Court Clarifies Computation of 10-Year Block Period Under Sections 149 and 153A of the Income Tax Act
Meetu Kumari | Mar 7, 2026 |
High Court Quashes Reopening Notice as Time-Barred After Search Proceedings
A search and seizure operation under Section 132 of the Income Tax Act, 1961 was conducted on 08.09.2021 against Sambhaav, Nila and their associated entities. During the search, certain material allegedly indicating undisclosed income of the petitioner, Manojbhai Bhupatbhai Vadodaria, was found. Based on this material, the Assessing Officer issued a notice dated 24.02.2023 under Section 148 seeking to reopen the assessment for AY 2012-13, along with similar notices for other years.
The petitioner challenged the notice before the High Court, contending that it was barred by limitation. It was argued that under Section 149 read with Sections 153A and 153C, reassessment in cases arising from search could extend only up to ten assessment years from the end of the assessment year relevant to the previous year in which the search was conducted.
Main Issue: Whether a notice issued under Section 148 for AY 2012-13 after a search conducted in FY 2021-22 was barred by limitation under Section 149 read with Section 153A of the Income Tax Act, 1961.
HC Held: The Hon’ble High Court allowed the writ petition and quashed the reassessment notice issued for AY 2012-13. The Court held that Explanation 1 to Section 153A clearly prescribes the manner of computing the ten-year block period in search-related cases. The ten assessment years must be counted from the end of the assessment year relevant to the previous year in which the search was conducted. Since the search occurred in FY 2021-22, the relevant assessment year was AY 2022-23, and the ten years extended backwards only up to AY 2013-14.
The Court further observed that the statutory scheme provides distinct methods for computing the six-year and ten-year periods. While the six years are counted immediately preceding the search assessment year, the ten years are calculated from the end of that assessment year. Applying this interpretation, AY 2013–14 constituted the outermost year open for reassessment. As the impugned notice sought to reopen AY 2012-13, which fell beyond this statutory limit, the Court held that the Assessing Officer lacked jurisdiction and accordingly set aside the notice as time-barred.
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