TaxTMI 
TaxTMI 
Guidelines regarding the provisions of section 153C of the Income tax Act, 1961
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....al taxation) Sub : Guidelines regarding the provisions of section 153C of the Income tax Act, 1961 Madam/Sir, Instances have come to notice wherein actions initiated under section 153C have been challenged before Courts on the ground of lack of jurisdiction or procedural infirmities. Common grounds of challenge include the following: (a) No satisfaction/improper satisfaction has been recorded by the Assessing Officer (AO/concerned to the effect that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned (hereinafter referred to as the seized material) belongs to a person other than referred to in section 153A (hereinafter referred to as the other person). ....
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....ile deciding about the appropriate course of such consequential action under section 153C in the case of such other person(s), satisfaction of conditions mentioned therein must be ensured. 2.3 Under section 153C, the AO of the searched person is to be satisfied that any seized material belongs to the other person. On the basis of his satisfaction, he shall hand over the relevant seized material to the AO of such other person for taking action under section 153C. It has been held by various judicial authorities that the expression 'belong to' connotes ownership: absolute or at least limited. Therefore, the AO of the searched person must arrive at his satisfaction on this vital issue after exercising due diligence, keeping in view, i....
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.... shall hand over the relevant seized material to the Assessing Officer of the other person within 1 month of recording of such satisfaction or within 1 month from the date of completion of assessments u/s 153A, whichever is earlier. Consequently, the AO of the other person shall proceed against such other person in accordance with the provisions of section 153C. A copy of the satisfaction recorded by the AO of the searched person in this regard should also be handed over to the AO of the other person. While taking photocopies/ extracts of the seized material for handing over, due process should be followed as specified in the Search and Seizure Manual 2007 Volume* I including Para 6.33(5) of Page 117. 2.5 The other person assumes j....
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....x Act, 1961 particularly under section 147/ 143(3) of the Act. It shall be ensured by the transferor AO that such handing over is effected at the earliest so that appropriate consequential action can be initiated by the transferee AO within the time limits prescribed in the Act. The transferee AO shall ensure that consequential actions are initiated and completed well within the statutory limitations. 2.7 A suggested proforma for recording satisfaction under section 153C by the AO of the searched person is enclosed. 3. As per second proviso to Section 153A(1) r.w. Section 153((1) of the Act, proceeding pending in one relevant years specified, shall abate. Such abatement in the relevant cases of the "other person" [to be assessed....
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....ested 4. Specific details of the seized material on the basis of which action under section 153C is suggested: (a) Nature of the seized material (money/ bullion /jewellery / other valuable article or thing / books of account/ documents) (b) Description of the seized material (c) Address of the premise/place from where such material was seized (d) Date of seizure of such material (e) Particulars of the relevant Panchanama (f) Annexure / S.No./Page number etc. (particulars to be specified) 5. Relationship of the person referred in S. No. 3 with the searched person 6. Specific reasons for suggesting that the seized material referred to in S. No. 4 belongs to the person referred ....