Smt. Mohinder Kaur, Chandigarh V. ACIT, Chandigarh

CO 31/CHANDI/2006

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7161 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 year(s) 7 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-03-2012
• Assessment Year: misc
• Appeal Filed On: 31-08-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Principle of natural justice; Competent authority; Block assessment; Revised return; Reason to believe
• Section: 145; 148; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI H.R. KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITSS NO. 13/CHD/2006 BLOCK PERIOD : 01.04.1996 TO 23.05.2002 ACIT, CC, V SMT. MOHINDER KAUR, CHANDIGARH. L/H LATE SHRI TARANJIT SINGH H.NO. 694, SECTOR 8, CHANDIGARH. PAN: AFDPS-0832G & CO 31/CHD/2006 IN ITSS NO.13/CHD/2006 SMT.MOHINDER KAUR, V ACIT, CC L/H LATE SHRI TARANJIT SINGH, CHANDIGARH. H.NO. 694, SECTOR 8, CHANDIGARH. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SMT. JYOTI KUMARI ASSESSEE BY : SHRI VED JAIN DATE OF HEARING : 30.03.2012 DATE OF PRONOUNCEMENT : 26.04.2012 ORDER PER MEHAR SINGH, AM THE REVENUE FILED APPEAL AGAINST THE ORDER PASSED BY THE CIT(A) ON 12.09.2005 FOR THE BLOCK PERIOD FROM 01.04.1996 TO 23.05.2002 U/S 250(6) OF THE INCOME-T AX ACT,1961 (IN SHORT 'THE ACT'). HOWEVER, THE ASSESS EE HAS RAISED IN THE CO, THE PRELIMINARY LEGAL GROUND OF N ON- EXISTENCE OF JURISDICTION, IN FRAMING THE BLOCK ASS ESSMENT ORDER DATED 22.08.2005, WHEREBY UNDISCLOSED INCOME WAS DETERMINED AT RS.8,57,15,730/-. THEREFORE, WE DEEM IT FIT, TO ADJUDICATE FIRSTLY THIS PRELIMINARY ISSUE OF LAC K OF JURISDICTION RAISED BY THE ASSESSEE, IN THE REVISED CO. 2 2. THE REVENUE HAS RAISED AS MANY AS 12 GROUNDS OF APPEAL, WHICH ARE REPRODUCED HEREUNDER: (I) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 85,45,680/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME FROM RUNNING OF AHATA. (II) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FAC TS OF THE CASE IN DELETING THE ADDITIONS OF RS. 1,86,54,215/- AND RS . 12,93,000/-MADE BY THE A.O ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN THE PURCHASE/CONSTRUCTION OF SCO 16-1 7 SECTOR 8, CHANDIGARH. (III) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FAC TS OF THE CASE IN DELETING THE ADDITION OF RS. 10,31,520/- MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF SCF NO 210, SECTOR 24, CHANDIGARH (IV) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FAC TS OF THE CASE IN DELETING THE ADDITION OF RS. 2,00,000/- ON ACCOUNT OF UNDISCLOSED INTEREST INCOME. (V) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FAC TS OF THE CASE IN DELETING THE ADDITION OF RS.8,40,000/- MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES. (VI) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACT S OF THE CASE IN DELETING THE ADDITION OF RS 2,50,00,000/- MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED DEPOSIT FROM M/S SHUBH INTERNATIONAL LTD. (VII) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FA CTS OF THE CASE IN DELETING THE ADDITION OF RS 1,54,056/- MADE BY THE A.O UNEXPLAINED INTEREST INCOME (VIII) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS 45,42,000/- MADE B Y THE A.O ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCT ION OF HOUSE NO. 694, SECTOR 8, CHANDIGARH. 3 IX) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FA CTS OF THE CASE IN DELETING THE ADDITION OF RS 1.24,66,000 - MADE BY TH E A.O BY TREATING THE UNEXPLAINED INVESTMENT OF MS RAJINDER KUMAR MANOJ KUMAR TO BE THE UNDISCLOSED INCOME OF SH TARANJIT SINGH. (X) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS 45.63.930/- MADE BY TH E A.O ON ACCOUNT OF UNDISCLOSED INCOME OF M S TARANJIT SING H & CO AND RS 1.24.65.000 - ON ACCOUNT OF CREDITS IN BANK ACCO UNT OF V TARANJIT SINGH & CO. (XI) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 5 LACS ON ACCOUNT OF UNEXPLAINED CREDIT IN THE ACCOUNT OF M/ S LADA LIQUOR (P) LTD. (XII) THE LD. CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS 10 LACS MADE BY ESTIMAT ING THE CAPITAL GAIN ON SETTLEMENT OF PROPERTIES AMONG FA MILY MEMBERS. 3. THE ASSESSEE ALSO RAISED REVISED GROUNDS OF APPE AL FILED VIDE LETTER DATED 20.05.2009, WHICH ARE REPRO DUCED HEREUNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE O RDER PASSED BY A.O IS BAD BOTH IN THE EYE OF LAW AND ON F ACTS AND IS LIABLE TO BE QUASHED AS THE SAME HAS BEEN PAS SED WITHOUT THERE BEING ANY SEARCH WARRANT IN THE NAME OF APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDE R PASSED BY A.O IS BAD BOTH IN THE EYE OF LAW AND ON FACTS AS THERE WAS NO MATERIAL FOUND DURING THE SEARCH WH ICH CAN BE THE BASIS OF ADDITION IN BLOCK ASSESSMENT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDE R PASSED BY A.O IS BAD BOTH IN THE EYE OF LAW AND ON FACTS 4 AS WHAT IS DISCLOSED CAN NOT BE UNDISCLOSED AND ALL TH E FACTS RELATED TO ASSESSMENT WERE DISCLOSED IN THE RE GULAR ASSESSMENT OF THE ASSESSEE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDE R PASSED BY A.O IS BAD AND LIABLE TO BE QUASHED AS THE SAME HAS BEEN MADE ON THE BASIS OF STATEMENTS OF VARIOUS PERSONS WITHOUT GIVING ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE THE SAME IN CLEAR VIOLA TION OF THE PRINCIPLE OF NATURAL JUSTICE. 5. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF CROSS OBJECTION. 4. AS IN THE REVISED C.O., THE ASSESSEE HAS CHALLEN GED THE VERY EXISTENCE OF JURISDICTION OF THE AO, U/S 158BC OF THE ACT, IT IS PERTINENT TO EXAMINE THE RELEVANT STATUTORY P ROVISIONS, IN THE MATTER. IT IS CONTENDED THEREIN THAT NO SEARCH WARRANT HAS BEEN ISSUED U/S 132(1) OF THE ACT, IN THE CASEO F THE ABOVE NAMED ASSESSEE, THEREFORE, THE AO HAS NO JURISDICTI ON TO FRAME ASSESSMENT U/S 158BC OF THE ACT. IN VIEW OF THIS VITAL LEGAL ISSUE OF JURISDICTION, AS RAISED BY THE ASSES SEE, AS PRELIMINARY OBJECTION, WE DEEM IT FIT TO DECIDE THE SAME FIRST. THE ASSESSEE, AT THE OUTSET, CHALLENGED THE VALIDIT Y OF THE IMPUGNED BLOCK ASSESSMENT FRAMED BY THE AO, BEING W ITHOUT JURISDICTION, AS NO SEARCH WARRANT HAS BEEN ISSUED U/S 132(1) OF THE ACT, IN THE NAME OF THE ASSESSEE AS SMT.MOHINDER KAUR, LEGAL HEIR OF LATE SHRI TARANJIT SINGH. 5. THE SUBMISSION OF THE ASSESSEE IS REPRODUCED HEREUNDER: 1.1 A SEARCH & SEIZURE OPERATION WAS CARRIED OUT O N SMT.MOHINDER KAUR ON 23 RD MAY, 2002. CONSEQUENT TO THAT ASSESSMENT ORDER HAS BEEN 5 FRAMED UNDER SECTION 158BC OF THE ACT ON SMT. MOHINDER KAUR AND LATE SHRI TARANJEET SINGH. SHRI TARANJEET SINGH DIED ON 19 TH APRIL. 2000 AND AS SUCH ON THE DATE OF THE SEARCH WHICH TOOK PLACE AFTER MO RE THAN TWO YEARS FROM THE DATE OF DEATH SHRI TARANJEE T SINGH WAS NOT ALIVE. 1.2 THE ASSESSING OFFICER HAS FRAMED THE BLOCK ASS ESSMENT BOTH ON SMT. MOHINDER KAUR AS WELL AS LATE SHRI TARANJIT SINGH. BOTH THE ASSESSMENT ORDERS ARE DA TED 22 ND AUGUST 2005. 1.3 IN THIS REGARD, THE ASSESSEE HAS RAISED A GROU ND THAT THE BLOCK ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS LIABLE TO BE QUASHED AS THERE WAS NO SEA RCH WARRANT IN THE NAME OF THE APPELLANT. 1.4 THE SEARCH WARRANT WAS ADMITTEDLY IN THE NAME OF MOHINDER KAUR AND AS SUCH THERE IS NO DOUBT ABOUT THE VALIDITY OF SEARCH AND THE BLOCK ASSESSMENT FRAMED IN THE NAME OF SMT. MOHINDER KUAR AS AN INDIVIDUAL. 1.5 IT IS A SETTLED POSITION OF THE LAW THAT FOR A VALID BLOCK ASSESSMENT THERE HAS TO BE A SEARCH WARRANT IN THE NAME OF THE PERSON. CHAPTER XIV-BECOMES INTO OPERATION WHEN THERE IS A SEARCH ON THE PERSON. THE ASSESSING OFFICER IN THE PRESENT CASE HAS ASSUMED T HAT THERE WAS A SEARCH WARRANT IN THE NAME OF LATE SHRI TARANJEET SINGH AND ON THAT ASSUMPTION HE HAS GONE AHEAD WITH THE BLOCK ASSESSMENT ON SMT.MOHINDER KAUR LATE SHRI TARANJEET SINGH. 1.6 THE ASSESSEE HAS FILED AN AFFIDAVIT BEFORE THE HON'BLE TRIBUNAL TO THE EFFECT THAT THERE WAS NO 6 SEARCH WARRANT OTHER THAN THE SEARCH WARRANT IN THE CASE OF SMT. MOHINDER KAUR. 1.7 THE DEPARTMENT HAS ALSO NOT BEEN ABLE TO PRODUCE ANY SEARCH WARRANT OTHER THAN THE ONE WHICH HAS BEEN ENCLOSED WITH THE LETTER DATED 15 TH FEBRUARY,2012. THE SAID SEARCH WARRANT WAS IN THE NAME OF SMT MOHINDER KAUR, HOUSE NO. 694, SECTOR 8, CHANDIGARH. 1.8 ACCORDINGLY THERE IS NO SEARCH WARRANT IN THE NAME OF LATE SHRI TARANJEET SINGH AND AS SUCH THE BLOCK ASSESSMENT ORDER FRAMED IS WITHOUT JURISDICTION AND LIABLE TO BE QUASHED. 