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2013 (3) TMI 71 - HC - Income TaxAuthorization for search - Status of assessee - existence of AOP/BOI - evidence of existence - essential ingredients - held that - after the decision rendered by this court in the case of Smt. Vandana Verma (2009 (10) TMI 52 - ALLAHABAD HIGH COURT), the Parliament stepped in and made retrospective amendment by inserting Section 292 CC w.e.f. 1.4.1976 by Finance Act, 2012. The effect of retrospective amendment made in the Income Tax Act came up for consideration before the Full Bench of this Court in the case of Commissioner of Income Tax vs. Devesh Singh (2012 (8) TMI 98 - ALLAHABAD HIGH COURT) and the Full Bench of this Court has held that after the amendment of the Act by insertion of Section 292 CC with retrospective effect from 1.4.1976, even if the authorization had been issued in the joint names of several persons, assessment in the individual names can be made. - Decided in favor of revenue.
Issues:
1. Interpretation of evidence for establishing AOP/BOI status 2. Application of legal principles for AOP formation 3. Requirement of essential ingredients for AOP existence 4. Compliance with provisions of section 153A for searched persons 5. Distinction in applying legal precedents to specific case facts Analysis: 1. The appeal raised the issue of whether the ITAT was justified in dismissing the revenue appeal without evidence establishing the assessee's status as AOP/BOI. The Tribunal's decision was challenged based on the lack of evidence during the search or submitted by the assessee. The Commissioner contended that the legal position required evidence to establish AOP/BOI status. 2. Another issue was the ITAT's dismissal of the department's appeal, questioning the legal position on AOP formation. The argument centered on the necessity of a violation by members forming the AOP to produce profit from a common income source. The absence of such evidence in the case was highlighted as a basis for challenging the ITAT's decision. 3. The ITAT's creation of an AOP status de-novo was also contested, emphasizing the essential ingredients required for AOP formation. The appellant argued that mere inclusion of names in a search warrant did not substitute evidence for AOP establishment. The ITAT was criticized for disregarding the jurisdictional High Court's precedent on AOP formation. 4. The ITAT's disregard for the provisions of section 153A, which require proceedings for persons searched under section 132 of the Income Tax Act, was a significant issue. The failure to initiate proceedings as mandated by the section was highlighted as a ground for challenging the ITAT's decision. 5. Lastly, the ITAT's application of legal precedents, specifically the judgment in CIT vs. Smt. Vandana Verma, was questioned for its relevance to the present case. The differences in facts and circumstances between the cited case and the current matter were emphasized to challenge the ITAT's decision. The High Court, after considering the retrospective amendment in the Income Tax Act and relevant legal precedents, set aside the ITAT's order. The matter was remanded to the Tribunal for a fresh decision in accordance with the law and on merits. The Court's decision favored the appellant, allowing the appeal and indicating a successful challenge to the ITAT's judgment.
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