Assessment u/s 153C is without Jurisdiction When Documents Seized is not belonged to the Assessee: ITAT [Read Order]

While dismissing the appeal filed by the revenue the Delhi bench of Income Tax Appellate Tribunal (ITAT) recently held that assessment under Section 153C of the Income Tax Act without jurisdiction when documents seized not belonged to the assessee is invalid.

In the instant case, a search and seizure action under section 132 of the act was carried out on M/s Wings Pharmaceutical Pvt. Ltd. And the assessee in the present case was a part of the said company. Accordingly notice under section 153A was issued inadvertently and in the case of the assessee which was dropped later with prior approval.

Before the Tribunal, the department contended that during the period of verification it has found that the seized materials and documents of M/s Wings Pharmaceutical Pvt. Ltd. as well as documents belonging to the assessee. Therefore, proceedings under section 153C of the act were initiated in the case of the assessee company. The assessee duly filed its returns and declared a total income of Rs. 60,268 and assessment for the assessment year under consideration was completed at Rs. 28,35,120 under section 143(3) r/w section 153C of the Act.

The bench comprising of Judicial Member Bhavnesh Saini and Accountant Member L.P.Sahu has observed that in the light of the relevant documents it is clear that the AO has conducted a search but failed to seize any materials or documents that belonged to the assessee. According to section 153C of the Act assessment conducted without jurisdiction when documents seized not belonged to the assessee is invalid. The bench dismissed the appeal of the revenue relied up on the order pronounced by the Delhi High Court in the similar issues.