V.H.YAHIYA V. THE DEPUTY COMMISSIONER OF INCOME TAX

ITA/123/2013

AI Insights

The case involves multiple Income Tax Appeals (ITAs) filed against the orders of the Income Tax Appellate Tribunal, Cochin Bench, concerning block assessments made for undisclosed incomes during a specified block period. The appeals were primarily focused on the procedural correctness of the notices issued under Sections 158BC and 158BD of the Income Tax Act following searches conducted at the premises of M/s. Harbour Syndicate and individuals V.H. Rafeeq and V.H. Yahiya. The High Court of Kerala examined whether the correct procedural steps were followed in issuing these notices and whether the assessments were made within the legal timeframe.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755780 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 31-03-2014
• Assessment Year: misc
• Other Referred Cases: CIT v. Lekshmi Traders, Manish Maheshwari & Another v. Assistant Commissioner of Income Tax & Others, Assistant Commissioner of Income Tax and another v. Hotel Blue Moon
• Laws Referred To: Income-tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: K V SIVASANKARAN; SUNIL SHANKAR
• Keywords: Block assessment; Legal Procedure; Search and seizure; Undisclosed income
• Section: 144; 132; 158 BD; 158(BC)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE MONDAY, THE 31ST DAY OF MARCH 2014/10TH CHAITHRA, 1936 ITA.No. 123 of 2013 --------------------------- AGAINST THE ORDER IN IT(SS 52/2008 of I.T.A.TRIBUNAL, COCHIN BENCH DATED 24-08-2012 ------------ APPELLANT/RESPONDENT/APPELLANT/ASSESSEE: --------------------------------------------------------------------------- V.H.YAHIYA, WINDSOR COURT APARTMENTS, ASHIRBHAVAN ROAD, KACHERIPADY, ERNAKULAM, KOCHI-18. BY ADVS.SRI.K.V.SIVASANKARAN SRI.SUNIL SHANKAR RESPONDENT/APPELLANT/RESPONDENT/ASSESSING AUTHORITY: ------------------------------------------------------------------------------------------------- THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), ERNAKULAM. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 14/03/2014 ALONG WITH ITA. 170/2013, ITA. 209/2013, THE COURT ON 31-03-2014, DELIVERED THE FOLLOWING: PJ ITA.No. 123 of 2013 --------------------------- APPENDIX PETITIONERS' ANNEXURES ----------------------------------------- ANNEXURE A: COPY OF THE ASSESSMENT ORDER OF THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE II, ERNAKULAM 26/6/2003 ANNEXDURE B: COPY OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN APPEAL NO.E-066/03-04,30/11/2004 ANNEXURE C: COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN IT (S&S)A NO.40/COCH/2007, 20/11/2007 ANNEXURE D: COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, KOCHI IN ITA NO.E-54/07-08, 28/1/2008 ANNEXURE E: CERTIFIED COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL COCHIN IN IT (S&S)A NO.52/COCH/2008 AND CO.NO.59/COCH/2008, 24/8/2012 RESPONDENTS' ANNEXURES ------------------------------------------- NIL. / TRUE COPY / P.S. TO JUDGE PJ Manjula Chellur, C.J. & A.M. Shaffique, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-=-=-=-= I.T.A. Nos. 123, 170 & 209 of 2013 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-=-=-= Dated this, the 31st day of March, 2014. J U D G M E N T Shaffique, J. I.T. Appeal No. 123 and 170 of 2013 are filed against the common order in IT(SS)A No. 52/Coch/2008 and I.T.A. No 209/2013 is filed against the order passed in IT(SS)A No. 51/Coch/2008 by the Income-tax Appellate Tribunal, Cochin Bench. Separate assessees are the appellants in these cases. The assessment relates to the block period for which assessment is made from 1.4.1990 to 6.9.2000. 2. The facts involved in I.T.A. No. 123/2013 would disclose that a search was conducted under Section 132 of the Income-tax Act (for short 'the Act) in the business premises of M/s. Harbour Syndicate. It resulted in seizure of documents showing undisclosed income of the assessee Mr. V.H. Yahiya. After recording the statement of V.H.Yahiya under Section 132 (4), notice was issued under Section 158-BD calling upon him to file return. He did not file any return of income even after the expiry of the period prescribed therein. Subsequently, notice under Section 142 (1) was issued to him and assessment was completed under Section 158BD read with Section 158BC and Section Section 144 of the Act. The total undisclosed income for the block period was Rs. 13,94,320/- and the assessee was I.T.A. Nos. 123, 170 & 209 of 2013 -: 2 :- called upon to pay tax of Rs. 10,77,086/-, which includes interest as well. