Sri. P. Shyamaraju, Bangalore V. ACIT, Bangalore

ITA 504/BANG/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57434 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 13-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V SESHACHALA
• Assessee Lawyers: SHANKAR
• Keywords: Principle of natural justice; Deemed dividend; Competent authority; Block assessment; Reason to believe; Documents seized
• Section: 143(3); 153A; 131; 246; 37; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NOS. A.Y. APPELLANT VS. RESPONDENT 434/BANG/2010 2004-05 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(2), BANGALORE. SHRI BHASKAR N. RAJU, NO.32, 1 ST A CROSS, RMV EXTENSION, BANGALORE 560 080. PAN: ABJPR 0744C 435/BANG/2010 2006-07 - DO - - DO - 436/BANG/2010 2004-05 - DO - SMT. ARATHI B. RAJU, NO.32, 1 ST A CROSS, RMV EXTENSION, BANGALORE 560 080. PAN: ADLPR 7052G 437/BANG/2010 2006-07 - DO - - DO - 438/BANG/2010 2004-05 - DO - SHRI UMESH RAJU, NO.313, IV MAIN, UPPER PALACE ORCHARDS, SADASHIVNAGAR, BANGALORE 560 080. PAN: ARMPS 9147H 439/BANG/2010 2006-07 - DO - - DO - 440/BANG/2010 2004-05 - DO - SHRI P. SHYAMARAJU, NO.343, IV MAIN, UPPER PALACE ORCHARDS, SADASHIVNAGAR, BANGALORE 560 080. PAN: AIOPP 2600D 441/BANG/2010 2006-07 - DO - - DO - ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 2 OF 14 ITA NOS. A.Y. APPELLANT VS. RESPONDENT 504/BANG/2010 2004-05 SHRI P. SHYAMARAJU, NO.343, IV MAIN, UPPER PALACE ORCHARDS, SADASHIVNAGAR, BANGALORE 560 080. PAN: AIOPP 2600D THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(2), BANGALORE. 505/BANG/2010 2005-06 - DO - - DO - 506/BANG/2010 2006-07 - DO - - DO - 507/BANG/2010 2004-05 SMT. ARATHI B. RAJU, NO.32, 1 ST A CROSS, RMV EXTENSION, BANGALORE 560 080. PAN: ADLPR 7052G - DO - 508/BANG/2010 2006-07 - DO - - DO - 509/BANG/2010 2004-05 SHRI BHASKAR N. RAJU, NO.32, 1 ST A CROSS, RMV EXTENSION, BANGALORE 560 080. PAN: ABJPR 0744C - DO - 510/BANG/2010 2006-07 - DO - - DO - 511/BANG/2010 2004-05 SHRI UMESH RAJU, NO.313, IV MAIN, UPPER PALACE ORCHARDS, SADASHIVNAGAR, BANGALORE 560 080. PAN: ARMPS 9147H - DO - 512/BANG/2010 2006-07 - DO - - DO - ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 3 OF 14 REVENUE BY : SHRI M.V. SESHACHALA, STANDING COUNSEL ASSESSEE BY : SHRI SHANKAR, ADVOCATE DATE OF HEARING : 06.01.2012 DATE OF PRONOUNCEMENT : 06.01.2012 O R D E R PER BENCH THESE APPEALS BY THE ASSESSEE AND THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 11.02.2010 O F THE LD. CIT(APPEALS)- VI, BANGALORE IN RESPECT OF EACH ASSESSEE. IN ALL THESE APPEALS, ISSUES INVOLVED ARE COMMON HAVING SIMILAR FACTS AND THE AP PEALS WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OF BY THIS CO NSOLIDATED ORDER. 2. FIRST WE WILL DEAL WITH ITA NO.504/BANG/2010 FOR THE A.Y. 2004-05. IN THIS APPEAL, THE FOLLOWING GROUNDS HAVE BEEN RAI SED BY THE ASSESSEE: 1. THE ORDER OF THE LEARNED AUTHORITIES BELOW IN SO FA R AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WE IGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCE OF THE APPELLANT'S CASE. 2. THE ORDER OF ASSESSMENT PASSED UNDER THE PROVISIONS OF SECTION 143(3) R.W.S. 153A OF THE I.T. ACT IS BAD I N LAW, VOID AB INITIO AND CONSEQUENTLY THE ASSESSMENT REQUIRES TO BE CANCELLED. THE ORDER OF ASSESSMENT IS WITHOUT JURIS DICTION AND NOT LEGALLY SUSTAINABLE IN LAW. THE LEGAL GROUNDS A RE SUB CLASSIFIED AS UNDER AND EACH OF THE GROUND IS WITHO UT PREJUDICE TO THE OTHER. A) THE WARRANT OF AUTHORIZATION BEING IN THE JOINT NAM ES OF VARIOUS PERSONS INCLUDING THE APPELLANT, THE IMPUGN ED ASSESSMENT REQUIRES TO BE CANCELLED. ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 4 OF 14 B) THE MANDATORY CONDITIONS FOR INVOKING THE PROVISION S OF SECTION 153A DID NOT EXIST AND FURTHER THE ESSENTIA L AND MANDATORY CONDITIONS HAVE NOT BEEN COMPLIED WITH AN D CONSEQUENTLY THE ASSESSMENT MADE IS BAD IN LAW AND LIABLE TO BE CANCELLED. C) THE PROCEEDINGS OF INITIATION AND LEGALITY AND VALI DITY OF SEARCH ARE NOT IN ACCORDANCE WITH PROVISIONS OF LAW AND CONSEQUENTLY THE QUESTION OF INVOKING THE PROVISION S OF SECTION 153A OF THE INCOME TAX ACT ON THE APPELLANT DOES NOT ARISE AND THUS THE IMPUGNED ORDER PASSED IS BAD IN LAW AND LIABLE TO BE CANCELLED. D) THE NON COMMUNICATION OF CENTRALIZATION OF THE APPE LLANT'S JURISDICTION BY THE IMPUGNED ASSESSING OFFICER, IS VIOLATIVE OF PRINCIPLES OF EQUITY AND NATURAL JUSTICE, AS COMMUN ICATION TO THE APPELLANT IS CONDITION PRECEDENT AND MANDATORY. 3. WITHOUT PREJUDICE TO THE ABOVE, THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN ASSESSING DEEMED DIVIDEND U/S 2(22)(E) OF THE I.T. ACT OF RS.16,37,17,380/- AND APPLYING THE SAID PROV ISIONS IN THE HANDS OF THE APPELLANT. THE ADDITIONS MADE ARE PURELY ON SURMISE AND SUSPICION AND DEVOID OF ANY FACTUAL FOU NDATION AND IS LIABLE TO BE DELETED ON THE FACTS AND CIRCUM STANCES OF THE CASE. 4. WITHOUT PREJUDICE TO THE ABOVE, THE AMOUNTS DRA WN BY THE APPELLANT ARE NOT IN THE NATURE OF LOANS AND ADVANC ES AND FURTHER THE CALCULATION OF THE AMOUNT OF ACCUMULATE D PROFITS IS CONTRARY TO LAW AND SCHEME OF THE ACT. FURTHER THE LEVY ON THE APPELLANT IS TOTALLY BAD IN LAW AS THE SCHEME OF TH E ACT ENVISAGES, AS TO HOW AND WHAT EXTENT THE DEEMING PR OVISIONS U/S 2(22)(E) OF THE I.T. ACT, HAS TO BE COMPUTED IN CASE OF SEVERAL SHAREHOLDERS FOR WHOM THE DEEMING PROVISION S ARE APPLICABLE. (APPELLANT PLACES RELIANCE ON THE SETTL ED POSITION OF LAW WHEN THE COMPUTATION PROVISIONS FAILS THE CH ARGE FAILS). 5. WITHOUT PREJUDICE TO THE ABOVE, THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 115 O ARE APPLICABLE AND CONSEQUENTLY ANY DIVIDEND UNDER THE DEEMING PRO VISIONS IS LIABLE TO BE TAXED ONLY IN THE HANDS OF THE COMP ANY AND NOT ON ANY INDIVIDUAL SHAREHOLDER MORE SO WHEREIN THE A FORESAID SECTION ENVISAGES WITH A NON OBSTINATE CLAUSE AND H ENCE THE LEVY OF DEEMED DIVIDEND IN THE HANDS OF THE APPELLA NT IS CONTRARY TO LAW. IT IS A SETTLED LAW THAT THE DEEMI NG SECTIONS ARE TO BE STRICTLY CONSTRUED. ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 5 OF 14 6. THE LEARNED CIT(A) IS NOT JUSTIFIED IN TREATING A SUM OF RS.2,19,13,068/- AS THE ALLEGED FURTHER CONSIDERATI ON RECEIVED BY THE APPELLANT ON ACCOUNT OF TRANSFER OF SHARES E FFECTED BY THE APPELLANT IN RESPECT OF THREE COMPANIES AND ASS ESSING THE SAME AS CAPITAL GAINS IN THE HANDS OF THE APPELLANT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER THE AD DITION IS WITHOUT ANY IOTA OF EVIDENCE AND IS MERELY ON SUSPI CION AND SURMISE AND DEVOID OF ANY LEGAL OR FACTUAL FOUNDATI ON. 7. WITHOUT PREJUDICE, THE AUTHORITIES BELOW, FAILED TO APPRECIATE THAT THE FULL VALUE OF CONSIDERATION AS APPEARING I N SECTION 48 OF THE INCOME TAX ACT CANNOT BE CONSTRUED AS THE MA RKET VALUE BUT AS THE PRICE BARGAINED / TRANSACTED / TRA NSFERRED BY THE PARTIES. 8. WITHOUT PREJUDICE, THE VERY ISSUE OF TRANSFER O F SHARES SO EFFECTED BY THE APPELLANT IN THE AFORESAID COMPANIE S HAD ALREADY BEEN DELIBERATED AND ASSESSED ON THE APPELL ANT IN SUCH SCRUTINY ASSESSMENTS COMPLETED PRIOR TO THE SEARCH, AND THAT CERTAIN ADDITIONS SO MADE THEN, ON APPEAL, WERE DELETED BY THE CIT(A) AND HAD ATTAINED FINALITY AND THE DEPARTMENT HAD NOT PURSUED THE SAME ON SECOND APPEA L. 9. THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARG ED TO INTEREST U/S 234 B AND 234 C OF THE LT. ACT AND FURTHER THE LEVY OF THE SAME ARE NOT IN ACCORDANCE TO LAW. FURTHERMORE, THE LEVY IS ALSO BAD IN LAW AS THE ADDITIONS MADE BY THE ASS ESSING OFFICER ARE EXTREMELY DEBATABLE. FURTHER NO SUCH LE VY IS POSSIBLE AFTER AN ASSESSMENT U/S 143(3) ON THE VERY SAME ISSUE FOLLOWING THE PARITY OF THE RATIO OF THE JURISDICTI ONAL HIGH COURT IN THE CASE OF T.P. INDIRA KUMAR REPORTED IN 322 ITR 454 /29 DTR 311 (KAR). 10. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING OF THE APPEAL THE APPELLANTS PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED. THE APPELLANT CRAVES LEAVE IN RELYING UPON THE ORIGINAL GROUNDS FILED AN D THE CONCISED GROUNDS OF APPEAL FILED ON 08/07/2011 AS P ART OF THE ARGUMENTS IN THE COURSE OF HEARING OF THE APPEAL. 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE VALIDITY OF THE ASSESSMENT ON ACCOUNT OF WARRANT OF AUTHORISATION BEING IN ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 6 OF 14 THE JOINT NAMES OF VARIOUS PERSONS AND THE ASSESSME NT WAS FRAMED IN THE INDIVIDUAL NAMES. 4. THE FACTS IN BRIEF ARE THAT IN THIS CASE A SEARC H WAS CONDUCTED ON 1.3.2007 AND NOTICE U/S. 153A OF THE INCOME-TAX ACT , 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT] WAS ISSUED ON 1 4.11.2007. THE ASSESSEE FILED RETURN OF INCOME UNDER PROTEST ON 14.12.2008. THE ASSESSING OFFICER CALLED FOR THE VARIOUS DETAILS VIDE MANY LETTERS ST ARTING FROM 4.7.2008 (DATE OF INITIAL SHOW CAUSE). THE ASSESSEE CHALLENGED TH E ISSUE OF NOTICE U/S. 153A BEFORE THE AO AND ALSO STATED THAT THE PROCEED INGS WERE ILLEGAL SINCE THE SEARCH WAS ILLEGAL AND PRAYED THAT PROCEEDINGS BE DROPPED. THE AO HOWEVER DID NOT FIND MERIT IN THE SUBMISSIONS OF TH E ASSESSEE BY OBSERVING THAT THE CONDITIONS HAVING BEEN SATISFIED, PROVISIO NS OF SECTION 153A WERE ATTRACTED, HENCE THERE WAS NO ERROR IN ACQUIRING JU RISDICTION FOR THE PURPOSE OF PROCEEDINGS U/S. 153A OF THE ACT IN THE CASE OF THE ASSESSEE. THE AO ULTIMATELY FRAMED THE ASSESSMENT U/S. 143(3) R.W. S EC. 153A OF THE ACT AND TOTAL INCOME WAS ASSESSED BY THE AO AT RS.18,98,47, 383. 5. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A ). THE ASSESSEE ALSO CHALLENGED THE VALIDITY OF THE SEARCH ALONG WI TH THE VARIOUS ADDITIONS AND SUBMITTED TO THE LD. CIT(A) AS UNDER: THERE WAS NO JUSTIFICATION TO ISSUE THE WARRANT TO SEARCH THE RESIDENTIAL PREMISES AND THE OFFICE PREMISES OF THE APPELLANT AND HIS GROUP ENTITIES IN AS MUCH AS THE CONDITIONS SPE CIFIED U/S 132(1)(A), (B) AND (C) DID NOT EXIST AND CONSEQUENT LY, THE SEARCH ACTION U/S 132(1) OF THE ACT IS ILLEGAL AND THERE CANNOT BE ANY VALID ASSESSMENT U/S 153A ON THE PARITY OF THE RATI O OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F AJITH JAIN REPORTED IN 260 ITR 80(SC). FURTHER MORE THE COPY O F THE WARRANT DATED 2.2.2007 AND THE SATISFACTION NOTE, G IVING THE REASONS RECORDED FOR ISSUANCE OF THE WARRANT U/S 132, WERE NOT ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 7 OF 14 FURNISHED TO THE APPELLANT NOR HIS GROUP ENTITIES W HEREIN IT HAS NOT BEEN POSSIBLE FOR THE APPELLANT AND HIS GROUP E NTITIES TO PLEAD ABOUT AND DEMONSTRATE THE ILLEGALITY OF SEARCH BEFO RE YOUR HONOUR MORE EFFECTIVELY. 6. THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BY OBSERVING AS UNDER: I. SECTION 132(1) OF INCOME TAX ACT 1961 PROVIDES THAT 'WHERE THE DIRECTOR GENERAL OR DIRECTOR OR THE CHIE F COMMISSIONER OR COMMISSIONER OR ANY SUCH JOINT DIRE CTOR OR JOINT COMMISSIONER AS BE EMPOWERED IN THIS BEHALF B Y THE BOARD, IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HA S 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 O F 1922), OR UNDER SUB-SECTION (1) OF SECTION 131 OF THIS ACT, O R 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 ACCO UNT OR OTHER DOCUMENTS HAS OMITTED OR FAILED TO PRODUCE, OR CAUS E 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 AFOR ESAID HAS BEEN OR MIGHT BE ISSUED WILL NOT, OR WOULD NOT, PRO DUCE OR CAUSE TO BE PRODUCED, ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS WHICH WILL BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE INDIAN INCOME-TAX ACT, 1922 (1 1 OF 1922), OR UNDER THIS ACT, OR (C) ANY PERSON IS IN POSSESSION OF ANY MONEY, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SU CH MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG REPRESENTS EITHER WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HA S NOT BEEN, OR WOULD NOT BE, DISCLOSED FOR THE PURPOSES OF THE IND IAN INCOME-TAX ACT, 1922 (11 OF 1922), OR THIS ACT (HEREINAFTER IN THIS SECTION REFERRED TO AS THE UNDISCLOSED INCOME OR PROPERTY), THEN, THE DIRECTOR GENERAL OR DIRECTOR OR THE CHIEF COMMISSIO NER OR COMMISSIONER, AS THE CASE MAY BE, MAY ISSUE UTHORIZ ATION UNDER SECTION 132(1) OF THE INCOME TAX ACT TO- ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 