TMI Blog2016 (9) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... his possession in respect of a person and such a person should be specifically named in search warrant and since names of the assessees having not figured in the authorisation of warrant as having been proved on the basis of Form 45 which has been reproduced by us in para 16 hereinbefore, the AO has exceeded its jurisdiction in issuing the notice under Section 158-BC and initiation of the proceedings being invalid, all subsequent action of A.O. including order of assessment is not sustainable in law. We need not go into the issue about issuance of notice under Section 158-BD instead of Section 158-BC particularly in view of the fact that learned counsel for the Revenue fairly conceded that Section 158-BD was not in existence at the time when the search on 23.3.1999 was conducted and the same was inserted with effect from 1.6.2002. After at-least 1.6.2002 an AO does get a right to assess a person, if satisfied on the material found that undisclosed income belongs to any person other than even the person searched.For the reasons assigned and our observation that when a search action under Section 132(1) has to be "person specific" & when admittedly the names of the present assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently assumption of jurisdiction under Section 158BC by the A.O. was bad in law? 2. Whether on the facts and in the circumstances of the case and in law, the I.T.A.T. was right and justified in upholding the order of C.I.T.(A) by which the entire search proceedings against the assessee was annulled and thus, providing a relief of ₹ 41,25,500/- to the assessee? 3. Whether on the facts and in the circumstances of the case, the learned Tribunal was right and justified in coming to the conclusion that the word 'family' or 'family members' mentioned in the search warrant, do not cover wife and daughter of a person? 4. Whether on the facts and in the circumstances of the case, the learned Tribunal had power to adjudicate on the issue of jurisdiction of the A.O. Under Section 158BD, when no such issue was decided by the CIT(A)? 5. Whether on the facts and in the circumstances of the case, the learned Tribunal was right and justified in holding that CIT(A)'s direction, to the A.O., to initiate action under Section 158BD/147 was without authority and CIT(A) has no power to expand the jurisdiction of the A.O.? 6. Whether the findings and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyal who is reported to be residing there. The search concluded on 11.5.1999. It transpires that insofar as O.P. Goyal and Anant Goyal are concerned, who are the heads of the family and in whose case panchnama for search operation was drawn, have preferred to approach the Settlement Commission, New Delhi, in terms of provisions of Section 245-C of the Act, to settle their cases. On perusal of the Assessment Order, it is noticed that the present assessees happen to be the wife and daughter of Anant Goyal. 5. The AO issued notice under Section 158-BC of the Act requiring the assessees to file return of income for the block period 1.4.1989 to 23.3.2000. There appeared to be some error in the initial notice, therefore, revised notice was issued. However, both the assessees filed their returns under protest, for the block period declaring total undisclosed income at NIL, inter alia, contending before the AO that the provisions of Section 158-BC of the Act are inapplicable as there was no warrant of authorisation against the present assessee under Section 132(1), therefore, the notice itself was bad, and raised several other grounds. However, the AO held that the notice issued under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orising search and seizure operation. 9. Learned counsel further contended that the search resulted into undisclosed assets, investment in various immovable properties which were found unrecorded so also jewellery, cash, FDRs etc. and naturally the AO was within his rights to assess such undisclosed income at-least pertaining to the assessees and, therefore, the notice under Section 158-BC was just and proper. He contended that assessment could not have been annulled as has been done by the CIT(A) as well as upheld by the Tribunal. He further contended that before the CIT(A) as well as the Tribunal, the assessees did not produce any material that O.P. Goyal, Anant Goyal and Sumant Goyal including other sister concerns have approached before the Settlement Commission and the terms on which they proposed to settle their cases and only such matters where the assessees were found with undisclosed income, the AO proceeded to move ahead and framed assessment. He thus contended that the order of the Tribunal is required to be reversed. 10. Per contra, learned counsel for the assessee contended that search and seizure operation is a very serious matter and invades privacy of persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property [which has not been, or would not be, disclosed] for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,- (A) the [Director General or Director] or the [Chief Commissioner or Commissioner], as the case may be, may authorise any [Deputy Director], [Deputy] Commissioner, [Assistant Director] or [Assistant Commissioner or Income- tax Officer] (B) such [Deputy Director] or [Deputy] Commissioner, as the case may be, may authorise any [Assistant Director], [Assistant Commissioner or Income-tax Officer], (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to- (i) enter and search any [building, place, vessel, vehicle or aircraft] where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l- (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June,1995, but before the 1st day of January, 1997 serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period: Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter; Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;] (b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of Art. 21 of the Constitution of India, and that citizen's right of privacy is not likely to be disturbed. The power of search and seizure under the provisions of the Act should be exercised only when there is sufficient material in possession of the competent authority on the basis of which it can have reasons to believe that there had been assets which could not be disclosed for the purposes of assessment under the Act. 15.1 Provision of Section 158-BC is attracted where any search has been conducted under Section 132 in the case of any person . In our view from these words it should statutorily mandate that search should have been carried out under Section 132(1) in the name of a person before invoking the provision of Section 158-BC. Person should normally mean name depicted in the warrant of authorisation, and the Authority authorising a search has to have information in his possession in respect of a person and such a person should be specifically named in the search warrant. Though family is not defined under the Income Tax Act but could not be stretched to cover all the family members, namely wife, daughter, children etc. Under the Income Tax Act Person h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, all family members, Sumant Goyal, will not cover the assessees, namely Ms. Umlesh Goyal and Ms. Surbhi Goyal, wife and daughter of Anant Goyal, so as to confer issuance of notice under Section 158- BC, and the Revenue cannot even remotely, cover female members in family insofar as proceedings under Section 158-BC or Income-Tax Act is concerned though for all other purposes wife and daughter will always be part of family and would certainly cover them to be part of Shri O.P. Goyal or/and Shri Anant Goyal. Therefore, in our view the AO had no valid jurisdiction under Section 158-BC to have issued notice and then to proceed ahead in passing an order under Section 158-BC of the Act. We fail to appreciate the reasoning of the Revenue in extending the word family to cover all family members when all are distinct and separate entities. 16.2 We have reproduced Form No.45 dated 23.3.1999 (supra) which is a warrant of authorisation under Section 132 of the Act read with Rule 112(1) of the Income Tax Rules, and perusal of the warrant clearly shows that the names of Ms. Umlesh Goyal and Ms. Surbhi Goyal, has not been written in the warrant of authorisation. Thus, when names of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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