2.1 IN THIS REGARD RELIANCE IS BEING PLACED ON TH E JUDGMENT OF SMT. NASREEN YUSUF DHANANI VS. ASSISTANT COMMISSIONER OF INCOME TAX 24 SOT 31 WHERE IT HAS BEEN HELD THAT THE CHAPTER XIV-B OF THE ACT IS A SPECIAL PROCEDURE FOR MAKING ASSESSMENT OF SEARCH CASES. THESE PROVISIONS OF BLOCK ASSESSMENT COME INTO PICTURE ONLY AS A RESULT OF SEARCH ACTION CARRIED OUT UNDER SECTION 132. ON READING THE PROVISIONS OF SECTION 132(1) OF THE ACT, IT IS CLEAR THAT THE SECTION IS PERSON- SPECIFIC AND NOT PREMISES-SPECIFIC. THE PRIMARY TARGET FOR CONDUCTING A SEARCH ACTION IS THE PERSON WHO IS IN POSSESSION OF ANY UNDISCLOSED INCOME. IN THIS CASE THE SEARCH WARRANT WAS IN THE NAME OF THE HUSBAND OF THE ASSESSEE AND IT WAS FOUND AS A MATTER OF FACT THERE WAS NO SEARCH WARRANT ISSUED IN THE NAME OF THE WIFE OF THE ASSESSSE. IN THE ABSENCE OF A SEARCH WARRANT IN THE NAME OF THE ASSESSEE ITSELF THE BLOCK ASSESSMENT WAS QUASHED. 2.2 SIMILAR IS THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. MS. PUSHPA RANI 289 ITR 328 7 WHERE IT HAS BEEN HELD THAT IF THERE IS NO SEARCH WARRANT ISSUED IN THE NAME OF THE ASSESSEE, THE PROCEEDINGS UNDER SECTION 158BC ARE WITHOUT JURISDICTION AND VOID AB INITIO. 2.3 SIMILARLY IN THE CASE OF NENMAL SHANKARLAL FARMER VS. ASSTT. CIT (INV.) 195 ITR 582 THE KARNATAKA HIGH COURT HAS HELD THAT FOR THE PURPOSE OF THE ACT, THE FIRM AND ITS PARTNERS ARE DIFFERENT ENTITIES. THE FIRM ITSELF IS A PERSON FOR THE PURPOSE OF THE ACT. WHEN A SEARCH WAS TO BE ON THE PARTNER, THE WARRANT OF AUTHORIZATION SHOULD HAVE BEEN IN THE NAME OF THE PARTNER. THE WARRANT OF AUTHORIZATION IN THE NAME OF THE FIRM WILL NOT BE VALID FOR CARRYING OUT A SEARCH ON THE PARTNER. 2.4 SIMILARLY IN THE CASE OF JT. CIT VS. LATIKAV. WAMAN 1 SOT 535 (MUM) HUSBAND AND WIFE WERE DOING SAME BUSINESS IN SAME PREMISES. SEARCH WARRANT WAS ISSUED AGAINST HUSBAND ONLY. IT WAS HELD BY THE MUMBAI BENCH THAT NO PROCEEDING FOR BLOCK ASSESSMENT CAN BE TAKEN AGAINST WIFE AND THE BLOCK ASSESSMENT ORDER PASSED IN THE NAME OF THE WIFE WAS INVALID. IT WAS HELD THAT ASSESSEE CANNOT CONCEDE A JURISDICTION TO THE ASSESSING OFFICER WHICH LAW DOES NOT CONFER ON HIM. 2.5 A SIMILAR ISSUE HAS COME UP BEFORE THE GUJARAT HIGH COURT IN THE CASE OF JAYANTILAL DAMBJIBHAJJJONI & ORS. VS. DIRECTOR OF INVESTIGATION & ANR 9 DTR 249. IN THIS CASE SEARCH WARRANT WAS ISSUED IN THE NAME OF PARTNERS OF JRT/JST. IT WAS HELD THAT THERE WAS NO SEARCH WARRANT ON THE ASSESSEE AND THEREFORE, THE PROCEEDING FOR BLOCK ASSESSMENT IS INVALID IN LAW. 8 2.6 SIMILARLY THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF SAROJ NURSING HOME VS. ASSISTANT COMMISSIONER OF INCOME TAX 98 TTJ 46 HAS HELD THAT THE SEARCH WARRANTS WERE IN THE NAME OF THE PARTNERS OF THE ASSESSEE FIRM AND NOT IN THE NAME OF THE FIRM AND ACCORDINGLY BLOCK ASSESSMENT CAN BE COMPLETED ONLY IN RESPECT OF THE PERSON WHO IS SUBJECTED TO SEARCH UNDER SECTION 132 I.E. PARTNERS AND NOT THE FIRM. IN THIS CASE THE BLOCK ASSESSMENT COMPLETED BY THE ASSESSING OFFICER IN THE NAME OF THE FIRM WAS HELD TO BE INVALID AND QUASHED. 2.7 FURTHER IT IS TO BE NOTED THAT SHRI TARANJEET SINGH HAS DIED TWO YEARS BEFORE THE DATE OF THE SEARCH AND IT IS A SETTLED LAW THAT THERE CANNOT BE A SEARCH WARRANT IN THE NAME OF A DEAD PERSON. THE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE CAME OF CIT VS. RAKESH KUMAR, MUKESHI KUMAR L/H OF LATE MOHAR SINGH 13 DTR 209 HAS HELD THAT IN SUCH CIRCUMSTANCE THE BLOCK ASSESSMENT ORDER WILL BE NULL AND VOID AND THE SAME WAS QUASHED. IN THE PRESENT CASE THERE WAS NO SEARCH WARRANT IN THE NAME OF LATE SHRI TARANJEET SINGH AND ACCORDINGLY T HE BLOCK ASSESSMENT ORDER PASSED BY THE ASSESSING OFFI CER IS LIABLE TO THE QUASHED. 5(I). THE ASSESSEE HAS ALSO FILED AN AFFIDAVIT DATE D 01.03.2012, WHICH IS REPRODUCED AS UNDER : AFFIDAVIT I, MAHENDAR KAUR W/O LATE SHRI TARANJIT SINGH, R/O HOUSE NO. 694 SECTOR 8, CHANDIGARH DO HEREBY SOLEMNLY AFFIRM AND DECLARE AS UNDER : 1. THAT A SEARCH WAS CARRIED OUT ON ME BY THE INCOME TAX DEPARTMENT ON 23 RD MAY, 2002. 9 2. THAT THE SAID SEARCH WAS CARRIED OUT IN CONSEQUENT TO WARRANT OF AUTHORIZATION ISSUED UNDER SECTION 132 OF THE INCOME-TAX ACT IN MY INDIVIDUAL NAME ONLY. 3. THAT THE WARRANT OF AUTHORIZATION SHOWN TO ME WAS IN MY INDIVIDUAL CAPACITY AND THERE WAS NO WARRANT OF AUTHORIZATION IN THE CAPACITY OF LEGAL HEIRS OF MY HUSBAND LATE SHRI TARANJIT SINGH. 4. THAT MY COUNSEL IN THE SUBMISSION BEFORE THE LD. CIT(A) HAS BY MISTAKE STATED THAT A SEPARATE WARRANT OF AUTHORIZATION WAS ISSUED IN THE NAME OF LEGAL HEIR OF LATE SHRI TARANJIT SINGH. 5. THAT IT IS HEREBY CONFIRMED AND REITERATED THAT NO WARRANT OF AUTHORIZATION WAS ISSUED AS LEGAL HEIR OF LATE SHRI TARANJIT SINGH. 6. THAT THE WARRANT OF AUTHORIZATION ISSUED WAS IN MY NAME AND IN MY INDIVIDUAL CAPACITY ONLY. SD/- DEPONENT VERIFICATION VERIFIED THAT THE CONTENTS OF PARA NO. 1 TO 6 OF M Y ABOVE AFFIDAVIT ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND NO PART OF IT IS FALSE OR MIS- STATED AND NOTHING MATERIAL HAS BEEN CONCEALED THEREFROM. SD/- CHANDIGARH DEPONENT DATED 1.3.2012. 6. THE REVENUE FILED SUBMISSIONS IN RESPONSE TO CO DATED 29.03.2012, WHICH IS REPRODUCED AS UNDER : F.NO.CIT/ITAT/CHD/2011-12/ DATED: 29.03.2012 TO THE HON'BLE MEMBERS, INCOME TAX APPELLATE TRIBUNAL, BENCH-A, CHANDIGARH SIR SUB:- IT(SS) NO.13/CHD/2006 AND CO NO.31/CHD/2006 IN THE CASE OF SMT. MOHINDER KAUR L/H OF LATE TARANJIT SINGH FOR THE BLOCK PERIOD 01.04.1996 TO 23.05.2002 AND A.Y. 2003-04 -REGARDING- PLEASE REFER TO THE SUBJECT MENTIONED ABOVE. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT 1961 WAS CONDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF SMT. MOHINDER KAUR OF M/S LADA LIQUOR GROUP ON 23.05.2002 . SEARCH WARRANTS WERE IN THE NAME OF SMT. MOHINDER KAUR OF M /S LADA 10 LIQUORS. THE SEARCH WARRANT WAS ISSUED BY THE COMPET ENT AUTHORITY I.E. DIRECTOR OF INCOME TAX (INV). IT MAY BE STATED THAT AFTER THE DEMISE OF SHRI TARANJIT SINGH ON 19.04.20 00, THE BUSINESS WAS TAKEN OVER AND CARRIED ON BY HIS WIFE SM T. MOHINDER KAUR TILL THE DATE OF SEARCH. FOR LAST SEVERAL YEARS BEFORE HIS DEATH, LATE SHRI TARANJIT SINGH HAD BEEN CARRYING ON BUSINESS IN THE NAME AND STYLE OF M/S LADA LIQUORS. BEFORE ISSUE OF SEARCH WARRANT, THE COMPETENT AUTHO RITY HAD REASON TO BELIEVE THAT STATUTORY CONDITIONS FOR EXER CISE OF POWER TO CONDUCT SEARCH AND SEIZURE U/S 132 EXISTED IN THE C ASE OF ASSESSEE SMT. MOHINDER KAUR OF LADA LIQUOR GROUP. THE REFORE, REASONS WERE RECORDED AND IN PURSUANCE TO THE SAME, SEARCH WAS CONDUCTED IN THE CASE OF SMT. MOHINDER KAUR, WHO WAS RUNNING BUSINESS IN THE NAME AND STYLE OF M/S LADA LIQUORS AT THE TIME OF SEARCH AND WHO WAS ALSO THE L/H OF LATE TARANJIT SINGH. THEREFORE THERE WAS NO ILLEGALITY INVOLVED IN THE CONDUCT OF SEARCH AGAINST THE ASSESSEE. RELIANCE IS PLACED ON TH E JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ITO VS SETH BROTHERS 74 ITR 836 (SC) IN WHICH THE APEX COURT HAS LAID DOWN T HE SCOPE OF SECTION 132. FURTHER, IT MAY BE STATED THAT ASSESSEE IS CHALLENGI NG THE VALIDITY OF BLOCK ASSESSMENT IN THE CASE OF SMT. MOH INDER KAUR L/H LATE TARANJIT SINGH, THEREBY SHE IS CHALLENGING THE VALIDITY OF SEARCH, WHICH IS A CONDITION PRECEDENT FOR CALLIN G UPON THE ASSESSEE TO FILE RETURNS FOR BLOCK ASSESSMENT U/S 15 8 BC. HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS PARAS RICE MILLS 313 ITR 182 HAS HELD THAT TRIBUNAL C OULD NOT GO INTO THE VALIDITY OR OTHERWISE OF ANY ADMINISTRATI VE DECISION FOR CONDUCTING SEARCH AND SEIZURE. THE SAME COULD BE SUBJ ECT MATTER OF CHALLENGE IN INDEPENDENT PROCEEDING. IN THIS CASE, ASSESSEE HAS NOT CHALLENGED THE VALIDITY OF SEARCH IN ANY IND EPENDENT PROCEEDINGS AND, THEREFORE, ASSESSEE CAN NOT CHALLE NGE THE VALIDITY OF ISSUE OF NOTICE U/S 158BC IN THE CASE OF MOHINDE R KAUR BEFORE THE HON'BLE TRIBUNAL. IT IS NOT THE CASE OF ASSESSEE THAT THERE WERE TWO BUSINESSES, ONE IN THE NAME OF SMT. MOHINDER KAUR AND ANOTHER IN TH E NAME OF 11 LATE TARANJIT SINGH AND SEARCH WAS CONDUCTED ONLY IN THE RESPECT OF BUSINESS WHICH WAS BEING OWNED AND RUN BY SMT. MO HINDER KAUR. IT MAY BE STATED THAT THERE WAS ONLY ONE BUSIN ESS OF M/S LADA