Search-based reassessment must follow the special third-party assessment route, not general reopening, when material belongs to another person.

Reopening based on material found in a search of third-party premises had to proceed under the search-related provision for another person, because that mechanism specifically covers incriminating material belonging to or relating to a different assessee. Resort to the general reassessment route under section 147 in such circumstances would make the special provision redundant and amount to use of an incorrect jurisdictional basis. The reassessment was therefore unsustainable, the assessment order was quashed, and the appeal succeeded.

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Issues: Whether reassessment under section 147 read with section 143(3) of the Income-tax Act, 1961 could be sustained when the reopening was founded on information and documents unearthed in a search of third-party premises, and whether section 153C was the applicable provision.

Analysis: The assessment was reopened on the basis of material found during search operations conducted in the case of third parties. On those facts, the governing mechanism was section 153C, which specifically deals with incriminating material belonging to or relating to another person found in a search and operates notwithstanding the general reassessment framework. Permitting recourse to section 147 in such a situation would render section 153C redundant and would amount to invoking an incorrect jurisdictional provision.

Conclusion: The reassessment under section 147 was held to be unsustainable, the assessment order was quashed, and the appeal was allowed in favour of the assessee.

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