TMI Blog2010 (5) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... suming valid jurisdiction under section 153A of the Act against the assessee - ITA No. 2878 to 2880 & 3339/Ahd/2007 - - - Dated:- 21-5-2010 - N. S. SAINI ACCOUNTANT MEMBER J. BHAVNESH SAINI JUDICIAL MEMBER J. For Assessee: Shri Vijay Ranjan, AR For Department: Shri Anil Kumar, DR ORDER PER SHRI BHAVNESH SAINI, J.M. This order shall dispose of all the above appeals based upon identical facts. ITA No.2878, 2879 AND 2880/AHD/2007(Assessee s appeals) 2. The appeals of the assessee in assessment years 2002-03, 2003-04 and 2004-05 are directed against different orders of learned Commissioner of Income Tax (Appeals)-IV, Ahmedabad all dated 20 th March -2007on the following common grounds: 1. In law and in the facts and circumstances of the appellant s case, the learned CIT (A) has grossly erred in dismissing Ground of Appeal No.1 of the appellant s appeal before him challenging the validity of the assessment order impugned before him, inter alia , for t he reasons that it had been passed pursuant to a Notice under Section 153A which was itself issued on the erroneous assumption that the appellant had been subject d to search under Section 132. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of survey, the survey party extracted an admission of the assessee to the effect that cash amounting to Rs.1,93,99,865/- deposited in those bank accounts of the Trust belonged to him and that he would include the income represented thereby in his return for the present assessment years. Later on, search was conducted in the Bank Premises and search warrants were issued in the name of the assessee and in the name of K. M. Shah Charitable Trust. Those search warrants were served not on the assessee or on K. M. Shah Charitable Trust in whose case the proceedings u/s. 132 were to be taken, but on the banks where the bank accounts of K. M. Shah Charitable Trust were opened before the date of survey conducted u/s 133A in August, 2004. The said search proceedings allegedly taken in the case of the assessee and K. M. Shah Charitable Trust resulted into the search party carrying out seizure of Rs.1,93,99,865/- after enforcing withdrawal of the amounts lying deposited in the said bank accounts of K. M. Shah Charitable Trust. The assessee had retracting from his admission extracted in his second statement which was recorded on 24-12-2004 during the post survey proceedings. It may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s K. M. Shah Charitable Trust, Mansukhbhai K. Shah and which clearly showed that even at the time of issuing search warrant, the Department had not made up its mind as to whether it was carrying out the search in the case of this Trust or in the case of Shri Mansukhbhai K. Shah in his individual capacity. It is evident from the fact that separate orders were passed on 27-12-2004 u/s. 210 by the Income tax Officer, Ward-5(3), Baroda calling upon not only the Trust but also Shri Mansukhbhai K. Shah in his individual capacity, to pay advance tax amounting to Rs.64,89,235/- on the same amount of estimated income of Rs.1,93,99,865/- that being the amount which was seized by the Department from this Trust bank accounts in the Indian Overseas Bank. 6. The learned Commissioner of Income Tax (Appeals) after considering the materials on record and the submissions of the assessee dismissed the appeal of the assessee on this issue. His findings in Para 3 are reproduced as under: 3. I have carefully considered the contentions of the Ld. Counsel as well as gone the rough the records. On perusal of assessment order, it has been noticed that search under Section 132 was conducted in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Trust. He has submitted that though he has admitted the amount to be his personal money but in answer to question No.36 in the same statement, the assessee has explained that his personal books are not written completely, therefore, he will furnish the evidence of the source by filing the return of income if available. He has submitted that the assessee in his later statement dated 24-12-2004 further explained before the AO that the amount lying in the bank belong to the Trust. Therefore, it would amount to retraction from the earlier statement. He has submitted that warrant of authorization dated 29-10-2004 were issued in respect of various branches of the Indian Overseas Bank through which the amount lying in the bank were converted into PD account of the Debarment which were in the name of the Trust. He has submitted that the Panchnamas of the bank were given to the assessee being the Managing Trustee only on 09-05-2005 on which endorsement is made in respect of bank accounts of the Trust. Copies are filed in the paper book. Thus, Rule 112 (3) of the IT Rules is not satisfied in this case. He has, therefore, submitted that no warrant of authorization u/s 132 was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be framed in an individual capacity but it should be framed either as association of person or as body of individual. In the light of the above discussions and by considering the totality of the facts and circumstances of the case, we uphold the impugned order passed by the Tribunal, who has rightly set-aside the assessment orders which were passed in individual capacity of the assessee. However, it will be open to the assessing authority to proceed and pass fresh assessment order in accordance with law, if so desire. The appeal is, therefore, dismissed. Learned Counsel for the assessee further submitted that there is no undisclosed income detected in the individual case of the assessee. The returned income is accepted in the individual assessments. The assessee denied money lying in the bank account in the name of Trust belonging to him. He has submitted that searches are not conducted on preponderance of probabilities. No material was found against the assessee at any point of time. Addition cannot be made