TMI Blog2021 (3) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... h operations conducted by it on the husband of the assessee namely Shri Munna Lal Verma , on 08.12.1999. Thus, the proceedings conducted u/s 158BD cannot be held to be bad in law in the instant case, which is in consonance with ratio of decision of Hon ble Apex Court in the case of Gunjan Girishbhai Mehta [ 2017 (3) TMI 1529 - SUPREME COURT] . - Miscellaneous Application (M.A. )No. 16/Alld./2017 arising out of ITA No.135/ALLD/2006 - - - Dated:- 9-3-2021 - SHRI. VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER Appellant by : Mr. A. K. Singh , Sr. DR Respondent by : Mr. N. C. Agrawal , CA ORDER PER SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER : This Miscellaneous application (MA) bearing number 16/Alld./2017 arising out of ITA no. 135/Alld./2006 for Block Period 01.04.1989 to 08.12.1999 is a second Misc. Application filed by Revenue with Income Tax Appellate Tribunal, Allahabad( herein after called the tribunal ) on 25th May, 2017, seeking reconsideration of dismissal of first MA filed by Revenue bearing no. M.A. No. 19/Alld/2016 , by tribunal, vide orders dated 28.11.2016 and also reconsideration of decision of the tribunal in quashing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed off and as per AO , in any case incriminating documents and undisclosed assets belonging to the assesssee were found and seized during search operations conducted by Revenue on Mr. Munna Lal Verma , on 08.12.1999 and hence proceedings initiated against the assessee u/s 158BD are valid. The AO passed Block Period Assessment order , dated 30.01.2004 for Block Period 01.04.1989 to 08.12.1999, u/s 158BC(c ) read with Section 158BD of the 1961 Act , computing undisclosed income of assessee to the tune of ₹ 16,15,770/- as against undisclosed income of Rs. Nil declared by assessee. While framing assessment order, the AO also disposed of the contentions of the assessee that no incriminating documents and undisclosed assets belonging to assessee were found during the course of search and seizure operations conducted by Revenue against Shri Munna Lal, wherein the assessee has contended that the assets were disclosed in wealth tax returns filed by the assessee with Revenue. 2.3 Aggrieved by assessment framed by AO, the assessee filed first appeal with ld. CIT(A). The main legal objections raised by assessee before ld. CIT(A) was that no incriminating material and undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 132(1) , the designated authority of the Revenue can take the search and seizure action only if they have the information in their possession and has the reasons to believe relating to the particular person. In our opinion, it cannot be a person who is not in existence the assessment. Under Chapter XIVB Assessment has to be made in consequence of a search carried out u/s. 132 to assess the undisclosed income of the assessee. If the search itself is invalid, we are of the view that no assessment can be made in consequence of such search. The learned DR even though relied upon the order of the CIT(A) but could not adduce any evidence or any case law which has taken a contrary view. The provision of Section 158BD will also apply where the Assessing Officer is satisfied that any undisclosed income belongs to any person other than the person with respect to him search was made u/s. 132 since the person in respect of search was made u/s. 132 was not in existence and it is invalid , therefore, the provision of Section 158BD in our opinion can also not apply. We therefore agree with the contention of the learned AR and quash the assessment made on the assessee in consequence of the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the issue of validity of search but only assessment framed was quashed as the search was conducted on deceased person 2.6 After the dismissal of the aforesaid first MA on 28.11.2016 by tribunal, Hon ble Supreme Court pronounced a judgment dated 21.03.2017 in the case of Gunjan Girishbhai Mehta v. Director of Investigation reported on (2017) 393 ITR 310(SC), wherein Hon ble Apex Court held as under: 3. Notice under Section 132 of the Income Tax Act, 1961 (for short the Act ) was issued in the name of a dead person. The said notice was duly received by the present petitioner as the legal heir of the dead person. Notice of assessment under Section 158BC of the Act was issued and in the assessment proceedings, where the income was declared to be 'nil', the present petitioner as the legal heir had participated. Thereafter, notice under Section 158BD of the Act was issued to the present petitioner on the basis of information coming to light in the course of search. Aggrieved, the petitioner moved the High Court and on dismissal of the writ petition filed, the present Special Leave Petition has been instituted. 