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TMI Blog2010 (7) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act, 1961? (ii) Whether initiation of a valid search as contemplated under Section 132 of the I.T. Act, 1961 in case of a person is a pre-requisite to issue notice for making assessment/reassessment under Section 153 A of the I.T. Act, 1961 in respect of such person ? (iii) Whether on the facts and circumstances of the case, the I.T.A.T. is justified in remanding the matter to the Commissioner of Income Tax (Appeal) to adjudicate on a question of law raised before it instead of deciding the issue itself? 3. Since appellants are the same and common questions of law are involved in all the appeals, they are heard together and disposed of by this common judgment. 4. The short facts leading to the present appeals are that the appellant-Siksha "O" Anusandhan (for short "the Society") is a Society registered under the Societies Registration Act, 1860. It was created for charitable purpose to impart technical education. Accordingly, an Engineering College known as I.T.E.R. and other educational institutions have been established in Bhubaneswar. The Society has been conferred upon the status of "Deemed University" by the University Grants Commission. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Patiala & Ors. (1977) 107 ITR 420, he argued that in absence of proper search warrant the proceedings under Section 153A of the I.T. Act, 1961 against the assessee are invalid. It was further argued that the assessment proceedings as contemplated under Section 153 A of the I.T. Act, 1961 can only be initiated against a person in whose case search operation has been initiated under Section 132(1) of the I.T. Act, 1961. The assessment proceedings initiated and completed under Section 153 A of the I.T. Act, 1961 in absence of initiation of valid search as contemplated under Section 132 of the I.T. Act, 1961 are illegal. Placing reliance on the decision of the Delhi High Court in Ajit Jain -v- Union of India & Ors., (2000) 242 ITR 302, which has been approved by the Hon'ble Supreme Court in Union of India -vs- Ajit Jain & Anr., (2003) 260 ITR 80, it is argued that the condition precedent for making a search assessment is a valid search. The action of the Assessing Officer is without jurisdiction. In support of his contention, he also relied on the decisions of the Delhi High Court in Commissioner of Income Tax Vs. M.S. Rohini S.Walia., (2007) 289 ITR 328. He further argued that the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or things and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property [which has not been, or would not be disclosed] for the purposes of the Indian Income Tax Act, 1922 (11 of 1922) or this Act (hereinafter in this section referred to as the undisclosed income or property), [then,- (A) the [Director General or Director] or the [Chief Commissioner or Commissioner], as the case may be, may authorize any [Joint] Director, [Joint] Commissioner, [Assistant Director] [or Deputy Director] [Assistant Commissioner [or Deputy Commissioner] or Income-tax Officer], or (B) such [Joint] Director] or [Joint] Commissioner, as the case may be, may authorize any [Assistant Director] [or Deputy Director], [Assistant Commissioner [or Deputy Commissioner] or Income-tax Officer], (the officer so authorized in all cases being hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fillment of certain conditions. Firstly, the competent authority must have the information in its possession and, secondly, on the basis of such information it must have the reason to believe that the conditions as stipulated in sub-clauses (a),(b) and (c) of Section 132(1) of the I.T. Act, 1961 exist. Sub-clauses (a), (b) and (c) of Section 132(1) speak of any person. Search and seizure cannot be sustained unless it is clearly shown that it was done by the authority duly authorized, and all the conditions precedent in relation thereto existed. Thus, before issuance of search warrant in order to take recourse under Section 132 of the I.T. Act, 1961, the authority competent to issue search warrant must be satisfied that search under Section 132 (1) is needed in respect of a definite person. Satisfaction required under Section 132 (1) of the Act 1961 is qua theperson whose name appears in the warrant of authorization. If search as contemplated under Section 132 of the I.T. Act, 1961 is conducted in the premises of a person without any warrant of authorization in the name of the person searched, or on the basis of a warrant of authorization in the name of some other persons, that woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall-- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made:" (underlined for emphasis) The provisions of Section 153A make it clear that only in case of a person where a search is initiated under Section 132 or books of account or other documents or any asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The relevant facts and circumstances giving rise to the third question are that the appellant had raised the following additional ground before the Tribunal:- "For that the proceeding under Section 153A of the I.T. Act, 1961 is not legal as there was no search warrant served on the appellant on the facts and in the circumstances of the case." The learned I.T.A.T. admitted the additional ground for hearing with the following observations:- "After hearing both the parties and going through the material available on record and the case law relied on by the learned Counsel for the assessee, we find that the additional ground taken by the assessee is legal one and goes to the root of the matter as the proceedings under Section 153A of the Act has been challenged by taking this ground. We further find that the Hon'ble apex Court in the case of NTPC Vs. CIT, 229 ITR 383 has observed as under:- "Under Section 254 of the Income-tax Act, 1961, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, passed such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of the assessee or not and adjourned the case to 06.05.2009. At this stage, there is no reason as to why the Tribunal being the final fact finding authority could not have recorded its finding on aforesaid vital jurisdictional issue when consciously the Tribunal called for the record of search. This action of the learned Tribunal, in our view, seems to be unjust. The specific stand of the appellant is that pursuant to order dated 05.05.2009 (Annexure-8) passed by the learned I.T.A.T. directing learned D.R. to produce the records of the search to examine whether search warrant was issued in the name of the assessee, the Revenue produced the search records and the I.T.A.T. after examining the relevant records was satisfied that no such search warrant was issued against the appellant-Society under Section 132(1) of the I.T. Act, 1961. In spite of the same, the I.T.A.T. vide its order dated 27.07.2009 remitted the matter to the C.I.T.(A) for fresh hearing which is not permissible under the law. Law is well settled that once the materials are available on record, the appellate Court should have disposed of the case on merit taking those materials into consideration and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the specific stand of the appellant that there was no search warrant in the name of the appellant-assessee, which was the foundation of jurisdictional issue. After verifying the relevant search records, learned Tribunal should have taken a decision on the additional ground and should not have remitted the matter to the C.I.T.(A) for adjudication on the additional ground that goes to the root of the case. 10. In the fact situation, since we have already laid down the law, the Tribunal has to decide the matter in the light of the legal position highlighted above after verifying the records with regard to the stand taken by the appellant. Because of the inadequate factual findings, we direct learned Tribunal to rehear the matter. However, we make it clear that if the Tribunal comes to the conclusion that there was no search warrant in the name of the appellant as contended by the appellant - assessee, then it would be open to the Department to make assessment in a manner other than Section 153A, if permissible under the law. Our above view gets support from the decision of the apex Court in Pooran Mal Vs. Director of Inspection (Investigation) & Ors., (1974) 93 ITR 505 (SC), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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