TMI Blog2018 (12) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) r.w.s. 153A of the Act in assessee’s case, we find that there are contradictory findings regarding the action taken by the Revenue i.e. Survey and Search, and further in the absence of any documentary proof submitted by the Revenue to prove that the search warrant was issued in the name of the assessee the assessment made u/s. 143(3) r.w.s. 153A is bad in law and void ab-initio. - Decided in favour of assessee. - ITA NO.233, 234, 235, 236, 237 & 239/MUM/2011, ITA NO.4738, 4739, 4740, 4741,4742 & 4743/MUM/2013 - - - Dated:- 30-11-2018 - Shri C.N. Prasad, Hon'ble Judicial Member And Shri Rajesh Kumar, Hon'ble Accountant Member For the Assessee : Shri H.S. Raheja Shri Pratik Jain For the Department : Shri Rajesh Damar Shri Chaudhary Arun Kumar Singh ORDER PER BENCH 1. Assessee has raised the following common grounds in its appeals filed for the Assessment Years 2002-03 to 2007-08 in ITA.Nos. 233 to 239/Mum/2011 against the common order passed by Learned Commissioner of Income Tax (Appeals)-38, Mumbai [hereinafter in short Ld.CIT(A) ] dated 30.09.2010 as under: - 1. On the facts and circumstances of the assessee's case and in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponse to which the assessee filed returns declaring NIL income. The Assessing Officer completed the assessments u/s. 143 r.w.s. 153A holding that the purchases made by the assessee from M/s. Vertex Chemicals of Mumbai are bogus. For coming to the conclusion that the purchases are bogus the Assessing Officer held that since certain signed cheques of the assessee were found in the office premises of M/s. Kores (India) Limited in Mumbai and that Shri S.N. Shah Vice President (Purchase) of M/s. Kores (India) Limited was not only placing orders on behalf of the assessee would also signing the cheques in respect of the assessee's bank account in Mumbai. Assessing Officer also observed that in the inward registered maintained by the assessee at Goa certain entries of purchases made from M/s. Vertex Chemicals were inserted, and the partner of M/s. Vertex Chemicals could not prove transportation of the raw material. Shri Ravi Kanodia could not satisfactorily explain the reason for the insertion of purchases from M/s. Vertex Chemicals in the inward register. It was held that the books of account of the assessee were not reliable and hence the purchases from M/s. Vertex Chemicals are bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee therefore submits that based on these impounded registers the Assessing Officer came to know that the assessee inflated purchases and made disallowance accordingly. Ld. Counsel for the assessee further referring to Para No.6 of the Assessment Order submits that it is the finding of the Assessing Officer that in the course of the Assessment Proceedings statement of oath was recorded from Shri S.N Shah in the course of the search in the case of M/s. Kores Group. It is also the finding of the Assessing Officer that during the course of the survey in the case of assessee company a statement of Shri Ravi Kanodia, whole time director of the assessee company was recorded. Therefore, Learned Counsel for the assessee submitted that on a reading of the entire Assessment Order the Assessing Officer refers to search made in the case of the M/s. Kores Group and survey made in the case of the assessee in the premises of Goa. The books were impounded in the course of the survey u/s. 133A and there has been no search u/s. 132 of the Act in the case of the assessee and no incriminating material were seized in the course of the search, in the case of the assessee. Learned Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atement recorded by the Assessing Officer has any deponent stated that the purchases are bogus. The factual finding of the Ld.CIT(A) that the allegation of interpolation and lack of details of transportation is not applicable to entire purchases made from M/s. Vertex Chemicals supports the case of the assessee that the purchases are genuine. The assessee has given quantity details and quantity tally in the audit report filed with the original return which has not been disproved by the Assessing Officer. In respect of transportation the partner of M/s. Vertex chemicals has stated that they have used their own tempos for transportation and hence the allegation of the Assessing Officer does not hold good that the purchases are bogus. 10. The assessee placed reliance on the following decisions for the proposition that if there is no search warrant, the search assessment made is not valid, bad in law and void ab-initio: - (i) CIT v. Ramesh D. Patil [362 ITR 492 (Guj)] (ii) CIT v. Jolly Fantasy World Ltd [373 ITR 530 (Guj).] (iii) Shiksha O Anusandhan v. CIT [336 ITR 112 (Orissa)] (iv) CIT v. Smt Priyanka Singhania [ITA.No. 163/2015 dated 02.09.2015 of Hon'ble Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry finding given by the Assessing Officer that there was a search in the case of the assessee at business premises of the assessee along with M/s. Kores Group and at the same time there was a finding that there was survey u/s.133A at the business premises of the assessee at Verna, Goa on 19.09.2006. It is also the finding of the Assessing Officer that during the course of the survey at the business premises at Goa inward raw materials registers belonging to the assessee company were impounded u/s.131 of the Act on 19.09.2006. Assessing Officer based only on this inward raw materials registers impounded in the course of the survey came to the conclusion that purchases made by the assessee company from M/s. Vertex Chemicals during the year were not genuine and only entries were made to inflate the purchases. 