TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the search and seizure proceedings under section 132 of the Income-tax Act were vitiated by violations of the statutory safeguards and constitutional protection; (ii) Whether Chapter XIV-B proceedings and notice under section 158BC could be initiated in the absence of valid search consequences.
Issue (i): Whether the search and seizure proceedings under section 132 of the Income-tax Act were vitiated by violations of the statutory safeguards and constitutional protection.
Analysis: The search was provisionally concluded and resumed after a 14-day gap without convincing justification. Documents and records were placed in an almirah and sealed without a satisfactory explanation for not seizing them when found, which the Court treated as contrary to the requirement governing seizure and the power to resort to a prohibitory order only where seizure is not practicable. The retention of seized material beyond the permissible period was also found to be contrary to the statutory scheme. The contemporaneous statement recorded in the presence of panch witnesses was accepted as genuine, and the surrounding circumstances were held to show arbitrary exercise of power amounting to legal malice.
Conclusion: The search and seizure proceedings were invalid and unenforceable against the petitioners.
Issue (ii): Whether Chapter XIV-B proceedings and notice under section 158BC could be initiated in the absence of valid search consequences.
Analysis: Block assessment under Chapter XIV-B is attracted only where the search yields a legally sustainable basis for assessment of undisclosed income. Since the foundational search action was held invalid and no justifiable basis for proceeding under the special block assessment provisions was established, the notice and consequent action could not stand.
Conclusion: Chapter XIV-B could not be invoked and the notice under section 158BC was liable to be quashed.
Final Conclusion: The original petition succeeded, the impugned search-related proceedings were declared invalid, and the respondents were restrained from proceeding under the special block assessment regime.
Ratio Decidendi: Where search and seizure under section 132 is conducted in breach of statutory safeguards and without a lawful basis, the resulting block assessment machinery under Chapter XIV-B cannot be invoked against the assessee.
TaxTMI 
