2019 (12) TMI 1598 - HC - Income Tax

Assessment u/s 153A - HELD THAT - High Court may be pleased to issue a writ order or direction especially in the nature of writ of Mandamus calling for the relevant records from the Respondents and (i) declaring the reason to believe purportedly recorded by 2nd and 3rd Respondents u/s. 132(l) of the Income Tax Act 1961 as being arbitrary illegal without jurisdiction mala fide and for collateral purpose and (ii) declare the warrants of authorization dated 03rd January 2018 and 08th January 2018 issued by the 2nd and 3rd Respondents respectively as arbitrary without jurisdiction and illegal and (iii) declare the consequent searches on the Petitioners premises as arbitrary without jurisdiction and illegal and (iv) consequently quash the notices dated 24th December 2018 issued by the 4th Respondent u/s. 153A for the assessment years 2012-13 to 2017-18 and (v) without prejudice to above no incriminating material seized during the course of search quash the notices dated 24th December 2018 issued by the 4th Respondent u/s. 153A of the Act for the Assessment Years 2012-13 to 2017-18 and (vi) without prejudice to above the statement recorded from farmers/ growers do not constitute incriminating material quash the notices dated 24th December 2018 issued by the 4th Respondent u/s. 153A for the Assessment Years 2012-13 to 2017-18 and (vii) without prejudice to above the assessment for the AY 2015-16 could not be subject to proceeding under section 153A of the Act quash the notice dated 24th December 2018 issued by the 4th Respondent u/s. 153A of the Act for the AY 2015-16 and (viii) restrain the Respondents from initiating any further action pursuant to the said searches. Stay the notices issued by the 4th Respondent u/s. 153A for the assessment years 2012-13 to 2017-18 pursuant to search and seizure proceedings - The interim order granted earlier is extended upto 31.12.2019 Post the WP on 23.12.2019.

Summary

Issues:
Petition under Article 226 of the Constitution of India challenging the validity of search and seizure proceedings under the Income Tax Act, 1961, and seeking various reliefs including quashing of notices and warrants, and restraining further actions by the Respondents.

Analysis:
The petition filed under Article 226 of the Constitution of India sought relief against the search and seizure proceedings conducted by the 2nd and 3rd Respondents under section 132(1) of the Income Tax Act, 1961. The petitioner requested a writ of Mandamus to declare the reasons recorded for the search as arbitrary, illegal, and mala fide. Additionally, the petitioner sought to declare the warrants of authorization issued by the 2nd and 3rd Respondents as arbitrary and illegal. The petition also aimed to challenge the searches conducted on the petitioner's premises as arbitrary and illegal. Furthermore, the petitioner requested the quashing of notices issued by the 4th Respondent under section 153A for the assessment years 2012-13 to 2017-18, on the grounds of lack of incriminating material seized during the search. The petitioner also contested the validity of statements recorded from farmers/growers as incriminating material. Moreover, the petitioner argued that the assessment for the assessment year 2015-16 should not be subject to proceedings under section 153A of the Act. The relief sought included restraining the Respondents from taking any further action based on the searches.

IA NO. 1 of 2019:
An application under Section 151 CPC was filed seeking a stay on the notices issued by the 4th Respondent under section 153A for the assessment years 2012-13 to 2017-18 pending the disposal of WP 9719 of 2019. The Court, after hearing arguments from both parties, extended the interim order granted earlier until 31.12.2019 and scheduled the next hearing for 23.12.2019.