Case Law Details
In the instant case, it is the assessment of person allegedly searched, which is disputed before us, unlike the notice issued for the assessment of `other person’ before the Hon’ble Supreme Court. Even otherwise, the issue of invalidity of the search warrant in that case was not raised at any point of time prior to the notice under section 158BD. On the contrary, the assessee contested the validity of search before the AO at the very threshold, immediately on receipt of notice u/s 153A. Moreover, in that case, a search operation actually took place and the defect, if any, claimed was in the warrant of authorization. In the oppugnation, the Revenue in the instant case has failed to demonstrate that any search action was, in fact, taken on the assessee. We are reminded of the celebrated judgment of the Hon’ble Supreme Court in Pooran Mal Vs. Director of Inspection (1974) 93 ITR 505 (SC) laying down that the material seized in an illegal search can be validly used by the income-tax authorities. The judgment in Gunjan Girishbhai Mehta (supra) is reiteration of almost the same view, when it held that `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.’ What to talk of some `information discovered in the course of search’ in the case under consideration, the Revenue has not proved the basic fact that the assessee was subjected to any search. Contention of the ld. DR, on the basis of certain observations made in the judgment of Gunjan Girishbhai (supra) validating the assessment on attending the assessment proceedings, that the validity of notice u/s 153A be upheld as the present assessee also attended the assessment proceedings, is sans merit. Such observations in the judgment are to be seen in the context in which these were made, being the actually carrying out of a search operation and finding of some incriminating material. It goes without saying that if no search is initiated or carried out, a simple participation by the assessee pursuant to notice of assessment, and that too, after registering a protest against such proceedings, cannot validate the jurisdiction of AO, if such jurisdiction is, in fact, absent.
Full Text of the ITAT Order is as follows:
These two cross appeals – one by the assessee and the other by the Revenue – arise out of the order passed by the CIT(A) on 14.10.2013 in relation to the A.Y. 2004- 05.
2. Succinctly, the facts, as recorded in the assessment order, are that a search and seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter also called `the Act’) was carried out in the Swastik Pipes group of cases on 28.08.2008. Notice u/s 153A was issued on 25.08.20 10 and served on the assessee. In response to the same, the assessee submitted vide its letter dated 7.10.20 10 that the return filed u/s 139 of the Act may be treated as its return of income in response to notice u/s 153A. Notice u/s 142 was issued and eventually, the assessment was completed on total income of Rs. 33,43,390/- as against the returned income of Rs. 13,390/-, thereby making an addition of Rs. 33,30,000/- on account of unproved share application money received from various persons. The assessee challenged initiation of proceedings u/s 153A before the ld. CIT(A), primarily, contending that no warrant of search was executed on the assessee company. The ld. CIT(A) dismissed such contention. Thereafter, he dealt with the addition made u/s 68 of the Act on merits. Out of total addition of Rs. 33,30,000/- made by the Assessing Officer, the ld. CIT(A) deleted the addition to the tune of Rs. 30,80,000/- and sustained the remaining addition of Rs. 2,50,000/-. Both the sides are in appeal on their respective stand points. The assessee, in its appeal, has, inter alia, challenged the initiation of proceedings u/s 153A of the Act.
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