When can action u/s 153C of the Income Tax Act be taken?

This judgement clarifies the conditions under which action can be taken under Section 153C of the Income Tax Act. The Assessing Officer (AO) must follow the procedures outlined in Section 153A for assessments up to six years prior to a search. Crucially, the seizure of a document is the primary condition, and the period to which the document relates is irrelevant. However, the AO cannot use documents pertaining to a later assessment year as incriminating material for an earlier year.

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘C’ BENCH,
NEW DELHI [THROUGH VIDEO CONFERENCE]
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND
SHRI K.N. CHARY, JUDICIAL MEMBER
ITA No. 2575/DEL/2017
[A.Y 2006-07]

The Income-tax Officer

Ward -12(3)

New Delhi

[Appellant]

VS

M/s Integer Leasing & Finance

Co, Pvt Ltd, 2, Pal Mohan

Apartment, Club Road,
Punjabi Bagh [W], New Delhi

PAN: AAACI 0151 R
[Respondent]

Assessee by : None
Revenue by : Ms. Sunita Singh, CIT-DR
Date of Hearing : 27.07.2021
Date of Pronouncement : 27.07.2021
ORDER

This appeal by the Revenue is preferred against the order of the CIT(A) - 30, New Delhi dated 18.01.2017 pertaining to A.Y 2006-07.

2. On the facts and circumstances of the case, the Ld.CIT(A) has erred by not following the provisions of section 153C which require the AO to take action u/s 153C in the manner provided u/s 153A for making assessment for 6 years prior to the date of search. The only condition is seizure of any document and the period to which it relates, is immaterial.

3.During search at the premises of Shri R.S. Bansal, balance sheet etc of the appellant was found and on receiving no plausible reply, the Assessing Officer made addition of Rs. 18,99,739/- as bogus expenses. Rs. 40 lakhs was added as unexplained cash credit u/s 68 of the Act and further addition of Rs. 1,25,60,000/- was made on account of unsecured loans.

4. Admittedly, the balance sheet pertained to Assessment Year 2009-10 and the same cannot be treated as incriminating material for Assessment Year 2006-07. We, therefore, do not find any error or infirmity in the findings of the ld. CIT(A).

5. In the result the appeal of the Revenue in ITA No. 2575/DEL/2017 is dismissed.

The order is pronounced in the open court in the presence of both the rival representative on 27.07.2021.

Please find attached the enclosed file for the full judgement