TMI Blog2013 (12) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... the validity of the search. Assessment orders under Section 153A cannot and should not be permitted to become a matter of writ proceedings as the first appellate forum. The first appellate statutory authority can deal with the questions and issues raised before us, whose jurisdiction indeed has been invoked with appeals being preferred by the petitioners. We do not think that the contentions and issues raised, merit or justify their examination and decision in writ petitions in exercise of extra ordinary jurisdiction. Writ petition dismissed - Decided against the assessee. - Writ Petition (Civil) No. 823/2013, Writ Petition (Civil) No. 693/2013, Writ Petition (Civil) No. 995/2013, Writ Petition (Civil) No. 1010/2013, Writ Petition (Civil) No. 1229/2013, Writ Petition (Civil) No. 697/2013, Writ Petition (Civil) No. 964/2 - - - Dated:- 20-12-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Petitioner : Mr. Parag P. Tripathi, Sr. Advocate with Mr. Salil Kapoor and Mr. Vikas Jain, Advocates. For the Respondent : Mr. Rajeeve Mehra, ASG with Mr. N.P. Sahni, Sr. Standing Counsel, Mr. Ruchesh Sinha, Jr. Standing Counsel, Mr. Ashish Virmani, Advocate and Mr. Ashok G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the assessment years 2006-07, 2007-08 and 2008-09 at Rs.1,66,326/-, Rs.3,59,03,210/- and 23,97,18,215/-, respectively. f) This indicates that income for MDLR Resorts Pvt. Ltd. for the assessment year 2008-09 has been assessed at the same figure as had been assessed in the first order. Income for the assessment years 2006-07 stands reduced by Rs.77,50,000/-, but income of assessment Year 2007-08 stands increased by a figure of Rs.77,35,728/-. g) For the sake of record, we mention that addition of Rs.77.50 lakhs made in the first/original order for the assessment year 2006-07 has been treated as income for assessment year 2007-08. In the assessment year 2007-08, addition of Rs.2.45 crores on account of payment to ABG Management was enhanced to Rs.3.25 crores in the second round. Contentions and Submissions 4. Following are the contentions raised by the petitioners, MDLR Group and their reply/response by Revenue/respondents:- i. Assessment proceedings under section 153A of the Act are invalid as no panchnamas were drawn in the names of 22 petitioners. Another aspect of the said contention relating to validity of proceedings under Section 153A of the Act has been also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first round produce relevant documents and material. Various issues were not properly investigated and in light of the various contentions, legal, technical, factual and in the interest of natural justice and fair play, the matter was restored to the Assessing Officer for fresh assessment. Assessing Officer s jurisdiction at the time of fresh assessment was as extensive and broad as at the time of the original assessment. It was not a case of limited remand. iv. The last and the fourth contention of the petitioners is that the Assessing Officer had invoked Section 144A and had sought the opinion of the Joint Commissioner before passing the assessment order. It is submitted that the Joint Commissioner had expressed an opinion, which was prejudicial to the petitioners, without opportunity of being heard. This violates the mandate of Section 144A of the Act. iva. In response, the respondents submit that explanation to Section 144A was applicable and no prejudicial directions were issued to the assessee. Petitioners had also invoked said provision. No prejudice has been caused. Lastly, the respondents submit that the fresh assessment orders under Section 153A have been made sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the panchnamas and were aware that their names did not figure in the panchnamas, is indicative of the fact that the stand/stance was an after-thought. We are satisfied that the search warrants were issued against the petitioners including the 22 petitioners mentioned above. Thus the said contention is to be rejected. 7. After the judgment was reserved vide order dated 24th October, 2013, an application for directions was filed by the petitioner in Writ Petition (Civil) No. 823/2013. We will treat the said application as filed on behalf of the said 22 petitioners. The application makes reference to copy of 14 search warrants and the panchnamas, which were made available to the counsel as per order dated 24th October, 2013. 8. With reference to the search warrants and panchnamas, it is alleged: (a) 22 asseessees, whose names do not figure in the panchnamas, were indicated or recorded in the search warrants after an (*) mark. (b) In the case of 14 petitioners, the addresses mentioned in search warrant were different from their actual addresses. The following chart is relied:- Name Appeared in Warrant Warrant Address Actual Address Alankar Saphir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us the addresses mentioned in the warrants in these cases were incorrect. This was indicative of interpolation and subsequent addition of names. (c) In the case of MDLR Estate Pvt Ltd and Shivgori Builders Private Limited, search warrants were issued for three different locations but their names do not find mention in any of the panchnamas for 2/3 locations. It was improbable that the same mistake could have been repeated. (d) King Buildcon Private Limited, MDLR Developers and Promoters Private Limited, Vinman Estate Private Limited and Rajeev Verma had no connection with or were not operating from MDLR house, S.C.O., 2, 3 and 4, OJC, Jharsa Road, Gurgaon and from the said premises actually and only LKG Builders Private Limited was functioning. 9. We have considered the said submissions but do not find any merit in the same. As recorded above, we had asked for the original files and we are satisfied that the search warrants were also issued against the 22 petitioners whose names do not figure in the panchnamas. We find that documentation, papers etc. relating to these 22 assessees were seized and were duly mentioned in the annexures to the panchnamas. Seizure of the said docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance on the judgment of the tribunal, Mumbai Bench in J.M. Trading Corporation versus Assistant Commissioner of Income Tax. In the said case, search and seizure operations were carried out in respect of a group. The respondent-assessee therein was a partnership firm and had claimed that they had no relation or business connection with the group subjected to search. The panchnamas did not articulate the name of the respondent-assessee. In the appellate proceedings, copy of warrant obtained from the office of Director General (Investigation) revealed name of the respondent-assessee. After examining the factual matrix, the tribunal came to the conclusion that though search was initiated by issue of warrant, but no search was actually conducted in the case of the respondent-assessee. It was further recorded that the premises where the assessee was functioning/found, was not searched. Bombay High Court dismissed Revenue s appeal in view of the finding of fact that no search was conducted against the assessee as the premises occupied by the assessee were not entered upon and searched by the authorized officer. It was observed that no substantial question of law arose. Special Leave to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] 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. 16. Section 153A is a non obstante provision which is invoked in case of a person where the search is initiated against him under Section 132 of the Act or books of accounts or other documents or any other assets which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been used under various sections of IT Act including ss. 158BA(1), 158BC, 158BD, 158BE(1)(a) and (b) and 253A(1)(a) and (b) and also in the light of examining the dictionary meaning of the word initiate as extracted by the High Court of Rajasthan at para No. 34 of its judgment in the case of Rajasthan Udyog referred to supra and also in the light of the above observations of the Hon ble Supreme Court in the case of Omprakash Jaiswal (supra) we may safely assign to the expression search initiated ; the meaning search taken or search commenced or making beginning of the search . If this is meant by expression search initiated it cannot be held that the only signing of the authorizations by the Director of IT, Bangalore, on 30th Dec., 1996 to make a search in the premises of the respective assessees would amount to initiation of search . The signing of the authorizations would at best amount to taking of the decision by the said authority to initiate search in the premises of respective assessees but not initiation of search itself. 18. In view of the aforesaid position, referring to Section 246A, it was held that the assessee (respondents therein) aggrieved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l documents/papers relating to the 22 petitioners were seized and were included in the list of the seized documents/papers attached to the panchamas. Thus, there cannot be any dispute or debate regarding the question of time limit or limitation period for completion of assessment under Section 153A and indeed the said issue is foreclosed. In the facts of the present case, the contention should be and is rejected. 22. The expression panchnama has not been defined in the Act. Section 132(13) makes provisions of Code of Criminal Procedure 1971 relating to search and seizure applicable to searches under the said section. Sub-section (5) to Section 100 of the said code states that search shall be made in presence of witnesses and list of things seized during the search shall be prepared by the officers or other persons and signed by such present witnesses. A copy of the said list prepared and duly signed by the witnesses shall be delivered to every occupant or person at the place searched, is mandated and required under sub-section (6) to Section 100 of the code. As per the manual prepared by the Revenue relating to search and seizure operations, at the end of search or when it is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Section 153A of the Act. Panchama is drawn when the search stands concluded finally or temporarily. The effect of the said lapse on merits or to the value or degree of importance to be given to the material seized is a matter of appraisal and merits and not a question to be examined and answered in these writ petitions. The view, we have taken finds support from the decisions of the Supreme Court in I.T.O. vs. Seth Brothers Ors. (1969) 74 ITR 836(SC) and Puran Mal vs. Director of Inspection (1973) 93 ITR 505 (SC). Reference can also be made to the decision of this court in Commissioner of Income Tax vs. S. K. Katyal (2009) 308 ITR 168 (Del.), wherein the expression panchnama was elucidated and explained in the following words:- 15. These provisions demonstrate that a search and seizure under the said Act has to be carried out in the presence of at least two respectable inhabitants of the locality where the search and seizure is conducted. These respectable inhabitants are witnesses to the search and seizure and are known as panchas . The documentation of what they witness is known as the panchnama. The word nama , refers to a written document. Its type is usually determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d issues which are to be and should be raised before the appropriate appellate authorities under the statute. We have already noted the contention of the petitioners and respondents in this regard. We have also read the orders passed by the Commissioner under Section 264 of the Act, which the parties do not challenge and question. The interpretation which can and should be given to the said orders and whether or not there was violation of the requirements of Section 144A can be examined in the appellate proceedings. 27. Assessment orders under Section 153A cannot and should not be permitted to become a matter of writ proceedings as the first appellate forum. The first appellate statutory authority can deal with the questions and issues raised before us, whose jurisdiction indeed has been invoked with appeals being preferred by the petitioners. We do not think that the contentions and issues raised, merit or justify their examination and decision in writ petitions in exercise of extra ordinary jurisdiction. The first appellate authority should and under the Act, can examine the said contentions/issues and pass appropriate orders. The first appellate authority can also examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
