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2021 (3) TMI 512 - AT - Income TaxAssessment made u/s 158BD read with Section 158BC - whether no incriminating documents and undisclosed assets belonging to assessee were found during the course of search and seizure operations conducted by Revenue against Shri Munna Lal, husband of the assessee? - assessee had contended before ld. CIT(A) that all investments in properties were disclosed in wealth tax returns filed by assessee, and hence proceedings u/s 158BD are bad in law - Whether search warrants were issued by Revenue on a deceased person namely Mr. Munna Lal Verma who expired on 06.10.1999 and the search having taken place on 08.12.2009? - HELD THAT - The assessee in the instant case before us, participated and co-operated in proceedings before the lower authorities as detailed and never raised this issue of invalidity of search on the grounds that the search warrant was issued in the name of deceased person. The Revenue has claimed that it has unearthed incriminating material and undisclosed assets pertaining to assessee during the course of search operations conducted by it on the husband of the assessee namely Shri Munna Lal Verma , on 08.12.1999. Thus, the proceedings conducted u/s 158BD cannot be held to be bad in law in the instant case, which is in consonance with ratio of decision of Hon ble Apex Court in the case of Gunjan Girishbhai Mehta 2017 (3) TMI 1529 - SUPREME COURT .
Issues Involved:
1. Validity of search conducted on a deceased person. 2. Legality of proceedings initiated under Section 158BD of the Income Tax Act, 1961. 3. Reconsideration of the tribunal's previous orders in light of the Supreme Court judgment in Gunjan Girishbhai Mehta v. Director of Investigation. Detailed Analysis: 1. Validity of Search Conducted on a Deceased Person: The tribunal initially quashed the block period assessment order against the assessee on the grounds that the search warrant was issued in the name of a deceased person, Mr. Munna Lal Verma, who had expired on 06.10.1999, while the search took place on 08.12.1999. The tribunal held that since the search was conducted on a deceased person, all consequential proceedings were invalid and liable to be quashed. 2. Legality of Proceedings Initiated Under Section 158BD: The assessee contended that no incriminating material or undisclosed assets were found during the search, and all assets were disclosed in wealth tax returns. The tribunal initially agreed, quashing the assessment on the grounds that the search was invalid. However, the Revenue argued that incriminating documents and undisclosed assets were found, justifying the initiation of proceedings under Section 158BD. The tribunal's decision was challenged on the basis that the search warrant's validity was not raised during the assessment or appellate proceedings but was introduced for the first time before the tribunal. 3. Reconsideration of Tribunal's Previous Orders in Light of Supreme Court Judgment: The Revenue filed a second Miscellaneous Application (MA) after the Supreme Court's judgment in Gunjan Girishbhai Mehta v. Director of Investigation, which held that information discovered during a search, even if the search warrant was issued to a deceased person, could still be used for further action under Section 158BD if it generated the necessary satisfaction. The tribunal acknowledged that its previous orders were in conflict with this Supreme Court judgment, which clarified that the validity of the search warrant does not invalidate subsequent proceedings under Section 158BD if the information discovered is relevant. Conclusion: The tribunal, recognizing the binding nature of the Supreme Court's judgment, recalled its previous appellate order dated 01.02.2016 and the MA order dated 28.11.2016. The tribunal ordered the appeal to be fixed before a regular bench for reconsideration, aligning its decision with the Supreme Court's interpretation that information discovered during a search on a deceased person could still justify proceedings under Section 158BD. The tribunal emphasized that the law declared by the Supreme Court is binding and any judgment in contravention is per incuriam.
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