Section 153B and Section 153C of Income Tax Act 1961: Search Assessment Time Limit and Other Person

Sections 153B and 153C were part of the special search-assessment framework linked with Section 153A of the Income-tax Act, 1961. Section 153B prescribed limitation for completing those assessments, while Section 153C dealt with specified seized or requisitioned material relating to a person other than the searched person.

Section 153B: Time Limit for Completion of Assessment under Section 153A

Section 153B prescribed the limitation period for assessment or reassessment under the Section 153A search-assessment regime. It operated notwithstanding Section 153 and therefore supplied a special limitation rule for proceedings covered by Section 153A.

General structure of the limitation rule

Section 153B(1) linked the deadline to the end of the financial year in which the last authorisation for search under Section 132 or requisition under Section 132A was executed. The statutory period changed through successive amendments. Accordingly, the applicable deadline must be identified from the version of Section 153B governing the date of the relevant search or requisition rather than from one general period.

Meaning of execution of authorisation

For Section 153B, an authorisation for search was treated as executed on conclusion of the search as recorded in the last panchnama drawn in relation to the person for whom the warrant was issued. In the case of a requisition under Section 132A, execution was linked to actual receipt of the books of account, documents or assets by the authorised officer.

Exclusions and extensions

The Explanation to Section 153B excluded specified periods while computing limitation. Depending on the applicable version, these included a court-ordered stay, special audit proceedings, a valuation reference, rehearing under Section 129, specified settlement or advance-ruling proceedings, exchange of information and GAAR-related proceedings. The provision also contained minimum-period rules after specified exclusions and special extensions in transfer-pricing cases.

Section 153C: Assessment of Income of Any Other Person

Section 153C addressed a person other than the person searched or subjected to requisition. In the version applicable to the later Section 153A regime, the provision operated where the Assessing Officer was satisfied that specified seized or requisitioned assets belonged to another person, or that seized or requisitioned books, documents or information pertained or related to another person.

Key statutory conditions

For the provision to operate, the statutory satisfaction requirements had to be met. The relevant books of account, documents or assets were then to be handed over to the Assessing Officer having jurisdiction over the other person. That Assessing Officer could proceed under Section 153C in accordance with Section 153A where satisfied that the seized or requisitioned material had a bearing on determination of that other person's total income for the years covered by the provision.

The distinction in Section 153C is important: in relation to valuable assets, the provision used the test that the item belongs to the other person; for books of account or documents, it used the broader formulation that they pertain or pertain to, or that information contained in them relates to, the other person.

Reference date for the other person

For the other person, the statutory reference to the date of initiation of search or requisition in the relevant proviso to Section 153A was read as the date on which the Assessing Officer having jurisdiction over that other person received the seized or requisitioned books, documents or assets.

Section 153C(2)

Section 153C(2) also dealt with the assessment year relevant to the previous year in which the search or requisition occurred where the material was received by the jurisdictional Assessing Officer after the return-filing due date and one of the statutory circumstances concerning the return, scrutiny notice or completed assessment existed. In such cases, the provision required notice and assessment or reassessment in the manner provided by Section 153A.

Which Search Assessment Regime Applies?

Current Search Assessment Law from 1 April 2026

Under the Income-tax Act, 2025, search assessments are dealt with through the block-assessment framework. Section 294 provides the procedure for block assessment. Section 295 addresses undisclosed income of a person other than the person searched or subjected to requisition, and Section 296 prescribes the time limit for completion of block assessment. These provisions should be read with the current amendments applicable for Tax Year 2026-27 and subsequent years.

For a current proceeding, the first step is therefore to identify the date of search or requisition and the relevant tax or assessment years. That date determines whether the matter falls under the legacy Section 153A to 153C framework, the intervening reassessment regime, the revived Chapter XIV-B regime under the 1961 Act, or the Income-tax Act, 2025.

Official Income-tax Resources

For the current statutory text and transition material, refer to the official Income Tax Department tax laws portal, the official Income-tax Act, 2025 resources, and the Income Tax e-Filing portal.

Updated: 29 September 2026. Limitation in search cases is date-sensitive and may be affected by exclusions, extensions, amendments, judicial orders and transition provisions. The applicable statutory version should be verified for the particular proceeding.