TMI Blog2008 (11) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... Narsayya Chilka and the names of the present assessees had been inserted subsequently. This explanation has been given for the reason that full names of the present assessees do not find place in the search warrant due to lack of space. It was clarified by him that he is not against the issue of search warrant in various names but the manner in which the names of the present assessees have been shown in the warrant clearly shows that same were inserted subsequently. According to him, had the search warrant been issued in the names of Shri S.N. Chilka and the present assessees, the competent authority would have clearly stated the complete names of the persons against whom search action was sought. He referred to Form No. 45 to contend that competent authority is required to specify the names of the persons against whom search warrant is issued. He then referred to the provisions of s. 2(31) of the Act, which defines that word 'person' to contend that the status of the person should also be mentioned. It was pointed out that the word 'Gopal' has been mentioned as one of the names against whom search warrant has been issued from which it cannot be inferred whether Mr. Gopal represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there is no provision prohibiting such course of action. According to him, the original search warrant must be shown to the assessee in the interest of justice. He also referred to the decision of the Supreme Court in the case of Manish Maheshwari vs. Asstt. CIT (2007) 208 CTR (SC) 97 for the proposition that provisions of the Act should not be interpreted in the manner which puts the fiscal burden on the assessee. 3, On the other hand, the learned Departmental Representative has strongly opposed the contentions raised on behalf of the assessee. It was contended by him that the Tribunal has no power to look into the validity of search conducted under s. 132(1) and it is only the High Court or the apex Court which can look into the validity of the search proceedings under s. 132(1) by resorting to the provisions of Art. 226/32 of the Constitution of India. Reliance has been placed on the decision of Hon'ble Delhi High Court in the case of M.B. Lal vs. CIT (2005) 199 CTR (Del) 571 : (2005) 279 ITR 298 (Del) as well as the decision of the Special Bench in the case of Pro main Ltd. vs. Dy. CIT. Proceeding further, it was submitted by him that the Tribunal can only look into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t out the illegality in the said search warrant. It was also submitted by him that he is not going to argue on merits unless it is given in writing that search warrant cannot be shown to him. Lastly, it was submitted that in case the Tribunal takes a view against the assessee then a written order be passed and then thereafter, the assessee may be allowed to argue his case on merits. 5. Rival submissions of the parties have been considered carefully. The first question for our consideration is whether the Tribunal can look into and examine the validity of the search action taken under s. 132 of the Act. The issue came up for consideration before the Special Bench of Three Members in the case of C. Ramaiah Reddy vs. Asstt. CIT (2003) 81 TTJ (Bang)(SB) 1044 : (2003) 87 ITD 439 (Bang)(SB). The Special Bench by majority opinion held that the Tribunal cannot look into the validity of the action under s. 132 of the Act. This issue was again examined by the Larger Bench of the Tribunal (of Five Members) in the case of Promain Ltd. The Special Bench unanimously held that the Tribunal cannot examine the validity of search action under s. 132 of the Act. The relevant observations are contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings could not be agitated in appeal before it? (ii) Whether the block assessment order made under s. 158BC had been passed within the time stipulated by law? The Tribunal has, as noticed earlier, answered both these questions in favour of the Revenue. It has relying upon the decisions of the Special Bench of the Tribunal at Bangalore in C. Ramaiah Reddy vs. Asstt. CIT (2003) 81 TTJ (Bang)(SB) 1044 : (2004) 268 ITR 49 (Bang)(SB)(AT), held that validity of the action taken under s. 132 of the Act could not be examined in the appeal filed before it. We see no reason to take a different view. Any appeal before the Tribunal against the block assessment made under s. 158BC does not take within its fold question touching the validity of the search conducted under s. 132 of the Act. Whether or not the conditions precedent for a search stipulated under cls. (a), (b) and (c) of s. 132(1) of the Act were satisfied in a given case falls beyond the scope of assessment proceedings instituted under s. 158BC of the Act or any statutory appeal preferred against the order made under that provision. If the petitioner was keen to test the validity of the said proceedings, his remedy lay in a writ p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal has no power to look into the validity of the search action under s. 132(1) of the Act. Therefore, the Tribunal cannot examine the issue whether the circumstances mentioned in s. 132(1) existed or not before issuing the search warrant. 