2012 (3) TMI 99 - HC - Income Tax

Validity of search and seizure - The petitioner has also adduced evidence in the form of affidavits of panchas and has sought an opportunity to cross examine the authorised officer of the Department to substantiate his contention regarding the illegality of the search - Held that the appellate authority is bound to consider all the contentions of the petitioner including the question as to whether the search is valid and whether the assessing authority had jurisdiction to initiate proceedings under Section 153A on the basis of that search, if the same is invalid - Decided in favor of the assessee by way of remand to appellate authority

Summary

Issues:
1. Jurisdiction of assessing authority based on legality of search
2. Opportunity for cross-examination of witnesses
3. Request for stay of proceedings pending disposal of writ petition

Analysis:
1. The petitioner challenged the initiation of assessment proceedings under Section 153A of the Income-tax Act following a search conducted under Section 132, contending the search was illegal. The petitioner sought to cross-examine the authorized officer to substantiate this claim. The petitioner filed a writ petition seeking to quash the notice for enhancing assessment and requested an opportunity for cross-examination before adjudication of appeals. The High Court held that the appellate authority must consider all contentions, including the validity of the search and the assessing authority's jurisdiction. The writ petition was disposed of with a direction for the appellate authority to address these issues.

2. The petitioner also requested the opportunity to cross-examine witnesses to support the argument on the illegality of the search. The High Court emphasized that the appellate authority is obligated to consider this request in line with the applicable legal provisions. The court directed the appellate authority to allow the petitioner the opportunity for cross-examination of the authorized officer of the Department as per the relevant laws.

3. Regarding the request for a stay on further proceedings pending the disposal of the writ petition, the High Court noted that the petitioner had already been given sufficient opportunity to file objections related to a specific notice. As a result, the court deemed no further orders necessary in this regard. The focus of the judgment was primarily on ensuring the petitioner's right to present evidence and arguments concerning the legality of the search and the jurisdiction of the assessing authority.