| Question And Answer | |
|---|---|
| Subject: | During the assessment proceeding U/s 153C whether the A.O can make enquiries relating to the issues other than issues covered by the reason recorded for issuance of notice u/s 153C of Income Tax Act. |
| Category: | Income-Tax |
| Querist: | MOHAMED ALI, Tax practitioner |
| Answered by: | Research Team |
| Tags: | Assessment of income of any other person, search, search assessment |
| Date: | June 9, 2021 |
During the assessment proceeding U/s 153C whether the A.O can make enquiries relating to the issues other than issues covered by the reason recorded for issuance of notice u/s 153C of Income Tax Act.
During the course of assessment proceeding U/s 153C whether the A.O should confine the finding only to the extent of the reasons recorded for issuance of a notice U/s 153C or can he go beyond the reasons recorded.
Thank you
In PCIT.v. S.R.Trust (2021) 123 taxmann.com 311 / 277 Taxmann.com 133 (Mad)(HC) following the ratio in CIT v. Sinhagad Technical Education Society (2017) 397 ITR 344/156 DTR 161/297 CTR 441/250 Taxman 225 (SC) court held that in absence of any incriminating documents or evidence discovered against assessee, during its search upon the third Party, jurisdiction under provisions of section 153C could not be assumed against assessee. Also refer PCIT v. Dhananjay International Ltd (2020) 114 taxmann.com 317 (Bom.)(HC)
The provision of section 153C should be strictly construed . Section 147 Explanation 3 specifically states that once a reassessment is validly initiated the Assessing Officer may make addition in respect of issues other than issues recorded in the recorded reason. Such a provision in not there in the section 153C hence according to our view the Assessing Officer cannot make any other addition . The assesee has to verify whether the assessment is unabated, if the assessment is unabated no addition can be made without any incriminating documents found in the course of search . refer, All Cargo Global Logistics Ltd v DCIT (2012) 137 ITD 287/ 18 ITR 106 (SB ) (Mum) (Trib), CIT v Continental Ware Housing Corporation (2016) 374 ITR 645 (Bom(HC)