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals), which came to be rejected. A further appeal is filed before the Tribunal. The Tribunal allowed the appeal and remanded the matter back to the C.I.T. (Appeals). The matter was again considered by the C.I.T. (Appeals) and the appeal was allowed. It is inter alia found that since the search was in the cases of Sri. V.H.M. Rafeeq and Mr. V.H. Yahiya, the assessment ought to have been completed under Section 158BC. It is further found that the Assessing Officer committed a serious error of law by invoking Section 158BD. It is found that the assessment under Section 158BC should have been completed within two years from 30.9.2000 and since the block assessment is completed by the Assessing Officer only on 26.6.2003, the assessment being not in accordance with the provisions of Chapter XIVB, is illegal and barred by limitation. The Revenue preferred an appeal before the Tribunal and it was heard along with another appeal, which is the subject matter in I.T.A. No. 170/2013. The Tribunal proceeded to form an opinion that the Assessing Officer was justified in making block assessment under Section 158BD read with Section 158BC, relying upon the I.T.A. Nos. 123, 170 & 209 of 2013 -: 3 :- judgment of this Court in CIT v. Lekshmi Traders, (2012) (344 ITR 281). Hence the matter was remitted back to the CIT (Appeals) for reconsideration on merits including the question of limitation. 3. In I.T.A. No. 170/2013, the assessee is the Harbour Syndicate. On 6.9.2000, there was a search in the business premises of the assessee. The officers found incriminating materials relating to the undisclosed income earned by the assessee. Proceedings were initiated against the assessee under Section 158BC by issuing a notice on 8.6.2001. The assessee, though requested for time to produce the books of accounts and documents, there was no further response and accordingly notice under Section 142(1) of the Act was served on him for making the block assessment. The assessee did not comply with the terms of the notice issued and the proposal made and therefore a block assessment was made and the total undisclosed income was arrived at Rs. 10,05,280/- and the assessee was called upon to pay tax with interest and surcharge at Rs 8,29,205/-. The assessee preferred an appeal before the CIT (Appeals) which came to be dismissed. On a further appeal by the assessee, the Tribunal had remanded the matter back to the CIT (Appeals). The CIT (Appeals) found that the Assessing I.T.A. Nos. 123, 170 & 209 of 2013 -: 4 :- Officer had completed assessment under Section 158BC, which, according to the Appellate Authority, was erroneous as the Panchanama shows that the search was in the cases of V.H.M. Rafeeq and Y.H. Yahiya and not in the case of the appellant-firm and hence it was found that the assessment was bad in law and void ab initio. The Revenue preferred an appeal before the Tribunal, which was heard along with the appeal filed by Y.H. Yahiya and by a common order, the Tribunal allowed the Revenue's appeal and remitted back the matter to CIT (Appeal) for considering the matter on merits. 4. I.T.A. No. 209/2013 is filed by M/s. DORIC- CON, a partnership firm in which Sri. V.H. Yahiya is the Managing Partner. During the search operation at the business premises of Harbour Syndicate, the appellant in I.T.A. No. 170/2013, certain documents showing real estate and construction business relating to the assessee firm were found and seized. Therefore, notice under Section 158BD was served on the assessee, for which there was no response and therefore notice under Section 142(1) was issued. The assessee informed the Department that he has no undisclosed income. However, the assessment was made ex parte as there was no material produced and I.T.A. Nos. 123, 170 & 209 of 2013 -: 5 :- the assessee did not co-operate. The Assessing Officer found that the undisclosed income would come to Rs.21,04,950/- and the assessee was called upon to pay tax and interest amounting to Rs. 16,26,054/-. Though an appeal was filed before the CIT (Appeals), the same came to be dismissed. On further appeal by the assessee before the Tribunal, the matter was remanded back to the CIT (Appeals). After remand, the CIT (Appeals) allowed the appeal and set aside the order of assessment on the ground that the income mentioned in the agreement seized does not belong to the appellant firm but to the parties mentioned in the said agreement and therefore the quantum of income made in such agreement should be assessed in the hands of the respective individuals. The Appellate Authority therefore cancelled the undisclosed income of Rs. 18,26,622/- for the assessment year 1995-1996 and Rs. 28,323/- for the assessment year 1994-1995. The Revenue preferred an appeal before the Tribunal and a cross objection was filed by the assessee as well. The Tribunal found that the assessee did not co-operate with the Assessing Officer by filing a block return and did not furnish any information and therefore the Assessing Officer was constrained to complete the assessment to the best of judgment. It is observed I.T.A. Nos. 123, 170 & 209 of 2013 -: 6 :- that the CIT (Appeals) has taken a decision in favour of the assessee without examining the partnership deed, which is necessary before taking any decision on the issue. Hence it was opined that the matter requires to be reconsidered on merits and the matter was remanded back to the CIT (Appeals). 