4. The point urged before us, shortly put, is that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istake apparent from record being in conflict with decision of Hon ble Supreme Court , which mistake apparent from record is sought to be rectified by Revenue through this second MA. 2.8 We have heard this MA through virtual court through video conferencing mode. The ld. DR opened arguments and submitted that block period assessment framed by Revenue u/s 158BD read with Section 158BC(c ) against the assessee was quashed by tribunal on the ground that search was conducted by Revenue against deceased person. It was submitted that search took place u/s 132 of the 1961 Act on 08.12.1999 against husband of the assessee Shri Munna Lal Verma . The said Munna Lal Verma had expired on 06.10.1999. The assessee is wife of deceased Shri Munna Lal Verma. There was incriminating documents and undisclosed assets belonging to the assessee were found and seized by Revenue during the course of search proceedings against Shri Munna Lal Verma . It was submitted by ld. DR that search warrant was duly executed on 08.12.2009 through legal heirs of Mr. Munna Lal Verma. The proceedings against the assessee was initiated u/s 158BD of the 1961 Act and the assessee co-operated and participated in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceedings before the AO . Our attention was drawn to page 36 of the paper book and it was submitted that Return of Income pursuant to notice u/s 158BD, was filed by assessee Under Protest . It was submitted by ld. Counsel for the assessee that Hon ble Supreme Court judgment is dated 21.03.2017, while the appellate order was passed by tribunal on 01.02.2016 and first Misc. Application filed by Revenue was dismissed by tribunal on 28.11.2016. It was submitted by ld. Counsel for the assessee that MA filed pursuant to Hon ble Supreme Court cannot be given cognizance. It was submitted that as per aforesaid judgment of Hon ble Supreme Court in the case of Gunjan Girishbhai Mehta(SC), the tax-payer must have participated and co-operated in the proceedings, while the assessee has not co-operated as she has filed return of income under protest . It was submitted that no incriminating material and undisclosed assets were found and seized during the course of search conducted by Revenue against Sh. Munna Lal which could evidence that the assessee had any undisclosed income. Our attention was drawn to statement of fact, which is placed at page 1/pb. It was submitted that none of the cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l objections raised by assessee, by speaking order . The ld. CIT(A) has partly allowed the appeal filed by the assessee. On perusal of assessment order and the appellate order passed by ld. CIT(A) and based on material available on record, we have observed that the assessee never raised the issue of search being declared invalid on the grounds that the search warrant was issued by Revenue in the name of deceased person, as the search warrant was executed on 08.12.1999 , while Shri Munna Lal died on 06.10.1999. The assessee never agitated before authorities below that all consequential proceedings to aforesaid search are to be declared as invalid and non-est in the eyes of law on the grounds that search warrant was issued in the name of deceased person. The assessee participated and co-operated in assessment proceedings as well appellate proceedings. It is equally true that the assessee did raised the legal challenge but the same was on the ground that no satisfaction was recorded before initiating proceedings u/s 158BD against the assessee as well that no incriminating material and undisclosed assets pertaining to the assessee were found during the course of search and seizure oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on 08.12.2009, and hence all consequential proceedings are bad in law and liable to be quashed which led to quashing of block period assessment order framed by Revenue against the assessee under the provisions of Section 158BD read with Section 158BC(c ) of the 1961 Act. The tribunal vide aforesaid appellate order dated 01.02.2016 , held as under: 5. We have heard the rival submissions and carefully considered the same along with the order of the tax authorities below. At the outset, learned AR before us vehemently contended that the husband of the assessee has expired on 6.10.1999 and the search warrant and search has taken place in the case of husband of the assessee on 8.12.1999, i.e. after the date of search and this fact is apparent from the assessment year. The block assessment is made in the case of the assessee only in consequence of the search taken place if the search is invalid and such warrant is on a deceased person the assessment order passed in consequence of the search cannot be valid one. The fact that the search warrant is on Late Munna Lal husband of the asessee is not denied by the DR which is also a fact which is apparent from the order that Late Munna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Misc. Application has been moved on the contention that this Tribunal does not have the jurisdiction to adjudicate upon the issue of validity of the search conducted u/s 132 of the Act. The issue about the jurisdiction of the Tribunal to decide the validity of the search is pending before the Special Bench. We may point out that in the order of the Tribunal dated 01/02/2016 the Tribunal has not adjudicated the issue relating to the validity of the search. The tribunal has quashed the assessment as the search has been carried out on a deceased person. In view of this fact, we do not find any mistake in the order of the Tribunal dated 01/02/2016. We , therefore , dismiss the Misc. Application filed by the Revenue. 5. In the result , the Misc. Application of the Revenue stands dismissed. Thus, the tribunal vide orders dated 28.11.2016 dismissed the Misc. Application filed by Revenue on the grounds that the tribunal has quashed the assessment as search was carried out by Revenue on the deceased person and hence consequential assessment made u/s 158BD read with Section 158BC(c ) of the 1961 Act on the assessee who is wife of person searched , cannot survive and was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search warrant is invalid the consequential action under Section 158BD would also be invalid. We do not agree. The issue of invalidity of the search warrant was not raised at any point of time prior to the notice under Section 158BD. In fact, the petitioner had participated in the proceedings of assessment initiated under Section 158BC of the Act. The information discovered in the course of the search, if capable of generating the satisfaction for issuing a notice under Section 158BD, cannot altogether become irrelevant for further action under Section 158BD of the Act. 5. The reliance placed on the decision of the High Court of Punjab and Haryana in CIT v. Rakesh Kumar, Mukesh Kumar [2009] 313 ITR 305/178 Taxman 224 against which Special Leave Petition [SLP(C) NO. CC 3623/2009] has been dismissed by this Court and the decision of this Court in Asstt. CIT v. A.R. Enterprises [2013] 350 ITR 489/212 Taxman 531/29 taxmann.com 50 (SC) are on entirely different facts. 6. In Rakesh Kumar, Mukesh Kumar (supra) the challenge was to the proceedings of assessment under Section 158 BC of the Act on the basis of a search warrant issued in the name of a dead person. The issue in A.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellate order dated 01.02.2016 passed by tribunal in contravention of judgment of Hon ble Supreme Court in the case of Gunjan Girishbhai Mehta(supra) be recalled , and as we have observed that the decision of tribunal vide appellate order dated 01.02.2016 is directly in conflict with the ratio of law laid down by Hon ble Supreme Court in the aforesaid judgment, hence we are constrained to recall the order dated 01.02.2016 passed by tribunal in ITA no. 135/Alld/2016 for Block Period 01.04.1989 to 08.12.1999. Our decision is fortified by the decision of Special Bench of ITAT, Delhi in the case of I.T.O. v. Padam Prakash (HUF), reported in (2010) 127 TTJ 311(Delhi-SB), wherein Special Bench was pleased to hold, as under: This miscellaneous application has been filed by the Revenue pointing out a mistake in the order dt. 26th Sept., 2008 passed in MA No. 5/Delhi/ 2008 arising in ITA No. 2964/Delhi/2002. 2. The Special Bench of the Tribunal in ITA No. 2964/Delhi/2002 in the case of Padam Prakash had held that enhanced compensation received by the assessee from the acquisition authorities in respect of its land was to be assessed on receipt basis. The Tribunal also passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh (HUF), 21, Shivaji Road, Meerut, C/o M/s Malik Co., 305/7, Thapar Nagar, Meerut. 3.CIT 4.CIT(A), Meerut. 5.Departmental Representative Dy. Registrar, ITAT 3. The Revenue has moved present miscellaneous application, pointing out that observations made in para No. 2 in the above order are wrong and are constituting a mistake apparent from record. It has been pointed out that Hon'ble Punjab Haryana High Court is not the jurisdictional High Court as the case pertains to Uttar Pradesh. 4. During the course of hearing of this miscellaneous application, it was brought to the notice of the parties that Hon'ble Supreme Court has now decided the issue in the case of CIT v. Ghanshyam (HUF) in Civil Appeal No. 4401 of 2009 vide decision dt. 16th July, 2009 [reported at [2009] 224 CTR (SC) 522 : [2009] 26 DTR (SC) 129-Ed.] finally and, therefore, the decision of Hon'ble Punjab Haryana High Court is no more a good law. The Revenue should suitably modify the miscellaneous application having regard to the final decision of the Supreme Court. 5. However, no fresh application has been filed as directed. The Special Bench is sitting for the third ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the learned Departmental Representative and also carefully and maticulously studied the entire judgment of the Hon'ble Supreme Court in Singhania's case in the light of the order passed by us on 30th December, 1993 in the appeal. We have also carefully gone through the reasons given by our learned Brothers in the MA order. In our considered view, the order passed by us on 30th December, 1993 now requires rectification in terms of section 35 of the Wealth-tax Act, 1957. But before we give our detailed reason for rectifying the appeal order of this Tribunal dated 30th December, 1993, we would, at the very outset with a view to clear and dispel any doubt or dispute say that the law enunciated by the Supreme Court should be and is the law of this country as enshrined in Art. 141 of the Constitution of India. It will, therefore, not only be futile, but even ridicuous, now to embark upon any debate, argument or discussion, by referring to any decisions or authorities on this very obvious proposition that the law enunciated and declared by the Supreme Court shall be law of the land. But, since it is to move in the world of law only on the crutches of precedents, useful refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reports (207 ITR) that sub-clause (a) of clause (i) and sub-clause (e) of clause (ii) has to be read, understood in the manner indicated in this judgment hereinabove. 8. We have highest regard and respect for our learned Brothers who passed the order in MA No. 18/Ahd/1994 dismissing the Revenue's miscellaneous application under section 35 of the Act on this very issue and there is least doubt about their competence and ability to comprehend any controversy and adjudicate the same judiciously. But, it appears to us on going through the reasons given by them in the said MA order that they got swayed away by the fallacious arguments advanced by the assessee's authorised representative that the appeal before the Hon'ble Supreme Court in the case of Ashok K. Parikh (supra) from the Hon'ble Gujarat High Court was pending and was not decided or disposed off by the Hon'ble Supreme Court while disposing Singhania's (supra) case and other appeals pending on similar issue and controversy. Our learned Brothers have also agreed and accepted the arguments advanced in that case by the assessee's authorised representative that in spite of the decision of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s application under section 35 of the Act and amend the appeal order dated 30th December, 1993 by bringing it in conformity with the law of the land enunciated, pronounced and declared by the Supreme Court in Singhania's case. 11. Let us take an extreme view that we dismiss this miscellaneous application of the Revenue as has been done by our learned Brothers in the MA order. The matter will not come to end here, but will travel to Their Lordships of Gujarat High Court either under section 27 of the Wealth-tax Act or by way of application by the Revenue under Art. 226/227 of the Constitution of India and surely the Hon'ble Gujarat High Court on the strength of the judgment of Hon'ble Supreme Court in Singhania's case (supra) will direct this Tribunal to follow respectfully the judgment of the Supreme Court in Singhania's case and amend the appeal order and bring it in conformity with the law of the land declared by Supreme Court in the said case of Singhania. When this is going to be the final and ultimate end result, we see no justifiable reason to dismiss this Revenue's application and involve the Revenue and the assessee into frivolous and vexati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well reasoned judgment of the Hon'ble Supreme Court in Singhania's case. To be more candid, the debate ended upon the delivery of the judgment by the Hon'ble Supreme Court in Bharat Hari Singhania's case on 17th February, 1994 (supra) and the only course open to this Tribunal or any other authority functioning under the Wealth-tax Act is to correct the orders by bringing it in consonance and in conformity with the said judgment of the Highest Court of this country. This is what we wish to do in this case. 17. We, therefore, in the end, in terms of section 35 of the Wealth-tax Act amend and reverse our order dated 30th December, 1993 passed in the main appeals filed by the Revenue and uphold the valuation done by the Assessing Officer in respect of the unquoted equity shares of the company as declared by the assessee in the various respective assessment years. 18. The application of the Revenue is allowed and consequently, the Revenue's appeal also stands allowed. In this case also the tribunal while adjudicating second MA filed by Revenue , allowed the MA filed by Revenue and reversed the main appellate order passed by tribunal to bring it in lin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y judgment passed in contravention of law declared by Hon ble Supreme Court is per incuriam and cannot be upheld , and thus it could be said that mistake apparent from records has crept in the judgment passed by any inferior Court in case it is passed in contravention with the law declared by the judgment of Hon ble Supreme Court. It is equally true that Hon ble Supreme Court interprets the law and the judgment declaring law shall go back to the date when law was originally enacted , unless specified in the judgment. The order passed by tribunal dated 01.02.2016 is in variance/contravention with the ratio of law laid down by Hon ble Supreme Court in the case of Girish Gunjanbhai Mehta(supra) and this decision of the tribunal although passed prior to Hon ble Supreme Court judgment cannot be sustained in the eyes of law owing to judgment passed by Hon ble Supreme Court in the case of Girish Gunjanbhai Mehta(supra). We have observed that the decision of tribunal vide appellate order dated 01.02.2016 is directly in conflict with the ratio of law laid down by Hon ble Supreme Court in the aforesaid judgment, hence we hereby order recalling of the appellate order dated 01.02.2016 passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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