BSC Paints Pvt. Ltd. Vs DCIT (ITAT Delhi)
Seized Material Reached Other Person’s AO After 1 April 2021: Section 153C Notices Quashed Despite Earlier Search
For proceedings against a person who was not searched, the relevant date can be the date on which the seized material is handed over to that person’s Assessing Officer. Applying the Delhi High Court rulings in Ojjus Medicare and Harigovind, the Delhi ITAT quashed Section 153C notices issued to BSC Paints Pvt. Ltd. for AYs 2019–20 and 2020–21. The search on the third party had taken place before 1 April 2021, but the evidence before the Tribunal did not establish that the material had reached the assessee’s AO before that date.
The decision in BSC Paints Pvt. Ltd. v. DCIT, ITA Nos. 2824 and 2825/Del/2025, was pronounced on 29 September 2026. It turns on the deemed date of search for the “other person” and the restriction in Section 153C(3).
Search in October 2020, Notice in December 2022
The assessee company had originally filed its return for AY 2019–20 declaring income of ₹11,31,580. An assessment under Section 143(3) accepted that income. Subsequently, the Department conducted a search on 26 October 2020 in the case of Sanjay Jain and others. Alleging that BSC Paints was a beneficiary of bogus purchases from entities connected with the searched persons, the Department initiated proceedings against the company under Section 153C.
