2017 (1) TMI 944 - AT - Income Tax

Validity of the AO s assumption of jurisdiction under section 153A - Held that - The said notice under section 153A of the Act dated 05.10.2009 issued to the assessee for A.Y. 2008-09, in order to enable the AO to assume valid jurisdiction for making the assessment thereunder, was not the notice that was required to be issued by the AO in the case on hand as it is clearly and undisputedly established that no search under section 132 of the Act was carried out at the assessee s premises on 24.02.2009 as stated by the assessee. Since it is clearly evident that the notice required to be issued for the assessee was not the one issued under section 153A of the Act for A.Y. 2008-09, as was admittedly issued by the AO in the case on hand, the provisions of section 292BB of the Act would not, in our considered view, come to the rescue of Revenue. We accordingly reject this argument put forth by the learned D.R.

Summary

Issues Involved:
Validity of AO's assumption of jurisdiction under section 153A of the Act and consequent passing of the order of assessment under section 143(3) r.w.s. 153A.

Detailed Analysis:

Issue 1 - Validity of AO's assumption of jurisdiction under section 153A of the Act and consequent passing of the order of assessment under section 143(3) r.w.s. 153A:

The appellant challenged the AO's assumption of jurisdiction under section 153A of the Income Tax Act and the subsequent assessment order for the assessment year 2008-09. The appellant contended that no search under section 132 of the Act was conducted at the appellant's premises on the stated date, but only a survey under section 133A was carried out. The appellant argued that without a valid search warrant, the notice issued under section 153A was invalid, rendering the assessment order void ab initio. The appellant relied on a decision of the Hon'ble Gujarat High Court in a similar case to support the contention.

The Revenue, on the other hand, relied on the AO's order and the provisions of section 292BB of the Act, arguing that the appellant's cooperation during the assessment proceedings precluded them from objecting to the notice issued under section 153A. However, the Tribunal disagreed with this argument, stating that the notice issued was not the one required for the appellant, as no valid search warrant was issued.

After considering the contentions and evidence, the Tribunal found that no search warrant was issued to search the appellant's premises on the stated date. The Revenue failed to produce any warrant of authorization despite opportunities provided by the Tribunal. As a result, the Tribunal concluded that the notice under section 153A was invalid, and the assessment order passed thereafter was void ab initio. The Tribunal also rejected the Revenue's argument based on section 292BB, as the notice issued was not the one required for the appellant.

Based on the findings, the Tribunal allowed the appellant's appeal for the assessment year 2008-09, as the notice under section 153A was deemed invalid due to the absence of a valid search warrant, rendering the assessment order void ab initio. Consequently, the other grounds raised by the appellant on merits did not require adjudication at that point.

In conclusion, the Tribunal's detailed analysis and decision highlighted the importance of a valid search warrant for issuing notices under section 153A of the Income Tax Act, ensuring that jurisdictional issues are addressed properly to maintain the validity of assessment orders.