Section 153C of the Income-tax Act, 1961—Search and seizure—Proceeding initiated under section 153C are bad in law as there is no satisfaction that seized document belonged to the assessee.

Facts: Whether Tribunal is right in holding the assessment illegal and void ab initio?

Held, that AO has issued notices under section 153C based on search under section 132(1) which was carried out in the case of Shri Kirit M. Shah. The provisions of section 153C can be invoked only after recording a satisfaction in the case of persons searched qua the assets or books or documents seized during the course of search belong to some other person. In the instant case, the Assessing officer of other concerned assessee has not recorded any satisfaction qua the belongingness of the seized documents with the assessee. Similarly, as admitted by the AO vide letter dated 20-8-2018 that there was no satisfaction note is available in the case of the assessee, led to believe that there was no satisfaction note recorded in the case of the assessee as well as in the case searched person, therefore, the assessment proceeding initiated by way of issue of notice under section 153C read with section 153A is bad in law. In the present case, there is no satisfaction that seized document belonged to the assessee. Therefore, proceeding initiated under section 153C are bad in law. Thus, Assessing officer of the person searched has to necessarily form a satisfaction that the item referred to in section 153C belongs or belong to a person other than the person searched. Apparently, in the present appeals, no such satisfaction has been recorded by the Assessment officer. Thus, the assessment in the assessee case for the assessment year under consideration is held as illegal and void ab initio. - PR. CIT V/s MUNISUVRAT CORPORATION - [2019] 15 ITCD Online 68 (GUJ)