Ram Saran Prajapati, V. Asstt. Commissioner of Income Tax, Kanpur

ITA 813/LKW/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92171 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-06-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 30-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR ANANT KUMAR AGRAWAL
• Assessee Lawyers: P K KAPOOR
• Keywords: Search and seizure; Validity of assessment; Block assessment
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.813 TO 819/LKW/2013 ASSESSMENT YEAR:2000-01 TO 2006-07 RAM SARAN PRAJAPATI C/O BUNDELKHAND BUILDING MATERIAL POST KURARA HAMIRPUR V. ACIT CENTRAL CIRCLE-III KANPUR TAN/PAN:BIDPD7727 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. P.K. KAPOOR, C.A. RESPONDENT BY: DR. ANANT KUMAR AGRAWAL, CIT (DR) DATE OF HEARING: 10 06 2015 DATE OF PRONOUNCEMENT: 26 06 2015 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER OF THE LD. CIT(A) RAISING VARIOUS GROUNDS, BUT ONE COMMON GROUND INVOLVED IN THESE APPEALS RELATES TO THE VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 153A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') CONSEQUENT TO THE SEARCH CONDUCTED ON M/S RAM NARAYAN PREM NARAIN GROUP AND NOT UPON THE ASSESSEE. 2. BEFORE THE LD. CIT(A), THE ASSESSEE, BY WAY OF ADDITIONAL GROUND, HAS RAISED A SPECIFIC GROUND THAT NO SEARCH WARRANT WAS ISSUED IN THE NAME OF THE ASSESSEE, THEREFORE, THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT IS NOT VALID AND THE ASSESSMENT FRAMED CONSEQUENT THERETO UNDER SECTION 153A OF THE ACT DESERVES TO BE QUASHED, BUT THE LD. CIT(A) HAS REJECTED THIS GROUND OF THE ASSESSEE AND HELD THE SEARCH TO BE VALID UPON THE ASSESSEE. :- 2 -: 3. NOW THE ASSESSEE HAS PREFERRED APPEALS BEFORE THE TRIBUNAL AND HAS INVITED OUR ATTENTION TO THE ASSESSMENT ORDER IN WHICH IT HAS BEEN SPECIFICALLY MENTIONED THAT SEARCH OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON 24.1.2006 IN M/S RAM NARAYAN PREM NARAIN (HAMIRPUR) GROUP, ENCOMPASSING RESIDENTIAL AND BUSINESS PREMISES OF SHRI. PREM NARAIN GUPTA, HIS SON, VIZ. SHRI. PRASHANT GUPTA, HIS FAMILY MEMBERS SITUATED AT HAMIRPUR CITY, AND ALL ITS BRANCHES SITUATED IN THE DISTRICT HAMIPUR AND KANPUR. 4. THE ASSESSEE WAS A MUNIM OF M/S RAM NARAYAN PREM NARAIN (HAMIRPUR) GROUP AND RESIDING IN THE BUSINESS PREMISES OF THE ASSESSEE GROUP DURING THE COURSE OF SEARCH. THEREFORE, NO SEARCH WAS EVER CONDUCTED UPON THE ASSESSEE AND HENCE THE ASSESSMENT UNDER SECTION 153A OF THE ACT CANNOT BE FRAMED IN THE HANDS OF THE ASSESSEE. IF ANYTHING WAS FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF M/S RAM NARAYAN PREM NARAIN (HAMIRPUR) GROUP RELATING TO THE ASSESSEE, THE ASSESSING OFFICER SHOULD HAVE ISSUED NOTICE UNDER SECTION 153C OF THE ACT AND FRAMED ASSESSMENT CONSEQUENT THERETO, BUT WITHOUT CONDUCTING SEARCH UPON THE ASSESSEE, THE ASSESSMENT UNDER SECTION 153A OF THE ACT IS NOT POSSIBLE. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO VARIOUS JUDGMENTS/ORDERS IN SUPPORT OF HIS CONTENTIONS. THE JUDGMENTS/ORDERS REFERRED TO BY THE LD. COUNSEL FOR THE ASSESSEE ARE AS UNDER:- 1. SIKSHA VS. CIT & OTHERS [2011] 336 ITR 112. 2. SMT. SARLADEVI SARAWAGI VS. ACIT IN I.T.A. NO. 209/AHD/2012. 3. JINDAL STAINLESS LTD. VS. ACIT IN I.T.A. NO. 3480 & 3481/DEL/2006. 4. CIT VS. PUSHPA RANI [2007] 289 ITR 328. 5. CIT VS. MKM MOHAMED NAZAR IN INCOME TAX APPEAL NO.684 OF 2005. :- 3 -: 6. M/S DEVANSH ENTERPRISE VS. INCOME TAX OFFICER IN I.T.A. NO. 1419/AHD/2006. 7. INCOME TAX OFFICER VS. MUKESH KUMAR [2002] 254 ITR 409. 8. CIT VS. GIRDHARILAL [1984] 147 ITR 379. 9. CIT VS. HARJINDER KAUR [29] 310 ITR 71. 10. SARAF GRAMODYOG SANSTHAN VS. INCOME TAX OFFICER [2007] 108 ITD 115. 5. THE LD. D.R. HAS STRONGLY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 6. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT IN THE ASSESSMENT ORDER IT HAS BEEN CATEGORICALLY MENTIONED BY THE ASSESSING OFFICER THAT SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON 24.1.2006 IN M/S RAM NARAYAN PREM NARAIN (HAMIRPUR) GROUP ENCOMPASSING RESIDENTIAL AND BUSINESS PREMISES OF OF SHRI. PREM NARAIN GUPTA, HIS SON, VIZ. SHRI. PRASHANT GUPTA, HIS FAMILY MEMBERS SITUATED AT HAMIRPUR CITY, AND ALL ITS BRANCHES SITUATED IN THE DISTRICT HAMIPUR AND KANPUR. UNDISPUTEDLY THE ASSESSEE WAS A MUNIM OF M/S RAM NARAYAN PREM NARAIN (HAMIRPUR) GROUP, BUT NO SEARCH WARRANT WAS ISSUED IN HIS NAME. THE SEARCH TEAM HAS FOUND CERTAIN KVPS IN THE NAME OF THE ASSESSEE AND THE ASSESSING OFFICER HAS TRIED TO FRAME ASSESSMENT UNDER SECTION 153A OF THE ACT IN THE HANDS OF THE ASSESSEE. 7. NOW THE QUESTION ARISES WHETHER ASSESSMENT UNDER SECTION 153A OF THE ACT IS POSSIBLE IN THE NAME OF A PERSON UPON WHOM SEARCH WAS NOT CONDUCTED? THE ANSWER IS CERTAINLY NO, AS THE RIGHT COURSE AVAILABLE WITH THE ASSESSING OFFICER IS TO INVOKE THE PROVISIONS OF SECTION 153C OF THE ACT AND AFTER RECORDING SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON, THE MATERIAL CAN BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE PERSON TO WHOM THE DOCUMENTS RELATE. BUT IN THE :- 4 -: INSTANT CASE, THE ASSESSING OFFICER HAS TRIED TO FRAME THE ASSESSMENT UNDER SECTION 153A OF THE ACT UPON THE ASSESSEE DESPITE THE FACT THAT NO SEARCH WARRANT WAS ISSUED IN THE NAME OF THE ASSESSEE. 8. IN THE CASE OF SIKSHA VS. CIT & OTHERS (SUPRA), IT HAS BEEN HELD BY THE HON'BLE ORISSA HIGH COURT THAT IN ABSENCE OF ANY SEARCH WARRANT IN THE NAME OF AN ASSESSEE, SEARCH CONDUCTED IN ITS PREMISES IS NOT A VALID SEARCH AS CONTEMPLATED UNDER SECTION 132 OF THE ACT. THE PERSON, IN RESPECT OF WHOM SEARCH UNDER SECTION 132 OF THE ACT IS INITIATED, MUST BE THE SAME PERSON AGAINST WHOM NOTICE UNDER SECTION 153A OF THE ACT IS TO BE ISSUED FOR MAKING ASSESSMENT/REASSESSMENT UNDER THAT SECTION. IN THAT CASE IT WAS HELD THAT IF THERE IS ANY ILLEGALITY IN THE SEARCH WARRANT, THE SAME WOULD INVALIDATE THE SEARCH ASSESSMENT PROCEEDINGS INITIATED UNDER SECTION 153A OF THE ACT. 9. RELIANCE WAS ALSO PLACED UPON THE ORDER OF THE TRIBUNAL IN THE CASE OF SMT. SARLADEVI SARAWAGI VS. ACIT (SUPRA) IN IT(SS)A NO.209/AHD/2012 IN WHICH THE AHMEDABAD BENCH OF THE TRIBUNAL HAS HELD THAT THE CONDITION LAID DOWN FOR INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT IN THE CASE OF PERSON OTHER THAN THE PERSONS SEARCHED HAS NOT BEEN SATISFIED IN THE CASE OF THE ASSESSEE, THEREFORE, NOTICE ISSUED UNDER SECTION 153C OF THE ACT WAS QUASHED. IN THAT CASE THE ASSESSMENT WAS FRAMED IN THE CASE OF THE ASSESSEE WHO WAS NOT SEARCHED, UNDER SECTION 153C OF THE ACT WITHOUT FULFILLING THE REQUIREMENTS FOR INITIATING ACTION UNDER SECTION 153C OF THE ACT. 10. AGAIN RELIANCE WAS PLACED UPON THE ORDER OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF JINDAL STAINLESS LTD. VS. ACIT (SUPRA) IN WHICH IT HAS BEEN HELD THAT THE REQUISITE CONDITION FOR APPLICATION OF SECTION 153A OF THE ACT IS THAT ASSESSMENT UNDER THIS SECTION CAN BE MADE AGAINST A PERSON IN THE CASE OF WHOM A SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT; NON- FULFILLMENT OF CONDITIONS LAID DOWN IN SECTION 153A OF THE ACT IS A JURISDICTIONAL DEFECT WHICH CANNOT BE CURED. THE TRIBUNAL ACCORDINGLY :- 5 -: QUASHED THE ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT CONSEQUENT TO SEARCH UPON A THIRD PERSON. 11. IN THE CASE OF CIT VS. PUSHPA RANI (SUPRA), THEIR LORDSHIPS OF THE HON'BLE DELHI HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL, IN WHICH THE TRIBUNAL HAS HELD THAT UNLESS SEARCH WARRANT IS ISSUED, THE ASSESSING OFFICER CANNOT INVOKE THE PROVISIONS OF SECTION 158BC OF THE ACT FOR INITIATION OF BLOCK ASSESSMENT PROCEEDINGS UNDER CHAPTER XIV-B OF THE ACT. 12. SIMILAR VIEW WAS EXPRESSED BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. MKM MOHAMED NAZAR (SUPRA) BY HOLDING THAT IN THE ABSENCE OF SEARCH WARRANT, THE ASSESSMENT MADE UNDER SECTION 158BC OF THE ACT COULD NOT BE SUSTAINED. 13. SIMILAR VIEW WAS EXPRESSED BY THE TRIBUNAL IN OTHER CASES REFERRED BY THE ASSESSEE. 14. TURNING TO THE FACTS OF THE CASE, WE FIND THAT UNDISPUTEDLY NO WARRANT OF SEARCH WAS ISSUED IN THE NAME OF THE ASSESSEE WHILE CONDUCTING SEARCH UNDER SECTION 132 OF THE ACT IN M/S RAM NARAYAN PREM NARAIN (HAMIRPUR) GROUP, THEREFORE, THE ASSESSMENT FRAMED CONSEQUENT TO THE SEARCH IN THE HANDS OF THE ASSESSEE UNDER SECTION 153A OF THE ACT IS NOT SUSTAINABLE IN THE EYES OF LAW. WE ACCORDINGLY QUASH THE SAME. 15. SINCE THE ASSESSMENT IS QUASHED, WE FIND NO JUSTIFICATION TO ADJUDICATE THE ISSUES ON MERIT. ACCORDINGLY IN ALL THE APPEALS THE ASSESSMENTS FRAMED UNDER SECTION 153A OF THE ACT ARE HEREBY QUASHED HAVING SET ASIDE THE ORDERS OF THE LD. CIT(A). 16. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH JUNE, 2015 JJ:2206 :- 6 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR