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Facts
The Assessing Officer (AO) initiated reassessment proceedings under Section 147/148 of the Income Tax Act, 1961, based on documents seized during a search conducted on a third party. The AO alleged that the assessee had received undisclosed interest income in cash. The assessee contended that the proceedings should have been initiated under Section 153C of the Act.
Held
The Tribunal held that when the basis for reassessment arises from materials seized during a search operation, Section 153C of the Act, which has an overriding effect, should be invoked instead of Section 147. The initiation of proceedings under Section 147/148 was therefore considered illegal and void ab initio.
Key Issues
Whether reassessment proceedings initiated under Section 147/148 are valid when the assessment is based on materials seized during a search, and Section 153C is the applicable provision.
Sections Cited
147, 148, 153C, 132, 143(3)
AI-generated summary — verify with the full judgment below
PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 09.07.2025 is preferred by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)