LIQUORS WHICH' WAS TAKEN OVER AND BEING RUN BY SMT. MOHINDER KAUR AFTER THE DEMISE OF HER HUSBAND. ASSES SING OFFICER ISSUED TWO NOTICES U/S 158BC, ONE IN THE CAS E OF SMT. MOHINDER KAUR AND ANOTHER IN THE NAME OF SMT. MOHIND ER KAUR L/H OF LATE TARANJIT SINGH. THEREFORE, IT IS NOT THE CASE OF ASSESSEE THAT NO SEARCH WAS CONDUCTED IN RESPECT OF ASSESSMENT OF UNDISCLOSED INCOME WHICH HAS BEEN MADE IN THE HAN DS SMT.MOHINDER KAUR L/H LATE TARANJIT SINGH. THERE IS NO DENYING THE FACT THAT SEARCH WAS CONDUCTED AT THE BUSINESS PREMISE OF M/S LADA LIQUORS WHICH WAS RUN BY LATE TARANJIT SINGH BEFORE HIS DEMISE AND BY HIS WIFE SMT . MOHINDER KAUR AFTER HIS DEATH. THEREFORE, ASSESSING OFFICER I S CORRECT IN ASSESSING THE UNDISCLOSED INCOME OF M/S LADA LIQUOR S IN THE HANDS OF SMT. MOHINDER KAUR L/H LATE TARANJIT SINGH T ILL HIS DEATH. FURTHER, IT MAY BE SUBMITTED THAT IS NO RESTRICT ION IN MAKING TWO ASSESSMENTS U/S 158BC ON THE BASIS OF A SINGLE WARRANT. IN THE CASE OF MADHUPURI CORPORATION VS PRA BHAT JHA, 256 ITR 498(GUJARAT) HON'BLE GUJARAT HIGH COURT HAS HELD THAT AS PER PROVISIONS OF SECTION 2 OF THE GENERAL CLAUSES ACT, 1897, SINGULAR INCLUDES PLURAL. IN THE CASE OF ASSESSEE, TW O ASSESSMENTS HAVE BEEN MADE IN RESPECT OF ONE BUSINESS ONLY I.E. OF LADA LIQUORS, IN PURSUANCE TO SEARCH CONDUCTED IN THE CAS E OF MOHINDER KAUR OF LADA LIQUOR GROUP IN ORDER TO COMP LY WITH THE PROVISIONS OF INCOME TAX ACT AS THE ASSESSMENT OF M /S LADA LIQUORS FOR THE BLOCK PERIOD PRIOR TO THE DEATH OF L ATE TARANJIT SINGH HAD TO BE MADE IN THE HANDS OF THE L/H SMT.MOHINDE R KAUR. THE FACTS IN THE CASE OF ASSESSEE ARE IDENTICAL TO THE FACTS OF JAI BHAGWAN OM PRAKASH VS DIRECTOR OF INSPECTION AND OT HERS 208 ITR 424 (P&H). IN THIS CASE, WARRANT WAS ISSUED IN TH E NAME OF HUF WHICH WAS NOT CARRYING ON THE BUSINESS. THE BUS INESS WAS BEING DONE BY PARTNERSHIP CONCERN IN WHOSE NAME NO WARRANT WAS ISSUED SEARCH WAS HELD TO BE VALID A S 12 BUSINESS WAS ACTUALLY CARRIED ON BY HUF IN THE NAME O F FIRM. THE CASE OF ASSESSEE IS ON A BETTER FOOTING BECAUS E IN THIS CASE BUSINESS WAS BEING RUN BY SMT MOHINDER KAUR AND WARRANT OF AUTHORIZATION HAS BEEN ISSUED IN HER NAM E AND NOTICES U/S 158BC WERE ISSUED IN THE NAME OF SMT. MOHIN DER KAUR /H OF LATE TARANJIT SINGH ONLY TO COMPLY WITH T HE REQUIREMENTS OF INCOME TAX ACT AS THE ASSESSMENT PRIO R TO THE DEATH OF SMT. MOHINDER KAUR'S HUSBAND WERE TO BE MA DE IN HER HANDS AS HIS LEGAL HEIR. THE RATIO OF THE JUDGMENT 208 ITR 424(P&H) OF HON'BLE PUNJAB & HARYANA HIGH COURT IS APPLICABLE TO THE FACTS OF THIS CASE. THEREFORE, NON-MENTIONING OF LEGAL HEIR IN WARRANT OF AUTHORIZATION WHICH WAS ISSUED IN THE NAME OF SMT. MOHINDER KAUR IS ONLY A TECHNICAL MISTAKE WHICH IS REC TIFIABLE AS PER SECTION 292B OF THE INCOME TAX ACT. NOTICE U /S 158BC IS PROCEDURAL IN NATURE AND THEREFORE, DEFECTS, IF ANY, IN THE NOTICE ARE PROTECTED U/S 292 BC. RELIANCE IS PLACED O N THE JUDGMENT OF 203 CTR(BOMBAY) 621. FURTHER, AS PER TH E PROVISIONS OF SECTION 292BB, IF THE ASSESSEE HAS NO T RAISED ANY OBJECTION REGARDING ISSUE OF NOTICE BEFORE THE COMPLETION OF ASSESSMENT PROCEEDINGS, SUCH NOTICE IS DEEMED TO BE VALID. IN VIEW OF THIS, ASSESSING OFFICER HAS CORRECTLY ISS UED NOTICE U/S 158BC IN THE NAME CASE OF SMT. MOHINDER KAUR L/H OF L ATE TARANJIT SINGH. YOURS FAITHFULLY, SD/- (JYOTI KUMARI) COMMISSIONER OF INCOME TAX-LL, ITAT, CHANDIGARH 6(I) A PERUSAL OF THE WRITTEN SUBMISSION FILED BY T HE REVENUE, DATED 29.03.2012, REVEALS THAT IT HAS BEEN CONTENDED THEREIN THAT SEARCH WAS CONDUCTED U/S 132 OF THE ACT, IN PURSUANCE OF WARRANT OF AUTHORIZATION, ISSUED BY THE COMPETENT AUTHORITY. IT IS FURTHER MENTIONED T HEREIN THAT SHRI TARANJIT SINGH EXPIRED ON 19.04.2000 AND THE 13 SEARCH WAS CONDUCTED ON 23.5.2002. THE BUSINESS WA S TAKEN OVER AND CARRIED ON BY HIS WIFE SMT.MOHINDER KAUR TILL THE DATE OF SEARCH. THE CONTENTION OF THE REV ENUE IS THAT THERE IS NO ILLEGALITY IN THE CONDUCT OF SEARC H AGAINST THE ASSESSEE. FURTHER, REVENUE PLACED RELIANCE ON THE DECISION OF SETH BROTHERS 74 ITR 836 (S.C). THIS C ONTENTION OF THE REVENUE IS IN THE CONTEXT OF VALIDITY OF THE SEARCH, WHEREAS THE ISSUE INVOLVED IN THE PRESENT C.O. IS V ALIDITY OF THE BLOCK ASSESSMENT ORDER. THE ASSESSEE HAS NOT CHALLENGED THE VALIDITY OF THE SEARCH IN THE C.O. THEREFORE, SUCH CONTENTION OF THE REVENUE IS NOT RELEVANT. TH E REVENUE FURTHER PRESUMES THAT THE CHALLENGE TO THE VALIDITY OF BLOCK ASSESSMENT BY THE ASSESSEE, IN THE CASE OF SMT.MOHI NDER KAUR L/H OF LATE SHRI TARANJIT SINGH AMOUNTS TO CHALLENGING THE VALIDITY OF THE SEARCH OPERATION. THIS CONTENTION OF THE REVENUE IS BASED ON INCORRECT INF ERENCES DRAWN FROM THE CONTENTION RAISED BY THE ASSESSEE IN THE C.O. THE REVENUE PLACED RELIANCE ON THE DECISION O F THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V PARAS RICE MILLS 313 ITR 181, WHEREBY IT HAS BEEN H ELD THAT TRIBUNAL IS NOT COMPETENT TO ADJUDICATE THE VALIDIT Y OF SEARCH. IN THIS CONTEXT, IT IS MENTIONED THAT BENC H IS NOT SEIZED OF THE ISSUE OF ADJUDICATION OF VALIDITY OF SEARCH, AS CONTENDED BY THE REVENUE. THE ASSESSEE HAS NOT CHA LLENGED THE VALIDITY OF SEARCH. THEREFORE, THIS CONTENTION OF THE REVENUE IS IRRELEVANT. THE CONTENTION OF THE ASSES SEE IS THAT NO VALID BLOCK ASSESSMENT CAN BE FRAMED UNLESS THERE IS A SEARCH WARRANT AND IN THE CASE OF PRESENT ASSE SSEE 14 NAMELY SMT. MOHINDER KAUR L/H LATE SHRI TARANJIT SI NGH, NO SEARCH WARRANT HAS BEEN ISSUED IN SUCH STATUS. THE ISSUE INVOLVED IN THE PRESENT CASE IS NOT SINGULAR OR PLURAL, AS HIGHLIGHTED BY THE REVENUE, BY PLEADING THE CASE OF HON'BLE GUJRAT HIGH COURT IN THE CASE OF MADHUPURI CORPORATION VS PRABHAT JHA, 256 ITR 498(GUJARAT). IN THIS CASE, THE UNDISCLOSED INCOME BELONGING TO LATE SHRI TARANJIT SINGH WAS REQUIRED TO BE ASSESSED U/S 158B D OF THE ACT AFTER RECORDING DUE SATISFACTION. THE REVENUE HAS FAILED TO FOLLOW THIS PROCEDURE FOR BLOCK ASSESSMEN T, AS EXPRESSLY CONTAINED IN PROVISIONS OF SECTION 158BC READ WITH 158BD OF THE ACT. THE CONTENTION MADE BY THE REVENUE THAT THE FACTS OF THE PRESENT CASE ARE COVERED BY T HE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT, IN THE CASE OF JAI BHAGWAN OM PARKASH V DIRECTOR OF INSPEC TION & OTHERS 208 ITR 424 IS MISPLACED. IN THIS CASE, WAR RANT WAS ISSUED IN THE NAME OF HUF, WHICH WAS NOT CARRYING T HE BUSINESS. THE BUSINESS WAS BEING CARRIED ON BY THE PARTNERSHIP CONCERN, IN WHOSE NAME, WARRANT WAS ISS UED. IN THIS CASE, SEARCH WAS HELD TO BE VALID. NEEDLES S TO SAY, THAT NO SEARCH WARRANT CAN BE ISSUED IN THE NAME OF DECEASED PERSON, BEING LEGALLY ESTABLISHED PROPOSIT ION. THE FACTS OF THE CASE, CITED BY THE REVENUE, ARE NOT AP PLICABLE TO THE PRESENT CASE. THE REVENUE, FURTHER CONTENDED T HAT NON- MENTIONING OF LEGAL HEIR, IN THE WARRANT OF AUTHORI ZATION, ISSUED IN THE NAME OF SMT.MOHINDER KAUR IS ONLY A TECHNICAL MISTAKE, WHICH IS RECTIFIABLE, AS PER SEC TION 292B OF THE ACT. THE PROPOSITION CONVASSED BY THE REVEN UE IS 15 CONTRARY TO THE EXPRESS PROVISIONS OF THE ACT. SEC TION 292B IS NOT INTENDED TO RECTIFY THE WARRANT OF AUTHORIZA TION ISSUED U/S 132(1) OF THE ACT. THE PROVISION OF SEC TION 292B MERELY CURES THE DEFECTS IN THE NOTICE, SUMMONS ETC . IF SUCH NOTICE IS ISSUED IN SUBSTANCE AND EFFECT, IN CONFOR MITY WITH, OR ACCORDING TO THE INTENT AND PURPOSES OF THE ACT. 6(II). THE REVENUE FILED LETTER DATED 29.02.2012, WHICH IS AS UNDER: F. NO: DDIT/INV-IL/CHD/2011-12/1298 D ATED: 29-02-2012 TO, THE COMMISSIONER OF INCOME TAX-II, ITAT, CHANDIGARH MADAM, SUB: -IT{SS) NO. 13/CHD/2006 AND CO NO. 3L/CHD/2006 IN THE CASE OF MOHINDER KAUR L/H OF LATE TARANJIT SINGH FO R THE BLOCK PERIOD 01-04-1996 TO 23-05-2002 AND A..Y. 2003-04 - REGARDING- KINDLY REFER TO YOUR LETTER NO. 820 DATED 24-02-2012 ON THE SUBJECT CITED ABOVE. 2. IN THIS REGARD, IT IS SUBMITTED THAT THE ORIGINAL W ARRANT IN THE CASE OF SMT. MOHINDER KAUR WAS SENT TO YOUR KIND OF FICE VIDE LETTER NO. 822 DATED 19-06-2009. MOREOVER, THE COPY OF THE SAME WARRANT WAS SENT TO YOUR KIND OFFICE VIDE LETTER NO. 1092-93 DATED 16-12-2011 (COPY ENCLOSED FOR READY REFERENCE). IN THIS REGARD IT IS ALSO MENTIONED HERE THAT THE ABOVE SAID WARRANT WAS EXECUTED ON SM T. MOHINDER KAUR WHO PUT HER SIGNATURE ON THE WARRANT ON 23-05-2002 IN THE PRESENCE OF TWO WITNESSES. 