TMI Blog2009 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... T List is being revised. 2. Neither learned counsel for the respondent or respondent is present nor there is any request for pass over or adjournment of the case in spite of service having been reported to be sufficient, as per order-sheet. 3. Heard Sri D.D. Chopra, learned counsel for the appellant and perused the records. 4. This appeal has been filed under Section 260-A of the Income Tax Act, 1961 [hereinafter referred to as the 'Act' for the sake of brevity] against the judgment and order dated 30.9.2008 passed by the Income Tax Appellate Tribunal, Lucknow Bench, Lucknow in Appeal No. I.T.A. No. 822/Luc/2009 ITA No. 826/Luc/2006 for the Block Period 1.4.1995 to 17.10.2001. 5. This Court, vide order dated 27.3.2009, admitted the appeal on the following substantial question of law : "I. Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in holding that the assessment was not justified simply because the warrant of search was not in the single name of the assessee but included the name of her husband also. II.Whether the learned Income Tax Appellate Tribunal was justified in law in holding that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r with the First Appellate Authority and the additions made on the basis of the documents seized from third party were not deleted. The First Appellate Authority, however, deleted certain additions made for ineligible expenditure and allowed the appeal partly. 7. Being aggrieved thereof, revenue as well as assessee preferred second appeal before the Income Tax Appellate Tribunal, where for the first time, a preliminary objection with regard to the framing of assessment in individual capacity has been raised by the assessee as the search warrant was in joint name and this fact was not disputed by the Revenue. The said objection was upheld by the Tribunal and accordingly, appeal of the assessee was allowed on the preliminary point itself. Further, the Tribunal observed that there is no necessity to deal with the revenue's appeal on merit and accordingly, dismissed the appeal of revenue by the common order dated 30.9.2008. 8. Hence this appeal has been filed for adjudication of the substantial question, referred to above. 9. In order to answer the question raised in the instant appeal, it would be appropriate to deal with the provisions of Section 132 (1) (c) and other connected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2 of the Information Technology Act, 2000 (21 of 2000), to afford the authorised officer the necessary facility to inspect such books of account or other documents; (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search; (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing: Provided that where any building, place, vessel, vehicle or aircraft referred to in clause(i) is within the area of jurisdiction of any Chief Commissioner or Commissioner, but such Chief Commissioner or Commissioner has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then,notwithstanding anything contained in section 120, it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation from the Chief Commissioner or Commissioner having jurisdiction over such person may be prejudicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor-General or the Chief Commissioner, etc., as the case may be, has to form his belief has not only to be authentic but capable of giving rise to the inference that a person is in possession of money, etc., which has not been or would not be disclosed for the purpose of the Act. In other words, it must necessarily be linked with the ingredients mentioned in the section. 12. The words ''reason to believe' under section 132(1)(c) refer to a belief that money or other asset belongs to a particular individual and such money or other asset represented undisclosed income of that individual. What is important and relevant is the reason to believe that it is the undisclosed income of a person and not in whose physical possession the same is. [ see Gulab Co. v. Supdt. of Central Excise (Preventive) [1975] 98 ITR 581 (Mad.)]. 13. In order to resolve the controversy as to who will be "any person", it will be necessary to comprehend the meaning of "any person". 14. It is pertinent to mention here that the definition of word "any" has not been defined under the Income-tax Act, 1922 but the meaning of word "person" has been defined under Section 2(31) of the Income-tax Act. 15. For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he persons are 'individual' and 'association of persons', which though has not been defined under the Income Tax Act but the expression has been considered by Hon'ble Apex Court in various cases. 19. Now, we deal with the relevant clauses of Section 2 (31) of the Income Tax Act. An ''Individual' means human being because it is used as something distinct from a joint family, firm and company. One cannot give to the word ''individuals' in the expression ''association of individuals' a different meaning to that which the word ''individuals' bears where it appears in the same phrase - CIT v. Ahmedabad Millowners' Association [1939] 7 ITR 369 (Bom.). 20. The expression ''individual' is now a unit of assessment and referable only to a natural person, i.e., a human being, a situation different from that in the 1922 Act - Udham Singh v. CIT [1987] 35 Taxman 275 (Ori.). 21. It is now well-settled that the word ''individual' does not necessarily and invariably always refer to a single natural person. A group of individuals may as well come in for treatment as an individual under the tax laws if the context so requires - CIT v. Shri Krishna Bandar Trust [1993] 201 ITR 989 (Cal.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1] 81 ITR 310 (SC). 27. For forming an ''association of persons' the members of the association must join together for the purpose of producing an income. An ''association of persons' can be formed only when two or more individuals voluntarily combine together for a certain purpose. Hence, volition on the part of the members of the association is an essential ingredient. Even a minor can join an ''association of persons' if his lawful guardian gives his consent. In the case of receiving dividends from shares, where there is no question of any management, it is difficult to draw an inference that two or more shareholders function as an ''association of persons' from the mere fact that they jointly own one or more shares, and jointly receive the dividends declared. Those circumstances do not by themselves go to show that they acted as an ''association of persons' - G. Murugesan Bros. v. CIT [1973] 88 ITR 432 (SC). 28. To ''Associate' is to join in a common purpose or action. ''Association' does necessitate the exercise of volition of those who form the association. The exercise of that volition can be by or on behalf of those who form the association - Estate of Khan Sahi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove to the words ''body of individuals'. The words ''body of individuals' occurring in the Income-tax Act in the definition of the word ''person' in section 2(31), therefore, could only mean a conglomeration of individuals, who carry on some activity with the object of earning income - CIT v. Harivadan Tribhovandas [1977] 106 ITR 494 (Guj.). 33. Thus, the expression ''person' as defined in section 2(31) includes ''an Association of Persons (AOP) or Body of Individuals (BOI), whether incorporated or not'. The Legislature had definitely some purpose in mind while specifically including a BOI in the category of persons along with ''AOP'. It will not be proper to say that ''BOI' must be given the same meaning as attributed to ''AOP' by the Supreme Court in CIT v. Indira Balkrishna [1960] 39 ITR 546. Doing so, will render the entire exercise of defining the expression and incorporating specifically ''BOI' within the ambit of particular category of persons redundant. The expression ''BOI' must be given a definite meaning of its own. ''AOP' and ''BOI' convey two different combinations of persons and it will not be proper to try to apply the principle of ejusdem generis to give the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which they occur, namely, an ''association of persons' and, therefore, the only course open as a matter of interpretation is to attribute the second meaning out of the three meanings set out hereinabove to the words ''body of individuals'. The words ''body of individuals' occurring in the Income-tax Act in the definition of the word ''person' in section 2(31), therefore, could only mean a conglomeration of individuals who carry on some activity with the object of earning income - CIT v. Harivadan Tribhovandas [1977] 106 ITR 494 (Guj.) 37. In view of the provisions of Section 132 of the Income-tax Act, which specifically lays down the conditions precedent for authorizing any officer to enter and search the premises that he had information in his possession in consequence of which he has reason to believe that the person concerned is in possession of money, bullion etc. and only then, he will sign the warrant of authorization. In the instant case, undisputedly, warrant of authorization under Section 132 of the Income-tax Act was issued in the joint name of Mudit Verma and Vandana Verma and as such, the authority who signed the warrant had information in his possession and had ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