13. In Para No.6 of the Assessment Order the Assessing Officer refers to the statement of oath recorded from Shri S.N. Shah in the course of the search in the case of M/s. Kores Group. Similarly, he also refers to the statement of Shri Ravi Kanodia, whole time director of the assessee company which was recorded during the course of the survey in the case of assessee. All th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded u/s. 131 of the Act on 19.09.2016 as observed by the Assessing Officer at Para No.5 and the purchases were treated as inflated and bogus only based on these impounded materials in the course of survey. 15. We find an identical issue came up before the Hon'ble Gujarat High Court in the case of CIT v. Ramesh D. Patil (supra), where the Assessing Officer made contradictory statements with respect to assessee being subjected to search and in spite of sufficient opportunities provided by the Tribunal, Revenue could not produce search authorizations. Therefore, the Tribunal concluded that in the absence of search warrant there is no search conducted in the assessee, which was affirmed by the Hon'ble Gujarat High Court observing as under: - Having heard the learned counsel for the parties, we find from the record that the Assessing Officer had made contradictory statements with respect to the assessee being subjected to search. In one order, he noted that no search warrant was issued against the assessee, while in another order, he recorded that not only M/s.J.K.Securities Group, but the assessee was also subjected to search. To clear this confusion, the Tribunal gave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act would be of no avail. Section 124 pertains to jurisdiction of the Assessing Officers. Sub-section (1) thereof concerns the situation where, by virtue of any order or direction under sub-sections (1) or (2) of O/TAXAP/347/2013 ORDER section 120, the Assessing Officer has been vested with jurisdiction over any area within the limits of such area. Sub-section (2) of section 124 provides, inter alia, that where a question arises under the said section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Director General or the Chief Commissioner, etc. Sub-section (3) thereof provides as under: (3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer - (a) Where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment whichever is earlier; (b) where he has made no such return, after the expiry of the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of evidence and no substantial question of law is involved in the present appeals. In this view of the matter, appeals stand dismissed in limini for want of substantial question of law with no order as to costs. 17. In the case of CIT v. Jolly Fantasy World Ltd (supra) the Hon'ble Gujarat High Court held as under: - 10. Law in this regard is clear and explicit. The only question which arises for our consideration is as to whether the notice dated 06.02.1996 satisfies the requirements of Section 158BD of the Act. The said notice does not record any satisfaction on the part of the Assessing Officer. Documents and other assets recovered during search had not been handed over to the Assessing Officer having jurisdiction in the matter. 11. No proceeding under Section 158BC had been initiated. There is, thus, a patent non-application of mind. A prescribed form had been utilized. Even the status of the assessee had not been specified. It had only been mentioned that the search was O/TAXAP/1254/2014 ORDER conducted in the month of November 1995. No other information had been furnished. The provisions contained in Chapter XIVB are drastic in nature. It has draconian con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied, such would go to the root of the matter and the jurisdiction, which has not been expressly conferred by the statute, cannot be invested with the AO for the block assessment. 