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TMI Blog2016 (5) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, such documents can be taken into consideration by the Assessing Officer. The documents taken into consideration are related to the search operation at the premises of the assessee on the own admission of the assessee while replying to the questionnaire to explain the basis of his undisclosed income declared by him. Thus, we find that not only the survey was not illegal but also that the material collected was relied upon by the assessee himself to explain the basis of undisclosed income for assessment years 2001-02 and 2002-03 shown in his block return, and therefore clearly relatable to evidence found as a result of search, etc. and, thus, was rightly made basis to frame block assessment by the Assessing Officer. Assessing Officer could take into consideration the note book KPS-5 and passbook of S.B. A/C No.9266 recovered from the premises of Sujata Hotel Pvt. Ltd. but from the office cabin which was in the control of the assessee. Tribunal has consequently erred in law in upholding the deletion of the additions made by the Assessing Officer on the basis of the notebook and the Bank passbook - Decided against assessee - Miscellaneous Appeal No. 224 of 2007 - - - Dated:- 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k KPS-5 were impounded. The aforesaid diary KPS-5 records the transactions in the form of receipts and payments. It contains written pages from 1 to 38 with Mr. H. K. Account inscribed on it. It is written in the handwriting of Shri Hardeo Singh. 4. A notice under Section 158BC of the Act was issued to the assessee on 29th of August, 2003. The assessee sought photo copies of all the seized documents. The copies of the seized (impounded) documents were supplied to the assessee on various dates between 04.09.2003 to 07.11.2003. The assessee was again asked to file the return vide letter dated 12th/13th February, 2004 followed by another notice under Section 142(1) of the Act on 04.08.2004. A show cause notice for initiating proceeding under Section 276CCC of the Act was also issued. Ultimately, the assessee filed return on 22nd February, 2005 declaring an undisclosed income of ₹ 7,02,100/-. 5. A questionnaire along with a notice under Section 142(1) and 143(2) of the Act dated 08.03.2005 was issued. The assessee was asked to explain the basis of undisclosed income of ₹ 7,02,100/- for assessment years 2001-02 and 2002-03 shown in the block return. The stand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the assessee which is as under: Qus:6 During the course of search and seizure operation carried on at your residential premises neither any pass book or cheque book are found. Please explain. Ans: All are lying in the accounts section or in the Hotel Premises which are also being searched by the Income Tax Department. 8. The Assessee suffered a statement on oath on 21st of April, 2005. He said to the following effect: Qus 2: During the course of search and survey on 24.04.2003 a diary KPS-5 was found from your premises, in which the account of receipt and payment of cash is recorded. What do you want to say? Answer: Captain Hardeo Singh used to write this diary. Whatever money he receive or paid he used to receive/pay on my instructions. 9. Hardeo Singh, who has written the notebook KPS-5, was produced by the assessee before the Assessing Officer. Hardeo Singh identified KPS-5 to be in his handwriting. In reply to question No.1 dated 11.04.2005 when cross-examined by the Assessing Officer, he replied as under: Qus.1: From the perusal of accounts as per KPS-5 it is observed that you have deposited amount in cash in the names of some persons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note book KPS-5 was recovered but undisclosed SB A/C No.9266 was also recovered during the survey conducted at the office cabin of the assessee in the premises of Sujata Hotel Pvt. Ltd. Thus, the office cabin of the assessee in the Sujata Hotel Pvt. Ltd. is not a premises of a different assessee, but of the assessee himself. The assessee has based his return on the basis of the documents, so recovered; therefore, the assessee cannot be permitted to assert that such documents could not be taken into consideration in the block assessment. It is also contended that there could not be any estoppel for taking into consideration such documents as he waived any protection when he voluntarily relied upon the note book KPS-5 and the passbook of S.B.A/c No.9266 while furnishing his block assessment return. Therefore, the learned CIT (A) as well as the Tribunal has gravely erred in law in holding that such document could not be taken into consideration by the Assessing Officer. 