Pursuant to a search under section 132 in the case of a third party, the Assessing Officer reopened the assessee’s assessment under section 147 on the basis of information received from the Investigation Wing. The Tribunal set aside the reassessment holding that once search material relating to a third person was found, assessment could be made only under section 153C and proceedings under section 147 were barred by the non obstante clause in section 153C. On appeal, the High Court held that section 153C is an enabling provision and its non obstante clause becomes operative only when jurisdiction under section 153C is validly assumed. Since no satisfaction note was recorded by the Assessing Officer of the searched person and no seized material was transmitted to the Assessing Officer having jurisdiction over the assessee, the jurisdictional conditions of section 153C were not fulfilled. In such circumstances, recourse to section 147 was not barred. The Court held that the Tribunal erred in treating section 153C as mandatory and in holding that section 147 stood excluded merely because a search had taken place. As the Tribunal had not examined the other grounds raised by the assessee, the matter was restored to the Tribunal for fresh adjudication. (AY.  2011-12)