on the basis of statement of the assessee only. He has submitted that it is well settled that whenever there is a retraction from the assessee, the department nee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that for proceedings u/s 153A, initiation of the search proceedings u/s 132 is enough. Assessing Officer was, therefore, justified in proceeding against the assessee u/s 153A of the IT Act because warrant of authorization was issued in the name of the Trust and the assessee u/s 132 of the IT Act in the following name K. M. Shah Charitable Trust, Mansukhbhai K. Shah . He has submitted that joint search warrant is valid under the law and relied upon decision of Allahabad High Court in the case of Raghuraj Pratap Singh and others Vs ACIT 307 ITR 450 in which it was held common authorization in respect of more than one person permissible . He has submitted that in the case of Smt. Vandana Verma decided by Hon ble Allahabad High Court (supra) the warrant was in the joint names of Mr. Mudit Verma and Mrs. Vandana Verma which was considered in the name of single person, but in the case of the assessee and is not used in the warrant of authorization because it is coma (,) being in the name of Trust and the assessee. Therefore, decision in the case of Vandana Verma (supra) would not apply. Learned Departmental Representative submitted that assessee did not file return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section pending on the date of initiation of the search under 14 section 132 or making of requisition under section 132A, as the case may be, shall abate. Explanation . For the removal of doubts, it is hereby declared that, ( i ) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; ( ii ) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. Section 132 of the Act provides - 132. (1) Where the Director General or Director] or the [Chief Commissioner or Commissioner] [or any such [Joint Director] or [Joint Commissioner] as may be empowered in this behalf by the Board], in consequence of information in his possession, has reason to believe that ( a ) any person to whom a summons under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of electronic record as defined in clause ( t ) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 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: [ Provided that bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business;] ( 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 : [ Provided that where any building, place, vessel, vehicle or aircraft referred to in clause ( i ) is within the area of jurisdiction of any [Chief Commissioner or Commissioner], but such [Chief Commissioner or Commissioner] has no jurisdiction over the person referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order.] (9) The person from whose custody any books of account or other documents are seized under sub-section (1) [or sub-section (1A)] 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. [(9A) 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 132A and 132B referred to as the assets) seized under that sub-section shall be handed over by the authorized 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 authorized officer under sub-section (8) or sub-section (9) shall be exercisable by such As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other words, even if the material found shows the concealment in only one year, all the completed assessments falling in the period of six AYs preceding the year of search will get reopen. There was an identical provision contained in Chapter XIV-B of the Act, which provides that where after 30th June, 1995, a search is initiated u/s 132 or books accounts etc. are requisitioned u/s 132A, the AO shall proceed to assess undisclosed income in accordance with provisions of Chapter XIV-B for making assessment for block period but in the block assessments, the question of assessing an undisclosed income in relation to any AY was restricted to the incriminating material on undisclosed assets discovered during the course of search and seizure or in the post search inquiry the material was relatable to such evidence discovered in search. The income assessed in the regular assessments was not to be considered in the block assessments. However, in the present provisions u/s 153A, there is no such provision provided in the Act. Once warrant of authorization is issued and the search is conducted and panchnama is drawn, the assessments for all the seven years including the current year have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income tax, called the authorized Officer, to enter and search any building, place, vessel, vehicle or air-craft, etc. where he has reason to suspect that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing are kept, break open the lock of any door, etc., search any person who is about to go from the above premises, require any person to account for the books of accounts or documents, seize any such books of accounts or documents, money, bullion, jewellery, etc. or things found as a result of such search and may place mark of identification on any books of accounts or other documents or take copy thereof and to prepare inventory of the same. The purpose of section 132 for issue of warrant of authorization is to unearth, detect and to take possession of the unaccounted/undisclosed income or property. The mere issue of warrant of authorization without there being search of the premises mentioned in the warrant of authorization would be meaningless and would not serve the purpose of section 132 of the Act. It may be illustrated by taking an example that if warrant of authorization under section 132 is issued in the name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition under section 132A of the Act as is referred to in section 158BA of the Act observed that the word requisition means taking of actual possession. The requisition is complete only when the seized books of