Case Law Details

Case Name : ACIT Vs Manorama Devi  (ITAT Allahabad)
Appeal Number : Miscellaneous Application (M.A.) No. 16/Alld./2017 arising out of ITA No.135/ALLD/2006
Date of Judgement/Order : 09/03/2021
Related Assessment Year : Block Period 01.04.1989 to 08.12.1999

ACIT Vs Manorama Devi  (ITAT Allahabad)

Conclusion: Once satisfaction note for initiation of proceedings against the assessee under section 158BD was furnished to assessee, the entire grievance of assessee were disposed off and as per AO, in any case incriminating documents and undisclosed assets belonging to assessee were found and seized during search operations conducted by Revenue on Mr. M and hence proceedings initiated against assessee under section 158BD were valid.

Held: Search and seizure operations conducted by Revenue u/s 132(1) against Shri M at his residential and business premises. Shri M had expired and assessee was wife of Shri M . Since, certain incriminating documents and undisclosed assets belonging to the assessee were found and seized during the course of search operations conducted by Revenue against Shri M, proceedings u/s 158BD were initiated by Revenue against assessee. Consequently, AO issued notice u/s 158BC read with Section 158BD to assessee on 11.01.2002 for the Block Period 01.04.1989 to 08.12.1999, requiring her to file return of income in prescribed form setting forth her total income including undisclosed income for the Block Period. Assessee filed return of income “Under Protest” showing ‘Nil’ undisclosed income for the entire block period.  Assessee claimed before AO that the return of income was filed ‘Under Protest’, and the grievance of assessee needed to be disposed of before proceeding further on the matter. AO was of the view that once satisfaction note for initiation of proceedings against assessee u/s. 158BD was furnished to assessee , the entire grievance of assessee were disposed off and as per AO , in any case incriminating documents and undisclosed assets belonging to assesssee were found and seized during search operations conducted by Revenue on Mr. M and hence proceedings initiated against assessee u/s 158BD were valid.  AO passed Block Period Assessment order u/s 158BC(c ) read with Section 158BD , computing undisclosed income of assessee . In the instant case, it was reiterated that the information discovered in the course of search , if capable of generating the satisfaction for issuing a notice u/s. 158BD , could not altogether become irrelevant for further action u/s. 158BD. Assessee in the instant case, participated and co­operated in proceedings before the lower authorities and never raised this issue of invalidity of search on the grounds that the search warrant was issued in the name of deceased person. AO had claimed that it had unearthed incriminating material and undisclosed assets pertaining to assessee during the course of search operations conducted by it on the husband of assessee. Thus, the proceedings conducted u/s 158BD could not be held to be bad in law in the instant case.

FULL TEXT OF THE ITAT JUDGEMENT

This Miscellaneous application (MA) bearing number 16/Alld./2017 arising out of ITA no. 135/Alld./2006 for Block Period 01.04.1989 to 08.12.1999 is a second Misc. Application filed by Revenue with Income Tax Appellate Tribunal, Allahabad( herein after called “ the tribunal” ) on 25th May, 2017, seeking reconsideration of dismissal of first MA filed by Revenue bearing no. M.A. No. 19/Alld/2016 , by tribunal, vide orders dated 28.11.2016 and also reconsideration of decision of the tribunal in quashing of the Block Period Assessment order vide orders dated 01.02.2016, in view of judgment dated 21.03.2017 of Hon’ble Supreme Court in the case of Gunjan Girishbhai Mehta v. Director of Investigation reported in (2017) 393 ITR 310(SC) .

2. The brief background of this case is that there was a search and seizure operations conducted by Revenue u/s 132(1) of the Income-tax Act, 1961 against Shri Munna Lal Verma at his residential and business at Nautanwa and Gorakhpur, on 08.12.1999. Shri Munna Lal Verma had expired on 06.10.1999. The assessee is wife of Shri Munna Lal .

2.2 Since, as per version of Revenue , certain incriminating documents and undisclosed assets belonging to the assessee were found and seized during the course of search operations conducted by Revenue against Shri Munna Lal Verma, proceedings u/s 158BD of the 1961 Act were initiated by Revenue against the assessee. Consequently, the learned Assessing Officer issued notice u/s 158BC read with Section 158BD to the assessee on 11.01.2002 for the Block Period 01.04.1989 to 08.12.1999, requiring her to file return of income in prescribed form setting forth her total income including undisclosed income for the Block Period, within 45 days of service of notice which was served on the assessee on 12.01.2002. In response thereof, the assessee filed return of income on 25.02.2002 “Under Protest” showing ‘Nil’ undisclosed income for the entire block period. Thereafter, notices u/s 143(2) and 142(1) of the 1961 Act were issued by learned Assessing Officer(AO) to the assessee from time to time. The assessee participated in the assessment proceedings before the AO. The assessee’s counsel vide letter dated 08.12.2003 asked AO to produce reasons for issuing aforesaid notices. The AO supplied to assessee copies of reasons recorded ( viz. satisfaction note) for initiating proceedings against the assessee u/s 158BD of the 1961 Act, which were supplied by AO on the very date of assessee’s application itself on 08.12.2003. The assessee then claimed before the AO that the return of income is filed ‘Under Protest’, and the grievances of the assessee needed to be disposed of before proceeding further on the matter. The AO was of the view that once satisfaction note for initiation of proceedings against the assessee u/s. 158BD of the 1961 Act is furnished to the assessee , the entire grievance of the assessee are disposed off and as per AO , in any case incriminating documents and undisclosed assets belonging to the assesssee were found and seized during search operations conducted by Revenue on Mr. Munna Lal Verma , on 08.12.1999 and hence proceedings initiated against the assessee u/s 158BD are valid. The AO passed Block Period Assessment order , dated 30.01.2004 for Block Period 01.04.1989 to 08.12.1999, u/s 158BC(c ) read with Section 158BD of the 1961 Act , computing undisclosed income of assessee to the tune of Rs. 16,15,770/- as against undisclosed income of Rs. Nil declared by assessee. While framing assessment order, the AO also disposed of the contentions of the assessee that no incriminating documents and undisclosed assets belonging to assessee were found during the course of search and seizure operations conducted by Revenue against Shri Munna Lal, wherein the assessee has contended that the assets were disclosed in wealth tax returns filed by the assessee with Revenue.

2.3 Aggrieved by assessment framed by AO, the assessee filed first appeal with ld. CIT(A). The main legal objections raised by assessee before ld. CIT(A) was that no incriminating material and undisclosed assets belonging to the assessee was found during the course of search proceedings against husband of the assessee , namely Mr. Munna Lal Verma on 08.12.1999 and proceedings initiated u/s 158BD of the 1961 Act against assessee are bad in law. The assessee had contended before ld. CIT(A) that all investments in properties were disclosed in wealth tax returns filed by assessee, and hence proceedings u/s 158BD are bad in law. The ld. CIT(A) dismissed these legal objections raised by assessee , and partly allowed the appeal filed by assessee, vide appellate orders dated 29.11.2005.

