Sec. 153C: Documents found during Search must belong to Assessee

We note that in terms of Section 153C of the Act at the relevant time i.e. prior to 1st June, 2015 the proceedings under Section 153C of the Act could only be initiated/proceeded against a party – assessee if the document seized during the search and seizure proceedings of another person belonged to the party – assessee concerned. The impugned order records a finding of fact that the seized documents which formed the basis of initiation of proceedings against the respondent assessees do not belong to it.

Requirement of Section 153C of the Act cannot be ignored at the alter of suspicion. The Revenue has to strictly comply with Section 153C of the Act. We are of the view that non satisfaction of the condition precedent viz. the seized document must belong to the respondent – assessee is a jurisdictional issue and non satisfaction thereof would make the entire proceedings taken thereunder null and void. The issue of Section 69C of the Act can only arise for consideration if the proceedings under Section 153C of the Act are upheld. Therefore, in the present facts, the issue of Section 69C of the Act is academic.

Relevant Extract of High Court Judgment

1. These two Appeals under Section 260­A of the Income Tax Act, 1961 (the Act) challenges the common impugned order dated 22nd March, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The common impugned order disposed of 67 appeals pertaining to 52 different assessees, amongst them were the present two respondents before us. The Revenue has filed these two appeals being aggrieved by the impugned order of the Tribunal to the extent it relates to assessment year 2007-08 in Income Tax Appeal No.150 of 2014 in the case of M/s.Ambit Realty Pvt. Ltd. and it relates for assessment year 2008-09 in Income Tax Appeal No.83 of 2014 in the case of M/s.Arpit Land Pvt. Ltd.

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