accounts and other documents which have been requisitioned have been delivered to the requisitioning authority. The provisions of section XIV-B of the Act would come into play only when the books of accounts or other documents or assets are actually received by the Assessing Officer pursuant to the requisition made under section 132A. It was held - Held, that no search under section 132 had been conducted by the Income tax Department. The search, if any, was conducted on June 7/8 of 2001 by the Central Excise Department. The Income-tax Department had sent a requisition on March 27, 2002 under section 132A of the Act requisitioning the books of accounts and other documents seized by the Central Excise Department. The record of the proceeding dated April 18, 2002 showed that the requisition was not fully executed as all the books of account and other documents had not been delivered to the requisitioning authority. The proceedings initiated under section 148 were valid. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that the money deposited in the bank account of the Trust belongs to assessee in his individual capacity. The assessee in his later statement recorded before Assessing Officer on 24-12-2004 retracted from his earlier statement and explained that the amount seized from the bank accounts of t he Trust did not belong to him because the same belong to the Trust only. Except the statement recorded on oath during the course of survey, there is no other material or evidence available on record to prove that the money deposited in the bank account of the Trust belong to the assessee in his individual capacity. It is well settled that admissions are not conclusive proof of matter. They may be shown to be untrue or have been made under mistake of facts or law. Circumstances have to be seen under which same are made. It can be withdrawn unless it is estoppels and conclusive. Hon'ble Punjab Haryana High Court in the case of Kishanlal Shivchand 88 ITR 293 held It is an established principle of law that a party is entitled to show and prove that an admission made by him was in fact not correct and true. Hon'ble Supreme Court of India in the case of Pullangode Rubber Product Co. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any search is conducted against the assessee in his individual capacity. It is admitted fact that warrant of authorization is issued in the name of the Trust and the assessee. Even if it is issued in joint (two) names but it appears from the facts and circumstances of the case that name of the assessee was added in the warrant of authorization and in the Panchnama being the assessee Managing Trustee of the Trust. Thus, assessee has no individual liability in the aforesaid case. We may also note here that learned Departmental Representative relied upon decision of Allahabad High Court in the case of Raghuraj Pratap Singh and others (supra) which was delivered on 14-07-2006. However, learned Counsel for the assessee relied upon another decision of Hon'ble Allahabad High Court in the case of CIT vs Smt. Vandana Verma (supra) which was delivered on 09-10-2009. The latter decision is binding for consideration. Moreover, the latter decision in the case of Smt. Vandana Verma (supra) is directly on the point in issue because when the warrant is issued in joint names in the case of the Trust and the assessee, then as per the above decision the assessments could not have been framed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e requirements of section 153A of the Act. As such, the Assessing Officer was not justified in initiating proceedings or assuming valid jurisdiction under section 153A of the Act against the assessee. In view of the above discussions, we do not find these to be the fit cases for initiating the proceedings u/s 153A of the IT Act against the assessee in his individual status. We accordingly hold that the proceedings u/s153A of the IT Act are invalid and bad in law, resultantly, the orders of the authorities below are set aside and quashed. 10. As a result, all the appeals of the assessee in ITA No.2878, 2879 and 2880/Ahd/2007 are allowed. 11. This appeal by Revenue is directed against the order of the learned Commissioner of Income Tax (Appeals) IV, Ahmedabad dated 20-03-2007 for Assessment Year 2005-06 on the following grounds: 1. The learned CIT (A) erred in law and on facts in deleting the addition of Rs.1,93,99,865/- made on account of undisclosed income found and seized during the course of survey/search by way of cash deposits in the bank accounts. 2. The learned CIT (A) failed to take note of the statement recorded on oath, on 28-10-2004 admitting that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, it is evident that the amounts seized belong to the Trust and the Appellant was managing the affairs of Trust as Managing Trustee. Hence, the amount seized does not belong to the Appellant in his individual capacity. Hence, the second ground of appeal is allowed. 13. Learned representatives of both the parties submitted that facts are same as considered above in appeals of the assessee. They have submitted that their submissions are same as argued above and findings may be followed accordingly. 14. On consideration of the above facts in the light of findings of learned CIT (A), we are of the view that the issue is same on merit as is considered while considering the appeals of the assessee. The A O made addition of Rs.1,93,99,865/- in the assessment years in question in respect of the same bank accounts in the name of the Trust. We have held above that the bank accounts belong to the Trust and the amount lying in the bank accounts of the Trust is already considered in the case of the Trust by the Department and even refund has been granted to the Trust. We have also held that there is no evidence on record to prove that the amount lying in the bank acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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