2.4 Still Aggrieved , the assessee filed second appeal with tribunal challenging the aforesaid appellate order passed by ld. CIT(A). The tribunal . vide appellate order dated 01.02.2016 , was pleased to allow the appeal filed by assessee on the legal ground that the search conducted by Revenue on Mr. Munna Lal Verma on 08.12.1999 was invalid , as search warrants were issued by Revenue on a deceased person namely Mr. Munna Lal Verma who expired on 06.10.1999 and the search having taken place on 08.12.2009, and hence all consequential proceedings are bad in law and liable to be quashed which led to quashing of block period assessment order framed by Revenue against the assessee under the provisions of Section 158BD read with Section 158BC(c ) of the 1961 Act. The tribunal vide aforesaid appellate order dated 01.02.2016 , held as under:

“ 5. We have heard the rival submissions and carefully considered the same along with the order of the tax authorities below. At the outset, learned AR before us vehemently contended that the husband of the assessee has expired on 6.10.1999 and the search warrant and search has taken place in the case of husband of the assessee on 8.12.1999, i.e. after the date of search and this fact is apparent from the assessment year. The block assessment is made in the case of the assessee only in consequence of the search taken place if the search is invalid and such warrant is on a deceased person the assessment order passed in consequence of the search cannot be valid one. The fact that the search warrant is on Late Munna Lal husband of the asessee is not denied by the DR which is also a fact which is apparent from the order that Late Munna Lal has expired on 6.10.1999 and in the case the search has taken place on 8.12.1999. In view of the provision of Section 132(1) , the designated authority of the Revenue can take the search and seizure action only if they have the information in their possession and has the reasons to believe relating to the particular person. In our opinion, it cannot be a person who is not in existence the assessment. Under Chapter XIVB Assessment has to be made in consequence of a search carried out u/s. 132 to assess the undisclosed income of the assessee. If the search itself is invalid, we are of the view that no assessment can be made in consequence of such search. The learned DR even though relied upon the order of the CIT(A) but could not adduce any evidence or any case law which has taken a contrary view. The provision of Section 158BD will also apply where the Assessing Officer is satisfied that any undisclosed income belongs to any person other than the person with respect to him search was made u/s. 132 since the person in respect of search was made u/s. 132 was not in existence and it is invalid , therefore, the provision of Section 158BD in our opinion can also not apply. We therefore agree with the contention of the learned AR and quash the assessment made on the assessee in consequence of the search carried out on a deceased person. Since, we have already quashed the assessment, therefore, in our opinion the other grounds relating to the other issue do not require adjudication.

6. In the result, the appeal filed by the assessee is allowed.”

2.5 The Revenue being aggrieved by tribunal’s order dated 01.02.2016 moved first miscellaneous application with the tribunal bearing number M.A.No.19/Alld/2016 arising out of ITA No. 135/Alld./2016 , which was dismissed by tribunal vide orders dated 28.11.2016, wherein tribunal held as under:

3. After hearing learned D.R. and going through the Misc. Application, we noted that in this case the Tribunal has quashed the assessment vide order dated 01/02/2016 by observing as under:

“We therefore , agree with the contention of learned A.R. and quash the assessment made on the assessee in consequence of the search carried out on a deceased person. Since we have already quashed the assessment, therefore, in our opinion the other grounds relating to the other issues do not require any adjudication.”

The Misc. Application has been moved on the contention that this Tribunal does not have the jurisdiction to adjudicate upon the issue of validity of the search conducted u/s 132 of the Act. The issue about the jurisdiction of the Tribunal to decide the validity of the search is pending before the Special Bench. We may point out that in the order of the Tribunal dated 01/02/2016 the Tribunal has not adjudicated the issue relating to the validity of the search. The tribunal has quashed the assessment as the search has been carried out on a deceased person. In view of this fact, we do not find any mistake in the order of the Tribunal dated 01/02/2016. We , therefore , dismiss the Misc. Application filed by the Revenue.

5. In the result , the Misc. Application of the Revenue stands dismissed.”

Thus, the tribunal vide orders dated 28.11.2016 dismissed the Misc. Application filed by Revenue on the grounds that the tribunal has quashed the assessment as search was carried out by Revenue on the deceased person and hence consequential assessment made u/s 158BD read with Section 158BC(c ) of the 1961 Act on the assessee who is wife of person searched , cannot survive and was quashed . The tribunal also clarified in MA order that the tribunal vide its appellate order dated 01.02.2016 has not adjudicated on the issue of validity of search but only assessment framed was quashed as the search was conducted on deceased person

2.6 After the dismissal of the aforesaid first MA on 28.11.2016 by tribunal, Hon’ble Supreme Court pronounced a judgment dated 21.03.2017 in the case of Gunjan Girishbhai Mehta v. Director of Investigation reported on (2017) 393 ITR 310(SC), wherein Hon’ble Apex Court held as under:

3. Notice under Section 132 of the Income Tax Act, 1961 (for short “the Act”) was issued in the name of a dead person. The said notice was duly received by the present petitioner as the legal heir of the dead person. Notice of assessment under Section 158BC of the Act was issued and in the assessment proceedings, where the income was declared to be ‘nil’, the present petitioner as the legal heir had participated. Thereafter, notice under Section 158BD of the Act was issued to the present petitioner on the basis of information coming to light in the course of search. Aggrieved, the petitioner moved the High Court and on dismissal of the writ petition filed, the present Special Leave Petition has been instituted.

4. The point urged before us, shortly put, is that if the original search warrant is invalid the consequential action under Section 158BD would also be invalid. We do not agree. The issue of invalidity of the search warrant was not raised at any point of time prior to the notice under Section 158BD. In fact, the petitioner had participated in the proceedings of assessment initiated under Section 158BC of the Act. The information discovered in the course of the search, if capable of generating the satisfaction for issuing a notice under Section 158BD, cannot altogether become irrelevant for further action under Section 158BD of the Act.

5. The reliance placed on the decision of the High Court of Punjab and Haryana in CIT v. Rakesh Kumar, Mukesh Kumar [2009] 313 ITR 305/178 Taxman 224 against which Special Leave Petition [SLP(C) NO. CC 3623/2009] has been dismissed by this Court and the decision of this Court in Asstt. CIT v. A.R. Enterprises [2013] 350 ITR 489/212 Taxman 531/29 taxmann.com 50 (SC) are on entirely different facts.

6. In Rakesh Kumar, Mukesh Kumar (supra) the challenge was to the proceedings of assessment under Section 158 BC of the Act on the basis of a search warrant issued in the name of a dead person. The issue in A.R. Enterprises (supra) has no similarity to the issue in hand, namely, the validity of the proceedings under Section 158BD of the Act.

7. For the aforesaid reasons, we find no merit in this Special Leave Petition. The same is accordingly dismissed.”

The Hon’ble Supreme Court in the above judgment, thus, held that the information discovered in the course of search , if capable of generating the satisfaction for issuing a notice u/s. 158BD , cannot altogether become irrelevant for further action u/s. 158BD of the Act.

2.7 Revenue after pronouncement of aforesaid judgment by Hon’ble Apex Court has filed this second Misc. Application bearing number M.A.No. 16/Alld/2017 arising from ITA No. 135/Alld/2006 for Block Period 01.04.1989 to 08.12.1999 , with which we are presently seized off. The main bone of contention of Revenue in this second MA filed with tribunal is that the issue on which tribunal allowed relief to the assessee and quashed the assessment order for the Block Period is covered by the aforesaid decision of Hon’ble Supreme Court in the case of Gunjan Girishbhai Mehta(supra) and hence the appellate order dated 01.02.2016 of the tribunal suffers from mistake apparent from record being in conflict with decision of Hon’ble Supreme Court , which mistake apparent from record is sought to be rectified by Revenue through this second MA.

2.8 We have heard this MA through virtual court through video conferencing mode. The ld. DR opened arguments and submitted that block period assessment framed by Revenue u/s 158BD read with Section 158BC(c ) against the assessee was quashed by tribunal on the ground that search was conducted by Revenue against deceased person. It was submitted that search took place u/s 132 of the 1961 Act on 08.12.1999 against husband of the assessee Shri Munna Lal Verma . The said Munna Lal Verma had expired on 06.10.1999. The assessee is wife of deceased Shri Munna Lal Verma. There was incriminating documents and undisclosed assets belonging to the assessee were found and seized by Revenue during the course of search proceedings against Shri Munna Lal Verma . It was submitted by ld. DR that search warrant was duly executed on 08.12.2009 through legal heirs of Mr. Munna Lal Verma. The proceedings against the assessee was initiated u/s 158BD of the 1961 Act and the assessee co­operated and participated in the assessment proceedings and never a challenge was raised by assessee to the legality and validity of search on the grounds that search was conducted on deceased person during the course of assessment proceedings. It was submitted by ld. DR that this legal issue of issuing of search warrant on deceased person and consequently block period assessment framed against assessee who is wife of the person search is to be quashed on the ground that the search warrant was issued in the name of deceased person, was not even raised before ld. CIT(A) . It was submitted by ld. DR that no ground of appeal is taken even before the tribunal as to invalidity of search owing to the search conducted on deceased person, as per grounds of appeal filed before the tribunal. Our attention was drawn to grounds of appeal filed by assessee in memo of appeal filed with tribunal. It is submitted by ld. DR that the said issue was raised for the first time before the tribunal at the time of hearing of the appeal before the Bench. Thus, in the nutshell it was submitted that the assessee participated and co-operated in all the proceedings before AO and ld. CIT(A) and never ever this issue of invalidity of search owning to search being conducted on deceased person was raised by assessee , prior to this issue being raised for the first time before tribunal during the course of hearing before the Bench. The ld. DR would rely on decision of Hon’ble Supreme Court in the case of Gunjan Girishbhai Mehta(supra) and prayers were made to quash MA order bearing number M.A. No. 19/Alld./2016 , dated 28.11.2016 and to recall the appellate order dated 01.02.2016 in ITA no. 135/Alld/2006 passed by tribunal. It was submitted that Hon’ble Supreme Court has vide aforesaid judgment dated 21.03.2017 in the case of Gunjan Girishbhai Mehta(supra) had explained the law as is contained in Section 158BC and 158BD and thus , it will affect the judgments passed even prior to said date as Hon’ble Apex Court has clarified the law and no new law is laid down by Hon’ble Supreme Court. The ld. DR has filed written submissions , which are placed on record in file.

2.9 The ld. Counsel for the assessee on the other hand submitted that tribunal rightly dismissed the first MA filed by Revenue. It was submitted that Revenue issued search warrants against Shri Munna Lal Verma after his death and the assessee had challenged the entire proceedings before the AO . Our attention was drawn to page 36 of the paper book and it was submitted that Return of Income pursuant to notice u/s 158BD, was filed by assessee ‘Under Protest’. It was submitted by ld. Counsel for the assessee that Hon’ble Supreme Court judgment is dated 21.03.2017, while the appellate order was passed by tribunal on 01.02.2016 and first Misc. Application filed by Revenue was dismissed by tribunal on 28.11.2016. It was submitted by ld. Counsel for the assessee that MA filed pursuant to Hon’ble Supreme Court cannot be given cognizance. It was submitted that as per aforesaid judgment of Hon’ble Supreme Court in the case of Gunjan Girishbhai Mehta(SC), the tax-payer must have participated and co-operated in the proceedings, while the assessee has not co­operated as she has filed return of income ‘under protest’. It was submitted that no incriminating material and undisclosed assets were found and seized during the course of search conducted by Revenue against Sh. Munna Lal which could evidence that the assessee had any undisclosed income. Our attention was drawn to statement of fact, which is placed at page 1/pb. It was submitted that none of the condition laid down by Hon’ble Supreme Court in its aforesaid judgment is fulfilled and hence , this second MA filed by Revenue is liable to be quashed. It was also submitted that the assessee has raised ground number 2 before the tribunal, wherein legal challenge was raised to initiation of proceedings u/s 158BD of the Act, being bad in law, the block assessment order dated 30.01.2004 is liable to be held and declared as non-est in the eyes of law and prayers were made to dismiss this MA and upheld the appellate order dated 01.02.2016 passed by tribunal