3. AS REGARDS TO THE REQUIREMENT OF AFFIDAVIT BY THIS OF FICE THAT THE WARRANT WAS ISSUED IN THE CASE OF SMT. MOHINDER KAUR , IT IS SUBMITTED THAT THE ORIGINAL WARRANT AS WELL AS THE COPY OF TH E SAME HAS ALREADY BEEN SENT TO YOUR OFFICE VIDE ABOVE LETTERS. THEREF ORE, THIS OFFICE HAS NOTHING MORE TO SAY IN THE MATTER. 4. THIS LETTER HAS BEEN ISSUED WITH THE PRIOR PERMISSION OF WORTHY DIT (INV.), CHANDIGARH. 16 SUBMITTED FOR YOUR KIND PERUSAL AND NECESSARY ACTION. YOURS FAITHFULLY, SD/- (SUNIL KUMAR YUDAV) DY, DIRECTOR OF INCOME TAX (INV.),II CHANDIGARH COPY TO:- 1. THE CHIEF COMMISSIONER OF INCOME TAX, NWR, CHANDIGA RH FOR KIND INFORMATION. 2. THE DIRECTOR GENERAL OF INCOME TAX (INV.), CHANDIGA RH FOR KIND INFORMATION, 3. THE JOINT DIRECTOR OF INCOME TAX (INV.), CHANDIGARH FOR KIND INFORMATION SD/- (SUNIL KUMAR YADAV) DY. DIRECTOR OF INCOME TAX (INV.), II CHANDIGARH 7. A WARRANT OF AUTHORIZATION, DATED 22.05.2002 H AS BEEN ISSUED U/S 132(1) OF THE INCOME-TAX ACT,1961 A ND RULE 112(1) OF THE INCOME TAX RULES, 1962, IN THE NAME OF SMT.MOHINDER KAUR OF M/S LADA LIQUORS LTD., HOUSE N O. 694 SECTOR 8, CHANDIGARH, RESIDENCE OF SMT.MOHINDER KAUR, BY THE DIRECTOR OF INCOME TAX (INVG.) CHANDIG ARGH, AS IS EVIDENT FROM THE PERUSAL OF THE PHOTOCOPY OF FORM NO.45, FILED BY THE REVENUE. THE SAID WARRANT OF AUTHORIZATION WAS EXECUTED, ON 23.5.2002, ON SMT.MO HINDER KAUR, AS IS EVIDENT FROM HER SIGNATURE APPENDED ON ITS BACK, IN TOKEN OF HAVING SEEN THE SAME, AS ON 23.5. 2002. 8. LD. 'AR' FOR THE ASSESSEE PLACED RELIANCE, ON T HE DECISIONS, AS INDICATED AT S.NO. 1 TO 5 OF THE PAPE R BOOK, FILED BY HIM. THOUGH THE LIST OF CASES CONTAINED I N THE PAPER BOOK IS LONG, BUT THE ASSESSEE SPECIFICALLY R ELIED UPON ONLY ON THE FOLLOWING FIVE CASE LAWS : 1. SAROJ NURSING HOME V ACIT (2005) 98 TTJ (LUCKNOW)446 17 2. SMT.NASREEN YUSUF DHANANI V ACIT (2008) 24 SOT 31 (MUM) 3. JCIT V LATIKA V WAMAN (2005) 1 SOT 535 (MUM) 4. JAYANTILAL DAMBJIBHAI SONI & ORS.V DIRECTOR OF INVESTIGATION & ANR (2008) 9 DTR 249 5. CIT V RAKESH KUMAR MUKESH KUMAR L/H OF LATE MOHAR SINGH (2008) 13 DTR 209 8(I). ASSESSEE ALSO PLACED RELIANCE ON ANOTHER DECI SION OF ITAT JABALPUR, IN THE CASE OF CIT V CM MITTAL STAIN LESS STEEL PVT. LTD. 263 ITR 255. 9. LD. 'DR' PLACED RELIANCE ON THE DECISION OF HON' BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V MUKT A METAL WORKS 36 ITR 555 (P&H); CIT V PANCHAYANYAM MANAGEME NT AGENCIES & SERVICES 333 ITR 281 (KER), AND CIT V K.M.GANESHAN 333 ITR 562 (MAD). REVENUE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF JAI BHAGWAN OM PRKASH V DIRECTOR OF INSPECTION & OTHERS (1994) 208 ITR 424 (P&H.) 9(I) LD. 'DR' FILED PAPER BOOK CONTAINING WRITTEN SUBMISSIONS. ANNEXURE-1, IS A LETTER OF DDIT, ANNEX URE-2, ORDER-SHEET, ANNEXURE-3, STATEMENT OF SMT.MOHINDER KAUR . THE PAPER BOOK FILED BY THE REVENUE CONTAINS AT S.N O. 1, UNDER THE HEAD ANNEXURE-4, DETAILS OF PREMISES COVE RED U/S 132(1), AS PER APPRAISAL REPORT, AS INDICATED AT PA GE 27 TO 28 OF THE PAPER BOOK. 10. A BARE PERUSAL OF THE RELEVANT RECORDS, RIVAL SUBMISSIONS, MADE BY BOTH THE REVENUE AND THE ASSES SEE REVEALS THAT A WARRANT OF AUTHORIZATION U/S 132(1) OF THE ACT WAS ISSUED, ON 22.05.2002, IN THE NAME OF 18 SMT.MOHINDER KAUR OF M/S LADA LIQUORS, CHANDIGARH, HOUSE NO. 694 SECTOR 8, CHANDIGARH, RESIDENCE OF SMT.MOHINDER KAUR, SPECIFYING THE PERSON, AND THE PREMISES THEREIN. THE SAID WARRANT OF AUTHORIZATION WAS EXECUTED, ON 23.5.2002, AT 8.15AM, AS IS EVIDENT FR OM THE SIGNATURES OF SMT.MOHINDER KAUR, IN LIEU OF HAVING SEEN THE SAID WARRANT, ISSUED IN FORM NO. 45 U/S 132(1) AND RULE 112(1) OF THE INCOME TAX RULES, 1962. THIS FACTUM STANDS DEMONSTRATED BY A LETTER, DATED 29.02.2012, ISSUED BY SHRI SUNIL KUMAR YADAV, DY.DIRECTOR OF INCOME TAX (INVG) II, CHANDIGARH, WHEREBY PHOTO COPY OF THE WARRANT OF AUTHORIZATION DATED 22.5.2002, WAS FILED BEFORE THE BENCH. IN PURSUANCE OF SUCH AUTHORIZATION, A SEARCH & SEIZ URE OPERATION, U/S 132(1) OF THE ACT, WAS CONDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF SMT.MOHINDER K AUR, OF M/S LADA LIQUOR, ON 23.05.2002. THE AO ISSUED NOTI CE U/S 158BC OF THE ACT, ON 19.08.2002, WHICH WAS SERVED O N HER, ON 20.08.2002, REQUIRING TO FILE RETURN FOR THE BLO CK PERIOD, FROM 1.4.1996 TO 23.5.2002, WITHIN A PERIOD OF 45 D AYS FROM THE DATE OF RECEIPT OF THE SAID NOTICE. CONSEQUENTLY, AO COMPLETED THE BLOCK ASSESSMENT, ON 22.8.2005 U/S 158BC OF THE ACT, AT AN UNDISCLOSED INCOME OF RS.9,02,13,220/-. THE BLOCK ASSESSMENT WAS PASSED BY THE AO IN THE STATUS OF INDIVIDUAL AS CLEARLY IND ICATED BY THE AO AGAINST COLUMN NO. 5 OF THE FIRST PAGE OF THE SAID BLOCK ASSESSMENT ORDER. 10(I) THE SAME AO ISSUED ANOTHER NOTICE U/S 158BC OF THE ACT, ON 19.08.2002, DULY SERVED UPON THE LEGAL HEIR OF THE 19 ASSESSEE ON 20.08.2002 (AS IS EVIDENT FROM PAGE 2 O F THE BLOCK ASSESSMENT ORDER), REQUIRING THE ASSESSEE TO FILE RETURN FOR THE BLOCK PERIOD FROM 1.4.1996 TO 23.5.2 002 WITHIN A PERIOD OF 45 DAYS FROM THE DATE OF RECEIPT OF THE NOTICE U/S 158BC OF THE ACT. THE BLOCK ASSESSMENT WAS COMPLETED, ON 22.08.2005, U/S 158BC OF THE INCOME-T AX ACT,1961, FOR THE BLOCK PERIOD 1.4.1996 TO 23.5.200 2, AT AN UNDISCLOSED INCOME OF RS.8,57,15,730/-, IN THE S TATUS OF INDIVIDUAL, AS INDICATED AGAINST COLUMN NO.5, AT PAGE ONE, OF THE SAID BLOCK ASSESSMENT ORDER. IN THIS BLOCK ASSESSMENT ORDER, NAME OF THE ASSESSEE HAS BEEN REC ORDED BY THE AO, AT PAGE NO.1 OF THE ORDER AS SMT.MOHINDER KAUR, LEGAL HEIR OF LATE SHRI TARANJIT SINGH, W/O S HRI TARANJIT SINGH, H.NO. 694 SECTOR 8, CHANDIGARH. 10(II) THUS, IT IS EVIDENT THAT AO HAS FRAMED ANOTHER BLOCK ASSESSMENTS ORDER U/S 158BC OF THE INCOME TAX ACT,1961, ON THE SAME DATE I.E. 22 ND AUG.,2005, COMPUTING UNDISCLOSED INCOMES , AT RS.9,02,13,220/- AS INDICATED ABOVE AND IN THE SAME STATUS. HOWEVER, T HE AO RECORDED IN COLUMN NO.1 AGAINST THE HEAD NAME OF ASSESSEE AT PAGE ONE OF THE BLOCK ASSESSMENT ORDER , AS SMT.MOHINDER KAUR W/O LATE SHRI TARANJIT SINGH, HO USE NO.694 SECTOR 8,CHANDIGARH. THUS, THE AO HAS FRAM ED TWO BLOCK ASSESSMENT AGAINST A SINGLE WARRANT OF AUTHOR IZATION U/S 158BC OF THE ACT. 10(III) IT IS UNDISPUTED FACT THAT SINGLE WARRANT O F AUTHORIZATION REFERRED TO ABOVE HAS BEEN ISSUED BY THE INCOME TAX DEPARTMENT. PANCHNAMA, IN RESPECT OF 20 SMT.MOHINDER KAUR, PREMISES AND LOCKERS HAVE BEEN PREPARED IN THE SAME STATUS. STATEMENT OF SMT.MOHIN DER KAUR HAS BEEN RECORDED IN THE COURSE OF SEARCH OPER ATION, AS AN INDIVIDUAL AND THE BLOCK ASSESSMENT ORDERS H AVE BEEN PASSED, IN THE STATUS OF AN INDIVIDUAL AS IN DICATED ABOVE. 10(IV) A PERUSAL OF THE PROVISIONS OF SECTION 158 BC AND 158BD OF THE ACT, CLEARLY REVEALS THE TRUE LEGISLAT IVE INTENT. THE TEXT OF SECTION 158BC IS REPRODUCED HEREUNDER : 158-BC- WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQ UISITIONED UNDER SECTION 132A , IN THE CASE OF ANY PERSON, THEN, 9 [( A ) THE ASSESSING OFFICER SHALL ( I ) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUN T OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED AFTER THE 30TH DAY OF JUNE , 1995, BUT BEFORE THE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PE RSON REQUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEE N DAYS; ( II ) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUN T OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED ON OR AFTER THE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITH IN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS BUT NOT MORE THAN FORT Y-FIVE DAYS, AS MAY BE SPECIFIED IN THE NOTICE A RETURN IN THE PRESCRIBED FORM 10 AND VERIFIED IN THE SAME MANNER AS A RETURN UNDER CLAUS E ( I ) OF SUB-SECTION (1) OF SECTION 142 , SETTING FORTH HIS TOTAL INCOME INCLUDING THE UNDI SCLOSED INCOME FOR THE BLOCK PERIOD : PROVIDED THAT NO NOTICE UNDER SECTION 148 IS REQUIRED TO BE ISSUED FOR THE PURPOSE OF PROCEEDING UNDER THIS CHAPTER : PROVIDED FURTHER THAT A PERSON WHO HAS FURNISHED A RETURN UNDER THIS CLAUSE SHALL NOT BE ENTITLED TO FILE A REVISED RETURN;] ( B ) THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142 , SUB-SECTIONS (2) AND (3) OF SECTION 143 11 [, SECTION 144 AND SECTION 145 ] SHALL, SO FAR AS MAY BE, APPLY; ( C ) THE ASSESSING OFFICER, ON DETERMINATION OF THE UN DISCLOSED INCOME OF THE BLOCK PERIOD IN ACCORDANCE WITH THIS CHAPTER, SHALL PASS AN ORDER OF ASSESSMENT AND DETERMINE THE TAX PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSMENT; 12 [( D ) THE ASSETS SEIZED UNDER SECTION 132 OR REQUISITIONED UNDER SECTION 132A SHALL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 132B .] 