DCIT Vs Arun Kumar Pillai (ITAT Bangalore)
153C Notice Invalid When Assessee Himself Is Searched — Bangalore ITAT Dismisses Revenue Appeal in Agnus Group Case
The Bangalore ITAT (A Bench) dismissed the Revenue’s appeal for AY 2018-19 and upheld the NFAC–CIT(A)’s order quashing the assessment, holding that when the assessee’s own premises are covered under a search u/s 132, proceedings must be initiated u/s 153A and not u/s 153C.
The Tribunal noted that the residence of Shri Arun Kumar Pillai, a key stakeholder of the Agnus Group, was also subjected to search, as evidenced by panchanamas dated 07.11.2019 and 21.11.2019, and documents were seized from his own premises. In such circumstances, the assessee squarely falls within the definition of a “searched person”, making Section 153C inapplicable.
Relying heavily on its own co-ordinate bench decision in the assessee’s case for AY 2014-15, as well as the Karnataka High Court ruling in DCIT vs. Sunil Kumar Sharma, the Tribunal reiterated that Section 153C applies only to “other persons”, i.e., persons other than the searched person, and the foundational jurisdictional condition of documents belonging to such other person being found during search of a third party must be satisfied.
The Tribunal further observed that documents relied upon for recording satisfaction were, in fact, found from the assessee’s own residence and not from the premises of a third party, thereby defeating the very assumption of jurisdiction u/s 153C. Consequently, the assessment framed u/s 153C r.w.s. 144 was held to be void ab initio.
Accordingly, the Revenue’s appeal was dismissed and the order of the CIT(A) was affirmed in full, reinforcing the settled principle that wrong invocation of Section 153C goes to the root of jurisdiction and vitiates the entire assessment
FULL TEXT OF THE ORDER OF ITAT BANGALORE
