Incriminating Books of Account is Not Necessary to Initiate Search Proceeding u/s 153C of Income Tax Act: ITAT [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that for initiating proceeding under Section 153C of the Income Tax Act, 1961, it is not necessary that these books of account should be incriminating.

The assessee in the present matter is Bharat Ginning & Pressing. The Counsel for the assessee Nimesh Vayawala, contended that the assessment orders in this case have been passed under section 153C of the Income Tax Act and for or taking cognizance under this provision it is mandatory that the Assessing Officer (AO) of the searched persons should record a satisfaction note exhibiting fact that during the course of search certain documents belonged to other persons were found and perusal of these documents would indicate that taxable income of the assessee has escaped assessment.

Further, the counsel submitted that the AO of the searched person and the assessee were the same and the AO of the assessee had recorded reasons for initiating proceedings under section 153C of the Income Tax Act.

The counsel argued on the merits of the satisfaction recorded by the AO taking the plea that there was no incriminating material which was found during search and further that a single note of satisfaction was recorded by the AO for all the years involved.

The Bench comprising of Annapurna Gupta, Accountant Member and T.R.Senthil Kumar, Judicial Member observed that on the basis of all the documents furnished nothing was found during the search, and he even pointed out to the assessment order passed stating that it did not refer to any seized material found.

The Tribunal stated that no satisfaction note of the AO, the searched person is required regarding documents relating to the assessee found during the course of search on some other persons for a valid assumption of jurisdiction to frame assessment under Section 153C of the Income Tax Act.

The ITAT further held that for initiating proceedings under Section 153C of the Income Tax Act it is not necessary that these books of accounts should be incriminating and accordingly rejected this plea of the assessee.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates