A search warrant u/s 132 (1) (c) was issued in the joint names of the assessee and her spouse. Subsequently, a block assessment of undisclosed income was made u/s 158BC in the individual name of the assessee. In appeal against such assessment, the assessee raised a preliminary objection that the search warrant having been issued in the joint names of the assessee and her spouse, the assessment on the assessee in the individual capacity was invalid. The objection was upheld by the Tribunal. The department appealed to the High Court. HELD, dismissing the appeal:
S. 132 (1) (c) empowers the officer to enter the premises etc and search it if he has “reason to believe” that “any person” is in possession of any money, bullion etc representing undisclosed income. As the search warrant was issued in the joint names of the assessee and her spouse, it means that the officer had reason to believe that the undisclosed assets and income were held jointly. If so, it is not open for the AO to assess the assessee individually on the basis of the assets and documents seized during the course of search in pursuance to the said warrant but the assessment ought to have been only in the capacity of AOP or BOI.