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2015 (6) TMI 477 - AT - Income TaxValidity of assessment under section 153C - CIT(A) came to hold that since the documents seized did not belong to the assessee or relate to the assessment year under consideration the AO was not justified in initiating the proceedings u/s 153C r.w.s. 153 - Held that - It is noticed that the documents found from the persons searched do belong to the assessee. As such there can be no question of lack of jurisdiction of the AO to initiate assessment of the assessee u/s 153C read with section 153A of the Act for the instant year which is one of the six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted. In view of the foregoing discussion we are of the considered opinion that the ld. CIT(A) was not justified in annulling the proceedings due to the absence of any books of account or documents for the current year found from the persons searched belonging to the assessee for the assessment year under consideration. - Decided in favour of revenue.
Issues Involved:
1. Quashing of the initiation of assessment under section 153C of the Income-tax Act, 1961. 2. Jurisdiction of the Assessing Officer (AO) to initiate assessment under section 153C. 3. Requirement of incriminating material for initiating assessment under section 153C. 4. Assessment of six preceding assessment years under section 153A. 5. Validity of the assessment order passed by the AO. Detailed Analysis: 1. Quashing of the Initiation of Assessment under Section 153C: The Revenue challenged the CIT(A)'s decision to quash the initiation of assessment under section 153C. The CIT(A) observed that the documents seized did not belong to the assessee or relate to the assessment year under consideration. Consequently, the CIT(A) held that the AO was not justified in initiating proceedings under section 153C read with section 153A, leading to the quashing of the assessment proceedings. 2. Jurisdiction of the Assessing Officer (AO) to Initiate Assessment under Section 153C: The Tribunal examined whether the AO had the jurisdiction to initiate assessment under section 153C. It was established that the documents seized from the premises of Shri Manvinder Singh and M/s Flex Industries Ltd. belonged to the assessee but pertained to the financial years starting from 1.4.2004, which relate to assessment year 2005-06 onwards. The Tribunal held that the AO had jurisdiction to initiate assessment under section 153C for the relevant year, which is one of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted. 3. Requirement of Incriminating Material for Initiating Assessment under Section 153C: The Tribunal addressed the contention that no incriminating material was found for the assessment year under consideration. It clarified that section 153C does not require the presence of incriminating material specifically for the assessment year under consideration. Instead, the presence of any books of account or documents belonging to the assessee found during the search is sufficient to trigger the jurisdiction under section 153C. 4. Assessment of Six Preceding Assessment Years under Section 153A: The Tribunal explained that section 153C, read with section 153A, mandates the assessment or reassessment of six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted. The Tribunal emphasized that the AO is required to assess or reassess the total income for all six assessment years, irrespective of the presence of incriminating material for each year. 5. Validity of the Assessment Order Passed by the AO: The Tribunal found that the documents seized from the persons searched did belong to the assessee, thereby justifying the initiation of assessment under section 153C. Consequently, the Tribunal set aside the CIT(A)'s order quashing the proceedings and remanded the matter back to the CIT(A) to address other legal and factual objections raised by the assessee. The CIT(A) was directed to decide the appeal afresh, providing the assessee a reasonable opportunity of being heard. Conclusion: The Tribunal allowed the Revenue's appeal, holding that the CIT(A) was not justified in annulling the proceedings due to the absence of books of account or documents for the current year. The Tribunal remanded the matter to the CIT(A) for fresh consideration of other issues raised by the assessee. The assessee's cross-objection was allowed for statistical purposes. The order was pronounced in the open court on 09.10.2014.
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