Question ID : 42311

Assessment us/. 148 VS 153C

Search initiated in 2017 on patsanstha, some account holder has received the notices for Income escapment u/s 148 in April 2021, whether the notice issued u/s 148 is valid?? Or it should be issued u/-s 153C?? Plz guide on the same

In the given scenario, if a search was initiated under Section 132 or requisition was made under Section 132A in respect of the "patsanstha" in the financial year 2017-18 or later, and during the course of the search, any incriminating material was found relating to the income of the account holder(s), then the notice should have been issued under Section 153C of the Income Tax Act, 1961. Section 153C provides that where any books of accounts, documents or assets seized or requisitioned during the search or survey operation pertain or belong to a person other than the person referred to in Section 153A, the Assessing Officer (AO) can initiate proceedings against such other person as well. In such a case, the AO is required to issue a notice to such person specifying the manner in which he has reason to believe that the income of the other person has escaped assessment and requiring him to furnish a return of income within the specified time. Therefore, if the notice for income escapement has been issued under Section 148 instead of Section 153C, it may not be valid. The account holder(s) who have received such notices may challenge the same before the appropriate authorities.