2.10. We have considered rival contentions and perused the material on record. We have observed that there was a search and seizure operations conducted by Revenue u/s 132(1) of the Income-tax Act, 1961 against Shri Munna Lal Verma at his residential and business at Nautanwa and Gorakhpur, on 08.12.1999. Shri Munna Lal Verma had expired on 06.10.1999. The assessee is wife of Shri Munna Lal . Since as per version of Revenue , certain incriminating documents and undisclosed assets pertaining to the assessee were found and seized during the course of search and seizure operations conducted by Revenue u/s 132(1) of the 1961 Act against Shri Munna Lal, the proceedings u/s 158BD were initiated against the assessee. The statutory notices u/s 158B was issued by AO to the assessee, which was duly served on the assessee. The assessee filed its return of income in pursuance to notice u/s 158BD for block period, disclosing ‘Nil’ undisclosed income. The said return of income was filed by assessee ‘Under Protest’. The assessee asked AO to provide reasons for initiating proceedings against the assessee u/s 158BD of the Act. The AO supplied the reasons(satisfaction note) recorded by Revenue for initiating proceedings u/s 158BD of the 1961 Act against the assessee. The assessee also raised her grievance before AO that no incriminating material or undisclosed assets pertaining to the assessee were found by Revenue during the course of search and seizure proceedings conducted against Mr. Munna Lal u/s 132(1) of the 1961 Act, on 08.12.1999. The assessee has claimed that the assets discovered were disclosed in wealth tax returns and hence the same cannot be called as undisclosed assets .Similar legal jurisdictional objections were raised by assessee before ld. CIT(A). The authorities below disposed of the said legal jurisdictional objections raised by assessee, by speaking order . The ld. CIT(A) has partly allowed the appeal filed by the assessee. On perusal of assessment order and the appellate order passed by ld. CIT(A) and based on material available on record, we have observed that the assessee never raised the issue of search being declared invalid on the grounds that the search warrant was issued by Revenue in the name of deceased person, as the search warrant was executed on 08.12.1999 , while Shri Munna Lal died on 06.10.1999. The assessee never agitated before authorities below that all consequential proceedings to aforesaid search are to be declared as invalid and non-est in the eyes of law on the grounds that search warrant was issued in the name of deceased person. The assessee participated and co-operated in assessment proceedings as well appellate proceedings. It is equally true that the assessee did raised the legal challenge but the same was on the ground that no satisfaction was recorded before initiating proceedings u/s 158BD against the assessee as well that no incriminating material and undisclosed assets pertaining to the assessee were found during the course of search and seizure operations conducted by Revenue u/s 132(1) of the 1961 Act against Mr. Munna Lal Verma, husband of the assessee on 08.12.1999. These legal jurisdictional objections were disposed of by both the authorities below by speaking order, but there was no legal challenge raised by assessee before lower authorities as to the search being invalid on the grounds that search warrant was issued in the name of deceased person. The assessee has claimed that vide ground number 2 raised before the tribunal, it has challenged the legality and validity of search. The ground number 2 raised by assessee in memo of appeal filed with tribunal is reproduced hereunder:

“2. Because the very initiation of proceedings under section 158BD , being bad in law , the block assessment order dated 30.1.2004 is liable to be held and declared as nonest in the eyes of law.”

As could be seen , the above ground of appeal is general in nature and there is no specific mention that assessee is seeking quashing of assessment order passed against the assessee on the grounds that the search conducted by Revenue u/s 132(1) of the 1961 Act on 08.12.1999 against the husband of the assessee who expired on 06.10.1999 is invalid on the grounds that search warrant was issued in the name of a deceased person. The assessee for the first time raised this issue before the Bench at the time of hearing of appeal. It is equally true that legal ground which does not require fresh investigation of fact can be raised at any time by tax-payer before the appellate authorities so long as relevant facts are on record in respect of that issue. Reference is drawn to decision of Hon’ble Supreme Court in the case of NTPC Limited v. CIT reported in (1998) 229 ITR 383(SC). Thus, in nut-shell the assessee although filed its return of income ‘Under Protest’, but the issues of protest were altogether different and they were addressed to by authorities below by speaking order and the assessee participated and co-operated in the proceedings conducted by AO as well ld. CIT(A). The tribunal . vide appellate order dated 01.02.2016 , was pleased to allow the appeal filed by assessee on the legal ground that the search conducted by Revenue on Mr. Munna Lal Verma on 08.12.1999 was invalid , as search warrants were issued by Revenue on a deceased person namely Mr. Munna Lal Verma who expired on 06.10.1999 and the search having taken place on 08.12.2009, and hence all consequential proceedings are bad in law and liable to be quashed which led to quashing of block period assessment order framed by Revenue against the assessee under the provisions of Section 158BD read with Section 158BC(c ) of the 1961 Act. The tribunal vide aforesaid appellate order dated 01.02.2016 , held as under:

“ 5. We have heard the rival submissions and carefully considered the same along with the order of the tax authorities below. At the outset, learned AR before us vehemently contended that the husband of the assessee has expired on 6.10.1999 and the search warrant and search has taken place in the case of husband of the assessee on 8.12.1999, i.e. after the date of search and this fact is apparent from the assessment year. The block assessment is made in the case of the assessee only in consequence of the search taken place if the search is invalid and such warrant is on a deceased person the assessment order passed in consequence of the search cannot be valid one. The fact that the search warrant is on Late Munna Lal husband of the asessee is not denied by the DR which is also a fact which is apparent from the order that Late Munna Lal has expired on 6.10.1999 and in the case the search has taken place on 8.12.1999. In view of the provision of Section 132(1) , the designated authority of the Revenue can take the search and seizure action only if they have the information in their possession and has the reasons to believe relating to the particular person. In our opinion, it cannot be a person who is not in existence the assessment. Under Chapter XIVB Assessment has to be made in consequence of a search carried out u/s. 132 to assess the undisclosed income of the assessee. If the search itself is invalid, we are of the view that no assessment can be made in consequence of such search. The learned DR even though relied upon the order of the CIT(A) but could not adduce any evidence or any case law which has taken a contrary view. The provision of Section 158BD will also apply where the Assessing Officer is satisfied that any undisclosed income belongs to any person other than the person with respect to him search was made u/s. 132 since the person in respect of search was made u/s. 132 was not in existence and it is invalid , therefore, the provision of Section 158BD in our opinion can also not apply. We therefore agree with the contention of the learned AR and quash the assessment made on the assessee in consequence of the search carried out on a deceased person. Since, we have already quashed the assessment, therefore, in our opinion the other grounds relating to the other issue do not require adjudication.

6. In the result, the appeal filed by the assessee is allowed.”

2.10.2 The Revenue being aggrieved by aforesaid tribunal’s order dated 01.02.2016 moved first miscellaneous application with the tribunal bearing number M.A.No.19/Alld/2016 arising out of ITA No. 135/Alld./2016 , which was dismissed by tribunal vide orders dated 28.11.2016, wherein tribunal held as under:

“3. After hearing learned D.R. and going through the Misc. Application, we noted that in this case the Tribunal has quashed the assessment vide order dated 01/02/2016 by observing as under:

“We therefore , agree with the contention of learned A.R. and quash the assessment made on the assessee in consequence of the search carried out on a deceased person. Since we have already quashed the assessment, therefore, in our opinion the other grounds relating to the other issues do not require any adjudication.”

