Principles and Procedure of Assessment u/s 153C

1.    The AO of the searched person is not required to examine whether the assets or documents seized reflect undisclosed income. [Para 13]

2.   All that is required for him is to satisfy himself that the assets or documents do not belong to the searched person but to another person[Para 13]

3.   Thereafter, the AO has to transfer the seized assets/documents to the AO having jurisdiction of the Assessee to whom such assets/documents belong.[Para 13]

4.   The AO of the Assessee, on receiving the documents and the assets seized, would have jurisdiction to commence proceedings under Section 153C of the Act.[Para 13]

5.   Section 153C(1) of the Act clearly postulates that once the AO of a person, other than the one searched, has received the assets or the documents, he is to issue a notice to assess/re-assess the income of such person - that is, the Assessee other than the person searched - in accordance with provisions of Section 153A of the Act.

6.   The AO of the person other than the one searched also, is not, at the stage of issuing notice under Section 153C/153A of the Act, required to conclude that the assets/documents handed over to him by the AO of the searched person represent or indicate any undisclosed income of the Assessee under his jurisdiction.[Para35]

7.   As explained in SSP Aviation (supra), Section 153C only enables the AO of a person other than the one searched, to investigate into the documents seized and/or the assets seized and ascertain that the same do not reflect any undisclosed income of the Assessee (i.e a person other than the one searched) for the relevant assessment years.[Para 35]

8.   If the seized money, bullion, jewellery or other valuable article or thing seized as handed over to the AO of the Assessee, are duly disclosed and reflected in the returns filed by the Assessee, no further interference would be called for. Similarly, if the books of accounts/documents seized do not reflect any undisclosed income, the assessments already made cannot be interfered with [Para 35]

9.   Merely because valuable articles and/or documents belonging to the Assessee have been seized and handed over to the AO of the Assessee would not necessarily require the AO to reopen the concluded assessments and reassess the income of the Assessee [Para 35]

10 The question whether the documents/assets seized could possibly reflect any undisclosed income has to be considered by the AO after examining the seized assets/documents handed over to him. It is only in cases where the seized documents/assets could possibly reflect any undisclosed income of the Assessee for the relevant assessment years, that further enquiry would be warranted in respect of those years.[Para 36]
11 Whilst, it is not necessary for the AO to be satisfied that the                           assets/documents seized during search of another person reflect undisclosed     income of an Assessee before commencing an enquiry under Section 153C of     the Act, it would be impermissible for him to commence such enquiry if it is     apparent that the documents/assets in question have no bearing on the             income of the Assessee for the relevant assessment years.[Para 36]

12     The concluded assessments cannot be interfered with under Section 153A     of the Act unless the incriminating material belonging to the Assessee has         been seized.[Para 37]

Delhi High Court Judgement in RRJ Securities Ltd [2015] 62 taxmann.com 391 (Delhi) 30-10-2015