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2021 (10) TMI 74 - HC - Income TaxValidity of Search proceedings - Requirement of issuance of summons before initiation of search - Whether warrant of authorization is “qua the premises” and not “qua the assessee”? - whether requisite satisfaction of the authorized officer who authorized the search could not have been validly arrived at since there was no information available qua each of the Petitioners to justify the search? - Material seized during the search - Undisclosed income of an Assessee - HELD THAT:- Department’s case does not pertain to Section 132(1) (a) or (b) but 132(1)(c). The Department’s contention is that it is in possession of information which led it to form reason to believe that the Petitioners are in possession of “any money, bullion, jewellery or other valuable articles or things and such money, bullion, jewellery represents either wholly or partly income or property which has not been disclosed”. - Both the petitioners have admitted in their respective writ petitions that they in fact did not file ITRs for certain AYs. Even this information, if available with the Department would have been sufficient for them to form a reason to believe for the purpose of Section 132(1)(c). In other words, it is not mandatory that in the present case there should have been summons under Section 131 of the Act for the Department to proceed to initiate action under Section 132 of the Act. If here was such information available for the purposes of search, why did the Department have to undertake a ‘survey’ of the factories of both Shiva and Shivom under Section 133A of the Act? - There is nothing in either in Section 132 or 133A of the Act that prohibits the Department from undertaking a survey of an entity exclusive to one location of its operations, whereas it may have credible information for search as regards the operations in another location. As rightly pointed out by the Department, search is qua a ‘place’ and not necessarily qua the ‘Assessee’. Survey by its very nature could be of the entity and any place from where such entity may operate. It is perfectly possible that while conducting survey and search of the premises of an entity, for which an authorisation has been issued, the Department can come across material pertaining to some other person or entity. The provisions like Section 153C of the Act deal with such contingencies. However, that is not to say that a survey or a search cannot happen in two different premises simultaneously. Further, if search is qua the place, the Court sees no reason why if there are two entities in one premises, there cannot be a common search operation. The Court is not prepared to accept the plea of the Petitioners that in the present case the search and survey operations were entirely without jurisdiction. The Court would like to add that this conclusion is of a prima facie nature since despite the petitioners having insisted on a finding by this Court, the right of the Assessees to agitate this issue again in the further proceedings cannot be lost sight of. Consequently, the Court is not satisfied that any ground is made out by either of the Petitioners for grant of any of the reliefs as prayed for at this stage. Although the Court has expressed its prima facie view on the legal and factual issues raised, on the insistence of the Petitioners, it is clarified that after the assessment orders are received and if the Petitioners are aggrieved thereby, it would be open to them to urge all the grounds raised in the present petitions, apart from any further grounds they may have, before the Appellate Authority in accordance with law.
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