2023 (4) TMI 193 - AT - Income Tax

Validity of assessment u/s. 153A r.w.s 143(3) - addition u/s 68 - Whether no search u/s 132 was undertaken in this case? - HELD THAT - As decided in assessee own case 2022 (8) TMI 784 - ITAT DELHI the warrant is said to be rightly issued and search on the assessee has been correctly took place - It is not necessary that warrant has to be issued only at /on the premises of the registered office of the company or corporate office, factory or godown but a warrant can be authorized to any other place where the issuing authority satisfies and reasons to suspect that the material/evidences pertaining to the assessee have been kept and are to be found. The ld. CIT(A) ignored the provisions of Section 132(1), the proviso under clause (B), provisions of (1A) which clearly deal with the jurisdiction, the premises and the actions that can be taken by the revenue authorities. Hence, we hold that the decision of the ld. CIT(A) that no search was conducted on the assessee and summarily nullifying the proceedings u/s 153A as exfacie illegal is devoid of any merit and cannot be sustained. No distinguishing feature in the facts of the present case and that of A.Y. 2011-12 supra has been pointed by the assessee. In such a situation we for the reasons given by the co-ordinate bench while deciding the appeal of the assessee for A.Y. 2011-12 and for similar reasons restore the issue back to the CIT(A). Since CIT(A) had not adjudicated the grounds on merits and since the matter is being restored back to the CIT(A).

Summary

Issues Involved:

1. Validity of the assessment framed under section 153A of the Income Tax Act.
2. Jurisdiction and legality of the search operation under section 132 of the Income Tax Act.
3. Adjudication of grounds on merits by the CIT(A).

Summary:

Issue 1: Validity of the assessment framed under section 153A of the Income Tax Act

The Assessee challenged the framing of the assessment under section 153A read with section 143(3) of the Income Tax Act, contending it to be without jurisdiction. The CIT(A) found the proceedings under section 153A to be illegal, arbitrary, and without jurisdiction, thus annulling the assessment order. The CIT(A) noted that the search warrant was served at an incorrect address, which was not the registered address of the Assessee at the time of the search. Consequently, the CIT(A) concluded that no search was conducted at the premises of the Assessee, rendering the proceedings under section 153A invalid.

Issue 2: Jurisdiction and legality of the search operation under section 132 of the Income Tax Act

The Revenue appealed against the CIT(A)'s decision, arguing that the search warrant was duly served on the director of the Assessee company and that the search was valid. The Tribunal referred to a similar case involving the Assessee for the assessment year 2011-12, where it was held that the warrant of authorization under section 132 was validly issued and the search was correctly conducted. The Tribunal noted that a warrant can be issued to search any place where the issuing authority has reason to suspect that documents or evidence related to tax evasion are kept. The Tribunal found that the CIT(A) had erred in concluding that no search was conducted based on the address discrepancy and held that the search was valid.

Issue 3: Adjudication of grounds on merits by the CIT(A)

Since the CIT(A) had annulled the assessment order on jurisdictional grounds, the grounds on merits were not adjudicated. The Tribunal restored the matter back to the CIT(A) to adjudicate the grounds on merits in accordance with the law. The CIT(A) was directed to grant adequate opportunity of hearing to both parties, and the Assessee was instructed to promptly furnish the required details.

Conclusion:

The Tribunal allowed the appeal of the Revenue and the cross-objection of the Assessee, directing the CIT(A) to adjudicate the grounds on merits. The order was pronounced in the open Court on 31.03.2023.