9911796707
TMI Blog2000 (5) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by this consolidated order. 2. The first common ground of contention of the assessee in these cases except in the case of Mrs. Lavina Bhatia is that the search and seizure operations conducted in their cases under section 132 of the Act were improper invalid and illegal because there was no information in possession of the Director of Income-tax (Inv.)/Dy. Director of Income-tax (Inv.) for reasonable exercise of powers under section 132 of the Act. It is also contended that since the search was invalid and illegal consequential assessments under section 158BC were invalid and liable to be cancelled. 3. In the case of Smt. Lavina Bhatia it has been contended that the impugned block assessment order passed under section 158BA was liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was liable to higher rate of tax, the Tribunal had to adjudicate upon the validity of the search. The ld. AR of the assessee contended that even if the question of validity of the search was not raised before the Assessing Officer the assessee could raise the same question before the appellate authority because the question of jurisdiction could be raised before the first time at any stage. He relied on the decisions in P.V. Doshi v. CIT [1978] 113 ITR 22 (Guj.) and Kiran Singh v. Chaman Paswan AIR 1954 SC 340. 6. The ld. AR of the assessee of the issues of various additions submitted that the Assessing Officer was not justified in making his own presumption and arbitrary interpretation of the jottings in the seized diary An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not even properly examined the jottings in the seized diary. 10. The ld. AR of the assessee also challenged the various other additions as mentioned in the ground of appeals including the addition as undisclosed income on account of investment in jewellery in the case of Smt. Lavina Bhatia. 11. The ld. Sr. counsel for the revenue, on the other hand, submitted that the Tribunal did not have the power to consider the validity of the search. He added that as the Assessing Officer did not have the power to consider the validity of search the Tribunal also did not have same powers because grounds of appeals and the consequent power of the Tribunal to adjudicate the same must arise out of the order of the Assessing Officer. He further adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be dismissed. 15. The ld. counsel for the revenue further submitted that a valid search was initiated against the assessee and valid search warrant was issued in the case. There was no mistaken identity as submitted by the ld. ARs for the assessee's but there was a case of mistaken relationship which was not relevant for the validity of search. He added that his name was at number 1 in the search warrant. He, further submitted that no appeal was provided against search under section 132 of the Act. 16. The ld. AR of the assessee, in reply submitted that the right to challenge the validity of search was inherent in right of appeal against the assessment. He relied on the decisions in 57 ITD 446 (Sic). 17. The ld. Sr. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of evidence in support of his action. 19. He further submitted that the Assessing Officer had relied upon the report of the Income-tax Inspector regarding investment in the properties without confronting the said report to the assessee. 20. The ld. AR further submitted that the impugned additions made by the Assessing Officer as undisclosed income on presumption and surmises could not be covered under the definition of undisclosed income given in section 158B(b) because no materials were found in the course of search to show that the assessee had made any undisclosed investment in the property etc. He added that addition could not be made in a block assessment under section 158BC on the basis of estimate presumption and surmises. 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under section 158BA/158BC. For assuming jurisdiction and issuing notice under section 158BA/158BC, the Assessing Officer is required to see whether search was initiated in the case. He has no power to go into the validity of search. Similarly, in appeal the Tribunal can consider whether the search was initiated in the case and thereby the Assessing Officer had assumed jurisdiction to issue notice under section 158BA/158BC. This power arises because the impugned assessment is based on the assumption of jurisdiction and the issue of notice and the issue of notice is based on the initiation of search in the case. Thus the question of validity of search is beyond the pale of power of the Assessing Officer and the Tribunal so far as the making ..... X X X X Extracts X X X X X X X X Extracts X X X X
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