Section 153C is the mandatory route for search-based assessments; reassessment under sections 147 and 148 was quashed as without jurisdiction.

The delay in filing the appeal was condoned because it was not deliberate and arose from bona fide reasons, and the additional ground was admitted as a pure question of law going to jurisdiction. On merits, where the reassessment was founded on search material relating to a searched party and a related person, the special scheme under section 153C was held to be the mandatory route. Resort to the general reassessment provisions under sections 147 and 148 was impermissible, so those proceedings and all consequential actions were quashed as without jurisdiction.

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Issues: (i) Whether the 120-day delay in filing the appeal deserved condonation and the additional ground could be admitted; (ii) Whether, on facts founded on search material relating to a searched party and its related person, the impugned proceedings under sections 147 and 148 were invalid because the case ought to have been proceeded with under section 153C.

Issue (i): Whether the 120-day delay in filing the appeal deserved condonation and the additional ground could be admitted.

Analysis: The delay was found to be neither deliberate nor intentional but attributable to bona fide circumstances, including the partner's ill health, lack of familiarity with compliance requirements, and absence of effective communication of the appellate order. The additional ground raised a pure question of law going to the root of jurisdiction and did not require fresh fact-finding, so it was admissible.

Conclusion: The delay was condoned and the additional ground was admitted.

Issue (ii): Whether, on facts founded on search material relating to a searched party and its related person, the impugned proceedings under sections 147 and 148 were invalid because the case ought to have been proceeded with under section 153C.

Analysis: The assessment was based on material and statements emanating from a search under section 132, and the reasoning adopted in the impugned assessments was substantially the same as that used in the connected search assessments. The special scheme in section 153C, which operates with overriding effect through its non obstante clause, was treated as the mandatory route where material seized in a search pertains to a person other than the searched person. In that situation, recourse to the general reassessment provisions under sections 147 and 148 was held to be impermissible and void ab initio.

Conclusion: The proceedings under sections 147 and 148, and all consequential actions, were held to be without jurisdiction and were quashed.

Final Conclusion: The appeals succeeded on the jurisdictional challenge, the reassessment mechanism adopted by the Revenue was set aside, and the connected grounds were rendered academic.

Ratio Decidendi: Where assessment for a person other than the searched person is founded on material seized in a search and the statutory conditions for section 153C are attracted, the Revenue must proceed under section 153C and cannot bypass that special code by invoking sections 147 and 148.

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