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2011 (4) TMI 1348 - AT - Income TaxAssessment made u/s 153C r.w.s. 153A - Validity of Order Passed u/s 153C rws 143(3) - Unfettered Powers of AO - Incriminating Documents found pertaining to the third party - Documents were seized from a employee looking after the accounts of assessee's trust - AO after satisfying himself about the invocations of provisions of section 153C, issued a notice HELD THAT:- In SINHGAD TECHNICAL EDUCATION SOCIETY VERSUS ACIT, CENTRAL CIRCLE 2 (2) , PUNE [2011 (4) TMI 871 - ITAT, PUNE], it was held "AO shall not possess unfettered powers of summarily opining or reopening the concluded assessments of all the six assessment years in respect of the third party mentioned in section 153C without having in possession the AY-specific incriminating documents/other listed items. Settled assessments must not be disturbed merely based on the dumb documents gathered and seized by the revenue." It is the decision of this bench of the Tribunal, taken relying on the decision of the Tribunal ie in the case of LMJ INTERNATIONAL LIMITED. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX. [2007 (12) TMI 237 - ITAT CALCUTTA-E] that where nothing incriminating is found in the course of search relating to any assessment year, the assessments for such years cannot be distributed. Thus, the assessments made by the AO u/s 153C of the Act without the existence of AY-specific incriminating documents are invalid. In present case, based on the existence of the seized documents, these six AYs can categorized into two categories: AYs without seizure of any documents - In the present case regarding AYs 2000-01 to 2003-04 & 2005-06, admittedly, there is no seizure of the documents, thus issuance of notices u/s 153C, is invalid. AY with the seizure of some documents - For AY 2004-05, admittedly, there is some seizure of the documents. We are convinced that the said ledger is an accounted one. Mere appearance of names does not mean anything as section 153C is intended for taxing the undisclosed income of the third party based on the material/others seized during the search action. The documents, the ledger in the instant case relevant for the AY 2004-05, with no financial implications can neither be considered incriminating nor be considered capable of springing satisfaction to any AO that there is scope of undisclosed income in respect of the third party assasable u/s 153C of the Act. Accordingly, the legal grounds raised by assessee relating to the validity of the notice u/s 153C are allowed in favour of the assessee in respect of all the AYs under consideration. Review of Power of CIT u/s 263 - Validity of Order passed by AO u/s 263 rws 153C rws 143(3) - HELD THAT:- We have upheld the invalidity of the notices issued u/s 153C and in effect, we hold that the orders passed u/s 153C r w s 143(3) by the AO for the AYs under consideration are held to be null and void. Consequently, the assessment orders reviewed by the CIT u/s 263 are null and void and therefore, the review order of the CIT also becomes null and void.
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