Search assessment jurisdiction fails where a Section 153C notice is withdrawn and assessment proceeds under Section 143(3).

Assessment jurisdiction under the search provisions must remain within the statutory framework once proceedings under Section 153C are initiated on the basis of seized material and a satisfaction note. Here, notice under Section 153C was issued and later withdrawn, yet the assessment was completed under Section 143(3). On these facts, the assessment was treated as beyond the permissible scope of search-based jurisdiction and therefore void ab initio for the assessment year concerned. The Revenue's appeal was dismissed as infructuous.

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Issues: Whether the assessment completed under Section 143(3) for assessment year 2017-18, after initiation and withdrawal of proceedings under Section 153C, was without jurisdiction and void ab initio.

Analysis: The assessment year involved was 2017-18. The search in the case of the searched person was on 16.12.2016, the satisfaction note was recorded on 26.03.2019, notice under Section 153C was issued on 27.03.2019 and later withdrawn on 31.03.2019. The assessment was nevertheless completed under Section 143(3). Relying on the governing interpretation of Sections 153A and 153C, the assessment of a person other than the searched person has to be made within the statutory framework of the search provisions once jurisdiction is assumed on the basis of the seized material and satisfaction note. On the facts, the assessment framed under Section 143(3) after withdrawal of the Section 153C notice was held to be outside the permissible scope of assessment jurisdiction.

Conclusion: The assessment under Section 143(3) for assessment year 2017-18 was held void ab initio, in favour of the assessee, and the Revenue appeal was dismissed as infructuous.

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