2025 (2) TMI 1030 - AT - Income Tax

Assessment u/s 153A - Assessment in case of search or requisition - as argued no material belonging to or pertaining to assessee was seized from the premises of the director where search was conducted - HELD THAT - Notice u/s 153A of the Act can be issued only in the case of a person where a search is initiated u/s 132 or books of account other documents or any assets are requisitioned u/s 132A of the Act. Admittedly in the case of the assessee neither of any such action was carried out thus the notice issued u/s 153A dt. 23.01.2019 is without jurisdiction and is bad in law. As no search warrant was issued in the name of the assessee thus no proceedings u/s 153A could be initiate in the case of the assessee accordingly the notice issued us 153A is hereby quashed. Appeal of the assessee is allowed.

Summary

The Appellate Tribunal considered the appeal filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18. The core issue in this case was whether proceedings under section 153A of the Income Tax Act could be initiated against the Assessee without a search being conducted at their premises.The Assessee, a private limited company, had filed its return of income declaring a total income of Rs. 870. Subsequently, proceedings under section 153A were initiated, and an assessment was completed by making additions to the income based on cash deposits during demonetization. The Assessee contended that since no search warrant was executed at their premises and only a survey under section 133A was conducted, proceedings under section 153A could not be initiated.The Assessee argued that jurisdiction under section 153A can only be assumed if a search under section 132 has been conducted at their premises, not in the case of a survey under section 133A. The Assessee relied on various judicial pronouncements to support their argument.The Department, represented by the CIT-DR, supported the lower authorities' order and requested confirmation of the same.The Tribunal examined the evidence and found that no search warrant was issued in the Assessee's name, and no material related to the Assessee was seized during the search. The Tribunal referred to the provisions of section 153A of the Act, which require a search to be initiated for proceedings under that section. Since no search was conducted at the Assessee's premises, the Tribunal concluded that the notice issued under section 153A was without jurisdiction and quashed it.Therefore, the Tribunal allowed the Assessee's appeal, ruling in their favor.In conclusion, the Tribunal held that proceedings under section 153A could not be initiated against the Assessee without a search being conducted at their premises, leading to the quashing of the notice issued under that section.