KARNATAKA HIGH COURT: Sri. Kewal Chand Jain v. Assistant Commissioner of Income Tax (W.P. No. 30135/2021)
Background: The petitioner challenged assessment order u/s 153C r/w Section 144 of the Income-tax Act, 1961. His residential premises were subjected to a search u/s 132, pursuant to which certain documents were seized. Despite search being conducted at his own premises, Department treated petitioner as an “other person” and issued notice u/s 153C, followed by an assessment order. The Petitioner contended that since his premises were searched, he was a “searched person” and not an “other person”, making invocation of S. 153C wholly without jurisdiction.
Decision: The Court allowed the writ petition and quashed the entire proceedings. The Court held that once the petitioner’s premises were searched, he could only be proceeded against as a “searched person” under Section 153A, and not under Section 153C, which applies exclusively to “other persons”. The impugned proceedings were held to be without jurisdiction. The Court further held that the assessment order was barred by limitation and therefore did not leave the control of the Department within the statutory time. The mere generation of a DIN number on the last date was held insufficient to save limitation. Hence, the writ petition was allowed.
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