The Misc. Application has been moved on the contention that this Tribunal does not have the jurisdiction to adjudicate upon the issue of validity of the search conducted u/s 132 of the Act. The issue about the jurisdiction of the Tribunal to decide the validity of the search is pending before the Special Bench. We may point out that in the order of the Tribunal dated 01/02/2016 the Tribunal has not adjudicated the issue relating to the validity of the search. The tribunal has quashed the assessment as the search has been carried out on a deceased person. In view of this fact, we do not find any mistake in the order of the Tribunal dated 01/02/2016. We , therefore , dismiss the Misc. Application filed by the Revenue.

5. In the result , the Misc. Application of the Revenue stands dismissed.”

Thus, the tribunal vide orders dated 28.11.2016 dismissed the Misc. Application filed by Revenue on the grounds that the tribunal has quashed the assessment as search was carried out by Revenue on the deceased person and hence consequential assessment made u/s 158BD read with Section 158BC(c ) of the 1961 Act on the assessee who is wife of person searched , cannot survive and was quashed . The tribunal also clarified in MA order that the tribunal vide its appellate order dated 01.02.2016 has not adjudicated on the issue of validity of search but only assessment framed was quashed as the search was conducted on deceased person. If both the appellate order dated 01.02.2016 passed by tribunal and the order dated 28.11.2016 passed by tribunal in first MA filed by Revenue are read together, it is clear that there is a mistake apparent in record as the appellate order dated 01.02.2016 passed by tribunal held that since search warrant was issued in the name of deceased person, the search was held to be invalid by tribunal and thereafter as a necessary corollary to the same, consequential assessment proceedings were held to be bad in law and block period assessment framed against the assessee by invoking provisions of Section 158BD was quashed, while in MA order it is stated that search was not declared invalid by the tribunal in its orders dated 01.02.2016 , but only assessment was quashed as search has been carried out on a deceased person. There is an obvious conflict , as unless search is declared invalid, the consequential assessments cannot be quashed . Thus, mistake apparent from record has emerged in orders passed earlier by tribunal which is to be rectified.

2.10.3 After the dismissal of the aforesaid first MA on 28.11.2016 by tribunal, Hon’ble Supreme Court pronounced a judgment dated 21.03.2017 in the case of Gunjan Girishbhai Mehta v. Director of Investigation reported on (2017) 393 ITR 310(SC), wherein Hon’ble Apex Court held as under:

3. Notice under Section 132 of the Income Tax Act, 1961 (for short “the Act”) was issued in the name of a dead person. The said notice was duly received by the present petitioner as the legal heir of the dead person. Notice of assessment under Section 158BC of the Act was issued and in the assessment proceedings, where the income was declared to be ‘nil’, the present petitioner as the legal heir had participated. Thereafter, notice under Section 158BD of the Act was issued to the present petitioner on the basis of information coming to light in the course of search. Aggrieved, the petitioner moved the High Court and on dismissal of the writ petition filed, the present Special Leave Petition has been instituted.

4. The point urged before us, shortly put, is that if the original search warrant is invalid the consequential action under Section 158BD would also be invalid. We do not agree. The issue of invalidity of the search warrant was not raised at any point of time prior to the notice under Section 158BD. In fact, the petitioner had participated in the proceedings of assessment initiated under Section 158BC of the Act. The information discovered in the course of the search, if capable of generating the satisfaction for issuing a notice under Section 158BD, cannot altogether become irrelevant for further action under Section 158BD of the Act.

5. The reliance placed on the decision of the High Court of Punjab and Haryana in CIT v. Rakesh Kumar, Mukesh Kumar [2009] 313 ITR 305/178 Taxman 224 against which Special Leave Petition [SLP(C) NO. CC 3623/2009] has been dismissed by this Court and the decision of this Court in Asstt. CIT v. A.R. Enterprises [2013] 350 ITR 489/212 Taxman 531/29 taxmann.com 50 (SC) are on entirely different facts.

6. In Rakesh Kumar, Mukesh Kumar (supra) the challenge was to the proceedings of assessment under Section 158 BC of the Act on the basis of a search warrant issued in the name of a dead person. The issue in A.R. Enterprises (supra) has no similarity to the issue in hand, namely, the validity of the proceedings under Section 158BD of the Act.

7. For the aforesaid reasons, we find no merit in this Special Leave Petition. The same is accordingly dismissed.”

The Hon’ble Supreme Court in the above judgment, thus, held that the information discovered in the course of search , if capable of generating the satisfaction for issuing a notice u/s. 158BD , cannot altogether become irrelevant for further action u/s. 158BD of the Act. The assessee in the instant case before us, participated and co-operated in proceedings before the lower authorities as detailed above (same is not repeated for sake of brevity) and never raised this issue of invalidity of search on the grounds that the search warrant was issued in the name of deceased person. The Revenue has claimed that it has unearthed incriminating material and undisclosed assets pertaining to assessee during the course of search operations conducted by it on the husband of the assessee namely Shri Munna Lal Verma , on 08.12.1999. Thus, the proceedings conducted u/s 158BD cannot be held to be bad in law in the instant case, which is in consonance with ratio of decision of Hon’ble Apex Court in the case of Gunjan Girishbhai Mehta(supra). The law declared by Hon’ble Supreme Court is binding on all Courts under Article 141 of the Constitution of India and any judgment passed in contravention of law declared by Hon’ble Supreme Court is per incuriam and cannot be upheld , and thus it could be said that mistake apparent from records has crept in the judgment passed by any inferior Court in case it is passed in contravention with the law declared by the judgment of Hon’ble Supreme Court. It is equally true that Hon’ble Supreme Court interprets the law and the judgment declaring law shall go back to the date when law was originally enacted , unless specified in the judgment. The order passed by tribunal dated 01.02.2016 is in variance/contravention with the ratio of law laid down by Hon’ble Supreme Court in the case of Girish Gunjanbhai Mehta(supra) and this decision of the tribunal although passed prior to Hon’ble Supreme Court judgment cannot be sustained in the eyes of law owing to judgment passed by Hon’ble Supreme Court in the case of Girish Gunjanbhai Mehta(supra). Revenue is before us with this second MA agitating that the appellate order dated 01.02.2016 passed by tribunal in contravention of judgment of Hon’ble Supreme Court in the case of Gunjan Girishbhai Mehta(supra) be recalled , and as we have observed that the decision of tribunal vide appellate order dated 01.02.2016 is directly in conflict with the ratio of law laid down by Hon’ble Supreme Court in the aforesaid judgment, hence we are constrained to recall the order dated 01.02.2016 passed by tribunal in ITA no. 135/Alld/2016 for Block Period 01.04.1989 to 08.12.1999. Our decision is fortified by the decision of Special Bench of ITAT, Delhi in the case of I.T.O. v. Padam Prakash (HUF), reported in (2010) 127 TTJ 311(Delhi-SB), wherein Special Bench was pleased to hold, as under:

“This miscellaneous application has been filed by the Revenue pointing out a mistake in the order dt. 26th Sept., 2008 passed in MA No. 5/Delhi/ 2008 arising in ITA No. 2964/Delhi/2002.

