ITO Vs Vikram Sujitkumar Bhatia (Supreme Court of India)
The Supreme Court of India recently delivered a significant judgment in the case of ITO Vs. Vikram Sujitkumar Bhatia, addressing the retrospective application of an amendment to Section 153C of the Income Tax Act, 1961. The ruling clarifies that the amended provisions, which expanded the scope of assessing third parties following a search and seizure operation, will not apply to searches conducted prior to the amendment’s effective date of June 1, 2015.
The Revenue (Income Tax Department) had challenged a common judgment from the Gujarat High Court, which had quashed notices issued under the amended Section 153C and set aside consequent assessment orders for searches initiated before June 1, 2015. The central legal question was whether the 2015 amendment to Section 153C, brought in by the Finance Act, 2015, applied to searches conducted before its effective date.
Background of the Case:
The lead case involved a search conducted on the H.N. Safal Group on September 4, 2013. During this search, a hard disk was seized containing an excel sheet with references to the assessee, Vikram Sujitkumar Bhatia. Based on this, the Assessing Officer (AO) initiated proceedings against Bhatia under Section 153C by issuing a notice on February 8, 2018.
