INCOME TAX ACT, 1961

Section 153C

Search and seizure - Proceedings under section 153C - Effect of amendment in section 153C subsequent to 1-6-2015 -

The section contemplates that material found during the course of search and considered by the AO of the searched person, belongs to some other person. However, after amendment in section 153C with effect from 1-6-2015 this expression 'belongs' or 'belong' to had been restricted with regard to any money, bullion, jewellery and other valuable article or things seized or requisitioned during the course of search. With regard to any books of account or documents seized or requisitioned, the expression 'belongs to' and 'belong to' has been eliminated; and in place of this expression 'pertains to' or 'pertain to' or any information contained therein relates to, has been used. Thus, according to the assessee the expression 'pertains' or 'pertain' to or any information contained therein relates to, has wider scope for taking action under section 153C, instead of expressions 'belongs' or 'belong to' used in the original section prior to its amendment with effect from 1-6-2015. Held: It could be construed that documents seized during the course of search; again carried out in the cases of concerned third person, were observed as 'relates to' the assessee. They do not belong to the assessee. When the assessee took this objection before the first appellate authority, the CIT(A) was of the view that since law has been changed, and scope of section 153C with effect from 1-6-2015 would be applicable on these cases, because the assessments have not been concluded when the scope of section 153C was widened. A perusal of the satisfaction note would indicate that the AO nowhere held that documents belonged to the present assessees were found at the premises of searched person/entity. Though, section 153C is a procedural section, but the jurisdiction to assess an assessee under this section was being invoked with help of the section. The AO will be in a position to pass assessment order only if during the course of search, any money, bullion, jewellery and other valuable article or thing, or the documents found belong to other person prior to 1-6-2015, and the AO of the searched person was satisfied that such documents disclosed undisclosed income. The documents belonged to the assessees considered under this compartment of the arguments were not found, rather certain information relating to the assessees were found to be embedded in these documents, but prior to 1-6-2015, jurisdiction under section 153C cannot be invoked on the basis of such information. Therefore, the preliminary ground of appeal raised by these 43 appellants (assessees) was allowed and all those assessment orders were cancelled.

Followed:Anil Kumar Gopikishna Agrawal v. Asstt. CIT (2019) 106 Taxmann.com 137 (Guj) : 2019 TaxPub(DT) 4420 (Guj-HC). Relied:Mahendrabhai Kasturchand Son v. ITO, SCA No. 11817 of 2019 (Guj) : 2019 TaxPub(DT) 5994 (Guj-HC), Charmy Sanket Naik v. ACIT, SCA No. 13374 of 2019 (Guj) : 2019 TaxPub(DT) 5183 (Guj-HC) and Nita Chaitanya Shah, SCA No. 14059 of 2019 (Guj) : 2019 TaxPub(DT) 5429 (Guj-HC). Distinguished:E.N. Gopakumar, (2016) 75 Taxmann.com 215 (Ker) : 2016 TaxPub(DT) 4661 (Ker-HC).

REFERRED : Pravinbhai Keshavbhai Patel v. Dy. CIT (2014) 45 Taxmann.com 533 (Ahd-Trib) : 2014 TaxPub(DT) 1615 (Ahd-Trib) and Pr. CIT v. Saumya Construction (P.) Ltd. (2016) 387 ITR 529 (Guj) : 2016 TaxPub(DT) 3466 (Guj-HC).

FAVOUR : In assessee's favour.

A.Y. : 2009-10 to 2015-16

INCOME TAX ACT, 1961

Section 153A

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