PCIT Vs Ridgeview Construction Pvt. Ltd (Delhi High Court)
Facts- The Principal Commissioner of Income Tax seeks to impugn the order of the Income Tax Appellate Tribunal dated 31 October 2018 and which has upheld the stand as taken by the respondent-assessee of the material seized in the course of a search not being incriminating and thus not justifying the initiation of assessment proceedings referable to Section 153C of the Income Tax Act, 1961, as it stood at the relevant time.
Conclusion- Delhi High Court held that Section 153C as application at relevant time didn’t contemplate two tier recordal of satisfaction. Thus, proceedings u/s. 153C couldn’t have been triggered mechanically without formation of opinion by AO of non-searched person.
Held that while and undoubtedly Section 153C as it stood at the relevant time did not contemplate a two tier recordal of satisfaction and the AO of the searched person was merely obliged to transmit the material belonging or pertaining to a third person gathered in the course of a search, proceedings under the said provision could not have been triggered mechanically absent the formation of opinion by the AO of the non-searched person that the material was likely to impact an assessment made.
