Case Law Details
From the above provisions, it is clear that Section 132 contemplates existence of certain eventualities in the event of existence where of the competent authority should have reason to believe the existence of the circumstances mentioned in clause (a) to (c) of sub-section (1) of Section 132 of the Act and in the event, the competent authority mentioned in clause (A) & (B) of sub-section(1) of Section 132 of the Act can authorize the authorities mentioned in these two clauses conduct the search.
Therefore, the existence of reason to believe in consequence of the information in possession of the officer about existence of the reason to believe is not satisfied, there could possibly be no authorization, irrespective of the fact that it may have been made, and in turn, if any search is conducted in pursuance of the authorization issued in absence of the eventualities mentioned in clause (a) to (c) of sub-section (1) of Section 132 of the Act, the said search under section 132 of the Act cannot be said to be a valid search.
In the instant case, there complete information in possession of SP CBI about any jewellery, cash or any other document, which could reveal assessee was in possession of undisclosed assets or incriminating documents. It appears that the department acted upon the information provided by the police department on 29/03/2007 and on the same the warrant of authorization was issued and the search was conducted, but nothing is brought on record to substantiate that any cash was although, search was conducted on the information that undisclosed being carried out by the assessee. On the similar issue, the jurisdictional High Court in the case of CIT Vs. Smt. Chitra Devi (2009) 313 ITR 174 (Raj) held as under:-
“…..that the Revenue failed to produce records containing relevant material including information in the possession of the competent authority, on the basis of which it had entertained the reason to believe the existence of one or more of the eventualities covered by clauses (a) to (c) of section 132(1). In the absence of a legal search, in accordance with the provisions of section 132 the “block period” or the previous year in which the search was conducted could not be said to have come into existence and therefore any assessment order based on such search could not stand. The Tribunal was justified in holding that when the authorization to conduct the search based on reasons germane to section 132(1) did not exist the search became invalid and that the assessment order based on such search could not stand and had rightly set is aside. “
Similarly, the Hon’ble Supreme Court in the case of Union of India Vs. Ajit Jain and another (2003) 260 ITR 80 held as under:-
“(iii) intimation simpliciter by the CBI that money was found in the possession of the respondent, which according to the CBI was undisclosed, without something more, did not constitute “information” within the meaning of section 132 of the Income tax Act, 1961, on the basis of which a search warrant could be issued, and the search conducted on the basis of such information and the block assessment made pursuant to such search was not valid.”
In the present case also, the search was conducted only on the basis of the information received from S.P. C.B.I. that undisclosed cash being carried out by the assessee, but no such cash or any other incriminating documents, books of accounts, money, bullion, jewellery or other valuable article or thing were found in the possession of the assessee. Therefore, the authorization to conduct search based on reason under section 132(1) of the Act did not exist and the search became invalid. Therefore, the assessment order based on the said search cannot stand and to be set aside. We, therefore, are of the view that the assessment orders passed by the Assessing Officer on the basis of invalid search deserve to be set aside and quashed. Since, the assessment orders are directed to be quashed, therefore, no finding is given on other issues raised by the assessee or the department.
Source- Shri Parma Ram Bhakar, Vs. The DCIT (ITAT Jodhpur), ITA NOs.329, 341,342 & 330 /Jodh/2010, Date of pronouncement : 23/09/2013.
