“section 153C proceedings”
The decision most relied on for section 153C proceedings is CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. (374 ITR 645), cited in 1,823 judgments on BharatTax.
Leading authorities on section 153C proceedings
In Section 153A proceedings, the scope of assessment extends to abated proceedings, enabling an assessee to raise fresh legal claims that could have been made in regular assessment proceedings.
The validity of reassessment proceedings initiated under Section 147, by issuing a notice under Section 148, must be judged solely on the reasons originally recorded by the Assessing Officer. These recorded reasons cannot be supplemented, improved upon, or modified at any later stage.
Transactions defying human probability cannot be applied to isolated purchases if sales are accepted as genuine, and purchases cannot be disallowed without considering the entire transaction and documentary evidence. Failure to produce parties in an assessment proceeding may not be fatal to the assessee.
A statement made by an assessee under Section 131 during search proceedings, without any corroborating incriminating material found during the search, cannot solely constitute incriminating evidence for making additions in assessments under Section 153A or 153C.
An assessee can make an additional claim for deduction or file a revised computation of income during assessment proceedings, even if a revised return of income has not been filed. Such additional claims or grounds can also be admitted at the appellate stage.
The date of initiation of search or requisition for the purpose of abatement of assessment proceedings is the date of search or requisition, or the date of receipt of seized documents by the jurisdictional Assessing Officer, whichever is later. Proceedings under section 153C can only be initiated by the Assessing Officer of the searched person after being satisfied that seized documents belong to another person.
For initiating proceedings under Section 153C, seized documents must be incriminating and specifically relate to the assessment years for which assessments are reopened. A document relevant only for one year cannot be used to reopen other assessment years without being incriminating for those years.
Loose sheets of paper containing jottings, not shown to be part of regularly maintained books of accounts, do not constitute incriminating material for initiating assessment under section 153C. The satisfaction note required for 153C proceedings must specify the assessment year to which the alleged incriminating material belongs.
