Assessment under section 147 void when documents seized during search requires section 153C proceedings instead

ITAT DELHI held that assessment under section 147 was void ab-initio where documents were seized during search proceedings. The court ruled that when documents belonging to the assessee are found during search operations, the correct procedure requires assessment under section 153C, not reopening under section 147. Following precedent in Girish Chand Sharma case, the tribunal determined that any document found during search makes the assessee an "other person" requiring section 153C proceedings. The notice under section 148 and subsequent assessment were declared invalid. Decision favored the assessee.

---

---

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.

---