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TMI Blog2021 (11) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... o not find any error in the order of CIT(A). Search warrant was required to be received by Smt.Radha S. Timblo in her individual capacity as well as in the capacity of Managing Director and only one signature appears on the search warrant - We are of the opinion that in the Companies Act and also in the Income Tax Act, the Managing Director of the company is an authorised officer to file the proceeding for and on behalf of the company and is also entitled to receive the document on behalf of the company. Admittedly, in her statement, Smt. Radha S. Timblo has categorically mentioned that she is making statement in her individual capacity and being the Managing Director of M/s Timblo Pvt. Ltd.. Once the Managing Director of the company says that the search was carried out in the premises of the company, therefore, it is not option for the assessee to take diametrically opposite stand stating that no search was carried out in the premises of the assessee company. With the above observations, we found that the legal ground raised by the assessee in all the appeals is not maintainable. Accordingly, we dismiss all the appeals of the assessee. - IT(SS)A Nos.86 to 89/PAN/2017 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on the parity of the ratio of the decision of the Hon ble Apex Court in the case of Ajit Jain, reported in 260 ITR 80. 3. The learned Commission of Income-tax [Appeals] failed to appreciate that the warrant of authorization which is alleged to have been issued to search the appellant has not been executed and consequently the subsequent order of assessment passed under section 143(3) r.w.s. 153A of the Act is bad in law, under the facts and circumstances of the case. 4. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 5. In view of the above and other grounds that may be urged at the time of hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity. 3. In this regard, ld.AR of the assessee has drew our attention to paper book page No.31, where the warrant for search was issued by the DG(Inv.) against the two person namely, Smt. Radha S. Timblo and also against M/s Timblo Pvt. Ltd.. The ld.AR thereafter drew our attention to the Panchanama prepared during the course of search and it was submitted that the name of M/s Timblo Pvt. Ltd. is conspicuously miss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses; [iii] It is submitted that as could be seen from the warrant of authorization it has been issued on two different distinct separate persons i.e. Smt. Radha S Timblo Et M/s Timblo Private Limited, they both are two distinct assessees in the eyes of law. [iv] The assessee submits that on a cursory perusal of the said copy of the warrant it can be observed that the warrant bears the signature of only one person i.e. Smt. Radha S Timblo which confirms that the warrant issued on her has been executed Et a Search under section 132 of the Act has been conducted on the said Smt. Radha S Timblo and not on the assessee company i.e. M/s. Timblo Private Limited. [v] It is further submitted that a Sworn statement of Mrs Radha S. Timblo was recorded by the official of the department i.e. the DCIT, CC Panaji under section 133A of the Act on 21/04/2010 [A copy of the statement recorded during the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the panchanamas as mentioned above clearly indicates that the warrantin the name of Smt. Radha S Timblo and the premises to search is M/s Timblo Private Limited. Thus, no search has taken place in the case of the assessee i.e. M/s Timblo Private Limited, which necessitated to issue notice under section153A of the Act. [ix] It is clear from the records produced as explained above that the warrant is executed only in the hands of Smt. Radha S Timblo and the premises to search is M/s. Timblo Private Limited. When no warrant has been executed on this assessee i.e. M/s. Timblo Private Limited, no notice under section 153A of the Act can be issued and the notice issued under section 153A of the Act is exfacie without jurisdiction. [x] It is also relevant to point out that clause 6 of the panchanama which reads as follows: 6. In the course of the search, the authorised Officer Shri T.N.C. Sridhar, DDIT (inv) recorded the statements Smt. Radha S. Timblo at the office of Timblo Pvt. Ltd. Kadar Manzil. Nr Hari Mandir, Marqoa or /oath in our presence. No coercion, threat, inducement, promise or other undue influence was brought to bear on the deponent (s). the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee company. The Panchanamas drawn during the impugned search proceedings are drawn in the name of Smt.Radha Timblo which proves that a Search under section 132 was conducted only on Smt. Radha Timblo, in her individual capacity not on M/s. Timblo Private Limited. 