Assessee wonrgly described (Status) in Income-tax search warrant

[RAJESH SANGHVI]

The ITs earch warrant u/s 132 contains the name of the Propertietory firm of the Individual and NOt the name of the Individual. The assessment is completed u/s 153A in the name of the Individual after the search is conducted arising from a search warrant. Is such an asst order valid since the search warrant did not contain the name of the Individual and the proprietory firm , in itself is NO entity u/s 2(31).

[CASeetharaman KC]

Briefly the provisions relating to issue of Search Warrant are as follows:

Issuance of search warrant: the authorization issued for search and seizure in the prescribed form is known as ‘search warrant’. Rule 112 of the Income Tax Rules, 1962 governs the procedure for issue of warrant. According to rule 112 (2A) every warrant of authorization shall be in writing with the signature of the authorizing officer along with his seal.

However, there is no requirement that the information on the basis of which search and seizure has been authorized should be given in the search warrant.

Service of search warrant: after the warrant is signed, actual search proceedings begin. The first duty of the authorizing officer before he commences the search is to produce and show a valid search warrant to the asessee. It is the right of the asessee to check and verify that the warrant is complete in all respects and is related to him.  In the instant case the warrant relates to the assessee as it is issued in the name of  the proprietory concern owned by the assessee.There is no requirement in the Income Tax Rules 1962 providing for a copy of warrant of authorization to be given to the person whose books are sought to be searched and seized before the search starts.

Whether blank warrants admissible: according to Jagmohan Mahajan & Anr v. CIT,(1975 (8) TMI 38 - PUNJAB AND HARYANA High Court) a search warrant should be complete in all respects. It must mention the name and address of the person to be searched. Blank authorization without mentioning the name and place is illegal.

Whether search warrant should specify the account books, documents or valuables to be seized: the search warrant need not specify which account books, documents or valuables should be seized as a general authorization of search and seizure of account books, documents, valuables etc is not bad in law. The things or articles to be seized have to be left to the discretion of the authorized officer.

Whether the reason for search be communicated to the assessee: according to Kalpaka Bazaar v. CIT , (1990 (6) TMI 62 - KERALA HIGH COURT) there is no provision of law which insists that the reason shall be communicated to the party concerned and that it is enough if the circumstances of the issuance of the others existed on the date of such issuance.

Fresh authorization against proper person: in case a warrant is issued against a particular person and during the search certain hidden assets are discovered which are claimed by another person and they are accordingly returned to the claimant, there would be no illegality in issuing a fresh authorization against such claimant.

Formation of belief within the meaning of section 132 is an important step and a condition precedent to the authorization of search and seizure. It is nevertheless basically a subjective step. It is one essentially of making up ones’ mind as to whether on the information presented, had or had not formed reason to believe.

AI Summary

Search warrant validity where proprietorship name identifies assessee; warrant need not list documents and belief is subjective. A search warrant in the proprietorship's name can relate to the individual proprietor; issuance requires a written, signed and sealed authorization but need not state the information forming the belief. A warrant must be complete by identifying the person and place; it need not list specific books or valuables to be seized, leaving seizure scope to the authorized officer's discretion. Formation of belief is a subjective condition precedent, and discovery of assets attributable to others can prompt fresh authorization.