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Section 153C of India’s Income-tax Act, 1961 concerns the assessment of an “other person” when specified money, valuables, books of account or documents found during a search or requisition concerning someone else are considered relevant to that person’s income. It is a legacy provision: the 1961 Act says it does not apply to searches initiated, or requisitions made, on or after 1 April 2021. The search date is therefore central to understanding a Section 153C notice.
What Section 153C means
Section 153C is titled “Assessment of income of any other person.” It addresses a situation in which a search or requisition involving one person produces specified material that is considered relevant to a different person. The first person is the searched person; the different person is the “other person” whose income may be assessed under the provision.
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The material described in the 1961 Act includes money, bullion, jewellery or another valuable article or thing, as well as books of account or documents. The statute uses distinct terms: an asset may “belong to” the other person; books or documents may “pertain to” that person; or information in them may “relate to” that person. The Assessing Officer must also be satisfied that the material has a bearing on determining the other person’s total income. A third party’s papers alone do not automatically trigger an assessment.
Does Section 153C apply to searches after 1 April 2021?
No. The official 2025 text of Section 153C expressly excludes a search initiated under section 132, or a requisition made under section 132A, on or after 1 April 2021. It states: “Nothing contained in this section shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021.” (Income Tax Department, Income-tax Act, 1961, 2025 text.)
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That cutoff means Section 153C should not be presented as the route for searches or requisitions on or after that date. For a notice referring to it, identify when the search was initiated or the requisition made, rather than relying only on when the notice arrived.
Why can a Section 153C notice still appear today?
The Income-tax Act, 2025 preserves the repealed Income-tax Act, 1961 for proceedings connected with a search or requisition that took place before the new Act commenced. In those connected proceedings, the repealed Act’s provisions continue to apply as if the new Act had not been enacted. That transition rule explains why a legacy Section 153C matter may remain relevant after repeal. (Income Tax Department, Income-tax Act, 2025.)
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How the Section 153C process is structured
- Material is found in a search or requisition. The proceeding begins with specified assets, books or documents connected to a search under section 132 or requisition under section 132A involving a person.
- The material is linked to another person. The statutory test concerns whether it belongs to, pertains to or contains information relating to the other person, and whether it bears on determining that person’s total income.
- The relevant material is handed over. It is provided to the Assessing Officer who has jurisdiction over the other person.
- The officer may issue notice and assess or reassess. This can occur only if the statutory conditions are met; the existence of third-party material is not, by itself, the full test.
The framework and its wording appear in the official Section 153C text. Whether the conditions were satisfied in a particular matter depends on its record and applicable law.
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Which assessment years does the 1961 Act text refer to?
For proceedings under the applicable Section 153C version, the text refers to the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition occurred, as well as relevant assessment year or years referred to in section 153A. This is a statutory period in the 1961 Act, not a general rule for searches on or after the 1 April 2021 cutoff. The applicable years depend on the search or requisition date and the statutory version governing the proceeding. (Income Tax Department, 2025 text.)
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How Section 153C relates to the newer search framework
Chapter XIV-B of the Income-tax Act, 2025 covers search cases. Section 158BD is titled “Undisclosed income of any other person” and provides for the Assessing Officer to proceed against an other person under section 158BC when its statutory condition is met. It is useful context for the newer framework, but it should not be treated as a simple renumbering of Section 153C or an automatic replacement for it in a legacy proceeding. (Income Tax Department, Income-tax Act, 2025.)
| Question | Legacy Section 153C proceeding | Newer framework context |
|---|---|---|
| Which law is relevant? | The Income-tax Act, 1961, where its provisions remain applicable to a pre-commencement search or requisition under the 2025 Act’s transition rule. | The Income-tax Act, 2025; Chapter XIV-B includes section 158BD. |
| What date matters? | The search or requisition must fall within the dates for which Section 153C applies; the 1961 Act text excludes searches or requisitions on or after 1 April 2021. | The 2025 Act’s provisions and transition rules govern according to the relevant search date and circumstances. |
| What is the other-person provision? | Section 153C: assessment of income of any other person based on qualifying material and statutory conditions. | Section 158BD: undisclosed income of any other person, with a proceeding under section 158BC when the statutory condition is met. |
What to check if your notice cites Section 153C
A citation alone does not establish whether the provision applies or whether an assessment is valid. The official statutory provisions set out the framework, but they do not determine an individual taxpayer’s facts or the correct response to a notice.
- Search or requisition date: Confirm when the search was initiated or the requisition made, since the 1 April 2021 cutoff affects Section 153C’s applicability.
- Material identified: Determine which assets, books, documents or information are said to belong to, pertain to or relate to you.
- Officer and handover: Check the proceeding’s record for the relevant Assessing Officer and transfer of material to the officer with jurisdiction over the other person.
- Satisfaction and income connection: Identify how the statutory satisfaction about the material’s bearing on your total income is recorded.
- Years and notices: Review the assessment years specified and the notices and procedural history against the statutory version that applies.
Those facts can require review of the actual notice and case record. The statutes alone do not establish a universal response deadline, remedy or outcome for every Section 153C matter.
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