2015 (9) TMI 237 - HC - Income Tax

Validity of assessment u/s 153A - Whether any proceedings at all could have been initiated against the Assessee/respondent under Section 153A without there being a search warrant in her name issued in terms of Section 132 read with Rule 112 of the Income Tax Rules 1962 and Form 45 thereof? - Held that - It is evident from Rule 112 read with Form 45 that the search warrant has to be issued in the name of the person. The search warrant will also have to indicate the place of search. The documents placed on record by the Respondent Assessee shows that while there was search warrant in the name of Mr. Raj Kumar Singhania, the father of the Respondent, there was no separate search warrant in the name of the Respondent. The panchnama dated 7th July 2006 with reference to search of locker No. 111 of the Respondent, refers to the said proceedings being in continuation of the earlier search proceedings which took place on 23rd June 2006. The search proceedings on 23rd June 2006 was on the basis of the search warrant issued in the name of the father of the Respondent and not the Respondent. As already noted, the Revenue has been unable to produce till date any record to show that there was any search warrant issued in the name of the Respondent. Respondent s contention is correct that with the Department not having proceeded to search the locker No. 111 on 23rd June 2006 itself and having completed the search proceedings on that date by 5.15 pm, if it thereafter proposed to search locker No. 111 belonging to the Respondent, it ought to have issued a separate search warrant in her name, specifying the place of search that was undertaken on 7th July 2006. Alternatively, if the Department wanted to continue with the search warrant issued on 23rd June 2006 in the name of Mr. Raj Kumar Singhania and proceed to open locker No.111, then they could not have instituted separate proceedings against the Respondent under Section 153A without there being any separate search warrant in her name. Consequently, the Court is satisfied that apart from other reasons mentioned in the impugned order of the ITAT, the proceedings under Section 153A against the Respondent was itself without the authority of law. - Decided in favour of assessee.

Summary

Issues:
1. Validity of proceedings under Section 153A without a search warrant in the name of the respondent.

Analysis:
The appeal by the Revenue was against the order passed by the Income Tax Appellate Tribunal (ITAT) for the Assessment Year 2005-06. The search warrant was issued against the father of the Respondent, and during the search, keys of a bank locker in the name of the Respondent were found. The Respondent's contention was whether proceedings under Section 153A could be initiated without a search warrant in her name. The Court emphasized the importance of a search warrant being issued in the name of the person to be searched, as per Rule 112 and Form 45. It was noted that no separate search warrant was issued in the name of the Respondent.

The Court highlighted that the search proceedings on 23rd June 2006 were based on the warrant issued in the name of the Respondent's father, not the Respondent herself. Despite the search of the locker on 7th July 2006, no incriminating evidence was found. The Court concluded that without a separate search warrant in the Respondent's name, the proceedings under Section 153A were not valid. The Court also mentioned that if any incriminating evidence had been found, proceedings under Section 153C could have been initiated, but that was not the case here.

The Court dismissed the appeal, stating that the proceedings under Section 153A against the Respondent were without the authority of law. It was concluded that no substantial question of law arose from the ITAT's order, leading to the dismissal of the appeal by the Revenue.