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TMI BlogGuidelines regarding the provisions of section 153C of the Income tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 Madam/Sir, Instances have come to notice wherein actions initiated under section 153C have been challenged before Courts on the ground of lack of jurisdiction or procedural infirmities. Common grounds of challenge include the following: (a) No satisfaction/improper satisfaction has been recorded by the Assessing Officer (AO/concerned to the effect that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned (hereinafter referred to as the seized material) belongs to a person other than referred to in section 153A (hereinafter referred to as the other person). (b) Satisfaction is not recorded by the AO having jurisdiction over the person covered under section 132 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions mentioned therein must be ensured. 2.3 Under section 153C, the AO of the searched person is to be satisfied that any seized material belongs to the other person. On the basis of his satisfaction, he shall hand over the relevant seized material to the AO of such other person for taking action under section 153C. It has been held by various judicial authorities that the expression 'belong to' connotes ownership: absolute or at least limited. Therefore, the AO of the searched person must arrive at his satisfaction on this vital issue after exercising due diligence, keeping in view, inter alia, the following: (a) Considering the views expressed in certain judicial pronouncements and to be on sound legal footing the although this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssments u/s 153A, whichever is earlier. Consequently, the AO of the other person shall proceed against such other person in accordance with the provisions of section 153C. A copy of the satisfaction recorded by the AO of the searched person in this regard should also be handed over to the AO of the other person. While taking photocopies/ extracts of the seized material for handing over, due process should be followed as specified in the Search and Seizure Manual 2007 Volume* I including Para 6.33(5) of Page 117. 2.5 The other person assumes jurisdiction under section 153C with the receipt of the relevant seized material from the AO of the searched person. Also, a copy of the satisfaction received from the AO of the searched person in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated by the transferee AO within the time limits prescribed in the Act. The transferee AO shall ensure that consequential actions are initiated and completed well within the statutory limitations. 2.7 A suggested proforma for recording satisfaction under section 153C by the AO of the searched person is enclosed. 3. As per second proviso to Section 153A(1) r.w. Section 153((1) of the Act, proceeding pending in one relevant years specified, shall abate. Such abatement in the relevant cases of the "other person" [to be assessed u/s 153C] shall also be recorded by the AO concerned for the sake of institutional memory. Attention is also invited to first proviso to section 153C(1) for ascertaining the date in relation to pendency of the relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents) (b) Description of the seized material (c) Address of the premise/place from where such material was seized (d) Date of seizure of such material (e) Particulars of the relevant Panchanama (f) Annexure / S.No./Page number etc. (particulars to be specified) 5. Relationship of the person referred in S. No. 3 with the searched person 6. Specific reasons for suggesting that the seized material referred to in S. No. 4 belongs to the person referred to in S. No. 3 6. Where, based upon facts and circumstances of each case, any seized material indicates undisclosed income/likely escapement of income of any other person and it is opined that the seized material does not belong to the other person, it woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account/documents) (b) Description of the seized material (c) Address of premise/place from where such material was seized (d) Date of seizure of such material (e) Particulars of the relevant Panchnama (f) Annexure/S. No./Page number etc. (particulars to be specified) 6. Relationship of the person referred in S. No. 4 with the person referred to in S. No. 2 7. Satisfaction of the Assessing Officer of the person referred to in section 153A that the seized material referred to in S. No. 5 belongs to the person referred to in S. No. 4 8. Assessment Years involved Note : 1. Copy of relevant Panchnama may be sent at the time of handing over of the relevant seized material. 2. For the purposes of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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