INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Validity - Non-furnishing of reasons for issuance of notice under section 153A to searched person

AO pursuant to search conducted at assessee's premises framed assessment under section 153A. Assessee challenged validity thereof on the ground that reasons for issuance of notice under section 153A had not been given and the assessee had reasons to believe that same had not been recorded and consequently the assessment was bad in law. Held: For issuing notice under section 153A in case of a person other than the searched person, AO issuing such notice has to record satisfaction that books of account or documents or assets seized or requisitioned had a bearing on determination of total income of such other person. But in case of searched person, there is no such requirement prescribed under section 153A of Income Tax Act. Since even in case of a person other than the searched person, notice has to be issued by AO to such other person under section 153A. Also regular assessment for the year under consideration was pending in the instant case as on the date of search and if the income could not be assessed under section 153A then such income would remain unassessed because as per second proviso to section 153A, pending assessment proceedings on the date of search would abate. This could not be an interpretation of provisions of section 153A and hence, no merit was there in grounds raised by the assessee.

Distinguished :CIT v. IBC Knowledge Park (P.) Ltd. 2016 TaxPub(DT) 2423 (Karn-HC) : (2016) 385 ITR 346 (Karn), CIT(Central) v. Kabul Chawla 2015 TaxPub(DT) 3486 (Del-HC) : (2016) 380 ITR 573 (Del) and Pr. CIT v. Ms. Lata Jain (2016) 384 ITR 543 (Del).

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2005-06

INCOME TAX ACT, 1961

Section 28

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