TMI Blog2014 (3) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, thereby vitiating the invocation of jurisdiction u/s 153A of the Act – Held that:- It cannot be denied that this is an issue pertaining to jurisdiction - It goes to the very root of the matter - It is not that the premises was owned by the assessee but was rented out - the premises searched does not belong to the assessee - non-compliance of the provisions of the Income-tax Act by the authorized officer renders a search invalid and illegal - Relying upon Dr. Mansukh Kanjibhai Shah vs. ACIT, Central Circle-2 [2010 (5) TMI 536 - ITAT, AHMEDABAD] - Since no search was conducted on the premises of the assessee and the search conducted was conducted on a premises not owned by the assessee, the proceedings u/s 153A of the Act are invalid and bad in law – Decided in favour of Assessee. - ITA No.196 to 198/Del/2011, CO Nos.115 to 117/Del/2011 - - - Dated:- 14-3-2014 - Shri A. D. Jain And Shri Shamim Yahya,JJ. For the Petitioner : Shri Gautam Jain, Advocate For the Respondent : Shri Ramesh Chandra, CIT, DR ORDER Per A. D. Jain, Judicial Member: These are Department's appeals and Assessee's Cross Objections for Assessment Years 2002-03 to 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (A) has erred in upholding the assessments framed under Sections 153A/143 (3) of the IT Act. 5. In this regard, the Ld. CIT (A) has observed that the assessee had challenged the jurisdiction of the Assessing Officer u/s 153A of the IT Act on two grounds, i.e., that there was no search warrant issued in the name of the assessee and that no panchnama was drawn in its name; that the Assessing Officer had held the name of the assessee company was written in the warrant issued for the search of the premises at 3rd Floor, Global Arcade, MG Road, Gurgaon and, as such, the objection of the assessee that no search warrant was issued in its name, was not correct; that she [Ld. CIT (A)] was of the view that once a search is initiated by the issuance and execution of a search warrant, the Assessing Officer is in its jurisdiction to issue a notice u/s 153A of the Act; and that thus, the Assessing Officer had valid jurisdiction to make an assessment u/s 153A of the Act. 6. Challenging the aforesaid observations of the CIT (A), it has been contended before us on behalf of the assessee that the Ld. CIT (A) has gone wrong in rejecting the valid objections raised by the assessee in this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searched is not owned by the assessee, again, no jurisdiction u/s 153A of the Act could be invoked against the assessee. For the proposition that since the premises searched does not belong to the assessee, no jurisdiction u/s 153A of the Act could have been invoked, the ld. Counsel for the assessee has placed reliance on the decision of the Mumbai Bench of the Tribunal in the case of 'J.M. Trading Corporation vs. ACIT', 20 SOT 489 (Mum), wherein, it was held that where a search is carried out at the premises owned by the assessee, but rented to any concern, the same does not prove conduct of search as enumerated u/s 132 of the Act. It has been pointed out that vide order dated 29.06.2009, the Hon'ble High Court of Bombay, in the case of 'CIT vs. J.M. Trading Company' in ITA No.589 of 2009 (copy at CLPB 200), dismissed the appeal filed by the department against the aforesaid Tribunal Order. It has further been pointed out that vide order dated 06.09.2010, the Hon'ble Supreme Court, in 'CIT, Mumbai vs. M/s J.M. Trading Corporation Ltd.' in CC No.13456/2010 (copy at CLPB 201), has dismissed the objection for special leave to appeal filed by the departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation; that the search is considered to be initiated once the warrant has been issued by the competent authority and the authorized officers had entered the correct premises to execute the search warrant; that in 'M/s Rajat Trade Com India Pvt. Ltd.', 120 ITD 48 (Indore), wherein a joint warrant of authorization was issued in the name of M/s Rajat Gems Jewellers (P) Ltd. and M/s Rajat Trade Com India Pvt. Ltd., but the name of M/s Rajat Trade Com India Pvt. Ltd. was not mentioned in the Panchnama drawn at the premises, it was held that in the event of Warrant of Authorisation being in the joint names of the assesses of the group, it was not necessary to write all the names in the Panchnama; that therefore, drawing of separate Panchnama in the names of all the persons mentioned in the Warrant of Authorisation is not necessary; that as per 'CIT vs. Dr. C. Balakrishnan Nair', 282 ITR 158 (Kar), it is not sacrosanct that the Panchnama must contain all the names of the persons whose names are otherwise mentioned in the search authorization and the non-mentioning of names of all the assessees mentioned in the Warrant of Authorisation can at the most be said to be an ina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filled. In 'M/s Rajat Tradecom (P) Ltd. vs. DCIT, 2 (1), Indore', 120 ITD 48 (Indore), it has been held that for applicability of Section 153A, the initiation of search is necessary; that Section 153A would be applicable where, inter alia, a search is initiated u/s 132; and that therefore, before invoking the provisions of Section 153A, it would be necessary to comply with the provisions contained in Section 132 (1). In the present case, since the Warrant of Authorisation contains the name of the assessee, such provisions are amply complied with. In view of the above, this objection of the assessee, i.e., C.O. No.2, is meritless and is rejected and the observations of the Ld. CIT (A) in this regard, as contained in para 5 of the impugned order, are rejected. 10. Coming to the other question raised by the assessee, the department has raised a preliminary objection in this regard, to the effect that this issue was never raised before the authorities below and, therefore, the Tribunal cannot go into it at this stage. This, however, is not found to be correct. This issue was raised before the ld. CIT (A), by way of the Assessee's rejoinder dated 20.05.2010 (PB 179-183 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of jurisdiction to initiate proceedings under section 153A of the Act and framing of assessment under section 153A/143 (3) of the Act are not in accordance with law and hence unsustainable. Further, so far as the merits of the case, the appellant apart from judicial decisions cited earlier, also seeks to rely upon the recent decision of the Mumbai Bench in the case of Anil P Khimani in ITA No (s) 2855 to 2860/Mum/2008 for Assessment Year 1999-2000 to 2004-05 and, Meghmani Organics Ltd. vs. DCIT reported in 36 DTR 187 (Ahd) are being enclosed (pages 6 to 13 and, 14 to 27 to this submissions) herewith to submit that, in absence of any material found as a result of search of the appellant, no addition could have been otherwise made in the order of assessment made under section 153A/143 (3) of the Act. 7. In view of the above, it is submitted that the assessments framed may kindly be quashed and in the alternative, disallowances addition made may kindly be deleted and appeals of the appellant company be allowed. Should your goodself require any further information, the appellant is too willing to furnish the same. 11. It cannot be denied that this is an issue pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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