CIT Vs Jasjit Singh (Supreme Court of India)
Supreme Court Clarifies Income Tax Assessment Date for Third Parties
The Supreme Court of India recently addressed a key dispute between the Income Tax Department (Revenue) and taxpayers regarding the starting point for income tax assessments under Sections 153A and 153C of the Income Tax Act, 1961. The case, CIT Vs. Jasjit Singh, consolidated several appeals from the Delhi High Court, all of which had previously sided with the taxpayers.
The core issue revolved around the interpretation of the “six assessment years” period for which returns must be filed and income assessed following a search and seizure operation. Specifically, for third parties whose documents or assets are found during a search on another entity, the question was whether this six-year period should be counted from the date of the original search (Section 132) or the date when the seized materials are handed over to the Assessing Officer (AO) having jurisdiction over the third party (Section 153C).
The Revenue argued that the six-year period should relate back to the original search date, asserting that the proviso to Section 153C(1) concerning the date of receiving books or documents by the jurisdictional AO was solely for the purpose of “abatement” of pending assessments, not for determining the commencement of the assessment period itself. They cited the Delhi High Court’s ruling in SSP Aviation Ltd. vs. Deputy Commissioner of Income Tax (2012) 346 ITR 177 to support their position.