5. As far as I.T.A. No. 209/2013 is concerned, we do not think that any of the substantial questions of law raised in the memorandum of appeal arises for consideration. The Tribunal had only directed the CIT (Appeals) to consider the matter on merits. It is not in dispute that materials were collected by the Assessing Officer while conducting search operations in the premises of M/s. Harbour Syndicate. The assessee herein is another partnership firm and their records were also seized. The Assessing Officer clearly indicates that notice under Section 158BD was issued to the assessee. The procedure to be adopted while issuing such notice is clearly indicated in the said provision itself. In so far as there is no illegality in issuing a notice under Section 158BD and the procedure followed is 158BC, there is no infirmity in the notice issued by the Assessing Officer. It is contended that so far no notice was issued under Section 158BD. In fact, the issue of notice under I.T.A. Nos. 123, 170 & 209 of 2013 -: 7 :- Section 158BD is the notice under Section 158BC itself. Therefore, the appellant is not entitled to take such a ground. The matter has been remanded back by the Tribunal for reconsideration on the ground that the CIT (Appeals) did not consider the partnership deed before arriving at conclusions on merits, which was required to be considered at the time of hearing the appeal. The remand has been made by the Tribunal on purely questions of fact to be decided by the First Appellate Authority. Hence, we do not think that any question of law arises for consideration in I.T.A. No. 209/203 and hence the said appeal is liable to be dismissed. 6. In respect of I.T.A. Nos. 123 and 170 of 2013, the main contention urged by the petitioner is that after conducting a search in the business premises of the M/s. Harbour Syndicate, the Assessing Officer had issued notice under Section 158BC. It is the contention of the appellants that the assessee was not the person against whom the search warrant was issued and therefore when a search is conducted in order to ascertain the undisclosed income of V.H.M. Rafeeq and V.H. Yahiya, the Assessing Officer ought to have proceeded under Section 158BD, which provision contemplates a different method of making the block assessment. In I.T.A.No. 123/2013 in which V.H. I.T.A. Nos. 123, 170 & 209 of 2013 -: 8 :- Yahiya is the assessee, the contention is that in so far as the warrant of search was in his name, the notice under Section 158BC ought to have been issued and the Assessing Officer had committed serious error of law in issuing notice under Section 158BD. This finding of the CIT (Appeals) had been set aside by the Tribunal based on the judgment of this Court in Lekshmi Traders's case (supra), which is clearly distinguishable on facts. Hence, the Tribunal committed serious error of law in remitting the matter back to the CIT (Appeals) for considering the matter on merits when the entire procedure itself is bad in law, is the argument. 7. The matter was heard at the admission stage itself after giving notice to the learned standing counsel for the Department. The short point to be considered in these appeals is while conducting a search in the premises of M/s. Harbour Syndicate, if documents leading to the undisclosed income of V.H. Yahiya is obtained, what is the procedure to be followed in making a block assessment. Is it that the Assessing Officer ought to have proceeded under Section 158BC or 158BD in respect of Yahiya and M/s. Harbour Syndicate? 8. The learned counsel for the appellants, while I.T.A. Nos. 123, 170 & 209 of 2013 -: 9 :- relying upon the statutory provisions also, placed reliance on the judgment of the Supreme Court in Manish Maheshwari & Another v. Assistant Commissioner of Income Tax & Others, CDJ 2007 SC 205. That was a case in which the Supreme Court was considering the question as to whether the Assessing Officer has jurisdiction to proceed against the assessee for block assessment in terms of Chapter XIVB of the Act under Section 158BC, when no search is conducted in the premises of the assessee under Section 132 of the Act. It is held that Section 158BD provides for taking recourse to a block assessment in terms of Section 158BC in respect of any other person, the conditions precedents are: (i) Satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 of the Act; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person and (iii) The Assessing Officer has proceeded under Section 158BC against such other person. In short, based on the above judgment, the argument is that when a search is conducted with reference to the undisclosed income of a person, I.T.A. Nos. 123, 170 & 209 of 2013 -: 10 :- irrespective of the place where the search is conducted, if proceedings are to be initiated for block assessment, the Assessing Officer can take only proceedings under Section 158BC in regard to the person who is being searched and as far as any other person is concerned, including the business premises of any other person which is searched other than the person against whom the search is conducted, proceedings can be taken only under Section 158BD and after complying with the requirements thereof. 9. On the other hand, the learned standing counsel relies on the very same judgment in Manish Maheshwari's case (supra) and contends that what is relevant under Section 158BC is with reference to taking proceedings for block assessment in respect of the person searched. The argument is that when the person searched is M/s. Harbour Syndicate, even though the reason for search is to find out the undisclosed income of V.H.M. Rafeeq and V.H. Yahiya, the Assessing Officer was justified in proceeding under Section 158BC. As far as Yahiya is concerned, since incriminating documents had been obtained from the premises of the searched person, ie. M/s. Harbour Syndicate, proceedings were taken under Section 158BD, which is valid and proper. Learned standing I.T.A. Nos. 123, 170 & 209 of 2013 -: 11 :- counsel also relies upon paragraph 12 of of Manish Maheshwari's case (supra), which reads as under: “12. The conditions precedent for invoking the provisions of Section 158BD, thus, are required to be satisfied before the provisions of the said chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under Section 132A of the Act.” Therefore, the argument is that Section 158 BC and Section 158BD are to be read with reference to the searched premises and the “person searched” will be the premises of the person searched and if such a view is taken, the Assessing Officer was justified in issuing notices of the block assessment in respect of the aforesaid two assessees and the finding of the CIT (Appeals) was erroneous. 10. Learned counsel for the appellants would further submit that the Tribunal had considered this issue on a different footing and the Tribunal proceeded on the basis that even though proceedings ought to have been issued against M/s. Harbour Syndicate under Section 158BD in so far as the procedure to be followed is issuing notice under Section 158BC, there is no illegality in issuing such a notice. It is contended that in the Panchanama, it is clearly indicated that notices I.T.A. Nos. 123, 170 & 209 of 2013 -: 12 :- were issued in the case of V.H.M. Rafeeq and V.H. Yahiya and the Tribunal also proceeded on the basis that the notices were not proper but relying upon the judgment in Lekshmi Traders's case (supra) it is found that when the procedure for assessment of a person other than the person searched under Section 158BD, is the same procedure under Section 158BC and when there is no prescribed notice under Section 158BD, the officer can only call for return in Form 2B prescribed under Rule 12(1)(c) for assessment under Section 158BC of the Act. The learned counsel relies places exception to the above finding by relying upon Manish Maheshwari's case (supra) and contending that if the notice is bad in law, the entire assessment proceedings become illegal. 11. Having regard to the nature of contentions urged by both sides, what is required to be considered is the scope and effect of Sections 158BC and 158BD with reference to the factual situation arising in these cases. It is not in dispute that in Harbour Syndicate's case, notice is issued under Section 158 BC and in V.H. Yahiya's case, notice is issued under Section 158BD. According to the learned counsel for the appellants, it ought to have been vice versa whereas according to the Department, it is the proper method. I.T.A. Nos. 123, 170 & 209 of 2013 -: 13 :- 12. Sections 158BC and 158BD read as under: “158BC. Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then,- (a) The Assessing Officer shall-- (i) in respect of search initiated or books of account 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 person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account 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 within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of Section 142, setting forth his total income including the undisclosed income for the block period: xx xx xx (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, section 144 and section 45 shall, so far as may be, apply; (c) the Assessing Officer, on determination of the undisclosed 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; I.T.A. Nos. 123, 170 & 209 of 2013 -: 14 :- (d) the assets seized under section 132 or requisitioned under section 132A shall be dealt with in accordance with the provisions of section 132B. 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 or whose books of account or other documents or any assets were requisitioned under Section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under Section 158BC against such other person and the provisions of this Chapter shall apply accordingly.” The learned standing counsel also brought to our notice the file regarding the search conducted. According to learned counsel, several raids were conducted in different premises when information was received that the aforesaid persons were having substantial undisclosed income and was not paying income tax. Section 132 of the Act deals with search and seizure, which reads as under: “132. Search and seizure.—(1) Where the Director General or Director or the Chief Commissioner or Commissioner or Additional Director or Additional Commissioner], [or Joint Director or Joint Commissioner] in consequence of information in his possession, has reason to believe that— (a) any person to whom a summons under sub-section (1) of Section 37 of the Indian Income Tax Act, 1922 (11 of 1922), or under sub-section (1) of Section 131 of this Act, I.T.A. Nos. 123, 170 & 209 of 2013 -: 15 :- or a notice under sub-section (4) of Section 22 of the Indian Income Tax Act, 1922 (11 of 1922), or under sub- section (1) of Section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account, or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or 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 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income Tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,— (A) the Director-General or Director or the Chief Commissioner or Commissioner, as the case may be, may authorise any 1c[Additional Director or Additional Commissioner or] Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income Tax Officer, or (B) such Additional Director or Additional Commissioner or] Joint Director or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income Tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to— (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such I.T.A. Nos. 123, 170 & 209 of 2013 -: 16 :- 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 conferred by clause (i) where the keys thereof are not available; (ii-a) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle 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 valuable article or thing; (ii-b) require any person who is found to be in possession 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 Technology Act, 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 documents, money, bullion, jewellery or other valuable article or thing found as a result of such search: (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing: (1-A) Where any Chief Commissioner or Commissioner, in consequence of information in his possession, has reason to suspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the Director-General or Director or any other Chief Commissioner or Commissioner or Additional I.T.A. Nos. 123, 170 & 209 of 2013 -: 17 :- Director or Additional Commissioner] [or Joint Director or Joint Commissioner]to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation under sub-section (1), such Chief Commissioner or Commissioner may, notwithstanding anything contained in Section 120, authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft. (2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) or sub-section (1-A) and it shall be the duty of every such officer to comply with such requisition. (3) The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section. Explanation.—For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other valuable article or thing under clause (iii) of sub-section (1). (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be I.T.A. Nos. 123, 170 & 209 of 2013 -: 18 :- used in evidence in any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act. Explanation.