2. The Special Bench of the Tribunal in ITA No. 2964/Delhi/2002 in the case of Padam Prakash had held that enhanced compensation received by the assessee from the acquisition authorities in respect of its land was to be assessed on receipt basis. The Tribunal also passed some directions relating to interest payable on compensation/enhanced compensation. Subsequently, MA No. 5/Delhi/2008 was filed before the Special Bench and the following order dt. 26th Sept., 2008 was passed :

“IN THE INCOME TAX TRIBUNAL
Delhi Bench ‘E’ Special Bench
Before Hon’ble President Shri Vimal Gandhi,
Shri I.P. Bansal, JM and Shri P.M. Jagtap, AM
MA No. 5/Delhi/2008
(ITA No. 2964/Delhi/2002)
Asst. yr. 1995-96

Dy. CIT, Cir.II, Meerut vs. Shri Padam Prakash (HUF), 21, Shivaji

Road, Meerut, C/o M/s Malik & Co., 305/7, Thapar Nagar, Meerut.

(Department)                                 (Assessee)

Assessee by : Shri H.G. Malik, Adv.

Department by : Shri Alok Kumar, Sr. D.R.
OrderVimal Gandhi, President :

This miscellaneous application has been filed by the assessee under s. 254(2) of the IT Act alleging that in the Special Bench decision dt. 29th Sept., 2006, the Bench failed to record any finding on the decision of Hon’ble Karnataka High Court in the case of Chief CIT & Anr. v. Smt. Shantavva [2004] 188 CTR (Kar.) 162 : [2004] 267 ITR 67 (Kar.) and on the case of CWT v. T. Girijammal [2006] 284  ITR 482 (Mad.) cited before the Special Bench for consideration and application. Therefore, there is a mistake in the decision of the Special Bench, which is liable to be rectified under s. 254(2) of the IT Act.

2. The miscellaneous application was fixed and both the parties have been heard. It is an admitted position that decision of the Special Bench was challenged in appeal under s. 260A of IT Act before the High Court and Hon’ble High Court, as per their decision dt. 25th Feb., 2008 [reported as Chandi Ram & Ors. v. CIT [2008] 217 CTR (P&H) 113: [2008] 4 DTR (P&H) 25—Ed.], has held that order of Special Bench is not sustainable. The order of the Tribunal has merged with the order of the High Court and there is no question of rectification of any mistake as at present. The miscellaneous application is, therefore, filed.

3. In the result, application is dismissed.

Pronounced in open Court on the date of hearing on 26th Sept., 2008

sd/-                                           sd/-                                      sd/-

(P.M. Jagtap)                         (I.P. Bansal)                  (Vimal Gandhi)

Accountant Member             Judicial Member                    President

Dated : 26th Sept., 2008.

Copy of the order forwarded to :
1.Dy. CIT, Cir. II, Meerut.

2.Shri Padam Prakash (HUF), 21, Shivaji Road, Meerut, C/o M/s Malik & Co., 305/7, Thapar Nagar, Meerut.

3.CIT

4.CIT(A), Meerut.

5.Departmental Representative

Dy. Registrar, ITAT”

3. The Revenue has moved present miscellaneous application, pointing out that observations made in para No. 2 in the above order are wrong and are constituting a mistake apparent from record. It has been pointed out that Hon’ble Punjab & Haryana High Court is not the jurisdictional High Court as the case pertains to Uttar Pradesh.

4. During the course of hearing of this miscellaneous application, it was brought to the notice of the parties that Hon’ble Supreme Court has now decided the issue in the case of CIT Ghanshyam (HUF) in Civil Appeal No. 4401 of 2009 vide decision dt. 16th July, 2009 [reported at [2009] 224 CTR (SC) 522 : [2009] 26 DTR (SC) 129—Ed.] finally and, therefore, the decision of Hon’ble Punjab & Haryana High Court is no more a good law. The Revenue should suitably modify the miscellaneous application having regard to the final decision of the Supreme Court.

5. However, no fresh application has been filed as directed. The Special Bench is sitting for the third time to hear this small issue. The Revenue has sought further time to move a fresh application. There is no co-operation from the assessee’s side who has also sought an adjournment. In the circumstances of the case, we are of the view that there is no need to adjourn the hearing as the matter can be disposed of without further loss of time.

6. On the facts and circumstances of the case and in view of the development noted above, it is more than clear that the observations made in order dt. 26th Sept., 2008 are not sustainable under the law and constitute a mistake apparent from record. The order would lead to unnecessary confusion when the matter has been clarified by the Hon’ble Supreme Court. Accordingly, order dt. 26th Sept., 2008 is rectified and is withdrawn. It is held that anything stated in the aforesaid order shall not affect the rights of the parties. It stands withdrawn. The miscellaneous application is allowed in terms stated above.”

As can be seen from aforesaid decision of Hon’ble Special Bench of ITAT(Delhi) , the first MA filed by Revenue was dismissed by the tribunal. The second MA was filed by Revenue pointing out that the observation of the Bench in para 2 of first MA are not correct which is a mistake apparent from record as Hon’ble Punjab and Haryana High Court is not jurisdictional High Court. In the meantime , Hon’ble Supreme Court has decided the issue in the case of CIT v. Ghanshyam (HUF) in Civil Appeal No. 4401 of 2009 vide decision dt. 16th July, 2009 [reported at [2009] 224 CTR (SC) 522 : [2009] 26 DTR (SC) 129—Ed.] which was brought to the notice of the Bench and directions were issued by Bench to Revenue to suitably modify its Misc. Application having regard to final decision of Hon’ble Supreme Court, but no fresh application was filed by Revenue modifying its MA. The Bench using its Suo motu powers rectified tribunal order passed in appeal by withdrawing the same keeping in view finality of issue settled by Hon’ble Supreme Court in the case of Ghanshyam(HUF) (supra) , thus the MA filed by Revenue stood allowed and the appellate order passed by tribunal was recalled and stood withdrawn .

2.10.4 The second authority on this issue is the decision of Ahmedabad-tribunal in the case of Wealth Tax Officer v. Nirman Shrayansbhai Shah reported in (1995) 51 TTJ 239(Ahd.), wherein tribunal held as under:

“5. We have heard the learned Departmental Representative and also carefully and maticulously studied the entire judgment of the Hon’ble Supreme Court in Singhania’s case in the light of the order passed by us on 30th December, 1993 in the appeal. We have also carefully gone through the reasons given by our learned Brothers in the MA order. In our considered view, the order passed by us on 30th December, 1993 now requires rectification in terms of section 35 of the Wealth-tax Act, 1957. But before we give our detailed reason for rectifying the appeal order of this Tribunal dated 30th December, 1993, we would, at the very outset with a view to clear and dispel any doubt or dispute say that the law enunciated by the Supreme Court should be and is the law of this country as enshrined in Art. 141 of the Constitution of India. It will, therefore, not only be futile, but even ridicuous, now to embark upon any debate, argument or discussion, by referring to any decisions or authorities on this very obvious proposition that the law enunciated and declared by the Supreme Court shall be law of the land. But, since it is to move in the world of law only on the crutches of precedents, useful reference may be made to the decision of the apex Court rendered some three decades back in the year 1962 in the case of East India Commercial Co. Ltd. reported in AIR 1962 SC 1893.

6. It is, therefore, the bounden duty of all Courts and Tribunals within the territory of India to bring their judgments and orders in consonance and in conformity with the law of the land as declared by the Highest Court of this country. The judgment of the Hon’ble Supreme Court in Singhania’s case (supra) has finally enunciated, pronounced and declared the correct interpretation and application of the provisions of rule 1D of the Wealth-tax Rules. In the instance case, the Assessing Officer has very rightly applied the correct law for valuing the unquoted equity shares on break up method as prescribed under rule 1D. But the first appellate authority did not agree with the Assessing Officer and directed him to value those unquoted equity shares on profit earning or yield basis on the basis of the Supreme Court’s decision in the case of Smt. Kusumben D. Mahadevia (supra), and this Tribunal approved the decision of the first appellate authority. Now in February, 1994, the Hon’ble Supreme Court finally interpreted the true effect, meaning, purpose and applicability of rule 1D by laying down in Singhania’s case (supra) that the said rule is mandatory; that it is binding on all the authorities functioning under the Wealth-tax Act including the Valuation Officer; that the unquoted equity shares have to be valued as per the method prescribed in rule 1D r/w relevant clauses of Explanation II of the said rule, etc., and which we have extracted elsewhere above in this order. That being the situation, now a mistake of law in this Tribunal’s order is apparent and brazenly visible and, therefore, the demand of justice and the law contained in section 35 of the Wealth-tax Act is that the erroneous order should be rectified and respectfully brought in consonance and in conformity with the judgment of the Highest Court of the land rendered in Singhania’s case (supra).

7. The Hon’ble Supreme Court in Singhania’s case (supra) has also overruled, impliedly, the judgment of the Hon’ble Gujarat High Court in the case of Ashok K. Parikh (supra) by laying down in explicit and clear terms in clause (4) of the summary of conclusions printed at page 34 of the Reports (207 ITR) that sub-clause (a) of clause (i) and sub-clause (e) of clause (ii) has to be read, understood in the manner indicated in this judgment hereinabove.

8. We have highest regard and respect for our learned Brothers who passed the order in MA No. 18/Ahd/1994 dismissing the Revenue’s miscellaneous application under section 35 of the Act on this very issue and there is least doubt about their competence and ability to comprehend any controversy and adjudicate the same judiciously. But, it appears to us on going through the reasons given by them in the said MA order that they got swayed away by the fallacious arguments advanced by the assessee’s authorised representative that the appeal before the Hon’ble Supreme Court in the case of Ashok K. Parikh (supra) from the Hon’ble Gujarat High Court was pending and was not decided or disposed off by the Hon’ble Supreme Court while disposing Singhania’s (supra) case and other appeals pending on similar issue and controversy. Our learned Brothers have also agreed and accepted the arguments advanced in that case by the assessee’s authorised representative that in spite of the decision of the Supreme Court in Singhania’s case (supra), the issue regarding the valuation of unquoted shares was a debatable one and, therefore, outside the ambit and scope of section 35 of the Wealth-tax Act. Our learned Brothers also conceded that even after the decision of the Supreme Court, investigation or enquiry into the facts are required for valuing unquoted equity shares and, therefore, the matter is beyond the provisions of section 35 of the Act.

9. The Hon’ble Supreme Court in Singhania’s case (supra) has discussed the judgment rendered by the Hon’ble Gujarat High Court in the case of Ashok K. Parikh (supra) and has overruled it, impliedly, as is evident from the summary of final conclusion given in clause (4) printed at page 34 of the reports (207 ITR). This apart, from the direction given by Their Lordships of the Hon’ble Supreme Court in Singhania’s case at pages 34 and 35 of the said reports (207 ITR), it is indubitably crystal clear that all appeals pending in the Supreme Court on the validity, application and interpretation of rule 1D shall be deemed to have been allowed in terms of the opinion expressed in the said judgment. It is further directed by Their Lordships that all reference applications of the Revenue which have been dismissed by the Tribunal shall be deemed as allowed and questions asked for shall be deemed to have been referred and answered in terms of the said judgment. The apex Court has further held that all appeals filed by the assessees against the orders of the High Court dismissing their reference applications are dismissed and that the Tribunals shall pass appropriate order in each case accordingly. From these directions, there is no scope or room for any authority, including this Tribunal, to say that the judgment of the Hon’ble Gujarat High Court in the case of Ashok K. Parikh is still pending for adjudication before the Hon’ble Supreme Court and that the same has not been overruled by the apex Court through the judgment in Singhania’s case.

10. This Tribunal, in any appeal coming up for consideration after the judgment of the Supreme Court in Singhania’s case, on the issue of valuation of unquoted equity shares of companies have to essentially follow and abide by the judgment and directions given in Singhania’s case. That being the case, we see no reason not to allow this Revenue’s application under section 35 of the Act and amend the appeal order dated 30th December, 1993 by bringing it in conformity with the law of the land enunciated, pronounced and declared by the Supreme Court in Singhania’s case.

11. Let us take an extreme view that we dismiss this miscellaneous application of the Revenue as has been done by our learned Brothers in the MA order. The matter will not come to end here, but will travel to Their Lordships of Gujarat High Court either under section 27 of the Wealth-tax Act or by way of application by the Revenue under Art. 226/227 of the Constitution of India and surely the Hon’ble Gujarat High Court on the strength of the judgment of Hon’ble Supreme Court in Singhania’s case (supra) will direct this Tribunal to follow respectfully the judgment of the Supreme Court in Singhania’s case and amend the appeal order and bring it in conformity with the law of the land declared by Supreme Court in the said case of Singhania. When this is going to be the final and ultimate end result, we see no justifiable reason to dismiss this Revenue’s application and involve the Revenue and the assessee into frivolous and vexatious litigation, yielding no substantial or tangible gains to any litigant. It will be, as a matter of fact, against public policy to proliferate and prolong unwanted, undesirable and unwarranted litigation particularly after Supreme Court judgment which we reiterate declares the law of the land.