8 OF 14 (I) ENTER AND SEARCH ANY BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAFT WHERE HE HAS REASON TO SUSPECT THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE KEPT; (II) BREAK OPEN THE LOCK OF ANY DOOR, BOX, LOCKER, SAFE, ALMIRAH OR OTHER RECEPTACLE FOR EXERCISING THE POWERS CONFE RRED BY CLAUSE (I) WHERE THE KEYS THEREOF ARE NOT AVAILABLE; (IIA) SEARCH ANY PERSON WHO HAS GOT OUT OF, OR IS ABOUT TO GET INTO, OR IS IN, THE BUILDING, PLACE, VESSEL, VEHICL E OR AIRCRAFT, IF THE AUTHORISED OFFICER HAS REASON TO SUSPECT THAT SUCH PERSON HAS SECRETED ABOUT HIS PERSON ANY SUCH BOOKS OF ACCOUNT , OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING; (IIB) REQUIRE ANY PERSON WHO IS FOUND TO BE IN POSS ESSION OR CONTROL OF ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE FORM OF ELECTRONIC RECORD AS DEFINED IN CLAUSE (T) OF SUB- SECTION (1) OF SECTION 2 OF THE INFORMATION TECHNOL OGY ACT, 2000 (21 OF 2000), TO AFFORD THE AUTHORISED OFFICER THE NECESSARY FACILITY TO INSPECT SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS; (III) SEIZE ANY SUCH BOOKS OF ACCOUNT, OTHER DOCUM ENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG FOUND AS A RESULT OF SUCH SEARCH; ONCE, THE WARRANT OF AUTHORIZATION IS ISSUED BY T HE COMPETENT AUTHORITY AFTER RECORDING SATISFACTION OF REASON TO BELIEVE BASED ON INFORMATION IN HIS POSSESSION, NO QUESTION OF VALIDITY OF SEARCH CAN BE RAISED BEFORE THE ASSESSI NG OFFICER OR BEFORE THE APPELLATE AUTHORITIES. THIS VIEW HAS BEE N AFFIRMED BY DELHI HIGH COURT IN THE CASE OF SRI M B LAL VS CIT 279 ITR 298, HON'BLE ITAT SPECIAL BENCH IN THE CASE OF C RAMAIAH VS ACIT (2003) 87 ITD 439 (BANG)(SB) AND THE ITAT SPECIAL BENCH DELHI IN THE CASE OF PROMAIN LTD VS DCIT REPORTED IN 95 ITD 489. II. THE COMMISSIONER OF INCOME TAX (APPEALS) DOES NOT HAVE ANY JURISDICTION UNDER SECTION 246 A OF THE IN COME TAX ACT 1961 TO ADJUDICATE ON THE REASONS RECORDED BY THE C OMPETENT AUTHORITY FOR ISSUE OF AUTHORISATION UNDER SECTION 132(1). THE SECTION 246A GIVES THE LIST OF THE ORDERS AGAINST W HICH THE APPEAL LIES BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS ). III. IN THE JUDGEMENT OF AJIT JAIN (260 ITR 80) ON WHICH THE RELIANCE HAS BEEN PLACED BY THE APPELLANT IS NOT OF ANY HELP TO THE ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 9 OF 14 APPELLANT. IN THE ABOVE CASE, HONOURABLE SUPREME CO URT AFFIRMED THAT THE JUDGEMENT OF DELHI HIGH COURT IN WRIT PETI TION NO.3756 OF 1997 IN THE CASE OF UNION OF INDIA VS AJIT JAIN WHICH WAS REPORTED IN 242 ITR 302. IN THAT CASE THE HONOURABL E DELHI HIGH COURT HELD THAT INTIMATION SIMPLICITER BY THE CBI T HAT MONEY WAS FOUND IN POSSESSION OF THE RESPONDENT WHICH ACCORDI NG TO THE CBI WAS UNDISCLOSED, WITHOUT SOMETHING MORE, DID NOT CO NSTITUTE 'INFORMATION' WITHIN THE MEANING OF SEC 132 OF I T ACT 1961, ON THE BASIS OF WHICH A SEARCH WARRANT COULD BE ISSUED , AND THE SEARCH CONDUCTED ON THE BASIS OF SUCH INFORMATION A ND THE BLOCK ASSESSMENT MADE PURSUANT