—For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act. (4-A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed— (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person’s handwriting, and in the case of a document, stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. (8) The books of account or other documents seized under sub-section (1) or sub-section (1-A) shall not be retained by the authorised officer for a period exceeding [thirty days from the date of the order of assessment [under Section 153-A or clause (c) of Section 158-BC]] unless the reasons for retaining the same are recorded by him in writing and the approval of the [Chief Commissioner, Commissioner, Director-General or Director] for such retention is obtained: I.T.A. Nos. 123, 170 & 209 of 2013 -: 19 :- [(8-A) An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order:] Provided that the Director or, as the case may be, Commissioner] shall not approve the extension of the period for any period beyond the expiry of thirty days after the completion of all the proceedings under this Act in respect of the years for which the books of account, other documents, money, bullion, jewellery or other valuable articles or things are relevant. (9) The person from whose custody any books of account or other documents are seized under sub-section (1) or sub-section (1-A) may make copies thereof, or take extracts therefrom, in the presence of the authorised officer or any other person empowered by him in this behalf, at such place and time as the authorised officer may appoint in this behalf. [(9-A) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub-section (1), the books of account or other documents, or any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in Sections 132-A and 132-B referred to as the assets) seized under that sub-section shall be handed over by the authorised officer to the Assessing Officer having jurisdiction over such person within a period of sixty days from the date on which the last of the authorisations for search was executed and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Assessing Officer.] (10) If a person legally entitled to the books of account or other documents seized under sub-section (1) or sub- section (1-A) objects for any reason to the approval given by the [Chief Commissioner, Commissioner, Director- General or Director] under sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the I.T.A. Nos. 123, 170 & 209 of 2013 -: 20 :- books of account or other documents and the Board may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit]. (13) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as may be, to searches and seizure under sub-section (1) or sub-section (1-A). (14) The Board may make rules in relation to any search or seizure under this section; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer— (i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where free ingress thereto is not available; (ii) for ensuring safe custody of any books of account or other documents or assets seized. Explanation 1.—For the purposes of sub-section (9-A), “execution of an authorisation for search” shall have the same meaning as assigned to it in Explanation 2 to Section 158-BE. Explanation 2.—In this section, the word “proceeding” means any proceeding in respect of any year, whether under the Indian Income Tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.” The officer authorizing the search and seizure is entitled to invoke the said powers to enter and search any building, place, vessel, vehicle or aircraft where he I.T.A. Nos. 123, 170 & 209 of 2013 -: 21 :- has reason to suspect that any books of account or other documents, money, bullion etc., are kept, if he has reason to believe that any person referred to under sub-clauses (a) to (c) of Section 132(1) has failed to provide the information sought for therein. According to the learned counsel for the appellants, Section 132 (1) can be invoked only when there is failure on the part of persons mentioned under clauses (a) to (c) in complying with the summons or notice issued or if any person is in possession of any of the items specified in clause (c) and which is undisclosed. It is the contention that only such persons mentioned in clauses (a), (b) and (c) are to be treated as “any person” referred to in Section 158 BC. This contention is based on the language of Section 158BD, which refers to the undisclosed income of any person “other than the person with respect to whom search was made under Section 132” or “whose books of account or other documents or any assets were requisitioned under Section 132A.” Therefore, M/s. Harbour Syndicate is not the person against whom the search was made under Section 132 and therefore Harbour Syndicate is any other person referred therein. 13. This argument, we do not think, is justifiable especially on an interpretation of the language used I.T.A. Nos. 123, 170 & 209 of 2013 -: 22 :- under Sections 158BC, 158BD read with Section 132 of the I.T. Act. Under Section 132, the officer is entitled to search any building, place, vessel, vehicle or aircraft. Here, the business premises of Harbour Syndicate is admittedly searched. In other words, the person searched is Harbour Syndicate and not V.H.M. Rafeeq or V.H. Yahiya. Section 2(31) defines a person as including an association of persons or a body or individuals whether incorporated or not and every artificial juridical person, not falling within any of the sub-clauses mentioned in the Section. Therefore, Harbour Syndicate, which is apparently the name of a concern, which belongs to certain persons, is also a person under the Income-tax Act. Section 158BC specifically refers to a search conducted under Section 132 in the case of any person. The person searched apparently is Habour Syndicate and not V.H. Yahiya. It may be true that the reason for searching Harbour Syndicate is non-compliance of the summons or notice issued to V.H.M. Rafeeq and V.H. Yahiya in terms of Section 132(1)(a) of the Act. But the fact remains that when the search is conducted in the business premises of Harbour Syndicate, they alone become the “person” mentioned in Section 158BC. According to the learned counsel for the appellants, a reading of Section 158BD I.T.A. Nos. 123, 170 & 209 of 2013 -: 23 :- will clarify the fact that the person mentioned in Section 158BC is the person to whom notice is issued under Section 132(1)(a) of the Act. As per Section 158BD, it contemplates satisfaction of the Assessing Officer that any undisclosed income belonging to any person other than the person with reference to whom search was made under Section 132. If we are of the opinion that the person searched under Section 158BC read with Section 132 is Harbour Syndicate, then Section 158BD contemplates taking proceedings against the person “other than the person with reference to whom search was made under Section 132” or in other words it contemplates a person other than a person referred to in Section 158BC. Apparently, the procedure to be followed by the Assessing Officer while invoking Section 158BD is his satisfaction that any undisclosed income belonged to any other person other than the person with reference to whom a search was made. Then the books of account and other documents or assets seized shall be handed over to the Assessing Officer having jurisdiction over “such other person” and that the Assessing Officer shall proceed under Section 158BC against such other person. We are fortified in the view taken by us based on the observation made by the Supreme Court in Manish Maheshwari's case I.T.A. Nos. 123, 170 & 209 of 2013 -: 24 :- (supra), taking into account the statement of law referred to in paragraph 12 of the said judgment. Further, while considering the scope and effect of block assessment under Chapter XIVB, the Supreme Court in Assistant Commissioner of Income Tax and another v. Hotel Blue Moon, [(2010) 3 SCC 259] has held in paragraph 15 as follows: “15. Section 158-B defined “undisclosed income”, and “block period” which are the two basic factors for framing the block assessments. Section 158-BA is an enabling section, empowering the Assessing Officer, to assess “undisclosed income” as a result of search initiated or requisition made after 30- 6-1995, in accordance with the provisions of this Chapter and tax the same at the fixed rate specified in Section 113. Section 158-BB provides the methodology for computation of undisclosed income of the block period. Section 158-BC prescribes the procedure for making the block assessment of the searched person. Section 158-BD enables assessment of any person, other than the searched person.” The Supreme Court clearly specifies in the above judgment that Section 158BC prescribes the procedure for making block assessment of the searched person and Section 158BD enables assessment of any person, other than the searched person. In this case, we have no hesitation to hold that searched person is M/s. Harbour Syndicate and therefore as far as M/s. Harbour Syndicate is concerned, the Assessing Officer I.T.A. Nos. 123, 170 & 209 of 2013 -: 25 :- was justified in issuing notice under Section 158BC and in respect Y.H. Yahiya, the Assessing Officer was justified in issuing notice under Section 158 BD. The question of law raised in this regard is answered in favour of the Revenue. In the light of the above discussion, we are of the view that the order of remittance by the Tribunal is justified though not for the reasons stated in the Tribunal's order. The Assessing Officer was justified in invoking Sections 158BC and 158BD in the respective cases and therefore the matter requires to be considered on merits by the CIT (Appeals). Having formed such an opinion, these appeals are liable to be dismissed and accordingly, we dismiss the appeals. Sd/- Manjula Chellur, Chief Justice. Sd/- A.M. Shaffique, Judge. Tds/ "