2014 (11) TMI 414 - SC - Income Tax

Validity of warrant of authorization issued u/s 132(1)(b) - Held that - assessee is allowed to raise the contentions insofar as whether the Income Tax Authorities can proceed to issue a warrant of authorization u/s 132(1) of the Act against the firm, dissolved as on the date of the issuance of authorization before the Tribunal, if already not raised in the memorandum of appeal so filed Tribunal may consider the said question, independently, in accordance with law.

Summary

Issues:
1. Challenge to High Court judgment sustaining proceedings under Section 132(1)(b) of the Income Tax Act, 1961.
2. Legality of warrant of authorization under Section 132(1)(b) and consequential Assessment Order for assessment years 2001-2002 to 2004-2005.
3. Permission to question orders of assessment for relevant assessment years.
4. Permission to raise contentions regarding issuance of warrant of authorization against a dissolved firm.
5. Return/furnishing of seized documents appended to the warrant of authorization.

Analysis:
1. The assessee challenged the High Court judgment upholding the proceedings initiated under Section 132(1)(b) of the Income Tax Act, 1961. The High Court allowed the assessee to question the orders of assessment for the relevant assessment years, despite rejecting the stand on the legality of the warrant of authorization issued under Section 132(1)(b).

2. The writ petition filed by the assessee questioned the legality of the warrant of authorization issued under Section 132(1)(b) and the consequential Assessment Order for the assessment years 2001-2002 to 2004-2005. The High Court permitted the assessee to challenge the assessment orders made for these years.

3. During the special leave petition hearing, the senior counsel for the assessee requested permission to raise contentions on whether the Income Tax Authorities could issue a warrant of authorization under Section 132(1) against a firm that was dissolved at the time of issuance. The respondent's counsel initially had reservations but agreed to allow the issue to be raised before the Tribunal for independent consideration.

4. The Supreme Court, considering the submissions of both counsels, disposed of the special leave petition by permitting the assessee to raise contentions before the Tribunal regarding the issuance of a warrant of authorization against a dissolved firm. The Tribunal was directed to consider this question independently and in accordance with the law.

5. Additionally, the assessee was granted permission to approach the authorities for returning or furnishing copies of the seized documents attached to the warrant of authorization issued under Section 132(1)(b) of the Act. The authorities were instructed to consider any such representation in accordance with the law.

Conclusion:
The Supreme Court allowed the assessee to challenge the High Court judgment, raise contentions regarding the warrant of authorization, and seek the return or furnishing of seized documents. The Tribunal was directed to independently consider the issue of issuing a warrant against a dissolved firm.