INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Assessee claimed that the searched premises did not belong to it -

The assessee is engaged in the business of real estate business of purchase and sale of immovable properties. It filed its return of income declaring NIL income. A search under section 132 of the Act was conducted at various business premises, purportedly, of the assessee from where certain papers/documents belonging to the assessee were found and seized. AO issued notice to initiate proceedings under section 153A of the Act. AO completed proceedings on making addition of Rs. 10 lakhs under section 68 of the Act. Assessee carried the matter to Commissioner (Appeals) where it took the plea that no search took place either at its business premises or at its registered office and hence the proceedings under section 153A of the Act was liable to be quashed. However, Commissioner (Appeals) upheld the action of the AO. Held: When no search has taken place at the premises of the assessee, assumption of jurisdiction under section 153A instead of 153C vitiates the entire assessment proceedings. Thus, the addition made by the AO was not in accordance with Law. Therefore, the assessment proceedings initiated under section 153A of the Act, instead of provisions of section 153C of the Act, was quashed.

Followed:CIT v. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) : 2017 TaxPub(DT) 3941 (SC), National Thermal Power Company Ltd. v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 0342 (SC), CIT v. Kabul Chawla (2015) 61 taxmann.com 412 (Delhi) : (2015) 234 Taxman 300 (Del) : 2015 TaxPub(DT) 3486 (Del-HC) and CIT v. Satyam Ginning Pressing & Oil Mills 1996 TaxPub(DT) 0592 (MP-HC)

REFERRED :

FAVOUR : In favour of assessee

A.Y. :

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