10(V) A PERUSAL OF THE CLEAR AND UNAMBIGUOUS PROV ISIONS OF SECTION 158BC OF THE ACT CLEARLY REVEALS THAT BL OCK 21 ASSESSMENT IS REQUIRED TO BE COMPLETED U/S 158BC(C) OF THE ACT, IN THE CASE OF ANY PERSON, WHERE ANY SEARCH HAS BEEN CONDUCTED U/S 132 OF THE ACT OR BOOKS OF ACCOU NT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED U/S 132 A OF THE ACT. FURTHER, THE PROVISIONS OF SECTION 158BD ARE REPRODUCED HEREUNDER : 158BD. WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH R ESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR AN Y ASSETS WERE REQUISITIONED UNDER SECTION 132A , THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL B E HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED 13 [UNDER SECTION 158BC ] AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. 10(VI). A BARE PERUSAL OF THE PROVISIONS OF SECTIO N 158BD CLEARLY REVEALS THAT WHERE THE AO IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THA N THE PERSON, WITH RESPECT TO WHOM SEARCH WAS CONDUCTED U /S 132 OF THE ACT OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED U/S 132A OF THE ACT, THEN THE AO OF THE PARTY SEARCHED WOULD RECORD SATISFACTION THAT UNDISCLOSED INCOME BELONGS TO OTH ER PERSON NOT COVERED U/S 132(1) OR 132A OF THE ACT AN D SUCH BOOKS OF ACCOUNT AND DOCUMENTS SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON, AND THAT AO SHALL PROCEED U/S 158BC AGAINST OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHA LL APPLY ACCORDINGLY. 11. FOR ASSUMPTION OF JURISDICTION U/S 158BD OF TH E ACT, IT IS STATUTORILY INCUMBENT UPON THE AO OF THE PART Y SEARCHED, TO RECORD SATISFACTION, WITHIN THE MEANIN G OF 22 SECTION 158BD OF THE ACT, TO THE FACT THAT UNDISCLO SED INCOME BELONGS TO THE ASSESSEE NOT COVERED UNDER SE ARCH OPERATION AND HAND OVER THE BOOKS OF ACCOUNT AND OT HER DOCUMENTS AND ASSETS SEIZED, TO THE AO HAVING JURIS DICTION OVER THAT PERSON. NON-RECORDING OF SUCH SATISFACTIO N WILL RENDER THE AO STATUTORILY INCOMPETENT TO ASSUME JURISDICTION U/S 158BD OF THE ACT. THIS CARDINAL S TATUTORY PRE-CONDITION FOR ASSUMPTION OF JURISDICTION U/S 15 8BD OF THE ACT IS SUPPORTED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURTS AND THE HON'BLE SUPREME COURT, AS IS EVIDENT FROM THE FOLLOWING DISCUSSIONS: A) IN THE CASE OF CIT V MRIDULA, PROPRIETOR DHRUV FABRICS (2011) 335 ITR 266 (P&H), HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT ACTION CONTEMPLATED U/S 158BD AGAINST A THIRD PARTY TO A SEARCH IS NECESSARILY TO BE DURING THE COURSE OF BL OCK ASSESSMENT PROCEEDINGS OF SEARCHED PERSON; IT CANNO T BE AFTER CONCLUSION OF BLOCK ASSESSMENT IN THE CASE OF SEARCHED PERSON. HON'BLE JURISDICTIONAL HIGH COURT HAS CLEARLY HELD THAT SATISFACTION U/S 158BD IS TO BE RECORDED EVEN BEFORE THE COMPLETION OF BLOCK ASSESSMENT OF THE PARTY SEARCHED. B) IN ANOTHER CASE, JURISDICTIONAL HIGH COURT, IN T HE CASE OF CIT V PRAVEEN FABRICS (P) LTD. (2011) 198 TAXMAN 463 HAS HELD THAT RECORDING OF SATISFACTION FOR TAKING ACTION AGAINST ANY OTHER PERSON U/S 158BD OF THE ACT HAS TO BE BETWEEN THE INITIATION OF PROCEED INGS 23 AND COMPLETION OF THE BLOCK ASSESSMENT U/S 158BC IN THE CASE OF THE PERSON SEARCHED. C) THE HON'BLE SUPREME COURT, IN THE CASE OF MANISH MAHESHWARI V ACIT AND ANOTHER (2007) 289 ITR 341 (SC) HAS LAID DOWN THE CLEAR PROPOSITION OF LAW THAT NO JURISDICTION U/S 158BD CAN BE CONFERRED UPON THE AO UNLESS SATISFACTION, WITHIN THE MEANING OF SECTION 158BD OF THE ACT IS RECORDED AND THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS, INCLUDING SEIZED ASSET S ARE HANDED OVER TO THE AO, HAVING JURISDICTION AGAI NST THE COMPANY. THE RELEVANT PART OF THE DECISION IS REPRODUCED HEREUNDER : BEFORE THE PROVISIONS OF SECTION 158BDOF THE INCOM E- TAX ACT,1961, ARE INVOKED AGAINST A PERSON OTHER TH AN THE PERSON WHOSE PREMISES HAVE BEEN SEARCHED UNDER SECTION 132 OR DOCUMENTS AND OTHER ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A, THE CONDITIONS PRECEDENT HAVE TO BE SATISFIED. HELD ACCORDINGLY, THAT WHERE THE PREMISES OF A DIRE CTOR OF A COMPANY AND HIS WIFE WERE SEARCHED UNDER SECTI ON 132 OF THE INCOME-TAX ACT,1961, AND A BLOCK ASSESSMENT HAD TO BE DONE IN RELATION TO THE COMPANY, THE AO HAD TO (I) RECORD HIS SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGED TO THE COMPANY AND (II) HAND OVER THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS AND ASSETS SEIZED TO THE AO HAVING JURISDICTION AGAINST THE COMPANY. D). THE DECISION OF THE HON'BLE GUJRAT HIGH COURT, IN THE CASE OF KHANDUBHAI VASAN G.DESAI V DY CIT (1999) 236 ITR 73, HAS BEEN REFERRED TO BY THE HON'BLE SUPREME COURT IN THE CASE OF MANISH 24 MAHESHWARI V ACIT (SUPRA). THE RELEVANT PART OF THE DECISION OF THE HON'BLE GUJRAT HIGH COURT IS REPRODUCED HEREUNDER : THIS PROVISION INDICATES THAT WHERE THE AO WHO IS SEIZED OF THE MATTER AND HAS JURISDICTION OVER THE PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE U/S 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SECTION 132A, HE SHALL PROCEED AGAINST SUCH OTHER PERSON AS PER THE PROVISIONS OF CHAPTER XIV-B WHICH WOULD MEAN THAT ON SUCH SATISFACTION BEING REACHED THAT ANY UNDISCLOSED INCOME BELONGS TO SUCH OTHER PERSON, HE MUST PROCEED TO SERVE A NOTICE TO SUCH OTHER PERSON AS PER THE PROVISIONS OF SECTION 158BC OF THE ACT. IF THE AO WHO IS SEIZED OF THE MATTER AGAINST THE RAIDED PERSON REACHES SUCH SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGS TO SUCH OTHER PERSON OVER WHOM HE HAS NO JURISDICTION, THEN, IN THAT EVENT, HE HAS TO TRANSMIT THE MATERIAL TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON AND IN SUCH CASES THE AO WHO HAS JURISDICTION WILL PROCEED AGAINST SUCH OTHER PERSON BY ISSUING THE REQUISITE NOTICE CONTEMPLATED BY SECTION 158BC OF THE ACT. E). A SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE GUJRAT HIGH COURT IN RUSHIL INDUSTRIES LTD. V HARSH PARKASH (2001) 251 ITR 608, PRIYA BLUE INDUSTRIES P VT. LTD. V JOINT CIT (2001) 251 ITR 615, PREMJI BHAI & SONS V JOINT CIT (2001) 251 ITR 625 (GUJ) AND BY KERALA HIGH COURT IN THE CASE OF CIT V DEEP ARTS (2005) 274 ITR 571, CIT V DON BOSCO CARD CENETRE 25 (2007) 289 ITR 329 (KER) AND BY THE MADHYA PARDESH HIGH COURT, IN CIT V SMT.MAYA CHOTRANI (2007) 288 ITR 175 (MP). F). SIMILAR VIEW HAS BEEN HELD BY THE HON'BLE JURISDICTIONAL HIGH COURT, IN THE CASE OF CIT V MUK TA METAL WORKS (2011) 336 ITR 555. G). IN THE CASE OF VED PARKASH SANJAY KUMAR V ACIT (2001) 76 ITD 107 (CHD), CHANDIGARH TRIBUNAL HELD THAT OMISSION TO RECORD SATISFACTION BEFORE ISSUE O F NOTICE UNDER SECTION 158BD OF THE ACT IS FATAL. NO N- RECORDING OF SUCH SATISFACTION IS AN ILLEGALITY, AN D NOT IRREGULARITY, WHICH IS FATAL TO THE BLOCK ASSESSMEN T PROCEEDINGS AND SUCH ILLEGALITY CANNOT BE CURED BY RESTORING MATTER TO THE FILE OF THE AO. 11(I) THE REVENUE HAS FAILED TO ADDUCE EVIDENCE, TO ESTABLISH THE FACTUM OF RECORDING OF SATISFACTION, IN THE PRESENT ASSESSEE'S CASE, WITHIN THE MEANING OF SECT ION 158BD OF THE ACT AND WITHIN THE CONTEMPLATION OF JU DICIAL PRONOUNCEMENTS DISCUSSED ABOVE. CONSEQUENTLY, THE AO IS NOT COMPETENT TO ASSUME JURISDICTION AND PASS BLOCK ASSESSMENT ORDER, U/S 158BD READ WITH SECTION 158BC OF THE ACT. IT IS PERTINENT TO MENTION HERE THAT THE EXISTENCE OF VALID JURISDICTION, FOR EXERCISE OF PO WER OR PERFORMANCE OF FUNCTIONS, BY AN AO UNDER THE INCOME - TAX ACT,1961 , IS THE JURISDICTIONAL FACT, WHICH CONSTITUTES FOUNDATIONAL AND FUNDAMENTAL FACT FOR T HE PURPOSE OF PASSING A VALID BLOCK ASSESSMENT ORDER. IN 26 THIS CONTEXT, A REFERENCE IS MADE TO THE DECISION O F THE HON'BLE SUPREME COURT, IN THE CASE OF ARUN KUMAR V UOI AND OTHERS (2006) 286 ITR 89 (S.C). THE RELEVANT PA RT OF THE DECISION IS REPRODUCED HEREUNDER : A JURISDICTIONAL FACT IS A FACT WHICH MUST EXIST BEFORE A COURT, TRIBUNAL OR AN AUTHORITY ASSUMES JURISDICTION OVER A PARTICULAR MATTER. A JURISDICTIONAL FACT IS ONE ON THE EXISTENCE OR NON- EXISTENCE OF WHICH DEPENDS THE JURISDICTION OF A COURT, A TRIBUNAL OR AN AUTHORITY. IT IS THE FACT UPON WHICH AN ADMINISTRATIVE AGENCYS POWER TO ACT DEPENDS. IF THE JURISDICTIONAL FACT DOES NOT EXIST, THE COURT, AUTHORITY OR OFFICER CANNOT ACT. IF A COURT OR AUTHORITY WRONGLY ASSUMES THE EXISTENCE OF SUCH FACT, THE ORDER CAN BE QUESTIONED BY A WRIT OF CERTIORARI. THE UNDERLYING PRINCIPLE IS THAT BY ERRONEOUSLY ASSUMING THE EXISTENCE OF SUCH JURISDICTIONAL FACT, NO AUTHORITY CAN CONFER UPON ITSELF JURISDICTION WHICH IT OTHERWISE DOES NOT POSSESS. THE EXISTENCE OF THE JURISDICTIONAL FACT I S THUS THE SINE QUA NON OR CONDITION PRECEDENT FOR THE EXERCISE OF POWER BY A COURT OF LIMITED JURISDICTION. IF THE JURISDICTIONAL FACT EXISTS, THE AUTHORITY CA N PROCEED WITH THE CASE AND TAKE AN APPROPRIATE DECIS ION IN ACCORDANCE WITH LAW. ONCE THE AUTHORITY HAS JURISDICTION IN THE MATTER ON EXISTENCE OF THE JURISDICTIONAL FACT, IT CAN DECIDE THE FACT IN I SSUE OR ADJUDICATORY FACT. A WRONG DECISION ON A FACT IN ISSUE OR ON AN ADJUDICATORY FACT WOULD NOT MAKE THE DECISION OF THE AUTHORITY WITHOUT JURISDICTION OR VULNERABLE PROVIDED THE ESSENTIAL OR FUNDAMENTAL FA CT AS TO EXISTENCE OF JURISDICTION IS PRESENT. 