13. On facts, as recorded herein above, admittedly, there was no warrant authorization on the name of the assessee and hence, the Tribunal has found the assessment as ab initio void, which, in our view, calls for no interference, on facts and on law. 18. In the case of Shiksha O Anusandhan v. CIT (supra) the Hon'ble Orissa High Court held as under: - Section 132 prescribes that the competent authorities are empowered to permit the authorized officers to enter, search, break open, seize, place marks of identification and take other steps as contemplated under subclauses (i) to (v). However, such powers can be exercised against a person upon fulfillment of certain conditions. Firstly, the competent authority must have the information in its possession and, secondly, on the basis of such information it must have the reason to believe that the conditions as stipulated in sub-clauses (a),(b) and (c) of Section 132(1) of the I.T. Act, 1961 exist. Sub-clauses (a), (b) and (c) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be a futile exercise to entertain the appeals where admittedly no search warrant was issued in case of the assessees and the Tribunal held that unless a search warrant was issued, the assessing officer could not invoke the provisions of Section 158 BC of the I.T. Act, 1961 for initiation of block assessment proceedings against the assessees. Thus, we are of the view that in absence of any search warrant in the name of an assessee, search conducted in its premises is not a valid search as contemplated under Section 132 of the I.T. Act, 1961. 19. In the case of Smt Rajkumari Chandak v. ACIT (supra) the Hon'ble Madras High Court held as under: - 16. In order to verify the correctness as to whether there was a search conducted in the premises of the assessee consequent upon the search notice under Section 132 of the Act, this Court called for the records of this Court in the earlier round of litigation in TCA Nos.240 and 241/2000. In the said documents, the objection raised by the learned counsel for the appellant that there was no search conducted by the respondent in the premises of the assessee, be it business premises or residence premises, is found to be justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under: - 17. In the instant case ₹ 17,00,000/- were requisitioned from the S.H.O. Kotwali, Allahabad under Section 132A of the Act, which was seized from three persons. Therefore, the provision of Section 158BD is applicable in the instant case, but the same was not applied by the Department. The assessment was framed after issuing notice under Section 158BC which is not applicable in the instant case, since the assessee was neither searched nor assets were requisitioned from him under Section 132A of the Act. Further, there were no warrant of authorization in the name of the assessee. 18. In view of the above discussion and by considering the totality of the facts and circumstances of the case, it appears that no substantial question of law is emerging from the impugned order. When it is so, then we find no reason to interfere with the impugned order passed by the Tribunal, the same is hereby sustained alongwith the reasons mentioned therein. 19. In the result, the appeal filed by the Department is dismissed. 21. The Coordinate Bench of the Mumbai Tribunal in the case of JCIT v. Latika V. Waman (supra) held that all the persons who are found at place of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrant in the case of the assessee as no such name has been found in the panchnama. In pursuance of the contention of the assessee, this Bench vide order dated 18.12.2012 has directed the DR to produce the copies of warrant in the case of the assessee. In response to the said direction, the Ld. DR has produced the communication of the concerned DCIT dated 02.01.2013 which confirms that only survey u/s 133A of the Act has been carried out in the case of the assessee and as per records no warrant of authorization has been issued in the name of the assessee. The Ld.DR has further confirmed that there is no search action u/s 132 of the Act has been conducted on the assessee. 3.1 Section 153A makes it clear that only in case of a person where a search is initiated u/s 132 or books of account or other documents or any assets are requisitioned u/s 132A, the AO shall after issuing notice assess or reassess the total income of such person for six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition made. The legislative intent is clear from the use of the expression such person in Clause-(a) of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 158BC/153A of the Act. On a reading of the Assessment Order passed u/s. 143(3) r.w.s. 153A of the Act in assessee s case, we find that there are contradictory findings regarding the action taken by the Revenue i.e. Survey and Search, and further in the absence of any documentary proof submitted by the Revenue to prove that the search warrant was issued in the name of the assessee the assessment made u/s. 143(3) r.w.s. 153A is bad in law and void ab-initio. Thus, we quash the assessments made u/s. 143(3) r.w.s. 153A of the Act for the Assessment Years 2002-03 to 2007-08. The additional ground raised by the assessee is allowed. 26. Since the legal ground is decided in favour of the assessee, we are not inclined to go into the other grounds raised by the assessee on the additions/disallowances made while completing the assessments. 27. Now coming to the appeals filed by the assessee in ITA.No. 4738 to 4743/Mum/2013, we observe that these appeals were filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-38, Mumbai [hereinafter in short Ld.CIT(A) ] dated 28.03.2013 in sustaining the additions/disallowances by the Assessing Officer whil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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