R.C. Jewellers Pvt. Ltd. Vs DCIT (Delhi High Court)
Delhi High Court has invalidated income tax proceedings initiated against R.C. Jewellers Pvt. Ltd. for multiple assessment years, ruling that action under Section 153C of the Income Tax Act, 1961, cannot be taken against a person who was not searched unless incriminating material directly relevant to their income is discovered during a search on a third party. The judgment, delivered in the case of R.C. Jewellers Pvt. Ltd. vs. DCIT, underscores the necessity of a clear nexus between seized material and the income of the person subjected to Section 153C proceedings.
The case originated from an incident on October 27, 2017, at Rajkot Airport. Personnel from the Air Intelligence Unit (AIU) became suspicious of two individuals associated with courier services. These individuals were at the airport to receive parcels that had arrived from Hyderabad and Delhi via Jet Airways. Upon questioning by Central Industrial Security Force (CISF) personnel, the individuals admitted that the parcels contained gold bullion and jewellery.
Further inquiries were conducted by the AIU in Rajkot to ascertain the ownership of the consignments. The individuals were reportedly unable to produce relevant documents to establish ownership. Subsequently, three of the parcels were opened, revealing thirty-one smaller packets along with booking papers. While two of these smaller packets contained bills, raising no immediate concerns, further investigation was deemed necessary for the remaining items.
