conclusion that the Section 153C notice issued in August 2023 was time-barred because the proceedings had not been initiated “immediately” after completion of the searched person’s assessment in September 2022.
More specifically, the earlier ruling had held that ten months was not a reasonable period for the searched person’s Assessing Officer to record the satisfaction note.
In reaching that conclusion, the Court had relied on its decisions in Clear Channel India (P) Ltd. v. Deputy Commissioner of Income-tax, (2026) 184 taxmann.com 434 (Bom), and Nippon Life India Asset Management Ltd. v. Deputy Commissioner of Income-tax, decided on 7 April 2026.
The present order applied that reasoning without undertaking a fresh examination of the underlying additions or seized material.
Decision
The Bombay High Court allowed both writ petitions and quashed the notices dated 10 August 2023 issued under Section 153C for AYs 2019–20 and 2020–21.
The petitions were disposed of without any order as to costs.
Author’s Comments
The decision highlights that the timing of recording satisfaction is a jurisdictional safeguard, and should be examined independently of the merits of the proposed additions.
For practical purposes, the relevant chronology includes completion of the searched person’s assessment, recording of satisfaction by that person’s Assessing Officer, recording of satisfaction by the other person’s Assessing Officer and issuance of notice. Here, the ten-month interval was fatal following binding decisions of the jurisdictional High Court.
At the same time, this short order should not be presented as prescribing a universal numerical deadline for every Section 153C case. It follows an earlier ruling on identical facts and holds that the particular ten-month delay failed the requirement of immediacy and reasonable timing.
Cases Discussed
- Commissioner of Income-tax-III vs. Calcutta Knitwears [(2014) 362 ITR 673 (SC)] – Supreme Court precedent concerning the timing of recording satisfaction; applied through the Bombay High Court’s earlier decision.
- Rajib Mukhopadhyay v. Deputy Commissioner of Income Tax (Bombay High Court), order dated 24 June 2026 – Earlier decision involving the same petitioner and identical satisfaction-note dates for five other assessment years. The present order follows this ruling. Related TaxGuru publication: Section 153C Notices Quashed as Satisfaction Note Was Recorded Nearly 10 Months Late.
- Clear Channel India (P) Ltd. vs. Deputy Commissioner of Income-tax [(2026) 184 taxmann.com 434 (Bom)] – Relied upon in the earlier ruling regarding unreasonable delay in recording satisfaction.
- Nippon Life India Asset Management Ltd. vs. Deputy Commissioner of Income-tax [Writ Petition No.4516 of 2025 decided on 7th April 2026] – Bombay High Court decision relied upon in the earlier ruling concerning delayed satisfaction.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule. Respondent waives service. With the consent of parties, Rule made returnable forthwith in the above Writ Petitions and heard finally.
2. The above two Writ Petitions are filed seeking to quash and set aside the notices dated 10th August 2023 issued under Section 153C of the Income Tax Act, 1961 (‘the IT Act’) and the Satisfaction Notes dated 3rd August 2023 and 10th August 2023. The two Writ Petitions relate to Assessment Year 2019-20 and Assessment Year 2020-21 respectively. Since the parties are common, and common issues are involved, both the Writ Petitions are disposed of by this common consolidated order.
3. Mr. Gandhi, the learned Counsel appearing on behalf of the Petitioner submitted that in the case of this very Petitioner for Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2021-22, the Revenue had issued identical notices to the Petitioner under Section 153C of the IT Act. In all the above referred Assessment Years, the Writ Petitions were filed by the Petitioner before this Court, and which were allowed by order dated 24th June 2026. Mr. Gandhi submitted that the said Writ Petitions were allowed on the basis that the Satisfaction Notes dated 3rd August 2023 and 10th August 2023 in those cases were not recorded “immediately”, as stipulated by the Hon’ble Supreme Court in the case of Commissioner of Income-tax-III vs. Calcutta Knitwears [(2014) 362 ITR 673 (SC)]. He therefore submitted that, on the basis of the ratio laid down in the Petitioner’s own case for Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2021-22, the above two Writ Petitions also be allowed and the notices issued under Section 153C of the IT Act be quashed and set aside.
4. The learned Counsel appearing for the Revenue fairly submitted that, in the present Assessment Years also, the notices issued under Section 153C of the IT Act are dated 10th August 2023 and the Satisfaction Note recorded by the Assessing Officer of the searched person is dated 3rd August 2023 and the Satisfaction Note of the jurisdictional Assessing Officer of the Petitioner is dated 10th August 2023. He fairly submitted that the present Assessment Years would also be governed by our decision dated 24th June 2026, passed in the Petitioner’s case for Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2021-22.
5. We have heard the learned Counsel appearing for the parties. We have also perused the papers and proceedings in the above two Writ Petitions. For the Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2021-22, this Court has already taken a view in the Petitioner’s own case that the notice dated 10th August 2023 issued under Section 153C of the IT Act is time barred as the same was not issued “immediately” as laid down by the Hon’ble Supreme Court in the case of Calcutta Knitwears (supra), since it was issued ten months after the assessment proceedings of the searched person was completed viz. on 27th September 2022. This Court also held that ten months was not a reasonable time by which the Satisfaction Note ought to have been issued by Assessing Officer of the searched person by relying upon its own decisions in Clear Channel India (P) Ltd. vs. Deputy Commissioner of Income-tax [(2026) 184 taxmann.com 434 (Bom)] and Nippon Life India Asset Management Ltd. vs. Deputy Commissioner of Income-tax [Writ Petition No.4516 of 2025 decided on 7th April 2026].
6. Considering the decision that we have already taken in the Petitioner’s own case for the other Assessment Years referred to above, for the reasons stated by us in our order dated 24th June 2026, we allow the above two Writ Petitions and quash the notices dated 10th August 2023 issued under Section 153C of the IT Act in the case of the Petitioner for Assessment Year 2019-20 and Assessment Year 2020-21, respectively.
7. Rule is made absolute in the aforesaid terms and both the above Writ Petitions are accordingly disposed of in terms thereof. However, there shall be no order as to costs.
8. This order will be digitally signed by the Private Secretary/Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
