S. 153C read with S. 153A — Documents found during search at the premises of another person which were in his own handwriting though may refer to the works proposed on behalf of the assessee, the same cannot be considered as ‘documents belonging to the as

Some handwritten documents were found and seized from the
residential premises of other persons. These documents showed estimate for the
purpose of land, building and machinery works for the assessee and statements of
steel and cement issued and deduction thereof for the purpose of computing the
amount payable to the contractor for the work carried out on behalf of the
assessee.

The Assessing Officer noted that although the seized
documents do not reveal any specific undisclosed income on verification, but the
proceedings validly initiated have to be completed in the manner prescribed
u/s.143(2) and u/s.143(3) of the Act. The Assessing Officer completed assessment
whereby the claim of deduction u/s.80HHC and u/s.80-IA of the Act was reduced.
No addition was either proposed or made in respect of so-called papers found
during the course of search and seized from the premises of other persons.

The original assessments were completed prior to initiation
of action u/s.153C of the Act and the issues regarding deductions u/s.80HHC and
u/s.80-IA were subject matter of earlier proceedings in original assessment and
were in further litigation before the CIT(A) and Tribunal.

Though these documents may refer to the work proposed on
behalf of the assessee, the same cannot be considered as ‘documents belonging to
the assessee’, which is a prerequisite for initiating action u/s.153C. If the
assessee has engaged the services of a professional and if the professional
maintains his own record for the purpose of rendering his services, the
documents cannot be said to be belonging to such assessee. Therefore, the
assessments were set aside.

Further, since the original assessments have been completed
before the initiation of action u/s.153C, these assessments have not abated. The
Assessing Officer was not competent to assume jurisdiction u/s.153C of the Act
(in relation to addition pertaining to deduction u/s.80HHC and u/s.80-IA) since
the original assessments have not abated. What were pending were only the
appeals. Since the appeals do not abate, the original assessments survive and
hence cannot be reopened u/s.153C proceedings. The Assessing Officer is
precluded from re-agitating the assessments that have attained finality in
original assessment proceedings, though pending in for the appeals. So far as
the Assessing Officer is concerned, his jurisdiction is ousted and is a ‘functus
officio’ so far as the original assessments are concerned. Therefore,
re-agitating the concluded issues in S. 153C proceedings without any documents
relating thereto belonging to the assessee cannot be considered in such
assessment u/s.153C of the Act.