IN
THE ITAT CHENNAI BENCH ‘D’
Anjuga
Chit Funds (P) Ltd.
v.
Deputy
Commissioner of Income-tax, Central Circle -I Madurai
M.K.CHATURVEDI,
VICE PRESIDENT
AND
CHANDRA POOJARI, ACCOUNTANT MEMBER
IT
(SS) APPEAL NO. 172 & 173 (MDS) OF 2004
[Block
Assessment year 1989-90 to 1999-2000]
November
30, 2006
Section 132of the Income-tax Act, 1961 - Search and seizure - General
- Whether when competent authority has reason to believe that a number of
persons are involved in inter connected transactions as reflected in prima
facie material available with such authorities, there is no prohibition
against issuance of common authorization to those persons - Held, Yes
On the basis of a satisfaction note prepared by the revenue authorities, the Director of Investigation issued a search warrant under section 132(1) in joint names of two persons. The assessee being one of them, filed appeal before the Tribunal against said action and submitted that since a common warrant was issued in the joint names of two persons by a common authorized officer and common supporting staff, the warrant was not valid and also since a common Panchanama was drawn, the Panchanama was also invalid. He further submitted that the term used in sections 132, 158BA, 158BC, 158BD and explanation to section 158BE and also in the grated provisions of Criminal Procedure into Income-tax Rules governing the search and seizure is with reference to single individual only. On the other hand, the department submitted that since the search warrant was issued by Director of Investigation and without making the Director of Investigation as a respondent, the assessee could not agitate the ground that section 132 is a self-code and action under the said section cannot be appealed against before the Tribunal.
There was material before the Investigating Authorities regarding
undisclosed income of the assessee and they had prepared a satisfaction note
which was approved by the competent authority and they had reason to believe
that the assessee had undisclosed income.
There was application of mind by the authorities in issue of search
warrant and though the panchnama was prepared in the names of both the
assessees, incriminating documents and assets of each assessee was listed
separately. The only requirement was
that the warrant of authorization had to be in the prescribed form mentioning
the person to whom it was being issued and filing up of other contents
therein. In the instant case, the
warrant of authorization mentioned names of two assessees who were concerned
with the undisclosed income and whose premises were to be searched in
connection with their undisclosed income.
When it was not clear whether one or more persons were in occupation and
control of the premises, the authorities had to issue authorization against all
the known persons who might be the owners or possessors of articles in the
premises. Further, as provision of
section 13 of the General Clauses Act, 1897, since singular includes plural,
there was no prohibition against issuance of common authorization when the
competent authority had reason to believe that a number of persons were
involved in inter connected transactions as reflected in the prima facie
material available with such authorities.
Hence, there was no infirmity in the issuance of common warrant to the
two different assessees. Hence, the
action of the departmental authorities was to be upheld. (