12. On the other hand, learned counsel for the assessee argued that Chapter XIV-B of the Act provides procedure for assessment of search cases. In terms of Section 158 BB of the Act, the undisclosed income of the bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ran Singh Tohra, 1980 Supp SCC 53, wherein the secrecy of the voter was in question. The argument was that the principle of secrecy enshrined in Section 94 of the Representation of People Act having been enacted in public interest and it being a prohibition based on public policy, it cannot be waived. It was held that if the privilege conferred or the right created by the statute is solely for the benefit of the individual, he can waive it. It was held that if a privilege was granted for the benefit of an individual, in the instant case for the benefit of voter, even if it was conferred to advance a principle enacted in public interest nonetheless the person for whose benefit the privilege was enacted has a right to waive it because the very concept of privilege inheres a right to waive it. 16. In Commr. of Customs v. Virgo Steels, (2002) 4 SCC 316, the question examined was whether a mandatory requirement of a statute can be waived by the party concerned? The Court held as under :- 9 ..In Vellayan Chettiar v. Govt. of Province of Madras, AIR 1947 PC 197 : 74 IA 223, the Privy Council held that even though Section 80 CPC is mandatory, still non-issuance of such notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the individual concerned, therefore, he can waive that right. In other words, this section casts a duty on the officer to issue notice to the person concerned of the proposed action to be taken. This is not in the nature of a public notice nor any person other than the person against whom the proceedings are initiated has any right for such a notice. Thus, this right of notice being personal to the person concerned, the same can be waived by that person. 16. If the above position in law is correct, which we think it is, M/s Virgo Steels, having specifically waived their right for a notice, cannot now be permitted to turn around and contend that the proceedings initiated against them are void for want of notice under Section 28 of the Act, so as to frustrate the statutory duty of the Revenue to demand and collect customs duty which M/s Virgo Steels had intentionally evaded. 17. In another judgment reported as Union of India v. Pramod Gupta, (2005) 12 SCC 1, the question examined was as to whether, the interest under the provisions of Land Acquisition Act, 1894 can be waived. The Court held :- 104. It may not, thus, be correct to contend that the said provisions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a situation where a person is entitled to alternative rights inconsistent with one another. If he has knowledge of the facts which give rise in law to these alternative rights and acts in a manner which is inconsistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be legal consequence of what he did. He is sometimes said to have waived the alternative right, as for instance a right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition. This is also sometimes described as election rather than waiver . Another type of waiver debars a person from raising a particular defence to a claim against him. It arises when he either agrees with the claimant not to raise that particular defence or so conducts himself as to be estopped from raising it. 28. In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. 19. The assessee when asked to explain as to why any passbook or cheque book was not recover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee while replying to the questionnaire to explain the basis of his undisclosed income declared by him. 22. Though Section 158BB of the Act was amended by the Finance Act 2002 with retrospective effect from 01.07.1995, but the documents recovered even when the search is illegal can be taken into consideration for framing assessment. Such is the view taken by the Hon ble Supreme Court in the case of Director of Enforcement and others v. Director of Enforcement and others, [1985] 155 ITR 166 where the Court has held that the Courts have refused to exclude relevant evidence merely on the ground that it was obtained by illegal search and seizure. The Court held to the following effect: This Court in Pooran Mal v. Director of Inspection (Investigation) of Income-tax [1974] 93 ITR 505 (SC) held that Courts in India and even in England have consistently refused to exclude relevant evidence merely on the ground that it is obtained by illegal search or seizure. If, therefore, the view of the learned single Judge of the Calcutta High Court were to be accepted, meaning thereby that if the search is shown to be illegal, anything seized during such illegal search will hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicability to the facts of the present case where the survey was, though in respect of a premises of a different assessee, but the assessee was a Director of the said Company and as per his statement he had kept all documents including the passbook of the Bank account and the cheque book in the premises of the Sujata Hotel Pvt. Ltd.. The assessee cannot say that such documents are unrelated to the search when the return was also filed on the basis of the materials recovered during the survey operation in the premises of the Sujata Hotel Pvt. Ltd. The judgments referred to by the learned counsel for the assessee are not applicable to decide the issues arising in the present case. 27. In view thereof, the first substantial question of law is answered in negative to hold that the Assessing Officer could take into consideration the note book KPS-5 and passbook of S.B. A/C No.9266 recovered from the premises of Sujata Hotel Pvt. Ltd. but from the office cabin which was in the control of the assessee. 28. So far second substantial question of law is concerned, though the judgment in G. K. Senniappan case (supra) in the different facts and is clearly distinguishable, but the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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