TO SUCH SEARCH WAS NOT VAL ID.' IN THE ABOVE CASE, THE ASSESSEE CHALLENGED THE ISSUE OF SE ARCH WARRANT BEFORE THE HONOURABLE HIGH COURT BY FILING A WRIT P ETITION. THE HONOURABLE COURT AFTER THE PERUSAL OF THE RECORDS O F SATISFACTION CAME TO THE CONCLUSION THAT THERE WAS NO SATISFACTI ON EXCEPT THE INTIMATION GIVEN BY THE CBI. HOWEVER, IN THE PRESEN T CASE, THE WARRANT WAS ISSUED ACCORDING TO PROVISIONS OF SUB S ECTION 1 OF SECTION 132, HENCE THE APPELLANT CANNOT RAISE SUCH GROUND BEFORE THE APPELLATE AUTHORITY. THE RIGHT FORUM FOR CHALLE NGING THE ACTION UNDER SECTION 132 IS ONLY BY WAY OF FILING WRIT PET ITION TO THE HIGH COURT. IV. THE ASSESSES ARGUMENT THAT THE COPY OF WARRAN T AND SATISFACTION NOTE WERE NOT FURNISHED, IS NOT ACCEPT ABLE IN VIEW OF THE PROVISIONS OF SECTION 132 WHICH DOES NOT PROVID E FOR PROVIDING THE COPY OF THE WARRANT OR THE SATISFACTI ON NOTE. THE WARRANT HAS TO BE EXECUTED ON THE SEARCHED PERSON, CONSEQUENCE TO THE EXECUTION OF THE WARRANT, SEARCH IS CONDUCTE D, THE PROCEEDING OF WHICH ARE RECORDED IN THE PANCHNAMA P REPARED FOR SUCH SEARCH IN PRESENCE OF WITNESSES. 7. THE ASSESSEE ALSO SUBMITTED TO THE LD. CIT(A) AS UNDER: EX-FACIE, THERE CANNOT BE A JOINT WARRANT, I.E. IN THE JOINT NAMES OF THE SEVERAL PERSONS, AND THAT TOO WITH THE SUFFI X 'AND OTHERS' WHICH PRESUMABLY REFERS TO PERSONS WHO ARE UNKNOWN. THEREFORE IT WAS SUBMITTED THAT THE SEARCH ITSELF IS ILLEGAL AND CONSEQUENTLY, THE PROCEEDING INITIATED BY ISSUANCE OF NOTICE U/S 153A DATED 14- 11-2007 ARE ALSO ILLEGAL. 8. THE LD. CIT(A) DID NOT FIND MERIT IN THE ABOVE S UBMISSIONS OF THE ASSESSEE BY OBSERVING AS UNDER: ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 10 OF 14 THE ARGUMENT IS NOT ACCEPTABLE, AS THERE IS NO BA R IN SECTION 132(1), THAT THE WARRANT CANNOT BE ISSUED I N THE JOINT NAME. ONCE, THE ISSUING AUTHORITY IS SATISFIED THAT THE REASONS EXIST FOR SEARCH, THE AUTHORITY CAN ISSUE A SEARCH WARRANT IN THE NAMES OF THE PERSONS WHO ARE OWNING, POSSESSING OR OCCUPYING THE PREMISES. FURTHER, IT HAS ALREADY BEEN DISCUSSE D IN PRECEDING PARA THAT THE LEGALITY OF THE SEARCH CANNOT BE QUES TIONED BEFORE THE ASSESSING OFFICER OR THE APPELLATE AUTHORITY. O NCE THE SEARCH IS INITIATED IN THE CASE OF PERSON, THE PROCEEDING UND ER SECTION 153A HAS TO BE INITIATED WHICH IS CLEAR FROM THE PLAIN R EADING OF SECTION 153A OF THE INCOME TAX ACT WHICH IS REPRODUCED BELO W :- 'NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTI ON 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL- (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNIS H WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTI CE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRE SCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUC TED OR REQUISITION IS MADE. THERE IS ONLY CONDITION UNDER SECTION 153A THAT S EARCH NECESSARILY TO BE INITIATED IN THE CASE OF PERSON I N WHOSE CASE NOTICE UNDER SECTION 153A HAS TO BE ISSUED, THIS CO NDITION HAS BEEN FULFILLED IN THE CASE OF APPELLANT, HENCE, THI S ARGUMENT IS ALSO NOT ACCEPTABLE . 9. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND FURTHER SUBMITTED THAT THE SEARCH WARRANT WAS ISSUED IN THE JOINT NAME, SO ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 11 OF 14 ASSESSMENT FRAMED IN THE INDIVIDUAL NAME WAS BAD IN LAW. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 3 OF THE PAPERBOO K, WHICH IS A COPY OF WARRANT OF AUTHORISATION ISSUED U/S. 132 OF THE ACT AND STATED THAT THE SAID WARRANT OF AUTHORISATION DATED 02.02.2007 WAS IN TH E JOINT NAME OF SEVERAL PERSONS, WHILE THE ASSESSMENT HAS BEEN FRAMED ONLY IN THE INDIVIDUAL NAMES, SO THE ASSESSMENT FRAMED IN THE INDIVIDUAL N AME OF THE ASSESSEE WAS NOT VALID. IT WAS CONTENDED THAT THE WARRANT O F AUTHORISATION WAS ISSUED IN THE JOINT NAMES AND NOT IN THE INDIVIDUAL NAME OF THE ASSESSEE, THUS THE SEARCH WAS NOT INITIATED AGAINST THE ASSES SEE INDIVIDUALLY, THEREFORE THE ASSESSMENT FRAMED WAS NOT VALID. 10. IT WAS FURTHER SUBMITTED THAT THE ISSUE IS SQUA RELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF CIT, GULBARGA V. P.J.KUMAR IN ITA NOS.6005 TO 6006/ 2010, ORDER DATED 17.9.2010 AND THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. SMT. VANDANA VERMA [2009] 227 CTR (ALL) 388. 11. IN HIS RIVAL SUBMISSIONS, THE LD. STANDING COUN SEL FOR THE DEPARTMENT STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A) AND FURTHER SUBMITTED THAT THE FACTS OF THE PRESENT CASE ARE DIFFERENT FROM THE FA CTS INVOLVED IN THE CASES RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE DEPARTMENT HAS NOT ACCEPTED THE JUDGMENT DELIVERED BY THE HONBLE JURISDICTIONAL HIGH COURT AS WELL AS THE HONBLE AL LAHABAD HIGH COURT AND FILED SLPS BEFORE THE HONBLE SUPREME COURT, WHICH ARE STILL PENDING FOR ADMISSION. RELIANCE WAS ALSO PLACED ON THE FOLLOWI NG CASE LAWS: (1) CIT V. INDIRA BALKRISHNA (1960) 39 ITR 546 (SC ) ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 12 OF 14 (2) ITO V. SETH BROS. & ORS. (1969) 74 ITR 836 (SC) (3) BHARAT SANCHAR NIGAM LTD. & ANR. V.. UOI & ORS. (2006) 282 ITR 273 (SC) 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS NOTICED FROM THE RECORD THAT THE WARRAN T OF AUTHORIZATION DATED 02.02.2007 WAS IN THE JOINT NAMES OF DIVYASHREE DE VELOPERS (P) LTD., CHATUR REALTORS (P) LTD., P. SHYAMARAJU, UMESH S. R AJU, BHASKAR RAJU AND SMT. ARATHI RAJU. A COPY OF THE SAID DOCUMENT I.E., WARRANT OF AUTHORISATION DATED 02.02.2007 IS AVAILABLE AT PAGE NO.3 OF THE ASSESSEES PAPERBOOK, THEREFORE THERE IS NO DOUBT TO THIS FACT THAT THE WARRANT OF AUTHORIZATION WAS IN THE JOINT NAMES, BUT THE ASSES SMENT HAS BEEN FRAMED IN THE INDIVIDUAL NAME OF THE ASSESSEE. ON A SIMIL AR ISSUE, THE HONBLE ALLAHABAD HIGH COURT, LUCKNOW BENCH IN THE CASE OF CIT V. SMT. VANDANA VERMA [2011] 330 ITR 533 (ALL) HAS HELD AS UNDER: A WARRANT OF AUTHORIZATION MUST BE ISSUED INDIVID UALLY, IF IT IS NOT ISSUED INDIVIDUALLY, THEN THE ASSESSMENT CANNOT BE MADE IN AN INDIVIDUAL CAPACITY. IT HAS FURTHER BEEN HELD THAT SINCE THE WARRANT OF AUTHORIZATION HAD BEEN I SSUED IN THE JOINT NAMES OF MV AND VV, WHO WERE HUSBAND AND WIFE LIVING TOGETHER IN A SINGLE PREMISES, IT WAS NOT OPEN FOR THE ASSESSING AUTHORITY TO ASSESS VV ALONE ON THE BASIS OF THE AS SETS AND DOCUMENTS SEIZED DURING THE COURSE OF SEARCH BY INV OKING THE PROVISIONS OF CHAPTER XIV-B IN AN INDIVIDUAL CAPACI TY. ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 13 OF 14 13. SIMILARLY, THE HONBLE JURISDICTIONAL HIGH COUR T IN THE CASE OF CIT V. P.J. KUMAR (SUPRA) HAS HELD THAT IT IS SETTLED LAW THAT THE SEARCH TO BE CONDUCTED SHOULD BE STRICTLY IN ACCORDANCE WITH LAW. IF AN AUTHORIZATI ON IS ISSUED IN THE NAME OF TWO PERSONS AND IF BLOCK ASSESSMENT ORD ER TO BE PASSED, IT SHOULD BE PASSED IN THE NAME OF TWO PERS ONS. IF THE ORDER IS PASSED IN THE NAME OF AN INDIVIDUAL AND NO T IN RESPECT OF BOTH THE PERSONS MENTIONED IN THE AUTHORISATION , O N THE FACE OF IT THE PROCEEDINGS INITIATED AND THE ASSESSMENT ORDER PASSED IS ILLEGAL. 14. IN THE PRESENT CASE ALSO, NO INDIVIDUAL WARRANT OF AUTHORISATION WAS ISSUED AND WARRANT OF AUTHORISATION OF SEARCH DATED 02.02.2007 WAS IN THE JOINT NAMES, THEREFORE KEEPING IN VIEW THE RATIO LA ID DOWN IN THE AFORESAID REFERRED TO CASES, WE ARE OF THE VIEW THAT IN THE P RESENT CASE THE ASSESSMENT FRAMED U/S. 158BC IS NOT MAINTAINABLE. 15. CONSIDERING THE TOTALITY OF FACTS AS DISCUSSED HEREINABOVE AND ALSO KEEPING IN VIEW THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL AS WELL AS ALLAHABAD HIGH COURT IN THE AFORESAID REFERRED TO C ASES, WE ARE OF THE VIEW THAT IN THE PRESENT CASE SINCE THE WARRANT OF AUTHO RISATION WAS IN THE JOINT NAMES AND NOT IN THE INDIVIDUAL NAMES OF THE ASSESS EE, THEREFORE THE ASSESSMENT FRAMED U/S. 153A OF THE ACT WAS NOT MAIN TAINABLE. ACCORDINGLY THE ASSESSMENT FRAMED BY THE AO U/S. 153A IS ANNULL ED. 16. SINCE WE HAVE ANNULLED THE ASSESSMENT AND DECID ED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE, THEREFORE NO SEPARATE FI NDINGS ARE BEING GIVEN ON THE OTHER GROUNDS RAISED BY THE ASSESSEE OR THE GROUNDS RAISED BY THE DEPARTMENT IN CROSS APPEAL IN ITA NO.440/BANG/2010 FOR A.Y. 2004-05 ON MERITS OF THE CASE. ITA NOS.434 TO 441 & 504 TO 512/BANG/10 PAGE 14 OF 14 17. IN THE APPEAL OF THE ASSESSEE I.E., SHRI P. SHY AMARAJU FOR A.YS. 2005-06 & 2006-07 AND IN ALL THE APPEALS BY THE OT HER ASSESSEES AND CROSS APPEALS BY THE DEPARTMENT, THE FACTS ARE IDEN TICAL, THEREFORE OUR FINDINGS GIVEN IN THE CASE OF SHRI P. SHYAMARAJU FO R THE A.Y. 2004-05 SHALL APPLY MUTATIS MUTANDIS IN RESPECT OF OTHER ASSESSMENT YEARS RELATING TO TH IS ASSESSEE AND ALSO THE APPEALS AND CROSS APPEALS OF OTHER ASSESSEES AND DEPARTMENT WHICH ARE UNDER CONSIDERATION. 18. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED AND THE APPEALS OF THE DEPARTMENT ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JANUARY, 2012. SD/- SD/- ( GEORGE GEORGE K. ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 6 TH JANUARY, 2012. DS/- COPY TO: 1. REVENUE 2. ASSESSEES 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.