IN THE ITAT MUMBAI BENCH ‘J’
J.M. Trading Corpn.
v.
Assistant
Commissioner of Income-tax,
G.D. AGRAWAL, VICE
PRESIDENT
AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER
IT APPEAL
NOS. 1435 TO 1438 AND 2629 (MUM.) OF 2007
[ASSESSMENT YEARs
1998-99 TO 2001-02 AND 2004-05]
SEPTEMBER 28, 2007
Section 132 of the Income-tax Act, 1961 -
Search and seizure - General - Assessment years 1998-99 to 2001-02 and 2004-05
- Whether mere mentioning of name in panchnama does
not lead to conclusion that a valid search was conducted against assessee -
Held, yes - Whether mere search of premises owned by assessee but rented to
another concern does not by any implication prove conduct of search as
enumerated under section 132 against assessee - Held, yes
Section 153A, read
with section 132 of the Income-tax Act, 1961 - Assessment in case of search on
requisition - Assessment years 1998-99 to 2001-02 and 2004-05 - Whether
provisions of section 153A are only applicable in case valid search is
conducted against assessee under section 132 - Held, yes
Facts
On the basis of a search
warrant, which also contained assessee firm’s name, search and seizure
operations were carried out under section 132 on a concern, which occupied assessee’s premises as tenant. Subsequently, the assessee’s original assessments framed under section 143(3)
were reframed under section 143(3) read with section 153A, which resulted in
making further additions in assessee’s hands. On
appeal, the Commissioner (Appeals) while dismissing the assessee’s
plea against the issue of notice under section 153A on the ground that there
was no search action conducted upon it, upheld the
impugned additions.
On second appeal:
Held
Section 132 provides
the acts and deeds to be carried out by the search team at the premises of the
assessee. The conduct of search includes acts, deeds and things enumerated
under section 132 which an authorized officer is bound to carry out in order to
complete the process of search. Search is an invasion of privacy of the assessee
and all proceedings connected with search need to be carried out within the
framework of the provisions of the Act. In case of non-compliance to the
provisions of the Act by the Authorised Officer, such
searches are invalid and illegal. In the instant case, no search was conducted
against the assessee as the premises occupied by the assessee were not entered
upon and searched by the Authorised Officer. Mere
search of the premises owned by the assessee but rented to another concern does
not by any implication prove the conduct of search against the assessee in view
of the fact that the assessee was not available at the address searched upon.
Mere mentioning of name in the panchnama does not
lead to the conclusion that a valid search was conducted against the assessee.
In the totality of circumstances, where no search had been conducted against
the assessee there was no merit in the issue of notice under section 153A under
which the jurisdictional area of operation is six assessment years immediately
preceding the assessment year relevant to the previous year in which search was
conducted. In case, no search is conducted against a person, the period of
operation to which the provisions of section 153A would apply, cannot be
determined and the invoking of provisions of section 153A is baseless. Though
the provisions of section 158BC are not applicable to searches conducted after
31-5-2003, but the provisions of section 132 are continuing on the statute
implying thereby that the provisions of section 153A are only applicable in
case valid search is conducted against the assessee under section 132.
Accordingly, the assessments made against the assessee under the provisions of
section 143(3) read with section 153A were to be declared as null and void and the same was to be
cancelled by the Assessing Officer. Thus, the issue related to the validity of
search raised by the assessee was to be allowed. [
Cases
referred to
Smt. Sita Devi v.
CIT [1980] 122 ITR 105/[1979] 2 Taxman 463 (Punj. & Har.) (para 8), Nawal
Kishore & Sons Jewels v. Dy. CIT [2003] 87 ITD 407 (Luck.) (SB) (para 10), CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1/123 Taxman
433 (
J.P. Bairagra for
the Appellant. Ajay for the Respondent.
nn