11(II) IN VIEW OF ABOVE LEGAL AND FACTUAL DISCUSSIONS, 27 REVENUE IS NOT COMPETENT TO CONTEND THAT THE VALID BLOCK ASSESSMENT ORDER HAS BEEN PASSED U/S 158BD OF THE ACT, AS NO SATISFACTION HAS SINCE BEEN RECORDED BY THE AO. 12. THE LD. 'AR' HAS RELIED UPON ON THE FOLLOWING C ASE LAWS TO CONTEND THAT THE AO IS NOT COMPETENT TO FRAME TH E IMPUGNED BLOCK ASSESSMENT ORDER U/S 158BC OF THE AC T, AS NO SEARCH WARRANT WAS ISSUED U/S 132(1) OF THE ACT IN THE NAME OF THE ASSESSEE. THE SAID DECISIONS AND RELEV ANT PART THEREOF, ARE REPRODUCED HEREUNDER, FOR THE PURPOSE OF PROPER APPRECIATION OF TRUE RATIO LAID DOWN THEREIN : A) SAROJ NURSING HOME V ACIT (ITAT LUCKNOW BENCH) ITA/1357/ALL/1997 DT. 23.9.2004 SEARCH AND SEIZUREBLOCK ASSESSMENTVALIDITYSEARCH WARRANTS WERE IN THE NAME PARTNERS OF THE ASSESSEE- FIRM AND NOT AGAINST THE ASSESSEECHAPTER XIV-B PROVIDES THAT THE ASSESSMENT IS TO BE COMPLETED UNDER S. 158BC ONLY IN RESPECT OF THE PERSON WHO IS SUBJECTED TO SEARCH UN DER S. 132SEPARATE PROCEDURE AS PROVIDED UNDER THE PROVIS IONS OF S.158BD IS TO BE FOLLOWED IN RESPECT OF UNDISCLOSED INCOME DETECTED IN RESPECT OF ANY PERSON OTHER THAN THE SEARCHED PERSON DURING THE SEARCH OPERATIONTHE ASSESSMENT COMPLETED BY THE AO IN THE CASE OF THE A SSESSEE UNDER S. 158BC WAS NOT IN ACCORDANCE WITH THE PROVIS IONS OF THE ACT AND WAS INVALIDSAME QUASHED B) SMT.NASREEN YUSUF DHANANI V ACIT, ITAT MUMBAI, ITSS NO.203/MUM/2003 DT. 5.10.2007 SEARCH AND SEIZURE BLOCK ASSESSMENT VALIDITY SEARCH WARRANT HAVING BEEN ISSUED IN THE NAME OF ASSESSEE'S HUSBAND, PROCEEDINGS UNDER S. 158BC COULD NOT HAVE BEEN INITIATED AGAINST THE ASSESSEE 28 IF DURING THE SEARCH OF ASSESSEE'S HUSBAND, SOME INCRIMINATING MATERIAL WAS FOUND AGAINST THE ASSESS EE, THE PROPER COURSE WAS TO PROCEED AGAINST THE ASSESS EE UNDER S. 158BDSEARCH UNDER S. 132 IS PERSON SPECIFIC AND NOT PREMISES SPECIFICCONTENTION ON BEHALF OF THE REVENUE THAT AS THE PREMISES SEARCHED BELONGED TO THE ASSESSEE, PROCEEDINGS AGAINST HER UNDER S, 158BC WERE VALID, COULD NOT BE ACCEPTED CHAPTER XIV-B OF THE ACT IS A SPECIAL PROCEDURE FOR MA KING ASSESSMENT OF SEARCH CASES. THESE PROVISIONS OF BLOCK ASSESSMENT COME INTO PICTURE ONLY AS A RESULT OF SEAR CH ACTION CARRIED OUT READING THE PROVISIONS OF S.132(L) OF THE ACT, IT IS CLEAR THAT THE SECTION IS PERSON -SP ECIFIC AND NOT PREMISES-SPECIFIC AS ARGUED BY THE LD. DEPARTME NTAL REPRESENTATIVE. THE PRIMARY TARGET FOR CONDUCTING A SEARCH ACTION IS THE PERSON WHO IS IN POSSESSION OF ANY UNDISCLOSED INCOME AND UPON CONSEQUENCE OF THE SAME THE SEARCH PARTY CAN ENTER AND SEARCH ANY BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAFT WHERE THE UNDISCLOS ED ASSETS OR INCRIMINATING DOCUMENTS ARE LIKELY TO BE FOU ND IN RELATION TO SUCH PERSON. JT. CIT VS. LATIKA V. WAMA N (2005) I/ SOT 535 (MUMBAI) RELIED ON. IT IS UNDISPUTED FACT THAT THERE IS NO SEARCH WARR ANT ISSUED IN THE NAME OF THE ASSESSEE. THE SEARCH WARR ANT AS PER THE PANCHNAMA FURNISHED IS IN THE NAME OF HUSBAND OF THE ASSESSEE AND IN THE NAME OF COMPANY WHEREIN HE IS A DIRECTOR. IN RESPECT OF THE PANCHNAMA ISSUED IN RESPECT PF THE BANK LOCKERS, IT IS SEEN THAT THE PANCHNAMA IS IN THE NAMES OF HUSBAND AND THE ASSESSEE FOR' THE SIMPLE REASON THAT THE BANK LOCKERS WERE IN JOINT NAMES OF HUSBAND AND WIFE, THE NAME- OF HUSBAND BEING FIRST IN ALL THE LOCKERS, FURTHER, THE SEARCH OF THE LOCKERS IS A CONTINUATION OF THE SEARCH PROCEEDINGS COMMENCED IN RELATION TO THE HUSBAND OF THE ASSESSEE. AS PER S. 158BB(1) R/W S. 132(1), THE POSITION IS CLEAR THAT I N ORDER 29 TO ASSESS UNDISCLOSED INCOME OF ANY PERSON IN ACCORDANCE WITH CHAPTER XIV-B, A SEARCH IS A PREREQUIS ITE FOR THE INITIATION OF BLOCK ASSESSMENT PROCEEDINGS. SI NCE THERE IS NO SEARCH WARRANT ISSUED IN THE NAME OF THE ASSESSEE, THE BLOCK, ASSESSMENT PROCEEDINGS UNDER S . 158BC CANNOT BE SUSTAINED.DHLRAI SURI VS. ADDL. CIT (2006) 99 TTJ (DE;L) 525 : (2006) 98 ITD 187 (DEL) RE LIED ON. ANOTHER ARGUMENT ADVANCED ON BEHALF OF THE REVENUE WAS THAT IN THE COURSE OF SEARCH ACTION, EVIDENCES WE RE FOUND SHOWING UNDISCLOSED INCOME IN THE NAME OF THE ASSESSEE AND THUS, PROVISIONS OF S. 158BC COULD BE INVOKED. IT IS NOT POSSIBLE TO DIGEST THE VIEW CANVASSE D BY THE DEPARTMENTAL REPRESENTATIVE. THE PROVISION OF S. 158BD IS TO BE APPLIED IN A CASE WHERE THERE IS NO SEA RCH WARRANT AND EVIDENCES ARE FOUND SHOWING UNDISCLOSED INCOME IN THE COURSE OF SEARCH ACTION CONDUCTED IN RESPECT OF ANY OTHER PERSON. CONDITIONS SPECIFIED I N S. 158BD HAS TO BE FOLLOWED IN ORDER TO INVOKE PROVISIO N OF S. 158BD. THE PROVISIONS CONTAINED IN CHAPTER XIV-B ARE DRASTIC IN NATURE AND IT HAS DRACONIAN CONSEQUENCES. IF IN THE COURSE OF SEARCH OF HUSBAND, ANY MATERIAL INCRIMINATING HIS WIFE HAD BEEN FOUND, THEN THE PROPER COURSE FOR THE AO WOULD HAVE BEEN TO ISSUE A NOTICE UNDER S. 158BD. WHEN SPECIFIC PROCEDURES ARE PRESCRIBED FOR PERSONS WHO ARE SEARCHED AND FOR OTHER PERSONS IN R ESPECT OF WHOM INCRIMINATING MATERIAL IS FOUND, THE AO CANNOT ABROGATE HIMSELF TO BYPASS THE PRESCRIBED PROCEDURE S AND ISSUE NOTICE UNDER S. 158BC ON A PERSON WHO WAS NOT SUBJECTED TO SEARCH. IN FACT, IN THE INSTANT CASE OF T HE ASSESSEE, IT WAS INTIMATED TO THE AO VIDE LETTER DT. 15TH DEC., 1997 THAT THERE IS NO SEARCH WARRANT IN HER N AME AND HENCE, THE BLOCK ASSESSMENT PROCEEDINGS INITIATED UNDER S. 158BC NEEDS TO BE DROPPED AND EVEN THEN, THE AO HAS PROCEEDED TO MAKE ASSESSMENT UNDER S. 158BC. THE ENTIRE PROCEEDINGS UNDERTAKEN BY THE AO WA:5 BAD IN LAW AND HENCE, THE ASSESSMENT IS QUASHED.MANISH 30 MAHESHWARI VS. ASSTT. CIT & ANR. (2007) 208 CTR (SC) 97 : (2007) 289 ITR 341 (SC) RELIED ON. (C) 260 ITR 80(S.C) IN THE CASE OF CIT V MS.PUSHPA R ANI (2004) 136 ITR 627, THE HON'BLE DELHI HIGH COURT HAS HELD THAT IF THERE IS NO SEARCH WARRANT ISSUED IN THE NA ME OF THE ASSESSEE, THE PROCEEDINGS UNDER S. 158BC ARE WITHOUT JURISDICTION AND VOID AB INITIO. IN THE CASE OF NENMAL SHANKARLAL PARMER V ASSTT.CIT (INV.) (1992) 102 CTR (KAR ) 64 : (1992) 195 ITR 582 (KAR), HAS BEEN HELD BY THE KARNATAKA HIGH COURT AS UNDER : THEREFORE, THERE IS NO REFERENCE AT ALL IN THE WARRANT OF AUTHORIZATION THAT SUCH DOCUMENTS OR MONEY, BULLION, JEWELLERY, OR OTHER VALUABLE ARTICLE OR THING IS IN THE POSSESSION OF THE PETITIONER IN HIS INDIVIDUAL CAPACITY . AS A NECESSARY CONSEQUENCE, THE MERE MENTION OF RESIDENTIAL PREMISES DOES NOT ENABLE THE DEPARTMENT TO EFFECT SEIZURE EITHER OF GOLD, JEWELLERY OR OTHER AR TICLES OR DOCUMENTS AND, HENCE, IT MUST BE HELD THAT THE PETITIONER'S CONTENTION THAT THE WARRANT OF AUTHORIZ ATION DOES NOT ENABLE THE DEPARTMENT TO AFFECT SEARCH OR SEIZURE OF THE PROPERTY BELONGING TO HIM ON THE BASIS OF A WARRANT ISSUED IN THE NAME OF THE FIRM, NO WARRANT I N THE NAME OF THE PETITIONER AT ALL HAVING BEEN ISSUED, IS VALID AND TENABLE. THIS GROUND ITSELF IS SUFFICIENT TO QU ASH THE ORDER IMPUGNED IN THIS PETITION D) JCIT V LATIKA V. WAMAN, ITAT MUMBAI, ITSS 113/MUM/2001 & CO 16/MUM/2002 SEARCH AND SEIZUREBLOCK ASSESSMENTVALIDITYWIFE AND HUSBAND DOING SAME BUSINESS IN SAME PREMISES