Search-seized material required section 153C treatment, so a routine income-tax assessment could not be sustained.

An assessment framed under section 143(3) was held unsustainable where the basis of addition was seized material found during search proceedings and the statute required recourse to section 153C(1). The alleged agreement and related WhatsApp chats were treated as material linking the assessee with unexplained investment, but the document was unsigned and the statutory route for search-related material involving a person other than the searched person was not followed. On that footing, the ordinary assessment could not stand and was quashed in favour of the assessee.

---

---

Issues: Whether the assessment framed under section 143(3) of the Income-tax Act, 1961 was sustainable when the material relied upon was seized during search and pertained to the assessee, attracting section 153C(1) of the Act.

Analysis: The assessment was founded on an alleged agreement and related whatsapp chats found in search proceedings. The document relied upon was not signed by the parties, but it was treated as seized material connecting the assessee with unexplained investment. In such a situation, the assessment could not be sustained as an ordinary assessment under section 143(3) when the statute specifically required action under section 153C(1) for material found during search belonging to or relating to a person other than the searched person.

Conclusion: The assessment framed under section 143(3) was held unsustainable in law and was quashed in favour of the assessee.

Ratio Decidendi: Where the basis of assessment is seized material discovered in search proceedings and the statutory conditions for section 153C(1) are attracted, an ordinary assessment under section 143(3) cannot be sustained.

---