Question And Answer
Subject: Sec153C of Income Tax Act.
Querist: Prakash
Answered by:
Tags: ,
Date: May 4, 2023
Query asked by Prakash

Search conducted U/Sec. 132 prior to June 2015 on Mr. X. On the basis of documents found during the course of search. Assessee Y received Notice U/Sec. 153C. In the Satisfaction Note, it is mentioned that certain documents seized during the course search at Mr. X , pertains to Mr. Y. The documents seized were slips of cash deposits in Bank. Assessee challenge the proceedings u/Sec  153C on the ground that satisfaction is incorrect as it mentioned documents pertains to Y and not Belonging to Y.

Whether proceedings initiated U/Sec. 153 c are valid ?

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Answer given by

In PCIT v. Prominent Real Tech Pvt. Ltd. (2023)451 ITR 371 (Delhi)(HC) court held that failure to establish how seized documents had nexus with undisclosed Income of assessee. The proceedings initiated was quashed . In Dy .CIT v. U.K.Paints (Overseas ) Ltd ( CA No. 6634 of 2021 dt . 25 -4-2021 ( SC) , Supreme Court has dismissed an appeal of the revenue wherein the High Courts have held that no addition can be made in the absence of incriminating material being found during the search in respect of such other person in an unabated assessment .
Accordingly, the proceedings initiated u/s 153C seem to be without jurisdiction.

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