2013 (3) TMI 868 - AT - Income Tax

Invalid assessment orders under section 153A due to lack of incriminating evidence

A.C.I.T., Circle 3 (1), Circle-3 (1), Gwalior Versus Shri Pradeep Shivhare, Smt. Poonam Shivhare, Smt. Divya Shivhare, Smt. Reena Shivhare

The Tribunal upheld the decision that assessment orders under section 153A were invalid as the search warrant did not mention the assessee's name and no ... - Issues Involved: 1. Validity of assessment orders u/s 153A.2. Conditions for invoking jurisdiction u/s 153A and 153C.3. Use of seized documents for assessments.Summary:1. Validity of Assessment Orders u/s 153A:The primary issue was whether the Ld. CIT(A) was justified in holding the assessment order as invalid, particularly when the search warrant mentioned the name of the proprietary concern of the assessee. The Tribunal noted that a search operation u/s 132 was conducted at the residential premises of Shri Chironjilal Shivhare and his family members, including the assessee. However, the assessee objected to the initiation of proceedings u/s 153A, arguing that no search warrant was issued in his individual name. The Ld. CIT(A) found that the conditions of section 153A were not satisfied as no search was conducted u/s 132 against the assessee, and the assessment orders were quashed. The Tribunal upheld this decision, noting that the search warrant did not mention the assessee's name, and no incriminating documents were found against the assessee during the search.2. Conditions for Invoking Jurisdiction u/s 153A and 153C:The Tribunal emphasized that for invoking jurisdiction u/s 153A, it is mandatory that a search is initiated under section 132 or books of account or other documents are requisitioned under section 132A. The Tribunal cited the case of Dr. Mansukh Kanjibhai Shah vs. ACIT, where it was held that not only the warrant of authorization should be issued in the name of the assessee, but the search must also be conducted. In the present case, since the search was conducted at a different address and not at the premises of Asha Oil Industries, the conditions for section 153A were not met. The Tribunal also noted that the conditions for section 153C are different and were not fulfilled in this case, thus the proceedings u/s 153A could not be converted into proceedings u/s 153C.3. Use of Seized Documents for Assessments:The Tribunal referred to the Supreme Court's decision in Pooran Mal vs. Director of Inspection (Investigation), which held that even if a search is illegal, the seized documents can be used for assessments. The Tribunal directed that if any material indicating the assessee's unaccounted money was found during the search, the department is not precluded from using such material against the assessee under different provisions of law.Conclusion:The Tribunal dismissed all the departmental appeals, confirming the order of the Ld. CIT(A) that the assessment orders u/s 153A were invalid. The Tribunal also directed the Assessing Officer to proceed on the basis of any incriminating material found during the search against the assessee as per law.