TMI Blog2015 (10) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... 53A of the Act was initiated, but was subsequently dropped on account of the fact that the warrant of authorisation was issued against a wrong person. The materials, so seized, at the appellant premises could be utilised for the purpose of assessment. In Dr.Sarad B. Sahai and another vs. Commissioner of Income Tax and others [2010 (9) TMI 383 - ALLAHABAD HIGH COURT] held it is a settled principle of law that even if a search is declared illegal the material found at the time of search can be utilized for the purposes of assessment. Therefore, the co-ordinated post-search investigation and meaningful assessment has to take place. It may be that on account of search being declared illegal, the block assessment under s. 158BC of the Act cannot be made but the regular assessment or the reassessment contemplated under the Act can be made In the light of the aforesaid, the contention that once proceeding under Section 153C of the Act was dropped, proceeding under Section 147 could not be initiated, is patently erroneous. We find that proceeding under Section 153C was initiated on different set of documents and on separate satisfactory note recorded whereas the proceedings which we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 153C of the Act should be initiated against the appellant in relation to the documents, so seized, at the premises of Anurag Pandey. Accordingly, notices under Section 153C read with Section 153A of the Act were issued to the appellant. The satisfactory note, so prepared for initiation of the proceeding under Section 153C of the Act, is as under: A search seizure operation u/s. 132 of I.T. Act, 1961 was carried out on 19.04.2006 at the business and residential premises of Shri Brij Mohan Pandey and his family members. This group (Pandey Group) is engaged in business of manufacturing/ production of Kaththa and Khaini and trading of Kaththa, Khaini and raw material used in manufacturing of Pan Masala. The assessee group also has a Petrol Pump in the name of Yandana Filling Station on G.T. Road towards Fatehpur. During the course of search and seizure operation, various books of accounts, documents and loose papers were found and seized. The details of relevant documents/loose papers are as under:- Panchnama dated 19.04.2006 drawn at premises No.53/12, Naya Ganj, Kanpur covered u/s 132 of the I.T.Act, 1961. Sl. No. Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial Area, Rania, Kanpur was also covered. The warrant of authorisation is in the name of Shivam Gramodyog Pvt.Ltd. The correct name of the assessee is Shivam Gramodyog Sansthan. Action U/s. 153C of the Income Tax Act, 1961 was initiated and a notice u/s.153C read with 153A was issued in the name of Shivam Gramodyog Sansthan. There exists no case in the name of M/s. Shivam Gramodyag Pvt.Ltd. No satisfaction can be recorded in the proceeding in the name of M/s Shivam Gramodyag Sansthan Pvt. Ltd. As such, action u/s.153C taken is not as per the law. With the approval of Addl. Commissioner of Income Tax, Central Range, Kanpur, the proceedings initiated U/S.153C are hereby dropped for A.Y.2001-02 to 2006-07. Proceedings u/s.143(3) for A.Y. 2007-08 are also dropped for the same reasons. The directions of Addl. CIT (Central), Kanpur, are to see feasibility of taking action u/s.147 of the Income Tax Act 1961. The same will be examined separately . 6. On the basis of the incriminating material seized at the appellants factory premises, the assessing authority had reasons to believe that some income had escaped assessment and, consequently, was of the opinion that proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 51,03,960/- The assessee has shown the consumption, sale and closing stock in the Trading Profit and Loss account as under: 1. Consumed Rs.17,24,363/- 2. Sales ₹ 6,41,799/- 3. Closing stock Rs.13,17,201/- The details as per above table do not match with the details as declared in the Trading Profit and Loss account. The figures in the seized documents are higher. Therefore, I have reason to believe that assessee's income which is more than ₹ 1,00 lac, has escaped assessment. The action u/s 147 is being taken with the approval of Learned Commissioner of Income Tax (Central), Kanpur to assess the income escaped from tax. The approval of Learned CIT (Central), Kanpur is received vide letter F. No. CIT(C)/ KNP/ approv/ u/s.148/ 09-10/2611 dated 05.03.2010. Accordingly, notice u/s.148 is being issued. 7. Pursuant to the proceeding initiated under Section 147 of the Act, an assessment order was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 132 of the Act of the books of account or other documents or assessed or requisitioned under Section 132A of the Act, the assessment can only be made under Section 153C of the Act, i.e., under Chapter XIV-B and not under Chapter XIV of the Act. 12. It was thus contended that having regard to the scheme of various provisions of Chapter XIV-B of the Act the provisions of Chapter XIV of the Act are not attracted. The learned counsel contended that consequently proceeding cannot be initiated under Section 148 of the Act and the same was without jurisdiction. It was also contended that in any case the material or the evidence which was seized under Section 132 of the Act could not be considered in reassessment proceeding under Section 148 of the Act. The learned counsel also relied upon a decision in Ram Ballabh Gupta vs. Assistant Commissioner of Income Tax and others, 288 ITR 374. 13. Having heard the learned counsel for the parties, the proposition advanced by the appellant appears to be attractive, but, we find that the submission cannot be accepted. The appellant is trying to confuse two issues in order to gain undue benefit which cannot be permitted. We find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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