Tribunal nullifies assessment orders under section 153C, citing lack of ownership proof.

The Tribunal allowed the appeals, holding that the Assessing Officer was not justified in invoking jurisdiction under section 153C of the Income Tax Act. The assessment orders were declared null and void, with the Tribunal concluding that the seized documents did not belong to the appellant company. The Tribunal emphasized that the Revenue failed to establish that the documents belonged to the appellant, rendering the assumption of jurisdiction under section 153C invalid. The decision was based on precedents and the ineffective application of the amended provisions introduced by the Finance Act, 2015.

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Issues Involved:
1. Validity of proceedings under section 153C/143(3) of the Income Tax Act, 1961.
2. Determination of whether the seized documents belonged to the appellant company.
3. Applicability of the amended provisions of section 153C by the Finance Act, 2015.

Detailed Analysis:

1. Validity of Proceedings under Section 153C/143(3) of the Income Tax Act, 1961:
The appellant company challenged the validity of the proceedings initiated under section 153C/143(3) of the Income Tax Act, 1961, by the Assessing Officer (A.O.). The A.O. had issued notices for assessment of six years based on documents seized during a search and seizure operation conducted against Naresh Kumar Group (NKG). The appellant contended that the seized documents did not belong to them, thus questioning the jurisdiction of the A.O. to initiate proceedings under section 153C.

2. Determination of Whether the Seized Documents Belonged to the Appellant Company:
The appellant argued that the seized documents marked as AVR-2 and AVR-5 did not belong to them. The documents were found in the possession of NKG, and the notings therein referred to payments made to TIPL (Tycoons Industries Pvt. Ltd.). The appellant contended that if the documents belonged to them, the notings would have indicated amounts received from TIPL rather than payments made to TIPL. The appellant further argued that the documents referred to M/s. S.K.S. Infrastructure Ltd., which shared the same business address but was a separate entity. The Revenue, however, maintained that the documents related to the appellant and justified the proceedings under section 153C.

3. Applicability of the Amended Provisions of Section 153C by the Finance Act, 2015:
The appellant highlighted that the relevant assessment orders were passed before the amendment to section 153C by the Finance Act, 2015, which inserted the expression "related to." Prior to the amendment, it was necessary for the Revenue to prove that the seized documents "belonged" to a person other than the one searched. The appellant argued that the un-amended provisions governed their case, and the Revenue failed to establish that the seized documents belonged to them.

Judgment Analysis:
The Tribunal examined the submissions and material on record, including judicial precedents. It found that the lower authorities had mainly dealt with pages 35 and 38 of AVR-2, which referred to payments made to TIPL. The Tribunal noted that the documents were found from NKG's premises and referred to payments made to TIPL, indicating that the documents belonged to NKG, not the appellant. The Tribunal also considered the computer printouts of M/s. S.K.S. Infrastructure Ltd., which shared the same address but was a separate entity. The Tribunal concluded that the seized documents did not belong to the appellant, and the invocation of section 153C was invalid.

The Tribunal further noted that the amendment to section 153C was effective from 01.06.2015, and the un-amended provisions required the Revenue to prove that the seized documents belonged to a third person. The Tribunal held that the A.O. failed to establish that the seized documents belonged to the appellant, making the assumption of jurisdiction under section 153C invalid. The Tribunal referred to judgments in Pepsico India Holding (P) Ltd. vs CIT, Vijaybhai N. Chandrani vs ACIT, and DCIT vs Dhansar Engineering Co. Pvt. Ltd., which supported the appellant's case.

Conclusion:
The Tribunal allowed the appeals, holding that the A.O. was not justified in invoking jurisdiction under section 153C of the Act. The assessment orders were declared null and void, and other grounds were deemed academic and infructuous. The order was pronounced in the open court on 13.06.2018.

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