SEARCH WARRANT ISSUED AGAINST HUSBAND ONLY AND SEARCH CONDUCTED NO PROCEEDINGS FOR BLOCK ASSESSMENT UNDER S. 158BC CAN BE TAKEN AGAINST WIFEALL PROCEEDINGS FOR BLOCK ASSESSMENT MADE BY AO IN PURSUANCE TO BLOCK RETURN FILED BY WIFE WERE INVALIDASSESSEE CANNOT CONCEDE A JURISDICTION TO A O 31 WHICH LAW DOES NOT CONFER ON HIM CHAPTER XIV-B PROVIDES FOR A SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CA SES. TO THAT EXTENT, I AGREES WITH THE AO THAT THE SAID CHAPTER CONTAINS MACHINERY PROVISIONS. SUB-S. (1) O F S. 158BA EMPOWERS THE AO TO ASSESS THE UNDISCLOSED INCOME IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XIV WHERE A SEARCH HAS BEEN UNDERTAKEN UNDER S. 132 OR WHERE THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS OR REQUISITION UNDER S. 132 IN THE CASE OF A NY PERSON. ACCORDING TO THE AC, SINCE THERE IS REFEREN CE TO THE EXPRESSION 'ANY PERSON' IN S. 158BA(1), CHAPTER XIV-B APPLIES TO ANY PERSON EVEN WHERE A SEARCH HAS NOT BEEN CONDUCTED ON HIM. THE AO HAS THUS MISREAD THE PROVISION, THE AO GETS THE POWER TO MAKE AN ASSESSMENT UNDER CHAPTER XIV-B AS A RESULT OF SEARC H CARRIED OUT UNDER S. 132. AS PER THE PROVISIONS OF S. 132(1), THE PRIMARY TARGET IS THE PERSON WHO IS IN POSSESSION OF ANY UNDISCLOSED INCOME. IN THAT EVENT , THE SEARCH PARTY CAN ENTER AND SEARCH ANY BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAFT WHERE THE UNDISCLOS ED ASSETS OR INCRIMINATING DOCUMENTS ARE LIKELY TO BE FOUND IN RELATION TO SUCH PERSON. THUS, TO REPEAT, THE PR IMARY TARGET UNDER S. 132 IS 'A PERSON' IN RELATION TO WH OM 'ANY PLACE' CAN BE SEARCHED BY THE SEARCH PARTY. ON CE PLACE OF A PERSON IS SEARCHED, IT IS ONLY IN. HIS R ESPECT THAT THE AO DERIVES POWER FROM S. 158BA(1) TO MAKE AN ASSESSMENT UNDER CHAPTER XIV-B. IT IS NOT THAT A LL PERSONS WHO ARE FOUND AT THE PLACE OF SEARCH ARE AUTOMATICALLY COVERED BY ACTION UNDER S. 132, WHICH IS PRIMARILY AGAINST A PARTICULAR PERSON. ONE MAY CLAR IFY THAT OTHER PERSONS AT THE SEARCH PLACE CAN BE COVER ED ONLY WHEN IN THE COURSE OF SEARCH THEY ARE ALSO FOUND TO BE IN POSSESSION OF WARRANT IN HER NAME, THE AO COULD NOT ASSUME ANY POWER TO MAKE THE ASSESSMENT OF UNDISCLOSED INCOME UNDER CHAPTER XIV-B. IF IN THE COURSE OF SEARCH ON V, ANY MATERIA L INCRIMINATING HIS WIFE HAD BEEN FOUND, THEN THE PRO PER 32 COURSE FOR THE AO WOULD HAVE BEEN TO ISSUE A NOTICE UNDER S. 158BD. WHEN SPECIFIC PROCEDURES ARE PRESCRIBED FOR PERSONS WHO ARE SEARCHED AND FOR OTH ER PERSONS IN RESPECT OF WHOM INCRIMINANTING MATERIAL IS FOUND, THE AO CANNOT ARROGATE HIMSELF TO BYPASS THE PRESCRIBED PROCEDURES AND ISSUE NOTICE UNDER S. 158BC ON A PERSON WHO WAS NOT SUBJECTED TO SEARCH. MOREOVER, WE ALSO REJECT THE CONTENTION OF THE AO THAT THE AS SESSEE COULD NOT HAVE RAISED THIS OBJECTION SINCE SHE HAD ACQUIESCED IN THE PROCEEDINGS. THE ASSESSEE CANNOT CONCEDE JURISDICTION TO THE ASSESSING AUTHORITY WHI CH IS NOT PRESCRIBED BY LAW. HER PARTICIPATION IN THE PROCEEDING WAS MERELY A TECHNICAL COMPLIANCE OF THE NOTICE ISSUED BY THE AO. IF SHE HAD NOT COMPLIED WI TH THE NOTICE, SHE WOULD HAVE BEEN SUBJECTED TO FURTHE R LITIGATION AND HENCE, IT WAS MERELY A CO-OPERATIVE ATTITUDE, WHICH HAS BEEN REFLECTED ON HER PART, WHI CH CANNOT BE EQUATED WITH CONCEDING OF JURISDICTION. THEREFORE, THE ENTIRE PROCEEDINGS UNDERTAKEN BY THE AO WERE BAD IN LAW AND HENCE, THE ASSESSMENT IS QUASHED. E) JAYANTILAL DAMJIBHAI SONI & ORS V DIRECTOR OF INVESTIGATION & ANR 291 CTR (GUJ) 26 (GUJ) SEARCH AND SEIZUREBLOCK ASSESSMENTVALIDITY OF NOTICE UNDER S, 158BCASSESSEES ARE SIX CO - OWNERS OF A CINEMA BUILDING CALLED JRT GIVEN ON LEASE TO A PARTNERSHIP FIRM JST RECORD SHOWED THAT ON THE DAY THE SATISFACTION NOTE WAS APPROVED BY DY. DIRECTOR OF IT (INV.) AND FURTHER APPROVED BY DIRECTOR OF IT (INV.), THERE WAS NO PROPOSAL AND NO APPROVAL IN RELATION TO EITHER THE ASSESSEES IN THEIR INDIVIDUAL CAPACITY OR AS PARTNERS OF JRT AS. AN ENTITYSUBSEQUENTLY, ASSTT. DIRECTOR OF IT (INV.) RECORDED A SATISFACTIO N NOTE IN RELATION TO OFFICE PREMISES OF JRT/JST BY MERELY REPEATING THE LANGUAGE OF S. 132 WITHOUT RECORDING ANY REASONSWARRANT OF AUTHORISATION 33 ACTUALLY ISSUED IN THE NAME OF 'PARTNERS OF JRT/JST'THIS SHOWED THAT WHILE RECORDING SATISFACTION FOR ISSUANCE OF WARRANT OF AUTHORISATION THE AUTHORITY WAS NOT SURE AS TO THE PREMISES OF WHICH PERSONS WERE REQUIRED TO BE SEARCHEDTHERE WAS, THUS, NO MATERIAL WITH THE AUTHORITY TO EVEN PRIMA FACIE COME TO THE CONCLUSION THAT AN ENTITY BY THE NAME OF JRT, A PARTNERSHIP FIRM, EXISTED AT THE POINT OF TIME WHEN THE SEARCH PROCEEDINGS WERE INITIATED BY ISSUANCE OF WARRANT OF AUTHORISATIONTHUS, AT NO POINT OF TIME, AN ENTITY NAMED JRT, A PARTNERSHIP FIRM, WAS EVER SUBJECTED TO SEARCH PROCEEDINGS UNDER S. 132, AND JRT NOT BEING A PERSON SEARCHED, NOTICE UNDER S. 158BC SERVED ON JRT WAS INVALIDDOCUMENT UNEARTHED DURING THE COURSE OF EARLIER SURVEY, BEING A DRAFT DOCUMEN T OF PROPOSED SALE OF JRT IS OF NO AVAIL AS IT IS NEITHER SIGNED BY THE SELLERS NOR PURCHASERSIN THE SAID DOCUMENT, THE VENDORS, WHO ARE THE SIX ASSESSEES ARE DESCRIBED AS CO-OWNERSACTION OF AUTHORITY IN ISSUING IMPUGNED NOTICE UNDER S. 158BC CANNOT, THEREFORE, BE SUSTAINED F) CIT V RAKESH KUMAR MUKESH KUMAR, L/H OF LATE MOHAR SINGH 219 CTR 494 (P&H) SEARCH AND SEIZUREBLOCK ASSESSMENTVALIDITY VIS-A- VIS SEARCH WARRANT IN THE NAME OF A DEAD PERSONSEARCH WARRANT BEING ISSUED IN THE NAME OF A DEAD PERSON A ND PANCHNAMA ALSO PREPARED IN THE NAME OF DEAD PERSON, THE SEARCH AND THE AUTHORISATION WERE INVALID AND VOID AB INITIO AND THEREFORE BLOCK ASSESSMENT UNDER S. I58B C R/W S. 144 IN PURSUANCE THEREOF IS ALSO INVALID SEARCH WARRANT IN THE NAME OF A DEAD PERSON BEING AGAINST THE LAW OF NATURAL JUSTICE, NO VALID ASSESSMENT COULD BE B ASED UPON IT. 34 IN THE INSTANT CASE, M DIED PRIOR TO THE ISSUANCE OF SEARCH AUTHORIZATION AND THUS THE SEARCH WARRANT WAS ISSUE D IN THE NAME OF A DEAD PERSON AND THE PANCHNAMA WAS ALSO PREPARED IN THE NAME OF THE DEAD PERSON. THESE FACTS ARE NOT DISPUTED BY THE COUNSEL FOR THE APPELLANT. THUS, F ROM THE UNDISPUTED FACTS, IT IS CRYSTAL CLEAR THAT NOT ONL Y THE SEARCH WAS INVALID BUT THE AUTHORIZATION FOR CONDUCT ING SEARCH ITSELF WAS INVALID AND VOID AB INITIO. THUS THE ORDER PASSED BY THE AO UNDER S. 158C(C)/144 DT. 30 TH JULY,2004 WAS ILLEGAL AS THE SAME WAS PASSED IN CONSEQUENCE TO A SEARCH WARRANT, ISSUED UNDER S.132 IN THE NAME OF A DEAD PERSON. SUCH SEARCH WARRANT IS AGAINST: THE LAW OF NA TURAL JUSTICE. NO VALID ASSESSMENT COULD HAVE BEEN MADE ON THE STRENGTH OF SUCH AN INVALID SEARCH WARRANT. R.C. IAI N THROUGH LR VS. CIT (2004) 190 CTR (DEL) 34 RELIED ON ; DR. PARTAP SINGH VS. DIRECTOR OF ENFORCEMENT (1985) 46 CTR (SC) 319 : (1985) 155 ITR 166 (SC), P'OORAN MAL VS. DIRECTOR OF INSPECTION (LNV.) & ORS. 1974 CTR (SC) 25 : (1974) 93 ITR 505 (SC) AND NEW STREET OIL MILLS VS. ST ATE OF KERALA 1978 CTR (KER)56 (1978) LLL ITR 463 (KER) DISTINGUISHED. 12(I). A SEARCH IS A PRE-CONDITION FOR INITIATION OF BLOCK ASSESSMENT PROCEEDINGS, AS HELD BY THE DELHI HIGH C OURT, IN THE CASE OF AJIT JAIN V UOI (2000) 242 ITR 301, AFF IRMED BY THE SUPREME COURT, IN UOI V AJIT JAIN & ANOTHER (20 03) 260 ITR 80 (S.C). 12)II) THE ASSESSEE, IN THE IMPUGNED CO, AT THE OU TSET, CHALLENGED THE VALIDITY OF THE IMPUGNED BLOCK ASSESSMENT ORDER, ON THE GROUND THAT NO SEARCH WARR ANT U/S 132(1) OF THE ACT WAS ISSUED IN THE NAME OF THE PRESENT ASSESSEE. THE WARRANT OF AUTHORIZATION ISSUED U/S 132(1) OF THE ACT AND CONSEQUENT PANCHNAMA DRAWN BY THE 35 DEPTT. REVEALS THAT THE SEARCH WARRANT HAS BEEN ISS UED IN THE NAME OF SMT.MOHINDER KAUR, AS DISCUSSED ABOVE. HOWEVER, THE BLOCK ASSESSMENT ORDER HAS BEEN PASSED ON 22.08.2005 U/S 158BC OF THE ACT, DETERMINING UNDISCLOSED INCOME OF RS. 8,57,15,730/- IN THE STAT US OF AN INDIVIDUAL (NAME OF THE ASSESSEE IS RECORDED BY T HE AO AS SMT.MOHINDER KAUR, M/H OF LATE SHRI TARANJIT SINGH) . THE WARRANT OF AUTHORIZATION AND CONSEQUENT PANCHNAMA, ARE MATTER OF RECORD. THE REVENUE WAS AFFORDED AMPLE, REASONABLE AND PROPER OPPORTUNITIES, TO SUPPORT ITS CASE, BY ADDUCING PHOTO COPY OF SEARCH WARRANT, ISSUED IN TH E NAME OF SMT.MOHINDER KAUR, L/H OF LATE SHRI TARANJIT SIN GH AND DOCUMENTARY EVIDENCE DEMONSTRATING THE FACTUM OF SATISFACTION RECORDED, BY THE AO OF THE SEARCH PART Y, WITHIN THE MEANING OF SECTION 158BD OF THE ACT. THE REVEN UE HAS FAILED TO FILE ANY EVIDENCE TO ESTABLISH THE FACTUM OF RECORDING OF SUCH SATISFACTION, WITHIN THE MEANING OF SECTION 158BD OF THE ACT. HOWEVER, A PHOTO COPY OF THE WARRANT OF AUTHORIZATION, ISSUED IN THE NAME OF SMT.MOHINDER KAUR AS INDICATED EARLIER, WAS FILED W HICH LED TO COMPLETION OF TWO BLOCK ASSESSMENT ORDERS U/ S 158BC OF THE ABOVE, AS REFERRED TO ABOVE. 