12. The stand of the Assessing Officer has been vindicated by the judgment of the Supreme Court in Singhania’s case. The Revenue has finally emerged victorious in the legal battle on the issue of valuation of unquoted equity shares after several years in the Highest Court of the land and, therefore, it is but fair and just that it should reap and taste the fruits of success by amending and rectifying, in accordance with the provisions of section 35 of the Wealth-tax Act, the appeal order dated 30th December, 1993.

13. Strictly speaking, this Tribunal should, as directed by the Supreme Court in Singhania’s case suo motu and without waiting for any application from the Revenue, pass appropriate order under section 35 of the Wealth-tax Act rectifying the appeal order passed by it.

14. The Assessing Officer in this case, applied the method provided in rule 1D for valuing the unquoted equity shares and now after a lapse of many years it has become evident from the judgment of the Hon’ble Supreme Court rendered in Singhania’s case (supra) that he did not commit any error but it is the appellate authorities, including this Tribunal, which committed mistakes and errors of law. No further investigation or enquiry is required to be made either by this Tribunal or by the Assessing Officer on the basis of the judgment of the Supreme Court in Singhania’s case.

15. For these reasons, we are inclined to allow this miscellaneous application of the Revenue and not dismiss it, as has been done by our learned Brothers in MA 18/Ahd/1994.

16. We would like to say and add hastily that when we read the judgment of apex Court in Singhania’s case (supra) in its entirety and that too vividly and in a proper perspective and with correct judicial approach, we do not find that this case or any other case for that matter, about the valuation of unquoted equity shares of companies as per rule 1D of the Wealth-tax Rules, require any further enquiry or investigation of facts or otherwise or that a debate can ensue on the strength of the elaborate and well reasoned judgment of the Hon’ble Supreme Court in Singhania’s case. To be more candid, the debate ended upon the delivery of the judgment by the Hon’ble Supreme Court in Bharat Hari Singhania’s case on 17th February, 1994 (supra) and the only course open to this Tribunal or any other authority functioning under the Wealth-tax Act is to correct the orders by bringing it in consonance and in conformity with the said judgment of the Highest Court of this country. This is what we wish to do in this case.

17. We, therefore, in the end, in terms of section 35 of the Wealth-tax Act amend and reverse our order dated 30th December, 1993 passed in the main appeals filed by the Revenue and uphold the valuation done by the Assessing Officer in respect of the unquoted equity shares of the company as declared by the assessee in the various respective assessment years.

18. The application of the Revenue is allowed and consequently, the Revenue’s appeal also stands allowed. “

In this case also the tribunal while adjudicating second MA filed by Revenue , allowed the MA filed by Revenue and reversed the main appellate order passed by tribunal to bring it in line with the judgment passed by Hon’ble Supreme Court in the case of Bharat Hari Singhania v. CWT (1994) reported in (1994) 207 ITR 1(SC). The tribunal appellate order was passed on 30.12.1993. The first MA filed by Revenue was finally heard on 27.09.1994 and disposed of by order dated 21.10.1994. The Hon’ble Supreme Court pronounced the judgment in the case of Bharat Hari Singhania(supra)16.02.1994 , which was after the main appellate order passed by tribunal on 30.12.1993. Thereafter, Revenue filed second MA with tribunal agitating that the tribunal appellate order dated 30.12.1993 suffers from mistake apparent from record as the same is not in conformity with the ratio of judgment dated 16.02.1994 of Hon’ble Supreme Court in the case of Bharat Hari Singhania(supra) and it was sought that amendment be made in appellate order passed by tribunal to bring it in line with aforesaid decision of Hon’ble Supreme Court. The tribunal , thus, allowed the second MA filed by Revenue and consequently, allowed the appeal filed by Revenue, keeping in view ratio of decision of Hon’ble Supreme Court in the case of Bharat Hari Singhania(supra).

2.10.5 Thus at the cost of repetition, in the instant case before us, it is reiterated that the Hon’ble Supreme Court in the above judgment, thus, held that the information discovered in the course of search , if capable of generating the satisfaction for issuing a notice u/s. 158BD , cannot altogether become irrelevant for further action u/s. 158BD of the Act. The assessee in the instant case before us, participated and co­operated in proceedings before the lower authorities as detailed above (same is not repeated for sake of brevity) and never raised this issue of invalidity of search on the grounds that the search warrant was issued in the name of deceased person. The Revenue has claimed that it has unearthed incriminating material and undisclosed assets pertaining to assessee during the course of search operations conducted by it on the husband of the assessee namely Shri Munna Lal Verma , on 08.12.1999. Thus, the proceedings conducted u/s 158BD cannot be held to be bad in law in the instant case, which is in consonance with ratio of decision of Hon’ble Apex Court in the case of Gunjan Girishbhai Mehta(supra). The law declared by Hon’ble Supreme Court is binding on all Courts under Article 141 of the Constitution of India and any judgment passed in contravention of law declared by Hon’ble Supreme Court is per incuriam and cannot be upheld , and thus it could be said that mistake apparent from records has crept in the judgment passed by any inferior Court in case it is passed in contravention with the law declared by the judgment of Hon’ble Supreme Court. It is equally true that Hon’ble Supreme Court interprets the law and the judgment declaring law shall go back to the date when law was originally enacted , unless specified in the judgment. The order passed by tribunal dated 01.02.2016 is in variance/contravention with the ratio of law laid down by Hon’ble Supreme Court in the case of Girish Gunjanbhai Mehta(supra) and this decision of the tribunal although passed prior to Hon’ble Supreme Court judgment cannot be sustained in the eyes of law owing to judgment passed by Hon’ble Supreme Court in the case of Girish Gunjanbhai Mehta(supra). We have observed that the decision of tribunal vide appellate order dated 01.02.2016 is directly in conflict with the ratio of law laid down by Hon’ble Supreme Court in the aforesaid judgment, hence we hereby order recalling of the appellate order dated 01.02.2016 passed by tribunal in ITA no. 135/Alld/2016 for Block Period 01.04.1989 to 08.12.1999 and also quash the MA order dated 28.11.2016 passed by tribunal, as it is directly in conflict with Hon’ble Supreme Court decision in the case of Girish Gunjanbhai Mehta(supra). The Registry is directed to fix the appeal in ITA no. 135/Alld/2006 before Regular Bench in due course. Registry is directed to issue notices to both the parties. We order accordingly.

3. In the result, M.A. No. 16/Alld/2017 arising out of ITA No. 135/Alld/2006 for the Block Period 01.04.1989 to 08.12.1999 , is allowed.

Order pronounced in the open Court on 09 /03/2021 at Allahabad .

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