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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether reassessment under section 147 could be sustained when the basis of addition was material found and seized in search proceedings, and whether the proper course was initiation of proceedings under section 153C.
Analysis: The reassessment was founded on documents seized in search under section 132 and the reasons recorded as well as the assessment order showed that the addition flowed from such seized material. In these circumstances, the appropriate statutory route for bringing to tax income relatable to a searched material of a person other than the searched person was section 153C. Since the proceedings were instead initiated under sections 147/148, the initiation was treated as not in accordance with law and without jurisdiction.
Conclusion: The reassessment under sections 147/148 was invalid, and the assessee succeeded on the jurisdictional objection.
Final Conclusion: The assessment was set aside and the appeal was allowed because the reopening could not be sustained under the wrong statutory provision where section 153C was the applicable mechanism.
Ratio Decidendi: Where income is sought to be assessed on the basis of material found in search proceedings, the statutory provision specifically governing such third-party search-related assessments must be invoked, and reassessment under section 147/148 is without jurisdiction if section 153C applies.
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