Assumption of jurisdiction U/s. 153C is invalid if seized documents makes no reference of assessee or any transaction by him

DCIT v. National Standard India Ltd. (ITAT Mumbai)

Assumption of jurisdiction over assessee under section 153C on the basis of statement of searched person, however, seized documents making no reference of either the assessee or any transaction entered into by it, was highly misplaced and, therefore, set aside.

Assessing officer in his attempt to justify the validity of the jurisdiction assumed by him under section 153C in the case of the assessee, had therein referred to and taken support of the statement of Shri Abhinandan Lodha recorded under section 132(4) during the course of search and seizure proceedings conducted in the case of Lodha group (supra), wherein a disclosure of Rs. 110.25 lacs was made by him as regards sale of parking space in the hands of the assessee company for assessment year 2011-12. The learned Authorised Representative submitted that as per the settled position of law, the assumption of jurisdiction under section 153C requires that a ‘document’ belonging to a person other than the person referred to a Section 153A is seized during the course of the search proceedings, and as a ‘Statement’ recorded during the course of search proceedings cannot be equated with a ‘seized document’, therefore, the reliance placed by the assessing officer on the statement of Shri Abhinandan Lodha (supra) in his attempt to justify the validity of assumption of jurisdiction under section 153C in the case of the assessee company, was highly misplaced. The learned Authorised Representative in order to drive home his aforesaid contention therein took support of the judgment of the Hon’ble High Court of Delhi in the case of CIT v. Rajpal Bhatia (2011) 202 Taxman 140 (Mag.) : 333 ITR 315 (Delhi), wherein the Hon’ble High Court by referring to the pari materia provisions contained in Section 158BD, had therein observed that the statement of a person subjected to search proceedings under section 132 could not be construed as a ‘document’ seized during the course of the search proceedings. The learned Authorised Representative further in support of his aforesaid contention relied on the order of the ITAT, Jodhpur Bench, in the case of Chitra Devi v. Asstt. CIT (2002) 77 TTJ 640. Alternatively, it was submitted by the learned Authorised Representative that as the disclosure of additional income of Rs. 110.25 lacs made in the hands of the assessee company by Sh. Abhinandan Lodha (supra) in his statement recorded under section 132(4) during the course of search and seizure proceedings conducted in the case of Lodha group (supra), was in respect of assessment year 2011-12 and did not pertain to any of the years in respect of which jurisdiction had been assumed by the assessing officer under 153C in the case of the assessee company, therefore, the same on the said count also would not in any way go to validate the assumption of jurisdiction by the assessing officer under section 153C. Thus in the backdrop of the aforesaid submissions it was averred by the learned Authorised Representative that as no ‘document’ pertaining to or referring to the assessee company, much the less ‘belonging’ to the latter was seized during the course of the search proceedings, therefore, the assessing officer had transgressed the scope of his jurisdiction under section 153C and had wrongly framed assessment under section 153A row with section 153C/143(3) in the hands of the assessee company.

Full Text of the ITAT Order is as follows:-

The present appeals filed by the revenue are directed against the consolidated order passed by the Commissioner (Appeals)-48, Mumbai for assessment year 2005-06 to assessment year 2010-11, dated 24-4-2015, which in itself arises from the respective orders passed by the assessing officer under section 153A row with section 153C/143(3) of the Income Tax Act, 1961 (for short ‘Act’), each dated. 31-3-2013. That as a common issue is involved in the respective appeals, therefore, for the sake of convenience they are clubbed and disposed of by a consolidated order. We herein first take up the appeal for assessment year 2005-06, marked as ITA No. 4055/Mum/2015. The revenue being aggrieved with the order of the Commissioner (Appeals) had therein raised before us the following grounds of appeal:–

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