2013 (11) TMI 1055 - HC - Income Tax

Survey u/s 133A versus search u/s 132 proceedings u/s 158BD Held that - ITAT is correct in saying that the material found during the course of survey operations is independent and has nothing to do with the material found during the course of search operation - If there is any material found during the course of survey operation though it does not form basis for proceedings so far as protective assessment under Section 132 proceedings read with Section 158. So far as material recovered during the course of survey, it has to be in accordance with the procedure contemplated under Section 133A. Such material could be considered for relevant action as provided under the Act but not for any course of action so far as Section 132A search and seizure - If in the exercise of powers by the assessing officer to make fresh orders they are at liberty to consider the case of the appellant assessee also only in accordance with the procedure under Section 132(4) read with provisions under Section 158 of the Act. This shall not come in the way of the authorities taking independent course of action if any under that provision on account of material collected by them during the survey Decided against assessee.

Summary

Issues:
1. Applicability of material secured during a survey under Section 133A for proceedings under Section 158BD of the Income Tax Act.

Analysis:
The appellant contended that material obtained during a survey under Section 133A cannot be used for proceedings under Section 158BD as there is no presumptive value attached to such material, unlike in a search and seizure under Section 132(4). The Tribunal clarified that undisclosed income must be computed based on material found during a search operation or information related to such material. The Tribunal emphasized that material from a survey operation is independent and should be dealt with separately. It was established that even if material points against the appellant firm, action can still be taken under Section 133A, while protective assessment under Section 132 proceedings with Section 158 should follow a different procedure.

The Tribunal justified its stance by explaining that material discovered during a survey operation must be handled in accordance with the provisions of Section 133A, separate from the procedures for search and seizure under Section 132A. The Tribunal's decision was supported by the fact that assessments in the partner's case were remitted back for fresh assessment, allowing authorities to consider the appellant's case under Section 132(4) and Section 158. This approach does not hinder authorities from taking independent action based on material collected during the survey.

In conclusion, the appeal was dismissed, affirming that material obtained during a survey under Section 133A should be processed separately from material obtained during search and seizure operations under Section 132A. The Tribunal's decision was deemed appropriate as it allowed for independent actions under the relevant provisions of the Income Tax Act based on the material collected during the survey operation.