TMI Blog2018 (3) TMI 1745X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the provisions of 153C and proceeding with the provisions of Section 147. Thus, assessment order framed u/s.143(3) r.w.s. 147 is without any jurisdiction. - Decided in favour of assessee. - ITA No.3275/Mum/2015 & 3276/Mum/2015 (Assessment Year :2003-04 & 2005-06) - - - Dated:- 16-3-2018 - Shri R.C.Sharma, J. Assessee by Shri Shashank Dundu Revenue by Ms. Arju Garodia ORDER R.C. Sharma, These are the appeals filed by assessee against the order of CIT(A)-14, Mumbai dated 23/03/2015 for A.Y 2003-04 2005-06 in the matter of order passed u/s.143(3) r.w.s. 147 of the IT Act 1961. 2. The following grounds have been taken by assessee:- 1. The learned Commissioner of Income Tax (Appeals) erred in upholding the validity of notice issued u/s. 148 and the assessment order framed pursuant thereto u/s. 143(3) r.w.s. 147 and while doing so she amongst others failed to appreciate that: a) There was no income chargeable to tax which had escaped assessment; b) The notice u/s. 148 was issued was invalid since the AO had already issued a\ notice u/s. 153C to the appellant prior to the date of issue of notice u/s. 148; c) There was no failure on par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shashank argued that no assessment u/s.153C was completed and notice was issued u/s.148 on 04/02/2008. As per learned AR Sec. 153C provides that persons relating to whom some material is found in search of some other person should be assessed under sec. 153C of the Act. The provisions of section 153C are non-obstantive provisions and specially exclude the operation of sec. 147 of the Act, therefore, the Assessing Officer in the present case has erred in invoking the provisions of sec. 147 of the Act. If action under sec. 147 is permitted on the basis of material found in the course of search, then the provisions of sec. 153 would be redundant. 8. He further contended that in the instant case provisions of sec. 153C were applicable in terms of search and documents found at the premises of Director of Company, which excludes the application of sections 147 and 148 of the Act and hence the notice issued under sec. 148 and proceedings under sec. 147 are illegal and void ab initio. For this proposition, reliance was placed on the decision of Delhi Tribunal in the case of Rajat Shubra Chatterji vs. ACIT (2007-08) ITA No.2430/Del/2015 and ITO vs. Arun Kumar Kapoor (2011) 16 taxmann.co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 153C, however, if the Assessing Officer after issue of notice u/s.153C, had proceeded with reassessment under section 147/148 and passed assessment' order under section 143(3), same would be arbitrary and without any Jurisdiction in terms of following judicial pronouncements. In the case of Rajat Shubra Chatterji (supra) ITAT Delhi Bench held as under:- On having gone through the decisions cited above especially the decision of Amritsar Bench in the case of ITO vs. Arun Kumar Kapoor (supra), we find that in that case as in the present case before us, reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153C were applicable which excludes the application of sections 147 and 148 of the Act. The ITAT held the notice issued under sec. 148 and proceedings under sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) set aside the order of the Assessing Officer passed in reassessment proceedings. Held:- On a perusal of section 153C, it would be clear that the provisions of this section are applicable, which supersedes the applicability of provisions of sections 147 and 148. In the instant case, the documents were seized during the search under section 132 and the same were sent to the Assessing Officer of the assessee and thus, the Commissioner (Appeals) has correctly observed that only the provision in which any assessment could be made against the assessee was section 153C, read with section 153A. It was also apparent from the record that the officer in the case of'T' Ltd. had mentioned in his letter that the necessary action may be taken as per law under section 153C/148. Hence, notice issued under section 148 and proceedings under section 147 by the Assessing Officer were illegal and void ab initio. In view of the provisions of section 153C, section 147/148 stands ousted. In the instant case, the procedure laid down under section 153C has not been followed by the Assessing Officer and, therefore, assessment has become invalid. The Commissioner (Appeals) was justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 5-9-2003, explaining the new scheme of assessment procedure. [Para 10] A careful study of sections 153A to 153C and also the circular issued by the CBDT explaining the procedure of assessment in search cases shows that these are separate provisions independent of other provisions relating to reassessment, because of the non abstante clause begins with the said sections. The language used in these sections, i.e. 'notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153 made it clear that provisions of these sections are not made applicable to the assessments covered by the provisions of section 153A. Prior to the introduction of these three sections, there was a separate chapter XIV-B of the Act, by sections 158BC to 158BE which governs the search assessments which is popularly known as block assessment. 15. In terms of above judicial pronouncements, Section 153C provides that persons relating to whom some material is found in search of some other person should be assessed under sec. 153C of the Act. The provisions of section 153C are non-obstantive provisions and specially exclude the operation of sec. 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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