6. Without prejudice, it is submitted that the learned assessing officer at para 3 of the remand report has submitted as under as regard to the satisfaction of the learned Director of Income-tax [Inv], Bangalore for issuing warrant of authorization on 21/04/2010. The same is reproduced hereunder for immediate reference: 3.0 The warrant of Authorisation was signed by Shri. P.R.Dhayal, Director of Income Tax (Inv), Bangalore on 21.04.2010. The warrant is given in Annexure - 1. The warrant signing authority said that information has been laid before me and on consideration thereof I have reason to believe that... ...If a summons is issued to Smt. Radha Timblo and M/s. Timblo Private Limited , he would not produce, or cause to be produced, such books of account or other documents as required by such summons or notice. Sarvashri/Shri/Shrimati. Radha Timblo and Timblo Private Ltd are in posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 132 of the Act on the assessee. It is submitted that since the learned authority has failed to record any satisfaction and so called satisfaction recorded is no satisfaction at all. There is nothing in the satisfaction given to even remotely indicate that there is reason to believe as envisaged in the provisions of section 132 of the Act. Reason to believe has been extensively interpreted under the provisions of section 148 of the Act and there is a consensus in judicial decisions that the process of reasoning should be explicit. In the instant case the so called satisfaction is neither reason to believe, nor reason to suspect and it is merely a reproduction of warrant and what information has laid before the Hon'ble Director of Income-tax [Inv], Bangalore is not discernible. The assessee has been a very conscious assessee and finding that the books will not be produced is patently not correct and perverse since the assessee in the earlier assessment years and also during the earlier search conducted under section 132 of the Act had produced all the documents and books to the then learned assessing officer. Thus, the very foundation that the books will not be produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be seized. Under Section 153A, the satisfaction regarding an inference of liability must be recorded. The Assessing Officer has to issue notice to the assessee i.e., the person searched for the purpose of assessment or re-assessment of the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted. Section 153C as already noted, deals with assessment of income of any other person, when the Assessing Officer is satisfied that the books of account or documents or valuable assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to under sub- section(1) of Section 153A of the Act. In such a case, the Assessing Officer has to issue notice to assess or re-assess income of other person under Section 153A of the Act. Thus, the fact that search has been conducted would not justify issuance of notice under Section 153A. If it is only during a valid search when certain incriminating materials are detected, notice could be issued. (ii) Para 50 of the order: Chapter XIV-B which deals with specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led, for the advancement of substantial cause of justice. 10. Department Appeal in ITA No. 89/PNJ/2016 for AY. 2010-11: [i] It is submitted that the department has preferred the above referred appeal before this Hon'ble Tribunal challenging the deletion of the additions made by the learned assessing officer under section 69C of the Act amounting to of ₹ 2,00,00,000/- and ₹ 2,28,54,314/-. It is submitted that the reasoning and finding given by the learned CIT[A] is just and proper and it is prayed that the appeal of the department may kindly be deleted in the interest of justice and equity. The findings of the learned CIT [A] are at pages 16 8t 17 at paras 7.12 to 7.14. [ii] . It is submitted that the during the course of alleged search conducted in the case of the assessee a dairy pertaining to the year 2002 was seized [A copy of the said dairy is placed at page 29 to 33 of the Paper Book]. In that said dairy certain scribbling were made by the assessee as regard to certain expenditure incurred by the assessee. The said entry in the dairy seized was confronted by the learned assessing officer to the assessee that as per the said seized dairy a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 76,09,624/- in M/s. Timblo Private Limited [Please refer page No. 66 of the paper book under the head Expenses not claimed and page 88 and page 90 being notes to accounts at item 4] and another sum of ₹ 7,48,690/- was declared in the hands of M/s. Timblo Minerals Private Limited [Please refer page No. 173 'Under Sundry Expenses and page 210 of the paper book] and further sum of ₹ 1,44,96,000/- was offered in the hands of Timblo Enterprise as withdrawal from capital account [Please refer page No. 171 G of the paper book Capital Account ]. The said disclosure to the extent of ₹ 2,28,54,314/- was declared by the assessee during the earlier search and seizure operation conducted on the assessee on 15/11/2006, wherein the search party had found shortage of cash on hand to the extent of ₹ 2,28,54,314/-. This deficit was reconciled and was explained that the said amount of ₹ 2,28,54,314/- in aggregate have been offered in the respective hands as mentioned above in the return of income for the year ended 31/03/2007 and the same has not been claimed by the assessee as an allowable expenditure. [vi] . The assessee considering these facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the inference and the presumption drawn by the learned assessing officer is totally not tenable in law and the addition of ₹ 2 crores required deletion which the learned CIT[A] has rightly deleted the said addition made. [x] The assessee places reliance on the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Lubtec India Ltd., reported in 311 ITR 175. Wherein the Hon'ble Court has held that It is quite clear that what is postulated in section 69C of the Income-tax Act, 1961 is that first of all the assessee must have incurred that expenditure and thereafter, if the explanation offered by the assessee about the source of such expenditure is not found satisfactory by the Assessing Officer, the amount may be added to his income. [xi] The assessee further places reliance on the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Anil Bhalla, reported in 322 ITR 191, wherein the Hon'ble Court has held that if there is no corroborative evidence found by the assessing officer as regard to the expenditure incurred by the assessee then the addition under section 69C of the Act is not correct. Further the Hon'ble Court co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the appeal of the department for the A.Y. 2010-11 in the interest of justice and equity or to pass any such orders as this Hon'ble Tribunal deem fit and proper in the interest of justice and equity. 4. On the other hand, ld. DR for the revenue has drew our attention at page 1 of the paper book, where the statement of the assessee was recorded during the course of survey on 21.04.2010 which reads as under :- Thereafter he drew our attention to the page 5 of the paper book where the statement of Smt. Radha S. Timblo was recorded during search and it was answered by her as under :- The basis on the above statement, it was submitted that since the search was conducted on Smt. Radha S. Timblo and M/s Timblo Pvt. Ltd., merely not mentioning the name of the assessee in the panchanama is not fatal as Smt. Radha S. Timblo herself had acknowledge that she is the Managing Director of M/s Timblo Pvt. Ltd.. It was submitted that the legal ground raised by the assessee is required to be dismissed. 5. We have heard rival contentions of the assessee and perused the material available on record. From the perusal of the statement recorded on the date of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as TE' for short). The said TE is engaged in extraction, processing, trading export of mineral ore for last several years. And the business income from the said TE is offered to tax by me in my individual capacity. The said TE has been converted into a Partnership Firm with effect from 01.01.2011,by inducting my children as partners, I being the Managing Partner. I say that all the above entities viz, TPL, TMPL, me TE (as firm) are assessed to income tax by the Assistant Commissioner of Income Tax, Central Circle, Panaji, Second Floor, Pundalik Niwas. Rua -de- Ourem, Panaji - Goa. I say state that during the search on the 21.04.2010 the search party found and seized a diary marked as A/RT/8 inventoried as a black 2002 diary. And the Deputy Director of Income Tax (Investigations) Panaji questioned me on the contents of the said diary on the 10.06.2010. First of all I say and submit that the entry of vv2Cr... is not payment but a budgeted amount or estimate of legal expenses as mentioned by me in the statement u/s 132(4) dated 10.06.2012 before the Dy CIT(Inv) and accordingly the total amount shall be read as rs,4,22,64,000/- only and not as Rs,6,22, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been shown above. It will be next to impossible to show a linkage to each of expenditure with dates of the amount paid/spent, and therefore I swear this affidavit on oath to substantiate my statement as true, and correct. I say that statements made here in above are true to the best of my knowledge. Solemnly affirmed by me this 11th Day of December 2012 at Margao, Goa Sd/- Margao Goa. Radha. S. Ttimblo 6. In view of the above, it is clear that the search warrant was clearly issued against the assessee company and, therefore, the action on the part of the revenue to initiate the search proceedings against the assessee company was in accordance with law. In our view, the ld. CIT(A) has rightly relied upon the decision of Hon ble Delhi High Court in the matter of MDLR Resorts Pvt. Ltd Vs. CIT 361 ITR 407 (Delhi), and therefore, we do not find any error in the order of CIT(A). 7. With regard to the submission of the ld.AR that the search warrant was required to be received by Smt.Radha S. Timblo in her individual capacity as well as in the capacity of Managing Director and only one signature appears on the search warrant, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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