INCOME TAX ACT, 1961

Section 153C

Search and seizure - Assessment under section 153C - Applicability of amendment brought to section 153C vide Finance Act, 2015 to searches conducted before 01-06-2015 -

A search was conducted in case of a group, wherein certain evidences were collected, which revealed that assessee-firm made unexplained investment in purchase of a land. AO therefore issued a notice under section 153C. Assessee submitted that in the documents seized, there were no handwriting of it as well as no address of it was mentioned in the same and also there was no reference of registration number of sale deed, etc. on such documents. It was further submitted by the assessee that the seized documents were not confirmed and loose papers, which were not binding on it as the same did not belong to it at all. It was therefore submitted that the AO could not have issued notice under section 153C by invoking amendment made with effect from 1-6-2015 to search carried out in the year 2013. AO, however, completed assessment under section 153C read with section 153A relying upon the documents seized. CIT(A) allowed the assessee's appeal on the ground that the AO could not have assumed jurisdiction as the documents seized did not belong to the assessee. The Tribunal held that since the search was conducted prior to amendment in section 153C, it was an essential pre-requisite that incriminating documents, on the basis of which the assessment was framed, must 'belong' to the assessee. From contents of assessment order, it could be said that the documents did not belong to the assessee as the AO himself stated that the documents pertained to the assessee. Accordingly, the Tribunal confirmed the order of the CIT (A). Held: In view of decision of Supreme Court in the case of ITO v. Vikram Sujitkumar Bhatia 2023 TaxPub(DT) 2189 (SC), amendment brought to section 153C vide Finance Act, 2015 shall be applicable to searches conducted under section 132 before 01-06-2015, i.e., date of the amendment. Accordingly, order passed by Tribunal was quashed and set aside.

Followed:ITO v. Vikram Sujitkumar Bhatia (2023) 149 taxman.com 123 (SC) : 2023 TaxPub(DT) 2189 (SC)

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2011-12

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