2020 (9) TMI 1309 - AT - Income Tax

Assessment u/s. 147 or 153C - addition on account of fees paid for the studies of the daughter of the assessee - documents as seized during the course of search and seizure proceedings - HELD THAT - It is incorrect to say that no documents were seized during the course of search and seizure proceedings. Documents as used during the course of the assessment proceedings of the assessee belong to the assessee and therefore the AO should have framed assessment u/s. 153 C of the Act. As identical set of facts were there in the case of Girish Chand Sharma 2018 (11) TMI 1736 - ITAT DELHI wherein similar reasoning were given for reopening of the assessment wherein held any document found during the course of the search makes the assessee other person therefore the correct section for initiation of any proceeding against the assessee is section 153C. Thus we hold the notice issued u/s. 148 and the assessment framed u/s. 147 of the Act is void-ab-initio. Decided in favour of assessee.

Summary

Issues:
Challenge to correctness of CIT(A) order confirming assessment under section 147 r.w.s 143 (3) and addition of fees paid for studies of daughter.

Analysis:
The appeal challenged the correctness of the CIT(A) order confirming the assessment under section 147 r.w.s 143 (3) and the addition of fees paid for the studies of the daughter. The AO reopened the assessment based on information received during a search and seizure action at Santosh Group of Institutions. Documents indicated payment of fees for the daughter from undisclosed sources. The AO added Rs.24.08 lakhs, alleging failure to produce evidence against seized documents. The CIT(A) upheld the assessment. The assessee contended that the assessment should have been under section 153 C, citing similar cases. The DR argued that section 153 C did not apply as no documents were seized, only information used to reopen the assessment. The ITAT found documents seized belonged to the assessee, requiring assessment under section 153 C. Citing similar cases, the ITAT held that the notice under section 148 and assessment under section 147 were void ab initio. The appeal was allowed, quashing the assessment. The ITAT did not delve into the case's merits due to the assessment being quashed.

In conclusion, the ITAT allowed the appeal, holding that the assessment under section 147 was void ab initio and quashed it. The decision was based on the documents seized during the search, belonging to the assessee, necessitating assessment under section 153 C. Citing similar cases, the ITAT found the notice under section 148 and assessment under section 147 to be void ab initio. Therefore, the appeal was allowed without delving into the case's merits.