Sanjeev Sharma Vs ACIT (ITAT Delhi)
Third-Party Search Material Can’t Sustain 153A: ITAT Delhi Quashes Assessments for Want of 153C Satisfaction
In this batch of five appeals, Sanjeev Sharma challenged assessments framed u/s 153A for AYs 2013-14 to 2017-18, wherein additions were made on the basis of a PowerPoint printout named “Kautilya Airbus Proposal” seized during search on Deepak Talwar Group. The core legal objection was that the seized documents belonged to a third party & could be used against the Assessee only after recording mandatory satisfaction u/s 153C by (i) the AO of the searched person, & (ii) the AO of the Assessee, as clarified in CBDT Circular No.24/2015.
Assessee argued that no satisfaction was recorded either by the AO of Deepak Talwar Group or by the AO of the Assessee, nor was there any finding that the PPT was incriminating or had a bearing on determination of income. It was urged that assessment u/s 153A is permissible only where incriminating material is found in search on the Assessee himself, & not when material is seized from a third party. Reliance was placed on several decisions including Trilok Chand Chaudhary, Shivani Mahajan, Pavitra Realcon, Pinaki Misra, & Delhi High Court ruling in Radico Khaitan, all holding that third-party material cannot be used u/s 153A & must mandatorily follow s.153C procedure.
