2017 (2) TMI 162 - AT - Income Tax

Jurisdiction u/s 153A - search u/s 132 - Held that - Section 153A would be applicable in the case of the assessee where a search is initiated u/s 132 or books of account, other documents or any asset are requisitioned u/s 132A. The Revenue has not been able to point out that either the search has taken place at the premises of the assessee or books of account or document or any other asset are requisitioned u/s 132A in the case of the assessee. Merely because the search has taken place in the other group companies would not be a ground for taking action u/s 153A in the case of the assessee. For the purpose of taking recourse to Section 153A, search u/s 132 or requisition of document/asset u/s 132A in the case of the assessee is an essential condition. Since the same is not fulfilled, we quash the initiation of proceedings u/s 153A and consequentially, the resultant assessment orders are also quashed. - Decided in favour of assessee

Summary

Issues: Jurisdiction of CIT(A) under section 153A

In this case, the assessee appealed against the order of the CIT(A) for the assessment years 2007-08, 2008-09, 2009-10 & 2010-11, challenging the assumption of jurisdiction under section 153A by the CIT(A) without any search under section 132 of the Income Tax Act, 1961.

The learned counsel for the assessee contended that no search proceedings had taken place at the assessee's premises, and there was no search warrant or panchnamas drawn. The Assessing Officer mentioned a search and seizure operation under section 132 in the M/s Dharampal Satyapal Group of cases but not in the case of the assessee. Both parties agreed to treat the appeals as heard, with no order to be pronounced for ten days pending verification by the Revenue.

After ten days, no evidence of search at the assessee's business premises was produced by the Revenue. Consequently, it was presumed that no search had taken place concerning the present assessee. Section 153A, which deals with assessments in cases of search or requisition, was discussed, emphasizing the requirement of a search under section 132 or requisition of documents/assets under section 132A for its applicability.

Since the Revenue failed to establish that a search or requisition had occurred in the case of the assessee, the initiation of proceedings under section 153A was quashed, leading to the cancellation of the resultant assessment orders. It was clarified that if evidence of a search at the assessee's premises is later found, the Revenue can file an application for recalling the order with necessary evidence.

Ultimately, the appeals of the assessee were allowed based on the absence of evidence of search or requisition in the case, and the decision was pronounced in open court on 31.01.2017.