[Opinion] Computing the Block Period u/s 153C | Search Date vs Receipt Date

Sumaksh Mahajan – [2026] 185 taxmann.com 834 (Article)

An Examination of Competing Interpretations and the Emerging Judicial Position

Sections 153A and 153C of the Income Tax Act, 1961 ceased to apply to searches conducted on or after 1 April 2021. Their continuing relevance, however, is not in doubt. A substantial volume of search assessments from the pre-2021 period remains pending before CIT(A)s, ITA Tribunals, and the High Courts. Within this body of litigation, one interpretive question surfaces with considerable frequency: for a person who has received a notice under Section 153C—the ‘other person,’ who was not searched but whose material was recovered during a search of a third party—from which date should the block period of six assessment years be computed? The Revenue’s position is that the date of search governs. The counter-position, which has found support in a consistent line of judicial decisions, is that the First Proviso to Section 153C creates a deeming fiction that displaces the date of search with the date on which the seized material was received by the jurisdictional Assessing Officer. This article sets out the statutory framework, examines the competing arguments, and surveys the current judicial position.

I. The Statutory Framework

Section 153A, introduced by the Finance Act, 2003, governs assessments of searched persons. Upon a search under Section 132 or a requisition under Section 132A, the Assessing Officer is required to issue notice for the six assessment years immediately preceding the year of search. The notice is mandatory—no precondition of satisfaction, no room for discretion. Abatement of pending assessments for those years follows automatically on the date of search.

Section 153C addresses a different scenario: where material seized from a searched person is found to belong to a third party—the ‘other person.’ That person’s assessment is conducted in accordance with the procedure under Section 153A. However, two conditions must be satisfied before any notice can issue:

(i) the AO of the searched person must record satisfaction that the seized material belongs to the ‘other person,’ and

(ii) the jurisdictional AO of the ‘other person’ must separately record satisfaction that the material has a bearing on the determination of their income.

The provision at the heart of this article is the First Proviso to Section 153C(1), which reads, in material part:

…for this purpose, references to the date of initiation of the search under section 132 or making of requisition under section 132A in section 153A shall be deemed to be references to the date of receiving the books of account, other documents or assets by the Assessing Officer having jurisdiction over such other person.—First Proviso to Section 153C(1)

On a textual reading, the First Proviso creates a deeming fiction: the date of search is substituted, for the purposes of the ‘other person’s’ proceedings, with the date of receipt of seized material by the jurisdictional AO. The six-year block runs backward from the assessment year relevant to the year of receipt—not the year of search.

II. Structural Distinction Between Sections 153A and 153C

Before examining the competing interpretations, it is useful to set out the key structural differences between the two provisions. These differences underlie the interpretive controversy and are frequently not pressed with sufficient clarity before lower authorities.

Parameter	Distinction
Trigger	Section 153A – A search u/s 132 or requisition u/s 132A is the sole trigger. No further condition precedent. Notice is mandatory—the AO ‘shall’ issue it. Section 153C – Double-satisfaction required before any notice can issue: (i) the AO of the searched person must record satisfaction that seized material belongs to the ‘other person’; and (ii) the jurisdictional AO of the ‘other person’ must record satisfaction that the material bears on their income.
Block Period Anchor	Section 153A – Six AYs reckoned backward from the AY relevant to the previous year in which the search was conducted. Section 153C – Per the First Proviso deeming fiction, the reference to the date of search in Section 153A is deemed to be the date of receipt of seized material/books by the jurisdictional AO of the ‘other person.’
Abatement of Pending Assessments	Section 153A – Automatic and unconditional on the date of search—a preordained consequence of the search. Section 153C – Conditional—arises only after the jurisdictional AO forms the requisite satisfaction and proceeds under Section 153C.
Legislative Design	Section 153A – Mandatory, non-discretionary, and search-driven. No room for the AO to form or withhold an opinion. Section 153C – Conditional, opinion-driven, and deliberately more exacting—consistent with the fact that the ‘other person’ was not the subject of the search.