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TMI Blog2021 (10) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Opposite Parties : Mr. T.K. Satapathy, Sr. Standing Counsel JUDGMENT Dr. S. Muralidhar, CJ. 1. These writ petitions arise from a common set of facts involving same questions of law and are accordingly being disposed of by this common judgment. For the sake of convenience the Court is taking up for discussion the facts of the lead case i.e. W.P.(C) No. 10587 of 2009. 2. The background facts of the case are that the Petitioner is a Director of a Private Limited Company in the name and style of Sambit Resorts Pvt. Ltd. On 15th November, 2007 search was conducted by the Income Tax Department at the Petitioner s residence in Bhubaneswar and a Panchnama was drawn up on that date. Subsequently another search warrant was issued under Section 132 (1) of the Income Tax Act, 1861 ( the Act ) on 6th December, 2007 by one Sri V. Ananda Rajan, Additional Director of Income Tax (Investigation) ( ADIT ) authorizing himself and Sri M.L Sardar, Additional Director of Income Tax (Investigation) to conduct search and seizure operation of the locker standing jointly in the name of the Petitioner and her husband at Andhra Bank, Ashok Nagar Branch, Bhubaneswar. Though the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Incometax 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 thing 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 (Additional Director or Additional Commissioner or ) (Joint director, (Joint Commissioner), (Assistant Director (or Deputy Director), (Assistant Commissioner or Deputy Commissioner) or Income Tax Officer), or (B) such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation from the (Chief Commissioner or Commissioner) having jurisdiction over such person may be prejudicial to the interests of the revenue : Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii): Provided also that nothing contained in the second proviso shall apply in case of any valuable article or thing, being stock-in-trade of the business: Provided also that no authorisation shall be issued by the Additional Director or Additional Commissioner or Joint Director or Joint Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the amendment with retrospective from 1st June, 1994. It is sought to be contended that the Additional Director or the Additional Commissioner always had the power to issue a warrant of authorization and that the amendment was merely declaratory and clarificatory in nature. Mr. T.K. Satapathy, Sr. Standing Counsel for the Department refers to the explanatory note issued by the CBDT by circular dated 3rd June, 2010 in this context. He relied on the decision in Government of Andhra Pradesh v. Laxmi Devi (2008) 4 SCC 720 to contend that the greater latitude is normally given by the Courts to fiscal statutes or tax measures. Reliance is also placed on the decision of State of Madhya Pradesh v. Rakesh Kohali (2012) 6 SCC 312. However on the merits of the search assessment, there is no reply in the counter affidavit to the averments in the writ petition. 9. In addition to the above issues Mr. Sidhartha Ray, learned counsel for the Petitioner also raised the issue of invocation of Section 153-A of the Act, where no incriminating materials have been found or seized. He placed reliance on the decisions of the Delhi High Court in CIT v. Kabul Chawla, (2016) 380 ITR 573 (Delhi) and Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Department, Additional Directors and Additional Commissioners have issued warrant of authorization. However, the courts have held that the Joint Directors and Joint Commissioners referred to in section 132 of the Income Tax Act do not include Additional Director or Additional Commissioner . 43.3 Therefore, to provide explicitly that Additional Director or Additional Commissioner always had the power to issue warrant of authorization, a clarificatory amendment has been made in clause (B) of subsection (1) of section 132, by inserting the words Additional Director or Additional Commissioner. The amendment clarifies that the Additional Commissioner or Additional Director always had the power to issue authorization. 43.4 Applicability - This amendment has been made applicable with retrospective effect from 1st June, 1994. 43.5 Sub-section (1) of section 132 provides that the Director General or Director or the Chief Commissioner or Commissioner, Additional Director or Additional Commissioner had the power to issue authorization. 43.6 A clarificatory amendment has been made in the subsection (1) of the section 132 to provide that Joint Director or Joint Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent or reassessment of the total income of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place. To repeat, there is no condition in this Section that additions should be strictly made on the basis of evidence found in the course of the search or other post-search material or information available with the Assessing Officer which can be related to the evidence found. This, however, does not mean that the assessment under Section 153A can be arbitrary or made without any relevance or nexus with the seized material .. 14. In Jai Steel (India) v. Assistant CIT (supra), the Rajasthan High Court on analyzing the provision held as under: In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassess to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the assessing officer. vii. Completed assessments can be interfered with by the assessing officer while making the assessment under section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 16. The same principles have been reiterated in Principal CIT v. Meeta Gutgutia (supra) and the Principal CIT v. Kurele Paper Mills Pvt. Ltd. (supra). 17. In the present cases, with there being absolutely no incriminating materials found or seized at the time of search, there was no justification for the initiation of assessment proceedings under Section 153A. On this gr ..... 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