TaxTMI 
TaxTMI 
2026 (1) TMI 122
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....has been passed between the parties or not. 4. The Learned CIT(Appeals) ought to have appreciated that the assessment was made u/s.153C of the I.T.Act based on a statement of a third party and without any seized material. 5. The Learned CIT(Appeals) out to have appreciated that the assessment made without proper satisfaction is legally invalid and accordingly treated the same as void ab intio. 6. The Learned CIT(Appeals) is not justified in holding that the Satisfaction drawn by the Assessing Officer is proper even though the Assessing Officer failed to prove the nexus between the addition and seized material and therefore would have held that the satisfaction drawn is invalid satisfaction and accordingly held the assessment made is also invalid. 7. Any other ground or grounds that may be urged at the time of hearing of the appeal. 3. The brief facts of the case are that, the assessee is an individual, filed her return of income for the assessment year 2019-20 on 01.10.2019 declaring total income of Rs. 28,420/-. Later on, the assessee filed a revised return on 31.12.2019 admitting total income of Rs. 63,420/-. A search was conducted on a thir....
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....e sale transaction in question. It was contended that the seized material relied upon by the Ld. AO only demonstrates the cash payment made by the assessee for purchase of two plots and does not establish any receipt of unaccounted money on sale of land. Relying on the decision of Hon'ble Delhi High Court in the case of PCIT Vs. Best Infrastructure (India) Pvt. Ltd. (2017) 397 ITR 82 (Delhi), the Ld. AR also submitted that the statement of the assessee's husband cannot be treated as incriminating material without any corroborative evidence. 6. It was further submitted by the Ld. AR that as per the settled legal position, for valid assumption of jurisdiction under section 153C of the Act, there must be seized incriminating material belonging to the assessee and relating to the relevant assessment year, failing which the proceedings are void. The Ld. AR relied heavily on the decision of the Hon'ble Supreme Court in the case of Principal CIT v. Sinhgad Technical Education Society [(2017) 397 ITR 344 (SC)], wherein it was held that in the absence of any incriminating material relating to the relevant assessment year, the assumption of jurisdiction under section 153C of t....
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....ses, is non-existent in the present case. In the said case, there was a factual finding to the effect that the Assessees were habitual offenders, indulging in clandestine operations whereas there is nothing in the present case, whatsoever, to suggest that any statement made by Mr. Anu Aggarwal or Mr. Harjeet Singh contained any such admission." 10. On perusal of above, we found that, the Hon'ble Delhi High Court held that statements recorded under Section 132(4) of the Act do not, by themselves, serve as incriminating material. The court emphasized that these statements must be supported by independent evidence to be admissible for making assessments. Therefore, in view of the decisions of the Hon'ble Delhi High Courts, it is clear that, a statement of assessee at the time of search on standalone basis has no evidentiary value and cannot be acted upon to fasten any liability on the assessee. Hence we hold that, a statement alone does not constitute incriminating material, unless backed by documentary evidence. 11. We have also gone through para nos. 13 to 23 of the decision of, the Hon'ble Supreme Court in the case of Principal CIT v. Sinhgad Technical Education S....
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....99-2000 is concerned, same was covered under Section 147 of the Act which means in respect of that year, there were re-assessment proceedings. Insofar as Assessment Year 2006-07 is concerned, it was fresh assessment under Section 143(3) of the Act. Thus, insofar as assessment under Section 153C read with Section 143(3) of the Act is concerned, it was in respect of Assessment Years 2000-01 to 2005- 06. Out of that, present appeals relate to four Assessment Years, namely, 2000-01 to 2003-04 covered by notice under Section 153C of the Act. There is a specific purpose in taking note of this aspect which would be stated by us in the concluding paragraphs of the judgment. 16. In these appeals, qua the aforesaid four Assessment Years, the assessment is quashed by the ITAT (which order is upheld by the High Court) on the sole ground that notice under Section 153C of the Act was legally unsustainable. The events recorded above further disclose that the issue pertaining to validity of notice under Section 153C of the Act was raised for the first time before the Tribunal and the Tribunal permitted the assessee to raise this additional ground and while dealing with the same on merits,....
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....dings, it is not necessary to enter into this controversy. 20. Insofar as the judgment of the Gujarat High Court relied upon by the learned Solicitor General is concerned, we find that the High Court in that case has categorically held that it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in Section 153A of the Act. This proposition of law laid down by the High Court is correct, which is stated by the Bombay High Court in the impugned judgment as well. The judgment of the Gujarat High Court in the said case went in favour of the Revenue when it was found on facts that the documents seized, in fact, pertain to third party, i.e. the assessee, and, therefore, the said condition precedent for taking action under Section 153C of the Act had been satisfied. 21. Likewise, the Delhi High Court also decided the case on altogether different facts which will have no bearing once the matter is examined in the aforesaid hue on the facts of this case. The Bombay High Court has rightly distinguished t....
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.... of the fact which has been emphasised in para 15. As pointed out in the said para, the assessment order passed by the AO covers eight Assessment Years. Assessment done in six Assessment Years is under Section 153C of the Act. Assessment order is set aside only in respect of four such Assessment Years that too on the technical ground, noted above. This objection pertaining to the four Assessment Years in question does not relate to the other two Assessment Years, namely, 2004-05 and 2005-06. Likewise, this decision has no bearing in respect of assessment done qua Assessment Year 1999-2000 as well as Assessment Year 2006-07. The necessary consequence would be that insofar as the conclusions of the AO in his assessment order regarding the activities of the trust not being genuine and not carried out in accordance with the trust deed or cancellation of registration, denial of benefits of Sections 11 and 12 etc. are concerned, the same would not be affected by this judgment. It is, thus, clarified that this Court has not dealt with the matter on merits insofar as incriminating material found against the assessee or Mr. Navale is concerned. Pithily put, this Court has not given any clea....