2014 (5) TMI 270 - AT - Income Tax

Admission of additional ground Held that - The objections should have been raised by the revenue at the time of admission of the additional ground - admission of additional ground has been upheld by the HC thus, revenue cannot urge the objection at this point of time Decided against Revenue. Assessment u/s 158BC after Initiation of search proceedings u/s 132 Interpretation of section 292CC of the Act - Authorisation and assessment in case of search of requisition - Whether in the absence of names of the assessees on the warrant authorizing search can proceedings u/s. 158BC be initiated against them or not Held that - For making assessment u/s. 158BC of the Act, it is not necessary to issue authorization u/s. 132 or make requisition u/s. 132A separately in the name of each person - Authorization or requisition in the name of more than one person is permissible - names of these assessees are not appearing in the authorization/requisition, proceedings initiated u/s. 158BC of the Act against them are void ab-initio Relying upon CIT v. Ms. Pushpa Rani 2004 (1) TMI 68 - DELHI High Court - where no search warrant is issued in name of assessee proceedings initiated u/s. 158BC are ab-initio void and without jurisdiction Decided in favour of Assessee.

Summary

Issues:
- Validity of assessment orders passed by Assessing Officer after the Hon'ble ITAT's order
- Additional ground of appeal challenging the validity of the warrant authorizing search
- Jurisdiction of the Appellate Tribunal to review its order in the second round of proceedings
- Examination of the validity of search proceedings by appellate authorities

Analysis:

The appeals before the Appellate Tribunal were against the Assessing Officer's orders following the Hon'ble ITAT's decision setting aside the original assessment orders. An additional ground of appeal was raised challenging the validity of the warrant authorizing search, which was admitted and subsequently modified. The Revenue challenged this modification, but the High Court dismissed the application, allowing the additional ground to be raised.

During the hearing, the Revenue raised preliminary objections, arguing that the Tribunal could not review its order in the second round and that the validity of search proceedings was beyond the appellate authorities' purview. The Revenue cited various case laws to support its contentions. However, the assessee argued that they were not barred from raising legal grounds at any stage and that the Tribunal had the power to adjudicate on jurisdiction issues.

The Tribunal refrained from adjudicating the Revenue's objections, stating they should have been raised earlier. The Tribunal then analyzed the merits of the additional ground, focusing on the absence of the assessee's names in the warrant authorizing search. The Tribunal referred to relevant provisions of the Income Tax Act and previous case law to determine that proceedings initiated against the assessee were void ab-initio due to the lack of their names in the authorization/requisition.

Based on this analysis, the Tribunal allowed the additional ground raised by the assessee, rendering the other grounds moot. Consequently, the assessee's appeals were allowed, and the assessment orders passed by the Assessing Officer were deemed invalid. The Tribunal's decision was pronounced in open court, concluding the judgment.

This comprehensive analysis delves into the issues raised in the legal judgment, covering the validity of assessment orders, challenges to the warrant authorizing search, jurisdictional matters, and the examination of search proceedings by the appellate authorities.