2025 (8) TMI 210 - AT - Income Tax

Section 132 Warrant Invalid Without Search at Registered Office; Section 153A Proceedings Not Triggered Without Search

The ITAT Delhi held that the warrant of authorization under section 132 was not validly executed as the search did not commence at the registered office ... Warrant of authorization u/s 132 not issued at the premises of registered office of the company or corporate office, factory or godown - HELD THAT:- Mere mention of name on warrants is not sufficient. Though the warrant of authorisation was prepared in the name of the assessee, yet there was no commencement or initiation of search in pursuance of the said warrant. When there is no commencement of search at all, the question of invoking the provisions of sec. 153A shall not arise. DR’s attempt to defend the case relying section 292B of the Act, we are of considered view that same protects only procedural errors of omission or commission, but does not contemplate extrapolation of section 153A of the Act, so as to bring within its ambit non-search cases. The said section cannot be used as a tool to bypass the conditions precedent to the operation of section 153 viz., the execution of a warrant of authorization issued u/s 132 of the Act, by initiation of a search and drawing up a panchnama in the case of the person in whose name warrant might have been issued. In the context of section 292BB of the Act, it was held that the said section only deals with the limited aspect of service of a notice. It was thus held that the section 292BB of the Act, does not confer the AO with any kind of jurisdiction where it legally does not exist. Thus, the findings of the CIT(A) require no interference. The grounds raised by revenue have no substance. ISSUES: Whether a search under section 132 of the Income Tax Act, 1961 ('the Act') can be considered valid if the search warrant is executed at an address different from the registered office or known premises of the assessee company.Whether mere mentioning of the assessee's name in the search warrant or panchnama without actual search or seizure at the assessee's premises constitutes valid initiation and conduct of search under section 132 of the Act.Whether the provisions of section 153A of the Act can be invoked in the absence of a valid search under section 132 of the Act.Whether section 292B of the Act can be relied upon to cure procedural defects or to validate assessments in cases where no valid search has been conducted. RULINGS / HOLDINGS: The Court held that 'though the warrant of authorisation was prepared in the name of the assessee, yet there was no commencement or initiation of search in pursuance of the said warrant' at the assessee's premises, and therefore the proceedings under section 153A of the Act are 'ex-facie illegal, arbitrary and without jurisdiction.'The Court emphasized that 'mere mentioning of name in the panchnama does not lead to the conclusion that a valid search was conducted against the assessee,' and that 'no search was conducted at the premises of the appellant,' thus invalidating the invocation of section 153A.The Court rejected the contention that a search warrant can be validly executed at any place where the authorities suspect relevant documents to be found, unless there is evidence of initiation and conduct of search specifically against the assessee company or by its authorized representative.The Court held that section 292B of the Act 'protects only procedural errors of omission or commission, but does not contemplate extrapolation of section 153A of the Act, so as to bring within its ambit non-search cases,' and that it 'does not confer the AO with any kind of jurisdiction where it legally does not exist.' RATIONALE: The Court applied the statutory framework of sections 132 and 153A of the Income Tax Act, 1961, along with Rule 112(1) of the Income Tax Rules, 1962, which govern the issuance and execution of search warrants and subsequent assessments.The Court relied on precedents distinguishing between 'initiation' and 'conduct' of search, holding that valid invocation of section 153A requires actual commencement and execution of search against the assessee at its premises or at a place where the assessee is represented by an authorized person.The Court followed the principle that 'search is an invasion of Privacy of the assessee and all proceedings connected with search need to be carried out within the framework of the provisions of the Act,' and non-compliance renders the search invalid and assessments null and void.Precedents from coordinate benches and High Courts were considered, including the ruling that 'mere mentioning of name in the panchnama' or presence of a director who did not represent the assessee company during search does not validate the search.The Court distinguished cases where the director signed the warrant on behalf of the assessee from the present facts where no such representation or connection was established.The Court clarified that section 292B and 292BB of the Act address procedural defects and service of notices but cannot be used to confer jurisdiction or validate assessments where the fundamental condition of a valid search under section 132 is not met.