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TMI Blog2022 (8) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... m is a separate taxable unit under the income tax act and in view of the Hon ble Bombay HC decision in the case of Tirupati Oil Corporation [ 2000 (2) TMI 42 - BOMBAY HIGH COURT] , Karnataka High Court decision in Nenmal Parmal [ 1991 (11) TMI 49 - KARNATAKA HIGH COURT] and in Govind G. Sarawagi HUF [ 2015 (11) TMI 993 - ITAT AHMEDABAD] it cannot be said that there was any search on the assessee firm. In view of these facts, we are of the opinion that the conditions stipulated u/s. 153A, for the issue of notice, are not satisfied. Until and unless the Assessing Officer assumes the valid jurisdiction u/s. 153A the assessment made in consequence of the notice issued u/s. 153A, in our view is invalid and void ab initio. Accordingly, ground No 1 raised by the appellant for all the assessment years is allowed and we quash the assessment order passed u/s. 153A r.w.s. 143(3). - I.T.A. NO 183, 184, 185/NAG/2017 - - - Dated:- 28-6-2022 - SHRI SANDEEP GOSAIN , JM AND SHRI ARUN KHODPIA , AM Appellant by : Shri Sudesh Banthia CA Respondent by : Shri Piyush Kolhe ( CIT - DR ) ORDER PER : SANDEEP GOSAIN , J. M. These are 3 appeals filed by the assessee again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 25/12/2011 and Rs 13,06,300/-for AY 2012-13 on13/03/2015. Search and seizure operation u/s 132 was conducted at the residential premises of partners at 40, Deshmukh Apartments, Dattatray Nagar, Nagpur and survey u/s 133A(3)(ia) at the business premises of the appellant at 16 17, Medical College Road, TB Ward Chowk, Ajni, Nagpur on 19/04/2012. Notice u/s 153A was issued on 23/04/2013. The appellant filed its return in response to the said notice on 13/03/2015. The assessment for AY 2010-11 and AY 2011-12 was ,therefore, complete and not pending on the date of search. The time limit for the issue of notice u/s 143(2) had also expired. The assessing officer (AO) framed the assessment order u/s 153A r.w.s. 143(3) of the Act on 30/03/2015 and determined assessed income of Rs 30,43,030/- for AY 2010-11, Rs 90,91,140/- for AY 2011-12 and Rs 1,12,27,727/- for AY 2012-13. Aggrieved with the said decision the assessee filed an appeal before the Ld. CIT(A). 4. During the proceedings before the first appellate authority, the Ld. counsel for the assessee contended that only survey action u/s 133A was carried out at the aforesaid business premises of the assessee on 19/04/2012. The coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Raipur bench in ACIT Vs M/s S.P.Cold Storage in ITA Nos 142 to 147/BLPR/2012 , ITAT, Mumbai bench in the case of J.M. Trading Corpn. Vs. ACIT reported in (2008) 20 SOT 489 (Mum.) ACIT vs. Sarvmangalam Builders Developers Pvt. Ltd. in ITA No.196 to 198/Del/2011. The Ld. Counsel for assessee further contended that the additions have not been made on the basis of any incriminating material found during search. He argued that since, no search was conducted in the case of assessee, hence no question of finding any incriminating material arises, therefore, no addition can be made u/s 153A of the Act. In this regard, assessee placed reliance on the decision of the Jurisdictional Bombay High court in M/s Continental Warehousing -ITA No 523, Al Cargo Logistics ITA No 1969 and Murli Agro Products- ITA No 36/2009 and others. Assessee also contended the merits of the additions made by the AO. After considering the submissions of the assessee, the Ld. CIT (A) upheld the order passed by the AO. Thus, further aggrieved, the assessee has filed the present appeal before us. 5. During the proceedings before us, the Ld. counsel for the assessee made the following submissions: a) The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidential premises of partners and not the business premises of the appellant at 16 17, Medical College Road, TB Ward Chowk, Ajni, Nagpur. Thus, the only place that could have been searched on the strength of authorization was the residential premises of partners and not any other place. There is no office of firm at the residential premises of partners given in the warrant of authorisation. d) It is further submitted that when search was to be conducted on the appellant firm, warrant of authorisation (Kindly refer Page No 5-7 of Paper Book) should have enabled the search of business premises of the appellant firm. The warrant is issued only for reason, that if summons is issued to the firm to produce the books of accounts or other documents which will be useful or relevant to proceedings under the Act, it will not produce the same. There is no reference at all in the warrant of authorisation that such documents or money, bullion, Jewellery or other valuable article or thing is in possession of the appellant firm. This shows that the authorised officer had no reasons to believe and in fact he did not believe that the appellant firm was in possession of any money, valuable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of Paper Book) in the name of Mr. Chandrashekhar Mudaliar also shows warrant in his name and place of search is the residential premises of partners. The premises searched are not the premises owned or belonging to the assessee firm and hence the search conducted is invalid qua the assessee firm. While there is ample evidence to show that survey u/s 133 was carried out at the business premises of the firm, no evidence has been produced or brought on record by AO to show that any search action u/s 132 was caried out against the appellant firm. The issue is squarely covered in favor of the assessee by the following decisions : 