9. However, the divergent view has been expressed by the Hon'ble Rajasthan High Court in the case of Smt. Chitra Devi Soni wherein the Hon'ble Court, after examining the provisions of s. 132(1) of the Act, observed at p. 125 as under: "The above being the legal position, since the assessment in the present case is made under Chapter XIV-B, and when it was specifically challenged by the assessee, that the circumstances contemplated by s. 132(1) did not exist, this is a matter which goes to the root of the matter about jurisdiction of the assessing authority, to proceed under Chapter XIV-B, the Tribunal was very much justified, and had jurisdiction to go into the question, as to whether the search was conducted consequent upon the authorisation having been issued, in the background of the existence of eventualities and material, mentioned in s. 132(1)." 10. The learned counsel for the assessee has pressed into service the judgment of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion where lone decision of a non-jurisdictional High Court is available which requires due respect while adjudicating an issue. However, we are concerned with the situation where conflicting views have been expressed by different non-jurisdictional High Courts. In such a situation, it is not possible to give effect to both the decisions. It is a settled legal position that only the decision of the jurisdictional High Court is binding on the Tribunal or the Courts subordinate to the High Court. The decision of the non-jurisdiction High Court has persuasive value particularly when conflicting views are available. Therefore, in our opinion, the decision rendered by the Hon'ble Rajasthan High Court has persuasive value only. The only binding decision is that of Special Bench of the Tribunal in the case of Promain Ltd. wherein it has been held that the Tribunal cannot examine the validity of the search proceedings initiated under s. 132 of the Act. As already stated, this view is fortified by the majority decision rendered by the two High Courts. 13. The Tribunal exercises its jurisdiction under s. 254 of the Act in respect of the appeal arising from the block assessment proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel is that no such search was carried out in the case of present assessees. The search was carried out only in the case of Sidram N. Chilka and names of the assessees were inserted in the search warrant subsequent to the date of search. We have gone through the original search warrants produced by the learned Departmental Representative and the learned Dy. Director of IT which shows that two search warrants were issued in respect of the premises bearing No. 1339, New Pachha Peth, Solapur. One search warrant was issued in respect of residential portion of this property and this warrant was in the names of S/Shri Sidram Narsayya Chilka, Shrinivas, Devalki, Gopal, Vyankatesh. The other warrant was issued in respect of the other portion of the property where the business was carried out. This warrant was in the names of M/s N.R. Chilka (Decd), Shri S.N. Chilka, Shrinivas, Smt. Devaki, M/s Chandrashekhar Saraswat Traders. A bare look at these warrants shows that there was no manipulations/interpolation in the search warrants. The search warrant executed at the residential portions shows that the words "S/Shri" are written before the names of various persons. This could be written only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not present, the search is legally permissible to be carried out. There is no dispute that search warrant was shown to Shri S.N. Chilka who was the head of family. This is apparent from his signature on the search warrant. It is also duly signed by the Panchas. Therefore, it cannot be said that search was not carried out in accordance with the law. As far as Panchanama is concerned, it is seen that common Panchanama is prepared in the names of Shri S.N. Chilka, Shri Gopal S. Chilka, Shrinivas S. Chilka and others. This Panchanama is signed by Sridram N. Chilka as well as by Panchas. Merely because common Panchanama was prepared it cannot be said that search was invalid. The statements of the persons present at the residence were recorded which is clear from para 6 of the Panchanama. Para 7 says that no other persons were present. Hence, question of recording of any statement of these assessees did not arise. Even otherwise, non-recording of the statement does not render the search illegal. 17. In view of the above discussions, it is held that search was carried out in accordance with law. The validity of the search action under s. 132(1) cannot be challenged before the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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