2016 (12) TMI 808 - AT - Income Tax

Assessment Orders Voided Due to Lack of Valid Search: Precedent Emphasizes Search Requirement

The tribunal held that the assessment orders passed under section 153A were null and void as no valid search was conducted against the assessee, following ... Validity of assessment u/s 153A - defective notice - Held that:- The searched premises were not in the occupation of the assessee is being established by the assessee on a different basis that the firm was reconstituted and after reconstitution, the address changed and the new address was brought on the record of the department also on a date prior to search by filing return of income for A. Y. 2010 – 11 and in the sworn statement of the person found at the time of search also, this fact was pointed out that this assessee firm was not having any office at that address at that point of time and hence, in our considered opinion, at least after knowing this fact at the time of search, the department should have conducted search at the correct address of the assessee if the department wanted to search the assessee after finding out the present address of the assessee and after obtaining search warrant for that address. The department carried out the search at the old address only although the new address was brought on record by the assessee by filing return of income for A. Y. 2010 – 11 on 15.10.2010 and the search was conducted on 10.12.2010 i.e. after almost two months. Considering these facts, we hold that the present assessment orders are null and void - Decided in favour of assessee Issues: Validity of search conducted against the assessee for invoking section 153A.Analysis:The appeals were filed against two separate orders of Learned CIT (A) VI, Bangalore for different assessment years. The contention raised by the learned AR of the assessee was that no valid search was conducted in the present case, rendering the orders passed by the A.O. u/s 153A invalid. The AR argued that the search was carried out at a different address from the one noted in the assessment order, indicating that no valid search was conducted against the assessee. The AR relied on a tribunal order in the case of J. M. Trading Corpn. Vs. ACIT to support this contention.The revenue, represented by the DR, supported the orders of the authorities below, emphasizing that a valid search is a prerequisite for invoking section 153A. The DR argued that the assessee failed to establish that no valid search was conducted against them. The tribunal examined the submissions and the material on record along with the tribunal order cited by the AR. It was noted that the address in the return of income for the relevant assessment year was different from the searched premises. The tribunal found discrepancies in the addresses and the reconstitution of the firm, leading to the conclusion that no valid search was conducted against the assessee. The tribunal held that the assessment orders passed u/s 153A were null and void, following the precedent set in the case of J. M. Trading Corpn. Vs. ACIT.The tribunal's decision rendered all six appeals of the assessee as allowed, as no other ground required separate adjudication. The judgment highlighted the importance of a valid search in invoking section 153A and emphasized the need for accurate information to conduct such searches effectively.