· The reassessment proceedings were initiated in the case of assessee on the basis of information received based on the material found during the course of search in the premises of Santosh Medical College run by Maharaja Education Trust.
· AO made an addition to the income of assessee on account of unexplained cash invested for the payment of fee.
· CIT(A) also confirmed the action of the AO and dismissed the appeal of assessee.
· The arguments of assessee’s counsel before ITAT were as follows:
Þ Provisions of section 153C are non-obstantive provisions and specifically exclude the operation of section 147.
Þ If action u/s 147 is permitted on the basis of material found in the course of search, then the provisions of section 153C would become redundant.
· ITAT observed that from the reasons recorded as well as the assessment order, it was clearly evident that the initiation of reassessment proceedings was made by the AO only on the basis of material found during the course of search of some other person.
· Therefore, the ITAT held that the provisions of section 153C were applicable in assessee’s case for framing the assessment, which specifically excludes the application of section 147. Thus, the reassessment was quashed by the ITAT in view of above circumstances.
For further reading, refer the attachment.
Further Reading