2013 (12) TMI 1116 - HC - Income Tax

Whether proceedings u/s 153A are invalid since no panchnamas were drawn/issued after search u/s 132 - Held that - The aforesaid contention of the 22 petitioners has to fail in the present cases for several reasons. The said contention was not raised against the first order under Section 153A passed by the Assessing Officer which was made subject matter of challenge in a revision before the Commissioner under Section 264 of the Act. The Commissioner has set aside the first assessment orders under Section 153A of the Act and has passed an order of remand for fresh adjudication vide order dated 16th March, 2012. The petitioners have not questioned and challenged the orders dated 16th March, 2012 and have accepted the same. There is certainly lapse and failure to comply with the requirements of search and seizure manual as the panchnama did not contain names of the 22 petitioners and does not record any suspension of search. Even the obstruction and presence of third persons were not mentioned in the panchnamas. But this would not affect the validity of the search. Assessment orders under Section 153A cannot and should not be permitted to become a matter of writ proceedings as the first appellate forum. The first appellate statutory authority can deal with the questions and issues raised before us, whose jurisdiction indeed has been invoked with appeals being preferred by the petitioners. We do not think that the contentions and issues raised, merit or justify their examination and decision in writ petitions in exercise of extra ordinary jurisdiction. Writ petition dismissed - Decided against the assessee.

Issues Involved:
1. Validity of assessment proceedings under Section 153A of the Income Tax Act due to absence of panchnamas.
2. Validity of search warrants under Section 132 of the Income Tax Act.
3. Scope of the order of remand passed by the Commissioner of Income Tax under Section 264.
4. Invocation of Section 144A by the Assessing Officer without giving an opportunity of being heard to the petitioners.

Detailed Analysis:

Issue 1: Validity of Assessment Proceedings under Section 153A
The petitioners argued that the assessment proceedings under Section 153A were invalid due to the absence of panchnamas for 22 petitioners. The respondents countered by stating that the omission of names in the panchnamas was due to an error or obstruction during the search, but the search was indeed conducted against the petitioners. The court examined the original records and search warrants, confirming that the search was initiated against the petitioners, and the omission in the panchnamas did not invalidate the proceedings under Section 153A. The court emphasized that Section 153A does not reference panchnamas but rather the initiation of a search under Section 132.

Issue 2: Validity of Search Warrants under Section 132
The petitioners contended that possibly no warrants were issued against the 22 petitioners, and their names were interpolated later. The court examined the search file and concluded that the search warrants were issued against the petitioners, including the 22 whose names did not appear in the panchnamas. The court found that the omission was due to space constraints in the printed proforma of the warrants and not due to any foul play. The court rejected the petitioners' contention as it was based on suspicion and raised belatedly.

Issue 3: Scope of the Order of Remand under Section 264
The petitioners argued that the Assessing Officer exceeded his jurisdiction by making additions beyond those in the original assessments, violating the mandate of Section 264. The respondents maintained that the Commissioner's order under Section 264 directed a fresh assessment, allowing the Assessing Officer to consider new evidence and material. The court held that the scope of the remand was broad, allowing the Assessing Officer to reassess the total income comprehensively. This contention was deemed a matter for the appellate authorities to examine.

Issue 4: Invocation of Section 144A without Opportunity of Hearing
The petitioners claimed that the Joint Commissioner's opinion under Section 144A was prejudicial and given without an opportunity for the petitioners to be heard. The respondents argued that the explanation to Section 144A was applicable, and no prejudicial directions were issued. The court noted that this issue, along with the petitioners' other contentions regarding the merits of the assessment orders, should be addressed in the appellate proceedings rather than in writ petitions. The court emphasized that the appellate authorities have the jurisdiction to examine these issues comprehensively.

Conclusion:
The court dismissed the writ petitions, finding no merit in the petitioners' contentions. It clarified that the observations made were for the purpose of disposing of the writ petitions, and the appellate authorities should decide the appeals on merits in accordance with the law. The petitioners were directed to pay costs as per the Delhi High Court Rules to the respondents.

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