1) ACIT Vs M/s S.P.Cold Storage-ITA Nos 142 to 147/BLPR/2012(ITAT Raipur) 2) Regency Mahavir Properties (ITAT Mumbai) ITA No. 682 683/Mum/2016 3) J.M. Trading Corpn. Vs. ACIT (2008) 20 SOT 489 (ITAT Mum.) upheld by Hon ble Bombay HC in its judgment dated 29.06.2009 in ITA No. 589/2009 and the SLP filed by the revenue against the HC judgment has been dismissed by the Hon ble SC in SLP CC 31208/2010 on 29.10.2010 4) Unique Star Developers Vs DCIT-57 ITR 0463 (ITAT Mumbai) h) It is a settled position of law, that the partnership f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidential premises of partners for the year. The AO has not brought on record any specific incriminating evidence and no addition has been made on the basis of any such evidence during the year. Even otherwise, having searched the residence of the partners of the appellant firm the revenue could have initiated action against the appellant only u/s 153C, had any document / incriminating evidence pertaining to the firm were seized from the residential premises searched. Reliance is placed on the following decisions: 1) ACIT VsM/s S.P.Cold Storage (supra)(Pg No 1-12-Paper Book-Case Laws) 2) Regency Mahavir Properties (supra) ITAT Mumbai 3) Sonal Vora - IITA No 179/AHD/2018 6. Per contra, the Ld. DR strongly rebutted the arguments of the ld. Counsel for assessee by submitting that the assessment has been rightly framed under section 153A read with 143(3) of the Act. The Ld. DR submitted that section 153A speaks of imitation of search and not conduct of search. The revenue department had initiated search at the residence of the partners of the firm at 2nd Floor, Deshmukh Apartment, 40 Dattatray Nagar, Nagpur, the assessee s name is mentioned in the warrant of auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the residence of the partners. Besides this, the Ld. Counsel for assessee also drew our attention to order u/s 133A(3)(ia) of the Act and the inventory (Annexure B and BA) of the books of accounts and documents etc. prepared by the authorised officer for impounding and retaining them in his custody to demonstrate that survey was conducted on 19/04/2012 at the aforesaid business premises of the assessee firm. He argued that the word search cancelled on all pages of inventory (Annexure B and BA) prepared during survey also shows that no search was conducted. The Ld. counsel for assessee therefore vehemently argued that there has never been any search conducted on the assessee firm and only survey u/s 133A was conducted. Thus, it is undisputed that the search was conducted at the residential premises of the partners at 40, Deshmukh Apartments, Dattatray Nagar and no search operation as contemplated under the provisions of section 132 was ever conducted at the sole business premises of the assessee firm at 16 17, Medical College Road, TB Ward Chowk, Ajni, Nagpur. 8. Before deciding whether the assessing officer has validly assumed jurisdiction u/s 153A, it is necessary to analy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer. Section 132(1) 132. (1) Where the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e before us, we find that the search has been initiated in the name of the assessee firm along with names of partners appearing on the warrant of authorization issued u/s 132(1) but no search was conducted at the business premises of the assessee firm. The address mentioned in the partnership deed, notice issued u/s. 133A, the PAN, IT Data base and ITR, copies of which were filed before us, clearly prove that 40, Deshmukh Apartments, Dattatray Nagar, Nagpur where the search was conducted is not the business address of the assessee firm. The search was concluded but no panchnama was drawn in the name of the assessee firm. Therefore, the conditions as stipulated for assuming the jurisdiction u/s. 153A, in our view, have not been satisfied. We do not agree with the contention of the Ld. CIT(A) that since, the premises belonged to the partners, search carried out at the residence of partners is a search conducted at the assessee firm. The firm is a separate taxable unit under the income tax act and in view of the Hon ble Bombay HC decision in the case of Tirupati Oil Corporation (Supra), Karnataka High Court decision in Nenmal Parmal(Supra) and ITAT decision in Govind G. Sarawagi HUF, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment dated 29.06.2009 in ITA No. 589/2009 and further the SLP filed by the revenue against the judgment of Hon ble Bombay HC has been dismissed by the Hon ble SCin SLP CC 31208/2010 on 29.10.2010 d) The Hon ble ITAT, Mumbai bench in the case of Unique Star Developers Vs DCIT(Supra) held in order to initiate assessment proceedings, u/s 153A, premises of appellant had to be searched and Panchanama had to be specifically drawn in name of assessee. When name of assessee did not appear in panchanama, it could not be taken as omission on part of search party of mentioning name but it was clear proof and conclusive proof that no search was at all conducted . The above-mentioned decisions support the view taken by us in the preceding paragraphs. Accordingly, ground No 1 raised by the appellant for all the assessment years is allowed and we quash the assessment order passed u/s. 153A r.w.s. 143(3) of the Act. 10. In ground No 2 and 3 also, the assessee has challenged the proceedings imitated against the assessee firm u/s 153A of the act. The counsel for the assessee contended that the survey action taken u/s 133A in the case of the assessee does not authorise the assessing office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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