9911796707
TMI Blog2012 (7) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case and on a proper construction of section 64(2) of the Finance Act 1997 the appellant was precluded from making a declaration under the V.D.I.S. scheme 1997 in respect of the sum of Rs. 4,00,000/- as held by the Tribunal. 3. The facts, in brief, as projected by the appellant are that the appellant is a partner of the partnership firm namely M/s. Mahavir Construction Company, Dhamtari. A search and seizure operation was carried out in case of the partnership firm under section 132 of the Income Tax Act, 1961 (for short 'the Act') on 11.11.1997. A search was also initiated against the appellant. The appellant was called upon to furnish details about initial investment made in proprietary contract business called "Vinay Constructions Co." from where he had gross contract receipt of Rs. 16,65,574/-. The appellant explained that the initial investment of Rs. 4,00,000/- was made by him which was declared under the provisions of the voluntary disclosure of Income Scheme, 1997 (for short 'the Scheme, 1997) and certificate to that effect was issued by the Commissioner of Income Tax. The Assessing Officer (for short 'the AO') accepted the amount of init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. CIT [2007] 159 Taxman 258 (SC), Asstt. CIT. v. Hotel Blue Moon [2010] 188 Taxman 113 (SC), C.I.T. v. Smt. Vandana Verma [2010] 186 Taxman 88 (All.). 6. Shri Dubey would further contend that in the instant case, no notice under section 158 BC (a)(ii) of the Act was issued by the AO. The assessee filed return in form 2-B on 18.08.1989 for the block period as before the assessment order, no notice under section 143(2) of the Act, which is mandatory, was issued before making assessment on the return filed. The satisfaction with regard to the fact that undisclosed income belonging to the assessee was not recorded. There was no notice under section 158 BD before recording the satisfaction. Since there was no search carried out against the assessee individually, rejection of the declaration under the Scheme, 1997 was bad in law. The case of Anita Parekh is distinguishable as in case of Anita Parekh the Tribunal itself has recorded that warrant of authorization was issued in her name. In the instant case, there was no individual warrant in the name of the assessee. If the firm and partners had made any declaration under the Scheme, 1997, that would be barred since search was conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 158 BD is applicable only in case of those assesses, wherein search and assessment was not done on the basis of warrant of authorization. It is next contended that the appellant is estopped from raising a new ground in this appeal filed under section 260A of the Act, 1961. He relies on a decision of this Court in Durga Prasad Verma v. Union of India. 11. Now, we proceed to consider the rival submissions made by learned counsel for the parties. 12. Shri Dubey submitted that since there was no warrant of authorization issued in the name of the appellant individually, the entire proceeding on the basis of search based on warrant of authorization, is vitiated. Thus, the subsequent decision of assessment made by the AO, also stands vitiated. Since there was no valid search, the assessment order could not have been passed under section 158 BC of the Act. Contrary to the said submission, Shri Shrivastava contended that there may not be an individual warrant of authorization, however, the name of the assessee found place in the combined warrant of authorization and the assessee, after search, has declared undisclosed income for the block period. Thus, the order was rightly passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person with respect to whom search was made under Section 132 or whose books of account or other documents or any assets were requisitioned under Section 132-A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under Section 158- BC against such other person and the provisions of this Chapter shall apply accordingly." 14. The Tribunal found that identical facts and circumstances had been decided by the Bench in the case of Smt. Anita Parekh, by its consolidated order dated 30.04.2009, wherein order of the CIT (A) upholding the action of the AO in denying immunity by the assessee under the Scheme, 1997, was upheld by the Tribunal. The cross objection of the assessee in respect of validity of the order under section 158 BC on the ground that no warrant of authorization was issued in the name of the assessee, was rejected. 15. In Manish Maheshwari, relied on by learned counsel for the appellant, the Supreme Court held as under: "11. Condition precedent for invoking a block assessment is that a search has been conducted unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the section is required to be served on the person who is found to be having undisclosed income. The section itself prescribes the time-limit of 15 days for compliance. In respect of searches on or after 1-1-1997, the time-limit may be given up to 45 days instead of 15 days for compliance. Such notice is prescribed under Rule 12(1-A) which in turn prescribes Form 2-B for block return. 20. Section 158-BC(b) is a procedural provision for making a regular assessment applicable to block assessment as well. Section 158-BC(c) would require the assessing officer to compute the income as well as tax on completion of the proceedings to be made. Section 158-BC(d) would authorise the assessing officer to apply the assets seized in the same manner as are applied under Section 132-B." 17. In Vandana Verma, the High Court of Allahabad held that warrant of authorization must be issued individually and if the same is not done, the assessment could not be made in individual capacity when the warrant was issued jointly. 18. In Trilok Singh Dhillon, this Court observed that it was not open to the assessee to question the legality and validity of the search and seizure proceedings during ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee was transferred to the office of the Assistant Commissioner of Income Tax, Circle Raipur and the notice issued by the DCIT, Circle Bhilai, was withdrawn. Thereafter, no notice was issued and as such, withdrawal of the notice on 22.01.1999 constituted dropping of the block assessment proceedings and once such block assessment proceedings had been withdrawn on 22.1.1999, the assessment under section 158 BC passed by the AO was set aside and the appeal was allowed. The department preferred an appeal before the Tribunal challenging the action of the CIT (A) on the ground that deleting the addition of Rs. 2,69,116/- made by the AO to the undisclosed income of the assessee for the assessment year 1996-97 and 1997-98 that the assessee had not filed returns for the said years before the date of search under section139(1). The department also challenged the action of the CIT (A) in deleting the addition of Rs. 37,800/- made by the AO for 7 months of assessment year 1998-99 on the same ground. The Tribunal, after having considered all the facts, came to the conclusion that the findings recorded by the CIT (A) and the decision taken thereafter, was just and proper. Accordingly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
