TaxTMI 
TaxTMI 
2001 (5) TMI 153
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....Annexure 1/1 to 1/4 and 2/1 to 2/5) as also of Shri Ashok Kumar Soni, the assessee were recorded. The statement of Shri Shree Chand Soni was ratified by Shri Ashok Kumar Soni. During search, some incriminating documents/materials were also found including Annexure A-1/5 which contained bills, in the name of assessee, relating to purchase of building material, Shri Shree Chand Soni disclosed, in his statement, an additional income of Rs. 26,74,720 in respect of various assets and investments. This disclosure of Rs. 26,74,720 as income from undisclosed sources, included income of Rs. 14,40,000 on account of unexplained investment in construction of house, which related to his son Shri Ashok Kumar Soni, the present assessee. The AO issued notice to assessee under s. 158BC r/w s. 158BD on 16th Oct., 1998 (Annexure 7), calling for return and the same was served on assessee the same day. In compliance thereof, the assessee filed return for the block period on 2nd Nov., 1998, showing undisclosed income of Rs. 7,50,000. But this return was filed under protest objecting/protesting because the notice issued and served on the assessee was under s. 158BC r/w s. 158BD. Thereafter, another notic....
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....related and assail the legality/validity of search, search warrant notices issued and AO's jurisdiction to assess with respect to assessee-appellant, so we may preferably and for convenience as well, take them up all together for discussion/decision. 8. The learned authorised representative of assessee has contended that s. 132(1)(c) refers to "any person" and so the search would be in the case of any person. He has contended that the term 'person' has been defined in s. 2(31). He has contended that no independent search could be authorised in the case of assessee. He has contended that s. 158BC can be invoked only when an independent search is initiated. He has contended that residential house is not a hidden asset. He has contended that this construction of house was also discussed and assessed also in the hands of assessee in asst. yrs. 1991-92 upto 1996-97. He has contended that the issue was raised before the learned CIT(A) also but the learned CIT(A) instead of going into the merits of the issue of legality/validity of search warrant only held that it was not justifiable. The learned authorised representative of assessee has referred to his w/s furnished before learned CIT(A....
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....0) 159 CTR (Del) 204 : (2000) 242 ITR 302 (Del). 11. He has contended that non-striking off/cutting the1 non-applicable portion of search warrant results in non-application of mind and renders the search invalid. He has cited Dwarka Prosad Agarwalla vs. Director of Inspection (1981) 25 CTR (Cal) 58 : (1982) 137 ITR 456 (Cal) at 470, Jagmohan Mahajan & Anr. vs. CIT & Ors. 1976 CTR (P&H) 316 : (1976) 103 ITR 579 (P&H). He has contended that even if the search warrant contains mention of "and family", but even then it cannot be a valid search warrant. 12. The learned authorised representative of assessee has referred to s. 158BC and contended that this section provides for assessment of undisclosed income as a result of search under s. 132 or requisition under s. 132A and that, unless search or requisition is there, there can be no assessment of undisclosed income. He has contended that the accrual of jurisdiction should be specified as to whether it is under s. 158BC or to under s. 158BD. He has cited, Premlata Kedia vs. Dy. CIT 22 Tax World 481 (Jp) and has also filed copies of a number of other citations on this count. He has contended that the defect in notice pertains to substa....
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.... sub-s. (4) of s. 132. He has also contended that the statement of Shri Shree Chand Soni was recorded regarding this house in which the entire family has been residing. He has contended that the search party recorded the statement of almost all the persons residing in that house and in the presence of all the family members. He has contended that as the search against assessee is legally valid so Chapter XIV-B will apply. He has also contended that the names of all the members of family are generally not known so normally the search warrant is issued in the name of head of family along with "and family" and so there is nothing wrong in this regard. He has also contended that the assessee filed two returns. He has contended that the notice was originally issued under s. 158BC r/w s. 158BD and his return of income was filed by assessee on 2nd Nov., 1998, mentioning therein the date of notice as 16th Oct., 1998, and thus the assessee made compliance of the said notice. He has contended that the assessee then filed second return on 20th Nov., 1998, which was in compliance of notice dt. 5th Nov., 1998, served on assessee on 14th Nov., 1998, and the assessee has paid tax also. He has con....
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....al available with the Department on the basis of which the Department has proceeded against the assessee. He has contended that the statement of Shri Shree Chand Soni was recorded on oath and the same is accordingly binding. He has cited 1 SCC 508 and Asstt. CIT vs. Yerra Nagabhushanam (1998) 144 CTR (AP) 467 : (1998) 226 ITR 843 (AP). He has contended that most of the cases cited by the learned authorised representative of assessee before the Tribunal was also before the CIT(A) and have been considered and discussed in the report submitted by AO to CIT(A). He has also contended that most of the cited cases are decided on Evidence Act and they are not applicable in cases under IT Act, 1961. He has contended that the cases are distinguishable on facts also. 14. We have considered the rival contentions, the relevant material on record as also the cited decisions furnished/produced before us. 15. As quite lengthy and elaborate contentions have been raised before us by both the sides, we may, in order to be precise and to concentrate on the exact issues raised before us, as contained in the grounds, proceed to decide the matter ground-wise. 16. First we take up ground No. 2.3. The r....
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....rned, we will deal with the same elsewhere in the relevant ground. Be that as it may, we agree with the learned counsel for assessee that the legality/validity of the search is very much justifiable and subject to judicial scrutiny as has also held in 73 ITD 49 and 67 ITD 446 cited by the learned counsel for assessee. 18. Now we take up ground No. 2.2 In (1998) 60 TTJ (Mad) 758, the Tribunal, Madras held that when the search warrants were issued in the name of B and M, father and uncle, respectively of U, the appellant, but not in the name of appellant (U), the AO did not derive jurisdiction/power to issue notice to appellant under s. 158BC. In (1998) 96 Taxman-Magazine 24, the search and seizure operation was conducted at the premises of assessee's husband, the AO issued notice under s. 158BC to assessee who filed return showing undisclosed income at nil. While assets were not found to be assessee's undisclosed income, AO treated rental and interest income declared in block return as undisclosed income as assessee had not filed return for asst. yr. 1995-96. In these circumstances, Tribunal, Nagpur held that when there was no search in assessee's own case, the issue of notice unde....
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....made for the house or to search for the house but what has been searched with respect to assessee is the material or evidence as contained in Annexure A-1/5 containing bills in the name of assessee, relating to purchase of the raw material, reflecting investment in the construction of the house. 19. The issuance of search warrant has, no doubt, been held to be not a judicial or a quasi-judicial act, but an administrative act by the Hon'ble Supreme Court in (1969) 74 ITR 836 (SC) cited by the learned Departmental Representative of Revenue, but we do not find merit in the contention of the learned Departmental Representative of Revenue that if administrative power is wrongly used, then that can be challenged in writ proceedings in High Court and not justifiable before the Tribunal. The irregularity or impropriety of the exercise of the power for issuance of search warrant may, no doubt, is challengeable in writ proceedings before the Hon'ble High Court but at the same time the same can also be scrutinised and examined judicially by the Tribunal in appeal. It has not been held by the Hon'ble Supreme Court in the said cited decision that it is not justifiable before the Tribunal. In f....
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....on and the consequential belief has been raised before us. The validity of the search warrant has, no doubt, been challenged in the grounds raised before us, but that is on distinct specific basis expressly contained in. the grounds. Still, to deal with the point enunciated in the citation, suffice it to observe, in the fact-situation of the case in hand, that the key person, in this search and seizure operation, Shri Shree Chand Soni (father of present assessee), who is not the subject of the present appeal under consideration before us, and the present assessee, Shri Ashok Kumar Soni, has been subject to search for being member of family of Shri Shree Chand Soni and residing with him in the very same premises known as 'Kailash Bhawan', and the search warrant being in the name of Shri Shree Chand Soni and family. 20.1. We may note that the definition of the term 'person' and s. 2(31) is inclusive only and is not exclusionary, nor is worded restrictively. This term, vide above provision, also includes an HUF as also an AOP and thus does embrace, within the its fold, plurality wherein the names of all the members of family of the key person for search are not known. In such a situa....
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....mission regarding assessee's appeal wherein in paras 7 and 8, the citations have been dealt with and distinguished. As regards 1976 CTR (P&H) 316 : (1976) 103 ITR 579 (P&H) the same is distinguishable on facts inasmuch as the search warrant was issued for conducting search of the house of M by authorised officer also started to search the portion of that house in the possession of the petitioner's son and son's wife. On the objection of the petitioner, a telephone call was made to IAC, Chandigarh and within 15 minutes, the requisite search warrant was sent to the authorised officer, although the CIT was stationed at Patiala, at a distance of about 40 miles. It also became clear that blank search warrants had been issued with fact was not denied by the respondents. It was in these circumstances that the search warrant utilised for making a search of the premises in possession of the petitioners was held illegal and the search warrant was quashed. As regards (1982) 25 CTR (Cal) 58 : (1982) 137 ITR 456 (470) (Cal) in second para, it has been held that in the authorisation, the irrelevant portions having not been struck out indicated non-application of mind but the same is distinguisha....
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....he learned CIT(A)'s impugned order in this regard to be quite proper and justified and in no way to be laconic or infirm. 25. Ground No. 2.4 disputes the AO's jurisdiction to assess the assessee-appellant under Chapter XIV-B. In view of our findings rendered above, on ground Nos. 2.1 to 2.3 wherein we have held the search warrant issued to be valid and the search conducted to be valid, we hold that in the facts and circumstances of the case, the AO did have valid and proper jurisdiction to assess the assessee-appellant under Chapter XIV-B of the IT Act, 1961. 26. Ground No. 2.5 disputes the learned CIT(A)'s impugned order in holding the notice to be issued under s. 158BC r/w s. 158BD on 16th Oct., 1998, and subsequently the notice issued under s. 158BC on 5th Nov., 1998, to be valid and conferring jurisdiction on AO to make assessment under s. 158BC/143/(3) of IT Act, 1961. We need not repeatedly enter into a discussion here and suffice it to say that we have already held above that the notice issued under s. 158BC on 5th Nov., 1998, was a valid notice and that the AO did have jurisdiction and a valid jurisdiction to assess the assessee-appellant under Chapter XIV-B. This ground ....
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....ent is quite ambiguous and does not contain any clear-cut admission. He has also contended that duress was also there at the time of making of this statement. He has also contended that even otherwise, an admission is not conclusive. In support of his above contentions, he has referred to various decisions mentioned under head 'H' (having caption "Binding nature of admission") of his "Index of case laws and decisions relied upon". He has contended that now there are three valuation reports before the Tribunal, one by registered valuer, making the valuation at Rs. 14.50 lakhs, another of DVO making the valuation at Rs. 15.97 lakhs and the third one of Land and Building Tax Department valued at Rs. 17.57 lakhs. He has contended that the DVO has made the valuation on CPWD rates, and the supervision allowance has not been allowed. He has contended that the architectural charges have also been included at the rate of 2 per cent rejecting the assessee's plea that the assessee's uncle was a civil engineer and assessee's father provided supervision. He has also contended that if valuation is made as per CPWD rates, then valuation is to be reduced by 15 to 20 per cent because rates in Rajas....
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....e Department's stand and that the Department has failed. He has contended that the Department has not relied on any valuation report and has based solely on statement of assessee which is not binding on assessee. He has contended that either the assessment be quashed or in the alternative, the assessee's declared income in the return be accepted. As against this, the learned Departmental Representative of Revenue has contended that assessee's father Shri Shree Chand Soni has made the statement at the time of search and therein he stated that there was an unexplained investment of Rs. 14.50 lakhs in the construction of the house and the said statement stands ratified by assessee. He has also contended that they know Hindi and Marwadi and they are aware of all things in the house and they cannot plead ignorance. Both the father and the husband (sic-son) had complete information regarding recorded investment as also the unrecorded investment. He has contended that the surrender was inconsequence to the seized papers, Annexure A-1/5. He has contended that in the statement of Shri Shree Chand Soni, it is not that the value of investment in property alone was surrendered but total surren....
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....ee as to what was the duress/threat on them the assessee would have explained and that letter dt. 10th April, 1997, on p. 19 of Revenue's PB is on different fact and is by Shri Shree Chand Soni. He has contended that Departmental Representative's contention that after seizing 75 papers contained in Annexure A-1/5, the surrender was made, is not correct because the entire total of Annexure A-1/5 is much less as it is roundabout Rs. 2 lakhs. He has, by and large, reiterated the contentions made in his arguments in chief. 30. We have considered the rival contentions, the material on record, as also the cited decisions. As regards the reference to the DVO and considering the DVO's report, the learned Departmental Representative of Revenue himself has disowned the valuation report of DVO contending that the Department has not relied upon it. We may, without inconvenience, drop this matter here itself and need not go any further about it as the same will only be an academic exercise and for no fruitful purpose. As regards the contention of the learned authorised representative of assessee that the statement recorded during search under s. 132(4) is rebuttable and though best evidence, b....