The Tax Publishers2019 TaxPub(DT) 2810 (All-HC)

INCOME TAX ACT, 1961

Section 153C

Where proceeding initiated under section 153C was without jurisdiction, the very basis for referring the matter to DVO had vanished, and thus, the entire proceedings could not be held to be justified.

Search and seizure - Reference to DVO whether would survive when assessment under section 153C was invalid - Validity of assessment under section 153C -

Pursuant to a search proceedings in terms of section 153C, AO referred case of assessee to DVO and based on his report, alleged undisclosed investment made in the construction of multiplex was added to taxable income of assessee. Assessee contended that AO was not justified in referring the matter to DVO as neither assessment nor reassessment proceedings were pending before him on the date of reference to DVO as the returns were filed thereafter. Held: The very basis for referring the matter to DVO in disputed years, where proceeding had been initiated under section 153C was without jurisdiction. Once the very basis for referring the matter to the DVO had vanished, the entire proceedings cannot be held to be justified. Moreover, at the time of referring the matter to DVO neither returns were filed, nor the books of account maintained by assessee were rejected, nor any assessment or reassessment proceedings were pending. Since the basis for referring the matter to DVO itself vitiates, therefore, it was liable to be quashed.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



IN THE ALLAHABAD HIGH COURT

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