2016 (12) TMI 861 - AT - Income Tax

Assessment u/s 153A - no warrant of authorisation issued to search the assessee s premises - Held that - There was no warrant of authorisation issued to search the assessee s premises on 24.02.2009 and Revenue was unable to produce the same if any to controvert our finding. This was specifically required in the light of the contradictory statements made by the AO in the order of assessment which led to the confusion of whether the assessee was subjected to search or not. In the absence of any warrant of authorisation to search the assessee s premises under section 132 of the Act on 24.02.2009 the AO had no jurisdiction to issue the notices under section 153A of the Act dated 05.10.2009 issued by him; thereby rendering them invalid and consequently the orders of assessment under section 153A of the Act for assessment years 2006-07 and 2007-08 subsequent to the issue of those notices under section 153A of the Act could not have been passed and the same are also held to be void abnitio and accordingly cancelled. - Decided in favour of assessee

Summary

Issues:
Validity of AO’s assumption of jurisdiction under section 153A of the Act and consequent passing of orders of Assessment under section 143(3) r.w.s. 153A

Analysis:
For the assessment years 2006-07 and 2007-08, the appellant challenged the AO’s assumption of jurisdiction under section 153A of the Income Tax Act and the subsequent assessment orders. The appellant argued that no search under section 132 of the Act was conducted at their premises but a survey under section 133A was carried out. The appellant contended that the AO lacked legal sanction to issue notices under section 153A due to the absence of a search warrant. Despite opportunities, the Revenue failed to produce the warrant of authorization for search under section 132. The Tribunal concluded that without a valid search warrant, the AO had no jurisdiction to issue notices under section 153A, rendering the assessment orders void ab-initio. Citing the decision of the Hon’ble Gujarat High Court, the Tribunal allowed the appellant’s appeal for both assessment years.

The Tribunal noted the contradictions in the AO’s statements regarding the search and survey actions conducted at the appellant’s premises. Despite the AO’s initial claim of a search, it was later clarified that only a survey under section 133A took place. The Tribunal emphasized that section 153A of the Act requires a valid search or requisition under sections 132 or 132A. As the Revenue failed to produce the search warrant and the AO’s statements were inconsistent, the Tribunal held that the notices issued under section 153A were invalid. Relying on legal precedents, the Tribunal concluded that the assessment orders for both years were void ab-initio and consequently canceled. The Tribunal allowed the appellant’s appeal based on the lack of jurisdiction in issuing the assessment orders under section 153A.

Due to the finding in favor of the appellant regarding the validity of the AO’s assumption of jurisdiction under section 153A, the Tribunal did not adjudicate on the other grounds raised by the appellant on merits. The Tribunal allowed the appellant’s appeals for the assessment years 2006-07 and 2007-08 based on the aforementioned findings.