13. A BARE PERUSAL OF THE PROVISIONS OF SECTION 158 BC AND 158BD OF THE ACT AND OTHER RELEVANT PROVISIONS CONT AINED IN CHAPTER XIV-B OF THE ACT REVEALS THAT IN THE ABSENC E OF ANY SEARCH OPERATION, THE PROVISIONS OF CHAPTER XIV-B, CANNOT BE INVOKED. THEREFORE, A SEARCH OPERATION U/S 132(1 ) OR REQUISITION OF BOOKS OF ACCOUNT OR ASSETS U/S 132A OF THE 36 ACT, IS STATUTORILY A PRE-CONDITION, FOR INITIATION OF THE BLOCK ASSESSMENT PROCEEDINGS, AS HELD BY THE HON'BLE DELH I HIGH COURT, IN THE CASE OF AJIT JAIN V UOI (2000) 242 IT R 302, WHICH WAS AFFIRMED BY THE HON'BLE SUPREME COURT IN UOI V AJIT JAIN (2003) 260 ITR 80. THE HON'BLE DELHI HIG H COURT, IN ANOTHER CASE OF CIT V MS. PUSHPA RANI (2004) 136 TAXMAN 627 HAS HELD THAT IF THERE IS NO SEARCH WARR ANT, ISSUED IN THE NAME OF ASSESSEE, THE PROCEEDINGS U/S 158BC OF THE ACT ARE WITHOUT JURISDICTION AND VOID ABINIT IO. 14. IT IS A WELL SETTLED PROPOSITION OF LAW THA T JURISDICTION CANNOT BE CREATED OR WAIVED BY THE CONSENT OF THE P ARTIES, AS DECIDED IN THE CASE OF KIRAN SINGH V CHAMAN PASW AN, AIR (1954) (S.C) 340 AND SWARN YASH V CIT (1982) 13 8 ITR 734 (DEL). NEEDLESS TO SAY THAT THE AO IS NOT COMP ETENT TO ARROGATE JURISDICTION UPON HIMSELF, UNLESS IT IS SP ECIFICALLY PROVIDED UNDER THE EXPRESS PROVISIONS OF THE ACT. THUS, JURISDICTION MUST ORIGINATE FROM THE ACT AND NOT FR OM THE DISCRETION OF THE AO. THEREFORE, THE AO IS NOT CO MPETENT TO EXERCISE JURISDICTION U/S 158BC OF THE ACT, IN THE ABSENCE OF VALID SEARCH OPERATION U/S 132(1) OF THE ACT. N EEDLESS TO SAY THAT EXISTENCE OF STATUTORY JURISDICTION IS A T HRESHOLD CONDITION FOR THE AO, TO EXERCISE JURISDICTION U/S 158BC AND 158BD OF THE ACT. INHERENT LACK OF JURISDICTION MEANS, A POWER OR JURISDICTION WHICH DOES NOT EXIST AT ALL OR VEST WITH THE AO. 14(I) IN THE CASE OF P.V.DOSHI V CIT (1978) 113 I TR 22 (AP), IT WAS HELD THAT A JURISDICTIONAL PROVISION, WHICH IS 37 MANDATORY AND ENACTED IN THE PUBLIC INTEREST AND COULD NEVER BE WAIVED. IT WAS FURTHER HELD THAT THERE WAS NO QUESTION OF ANY FINALITY OF THE ORDERS OF THE INCOM E TAX AUTHORITIES OR THE TRIBUNAL, BECAUSE JURISDICTION C ANNOT BE CONFERRED BY CONSENT. THE QUESTION OF JURISDICTION IS, THUS, OF VITAL IMPORTANCE AND IT WOULD BE OPEN TO T HE ASSESSEE TO RAISE THE QUESTION OF VALIDITY OF THE ASSESSMENT ON ACCOUNT OF LACK OF JURISDICTION, AT A NY TIME AND AT ANY STAGE OF THE PROCEEDINGS. 15. LD. 'DR' PLACED RELIANCE, ON THE DECISION OF CIT V K.M.GANESHAN 333 ITR 562 (MAD) WHICH HAS BEEN CAREF ULLY PERUSED AND CONSIDERED BY US AND IT IS FOUND THAT T HE SAME IS ACTUALLY DIFFERENT AND DISTINGUISHABLE VIS-A-VIS THE FACT- SITUATION OF THE PRESENT CASE, AND, HENCE NOT APPLI CABLE TO THE FACTS OF THE PRESENT CASE. IN THE CASE RELIED UPON BY LD. 'DR', NOTICE U/S 158BC ON 27.7.1999, WAS ISSUED IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 158BD O F THE ACT. HOWEVER, IN THE PRESENT CASE, REVENUE HAS FAI LED TO ADDUCE EVIDENCE DEMONSTRATING RECORDING OF SATISFAC TION U/S 158BD OF THE ACT. THEREFORE, THE FACTS OF THE P RESENT CASE ARE DISTINGUISHABLE. 15(I) LD. 'DR', FURTHER, PLACED RELIANCE ON DECISI ON IN THE CASE OF DIGVIJAY CHEMICALS LTD. V ASSTT. CIT 248 IT R 381. IN THIS CASE, THE ISSUE INVOLVED WAS, WHETHER THERE IS ANY REQUIREMENT TO AFFORD OPPORTUNITY OF HEARING TO A P ARTY BEFORE RECORDING SATISFACTION U/S 158BD OF THE ACT. IN THE PRESENT CASE, REVENUE HAS FAILED TO ADDUCE ANY EVID ENCE OF 38 THE FACTUM OF RECORDING OF SATISFACTION U/S 158BD O F THE ACT. THEREFORE, CASE LAW RELIED UPON BY THE REVENU E IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 15(II). LD. 'DR', FURTHER, PLACED RELIANCE ON THE D ECISION IN THE CASE OF JAI BHAGWAN OM PARKASH V DIRECTOR OF INSPECTION & OTHERS 208 ITR 424 (P&H). IN THIS CASE THE HON'BLE JURISDICTIONAL HIGH COURT HAS ADJUDICATED T HE ISSUE OF VALIDITY OF SEARCH. HOWEVER, IN THE PRESENT CASE, THE VALIDITY OF THE SEARCH HAS NOT BEEN CHALLENGED BY T HE ASSESSEE. THE ASSESSEE, BY WAY OF CO, HAS CHALLENGE D THE VALIDITY OF THE BLOCK ASSESSMENT ORDER IN QUESTION, BEING WITHOUT JURISDICTION. THEREFORE, FACTS OF THE CASE LAW RELIED UPON BY THE AO, ARE FACTUALLY DIFFERENT AND DISTINGUISHABLE, AND, HENCE, THE SAME IS NOT APPLICABLE TO THE PRESENT CASE. 16. THE PRESENT ASSESSEE APPELLANT CONTENDED THAT S HRI TARANJIT SINGH DIED ON 19.4.2000. NO WARRANT OF AUTHORIZATION U/S 132(1) OF THE ACT CAN BE ISSUED I N THE NAME OF A DECEASED PERSON. IT IS ESSENTIAL TO HIGHL IGHT HERE THAT IT IS ESTABLISHED LEGAL PROPOSITION THAT DEAD MAN IS NOT A PERSON LIKE A LIVING BEING. DEAD MAN CEASES T O BE A LEGAL PERSONALITY. DEAD MEN ARE SANS RIGHTS AND DU TIES, FOR IT IS SAID THAT THEY HAVE LAID DOWN THEIR RIGHTS AN D DUTIES ALONGWITH THEIR DEATH-----ACTIO PERSONALIS MORITUR CUM PERSONA ---- ACTION DIES WITH THE DEATH OF A MAN. THUS, ISSUANCE OF SUCH WARRANT IN THE NAME OF A DEAD PERS ON, LIKE SHRI TARANJIT SINGH IS NOT LEGALLY FEASIBLE. THUS, THE 39 CONTENTION OF THE LD. 'AR' HAS FACTUAL AND LEGAL FO RCE. THE PROPER LEGAL COURSE FOR THE REVENUE WAS TO FRAME BL OCK, IN RESPECT OF UNDISCLOSED INCOME, BELONGING TO THE DECEASED HUSBAND OF THE PRESENT ASSESSEE U/S 158BD OF THE ACT, IN THE HANDS OF HIS LEGAL HEIRS. IN THIS CASE, THE REVENUE FAILED TO INVOKE THE PROVISIONS OF SECTION 158BD OF THE ACT, AFTER RECORDING VALID SATISFACTIO N WITHIN THE CONTEMPLATION OF THE PROVISIONS OF SECTI ON 158BD OF THE ACT AND IN CONSONANCE WITH THE RATIO L AID DOWN BY THE VARIOUS HIGH COURTS INCLUDING THE JURISDICTIONAL HIGH COURT AND THE HON'BLE SUPREME COURT, AS DISCUSSED ABOVE. 17. THE ISSUE INVOLVED IN THE IMPUGNED C.O. IS SUMMARIZED AS UNDER : 1. THE DIRECTOR OF INCOME-TAX (INV.) CHANDIGARH, ISSUED WARRANT OF AUTHORIZATION, DATED 22.05.2002, U/S 132(1) OF THE ACT IN THE NAME OF SMT.MOHINDER KAUR OF M/S LADA LIQUORS LTD., H.NO. 694, SECTOR 8, CHANDIGARH. THE SAID AUTHORIZATION WAS EXECUTED ON 23.05.2002. 2. (A) THE AO FRAMED BLOCK ASSESSMENT ORDER U/S 158BC OF THE ACT, ON 22.08.2005, IN THE STATUS OF INDIVIDUAL DETERMINING UNDISCLOSED INCOME AT RS.9,02,13,220/- FOR THE BLOCK PERIOD COMMENCING FROM 1.4.1996 TO 23.5.2005. (B) ANOTHER BLOCK ASSESSMENT ORDER WAS FRAMED BY THE AO U/S 158BC ON 22.8.2005 OF THE ACT IN 40 THE STATUS OF INDIVIDUAL, DETERMINING THE UNDISCLOSED INCOME OF THE SAME BLOCK PERIOD AT RS.8,57,15,730/-. AS NO WARRANT OF AUTHORIZATION U/S 132(1) OF THE ACT WAS ISSUED, IN THE NAME OF SMT.MOHINDER KAUR, L/H OF LATE SHRI TARANJIT SINGH W/O SHRI TARANJIT SINGH, BLOCK ASSESSMENT CANNOT BE FRAMED U/S 158BC OF THE ACT IN SUCH STATUS. HENCE, THE IMPUGNED BLOCK ASSESSMENT ORDER IS BAD IN LAW AND WITHOUT JURISDICTION. 3. FURTHER, THE REVENUE HAS ALSO FAILED TO ADDUCE ANY EVIDENCE DEMONSTRATING THE FACTUM OF RECORDING OF SATISFACTION WITHIN THE MEANING OF SECTION 158BD R.W. SECTION 158BC OF THE ACT. 4. IN VIEW OF THE ABOVE DISCUSSIONS, THE IMPUGNED BLOCK ASSESSMENT ORDER, WHICH IS UNDER CHALLENGE, IN THE C.O. IN QUESTION, HAS BEEN PASSED WITHOUT JURISDICTION. 18. HAVING REGARD TO THE ABOVE DETAILED LEGAL AND F ACTUAL DISCUSSIONS, INCLUDING THE CASE LAWS AND RELEVANT PROVISIONS OF THE ACT, THE C.O. OF THE ASSESSEE IS ALLOWED AND CONSEQUENTLY, THE IMPUGNED BLOCK ASSESSMENT ORD ER IS SET ASIDE, AND HELD AS BAD IN LAW, BEING WITHOUT JURISDICTION. 19. IN VIEW OF THE ABOVE FINDINGS, ON THE LEGAL ISS UE OF NON-EXISTENCE OF JURISDICTION, AS CONTENDED IN THE IMPUGNED C.O., WE DONT CONSIDER IT, FIT TO ADJUDICATE THE A PPEAL OF THE 41 REVENUE, ON MERIT, AND, HENCE, THE SAME IS DISMISSE D. 20. IN THE RESULT, THE C.O. OF THE ASSESSEE IS ALLO WED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH APRIL,2012. SD/- SD/- (H.L.KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT ME MBER DATED: 26 TH APRIL,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH