Section 292C

Section 292C — the law in short

What the courts have decided on section 292C, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• P.R. Metrani v CIT Supreme CourtHelps taxpayerSuperseded by amendment
  Can papers seized in a search be presumed true against me in the regular assessment?
  That was not the law as this case decided it: the s.132(4A) presumption operated only within the search proceedings and not in a regular assessment under s.143. Parliament changed that by inserting s.292C in 2007. What survives from this judgment is that the presumption is rebuttable and that seized documents can still be used as ordinary evidence even without it.
• Pepsi Foods Pvt Ltd v ACIT High CourtHelps taxpayerSuperseded by amendment
  The satisfaction note says the officer is satisfied and nothing else. Is that enough to found a s.153C notice?
  On s.153C as it stood before 1 June 2015. No. Anything found during a search is presumed by law to belong to the person searched. Before the Assessing Officer of the searched person can say a document belongs to somebody else, he must rebut that presumption on cogent material, and the satisfaction note itself must show the reasons. A note that only recites the word 'satisfied' fails the first step, and everything built on it goes. Read the decision only against that older wording: with effect from 1 June 2015 s.153C was widened to cover books or documents that 'pertain to' the other person or contain information 'relating to' him, and in ITO v. Vikram Sujitkumar Bhatia (SC, 2023) the Supreme Court held the amended provision applies even where the search was conducted before that date. The 'belongs to' analysis in this case is therefore not the current test.
• Manoj Kumar Jagetia v ITO ITATHelps taxpayerValidity unconfirmed
  My s.80GGC donation has been disallowed and the same money added back under s.69A, purely because the Investigation Wing says the party ran a cash-back racket. Nothing in the order names me. Can that stand?
  No. A general modus operandi found in a search of the recipient political party may justify opening an enquiry, but it cannot by itself prove that this donor got his money back; the Revenue must produce assessee-specific material and must confront the donor with it. The Tribunal restored the full Rs.3,00,000 deduction under s.80GGC and deleted the consequential Rs.2,85,000 addition under s.69A.
• CBDT Instruction No. 1916 of 11 May 1994 — jewellery that is not to be seized CBDT Circulars & InstructionsHelps taxpayer
  The search party found my family's gold. Is there a quantity the department is not supposed to touch?
  Yes, for seizure. The Board's instruction tells the authorised officer not to seize gold jewellery and ornaments up to 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family where the person is not assessed to wealth-tax, and to leave more than that where the status of the family and the customs of the community justify it. It is written as a seizure instruction, and whether it also bars an addition is a separate fight.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.