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2016 (10) TMI 1361 - AT - Income TaxAssessment u/s 153A - valid initiation of search - assessee has challenged execution of warrants and also whether valid search was initiated in this case? - HELD THAT:- Search will be deemed to be concluded on the basis of last panchnama drawn in relation to the person in whose case the warrant of authorization has been issued and in the instant case , we have observed that no panchnama was drawn against the assessee so it can be concluded that search against the assessee got vitiated as no panchnama was ever prepared against the assessee. The search is a serious invasion into the privacy of the person infringing on fundamental rights as enshrined in Article 21 of the Constitution of India and the same cannot be lightly carried out by the State in an casual or lax manner. The Revenue has prepared the Panchnama in the name of ‘Manoj B Punmia and group’ while there is no concept of word ‘group’ in the Act in context of search proceedings. Incidentally in the instant appeal , there is no panchnama drawn by the Revenue against the present assessee which is an admitted position. Keeping in view the facts and circumstances of the case, we are of considered view that the search proceedings in the case of present assessee got vitiated due to non-preparation of the panchnama in the name of the assessee which evidences conclusion of the search and which effectively decides against whom the Revenue has conducted search so much so further actions are required to initiate assessment proceedings u/s 153A of the Act for the last six years against the person so searched within the time stipulated u/s 153B. Thus, in the absence of panchnama being drawn against the assessee, no incriminating material having been found pertaining to the assessee and also the premises searched did not belonged to the assessee, it could be concluded based on the cumulative effect of all the above-stated relevant facts that no valid search was conducted against the assessee and the assessment u/s 153A of the Act is bad in law hence liable to be quashed. Why, despite a ‘search’, we observe a ‘notice’ u/s 153C as well as a survey being conducted on the assessee in the present case. Disallowance made on account of unexplained purchases to 50% - Since, we have declared the proceedings u/s 153A as null and void, these appeals for impugned assessment years have also remained for academic interest only. Since, the basis for making the assessment/reassessment has been declared as null and void, therefore, the same ratio will be applicable to the appeals of the Revenue also, consequently, dismissed, therefore, these appeals are also decided in favour of the assessee. Incriminating material found during the course of search or not? - The assessee company had filed return of income on 20-10-2004 u/s 139(1) of the Act. The time limit for service of notice u/s 143(2) of the Act for the said relevant period was till the expiry of twelve months from the end of the month in which the return is furnished i.e. up-to 31-10- 2005. The search was initiated on 31-10-2009 and hence the period with in which Revenue could have issued notice u/s 143(2) of the Act to frame assessment under Section 143(3) of the Act has already expired and hence the assessment for the impugned assessment year is a concluded assessment as stipulated u/s 153A of the Act on the date of search on 31- 10-2009. Thus, as per mandate of Section 153A of the Act the concluded assessment can be re-opened for framing assessment u/s 153A of the Act provided there is an incriminating material found during the course of search. Since, in the instant case no incriminating material was during the course of search against the assessee company for the impugned assessment year, no additions can be sustained. - Assessee appeal allowed.
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