Invalid search authorisation by an incompetent income-tax authority rendered the block assessment unsustainable.

A search authorisation issued by a Joint Director of Income-tax (Investigation) was held to lack statutory competence because a redesignated income-tax authority does not acquire power to issue authorisation unless the governing provisions are amended. The CBDT notification relied on by the Revenue did not expressly empower the Joint Director of Income-tax (Investigation) under section 132(1), so the authorisation was treated as invalid. As the search itself was invalid, the block assessment framed under section 158BC on that search could not be sustained and was cancelled.

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Issues: Whether the search authorization issued by the Joint Director of Income-tax (Investigation) was without statutory competence and, if so, whether the block assessment under section 158BC could survive.

Analysis: The Tribunal relied on the jurisdictional High Court's view that a redesignated income-tax authority does not acquire statutory power to issue search authorization unless the relevant provisions are amended. The CBDT notification relied upon by the Revenue did not specify the Joint Director of Income-tax (Investigation) as an authority empowered under section 132(1). On that basis, the authorization was treated as having been issued by an incompetent authority, rendering the search invalid.

Conclusion: The search authorization was invalid, and the block assessment framed under section 158BC on the basis of that search could not be sustained. The assessment was cancelled.

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