Case Law Details
HIGH COURT OF KERALA
Commissioner of Income-tax, Cochin
v/s.
Khyber Foods
IT APPEAL NOS. 1201, 1218, 1268 & 1311 OF 2009
JANUARY 10, 2012
JUDGMENT
C.N. Ramachandran Nair, J.
The two sets of appeals pertain to two assessees, one by name M/s. Bimbis South Star and the other by name M/s. Khyber Foods, both assessed based on search conducted under Section 132 of the Income Tax Act. Even though there is only one assessment, the two appeals happened to be filed in the case of two assessees only because both the Revenue as well as the assessee were in appeal before the Tribunal. We have heard Senior counsel Sri P.K.R. Menon appearing for the Revenue and Senior counsel Sri T.M. Sreedharan appearing for the respondent.
2. The only question raised is whether the Tribunal was justified in holding that the assessments were invalid for the reason that search warrant issued in Form 45 was invalid. The contention of Senior counsel for the Revenue is that assessee never had a case on the validity of assessments except at the Tribunal stage when the assessee raised additional grounds in second appeals contending that warrants issued in the name of group concerns is invalid. The assessees in support of their contention against validity of assessment heavily relied on the order issued by the Tribunal in the case of a group of related assessees namely, P.C. Roy, Jose Kurian and others commonly called CARBO Group of concerns, the assessments of whom were also cancelled by the Tribunal on the ground that search warrant issued was in the name of group concerns with names of the assessees separately stated therein. Senior counsel for Revenue has relied on Division Bench decision of this court in Jose Cyriac v. Commissioner of Income-tax [2011] 336 ITR 241 (Ker.) wherein this court reversed the said order of the Tribunal relied on by them in allowing the assessee’s claim in these cases. Since the Tribunal has relied on their own order which stands now reversed by judgment of this court above referred, the appeals filed by the Revenue have to be necessarily allowed by vacating the orders of the Tribunal and with direction to the Tribunal to decide the appeals on merits. However, since counsel for the respondent has raised a contention about the maintainability, we have to necessarily examine the nature of the infirmity pointed out in these cases. In this regard we called for copies of the warrants issued in Form No.45 and also the Panchanamas prepared. It is seen that simultaneous search was made based on warrants issued under Section 132 in three premises on 10.3.1999. One of the premises searched under the warrant issued consist several establishments in the same building under the names Bimbis Fast Food, Bimbis Ice Cream, Khyber Hayath (sadhya) and Lala Fast Food. So far as the search conducted in these buildings at DH Road, Jose Junction, Ernakulam, is concerned, we notice that after writing in the warrant in Form 44 that the establishment to be searched is “Bimbis Group of Concerns”, it is specifically stated that the premises to be searched are as follows “Bimbis, D.H. Road, Jose Junction, Cochin, with concerns such as Bimbis Fast Food, Bimbis Ice Cream, Khaiber Hayath (sadhya) and Lala Fast Food. Admittedly all these concerns are housed in one and the same building and the department proceeded to search the premises as it is a group of concerns with common store room and common facilities. It is also pertinent to note from the search records produced by the department that food bills raised against the customers by Khyber Hayath (sadhya) restaurant and Bimbis Fast Food show the same telephone number 382357, which intrinsically prove that all the concerns are owned and managed by same party, though under separate group names and concerns for the purpose of income tax benefits. On going through the Tribunal’s order we notice that Tribunal has taken only one line from the warrant wherein the premises to be searched is stated as Bimbis Group of concerns and the Tribunal has not cared to note the individual names of assessees mentioned in the warrant which are extracted by us above. It is also seen that all the Panchanamas after search were received by the common person by name P.A. Abdul Gafoor, Manager of the concern. During search it was also noticed that all the group concerns had common store in the same building. It is seen that simultaneously on 10.3.1999 itself the Managing Partner’s house as well as another premises of the Bimbis functioning in another place at Ernakulam was also searched based on separate warrants. So much so, what we notice is that a common warrant is issued for searching several assessees functioning as a connected group in the same building and wherever the assessees were to be searched in other buildings, separate warrants were issued. We, therefore, find that the search is carried out strictly by following the procedure contained under Rule 112 and by issuing warrant by giving the names of each and every assessee separately after describing all of them as “Bimbis Group of Concerns”. Further, when notice after search was issued, each and every assessee without any objection filed return and contested the assessment on merit. In the first appeal stage also they had no contention that block assessments were invalid for want of separate warrants in the case of each and every assessee. However, at the second appeal stage the assessees raised the contention that warrants were defective and the Tribunal without even reading the entries in the warrant in the prescribed form, upheld the claim of assessees. In exactly similar circumstances we decided the above referred reported case by reversing the order of the Tribunal upholding the validity of assessments and by directing the Tribunal to decide the appeal on merits. Since the Tribunal has followed their order in allowing assessee’s claim which stands now reversed, we allow these appeals by setting aside the orders of the Tribunal and by restoring the appeals back to the Tribunal for decision on merits.
