Shiv Parkash Bansal Vs DCIT Central Circle-14 Delhi & Ors. (Delhi High Court)
Delhi High Court held that section 153C of the Income Tax Act doesn’t required AO to find or uncover a relationship or an association between the searched and the non-searched person. Provision is merely concerned with the evaluation of the material unearthed in the course of a search.
Facts- The present petition has been preferred by the petitioner assailing initiation of action u/s. 153C of the Income Tax Act. The petitioner’s solitary ground of challenge to the initiation of action under Section 153C proceeds on the premise that the material gathered had no correlation or connection with the individuals who were subjected to the search. They would thus contend that in the absence of the evidence gathered being pertinent or relevant to the persons named in the search authorization, the commencement of action under Section 153C against the writ petitioners would not sustain.
Conclusion- Held that an action under Section 153C is premised solely on the discovery of incriminating material and which is likely to have an impact or bearing on the assessed income of a non-searched entity. The statute neither requires nor obliges the AO of the other person to find or uncover a relationship or an association between the searched and the non-searched person. The provision is merely concerned with the evaluation of the material unearthed in the course of a search and an assessment of whether it is likely to have a bearing on the income of a non-searched entity. If the submission of Mr. Sinha were to be accepted, we would be compelled to read Section 153C as being liable to be invoked only if there be some relationship between persons who were subjected to the actual search and those to whom the material may relate. Interpreting Section 153C as suggested would lead one to a situation where even though the material unearthed may be incriminating, absent a relationship between persons, the AO would be left powerless to even consider the likely impact of that material. That clearly does not appear to be the object or the purpose of that provision. We are thus of the considered opinion that the challenge is clearly misconceived.
