TaxTMI 
TaxTMI 
2013 (12) TMI 1116
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....ated in brief to avoid prolixity and repetition. 2. The respondents claim that search and seizure operation against the petitioners were initiated and conducted under Section 132 of the Income Tax Act, 1961 (Act, for short) on 31st January, 2008. The petitioners have accepted and not disputed the search and seizure operations in the writ petitions but the contention raised is that against 22 petitioners detailed below, no panchnamas were drawn/issued and thus proceedings under section 153A of the Act are void and bad for want of jurisdiction. It is also submitted in the rejoinder affidavit to the counter affidavit that these petitioners were not subjected to search and their names have been subsequently interpolated and mentioned in the warrants of search. Details of these 22 petitioners along with their writ petition numbers is as under:- 3. The facts of the lead case i.e. Writ Petition (Civil) No. 823/2013 filed by MDLR Resorts Pvt. Ltd., are as follows:- a) On 31st January, 2008, search and seizure operation under Section 132 of the Act was carried out in the case of the petitioner, a member of the MDLR group. b) On 19th June, 2009, notice under Section 153....
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....ers and, therefore, their names do not appear in the panchnamas. ia/iia. The respondents have contested the first and second contentions of the petitioner on three grounds. There was an error or mistake in the panchnamas as a consequence thereof, names of 22 petitioners did not feature in the panchnamas, though the said petitioners were subjected to search and seizure. Error or mistake cannot vitiate proceedings under section 153A of the Act. Secondly, there was obstruction and the officers were prevented from carrying out search at MDLR House, SCO 1, 2 and 3, Sector 15, Gurgaon and 436/16 Civil Lines, Gurgaon and due to resultant confusion, names of the said 22 petitioners were not mentioned in the panchnamas. Lastly, the proceedings under Section 153A are valid and do not falter on the ground of lack of jurisdiction as the search was initiated and duly conducted against the aforesaid 22 petitioners. In re, the contention regarding warrant of search, the respondents rely upon the original records including relevant search warrants namely D.N. 0194, D.N. 0195 and D.N. 0191 to affirm that search and seizure operation was also directed against the said 22 petitioners. iii. The ....
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....rejoinder to the amended writ petition and that too vaguely. This contention has neither been raised in the writ petition which was filed in January, 2013 nor in the amended writ petition which was filed pursuant to the order dated 22nd May, 2013. Even in the rejoinder affidavit, the petitioners have stated that copy of some search warrants were shown to them for the first time on 21st March, 2013, though a request was made vide letter dated 13th March, 2010. The contention was based primarily on apprehension and suspicion. This was accepted during arguments but with the assertion that the petitioners do not have access to files of the respondents and are handicapped from making affirmative statement in the absence of examination/scrutiny of records. 6. Search file was produced before us. MDLR Group as a whole was subjected to search following a detailed note prepared for approval and issue of warrant of search. The note was available on the confidential files produced before us. Names of companies, concerns etc. belonging to MDLR group were mentioned and recorded in the file/proceeding recorded. Names of 22 petitioners are included in the said list. We have also examined the wa....
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.... Flat no. -4, RR Apartments, 3&4, Manglapuri, Mehrauli, New Delhi-30 C-12, B.M. Rohtagi Apartment, 1, Ram Kishore Road, Civil Lines, Delhi-110054 King Buildcon P. Ltd. MDLR House, S.C.O. 2, 3,4, OJC Jharsa Road, Gurgaon W.Z. 34-A Raj Nagar-1st DADA Chttriwala Marg, Palam Colony, New Delhi-110045 Lakshya Consultant Pvt. Ltd. Flat no. -4, RR Apartments, 3&4, Manglapuri, Mehrauli, New Delhi-30 C-12, B.M. Rohtagi Apartment, 1, Ram Kishore Road, Civil Lines, Delhi-110054 MDLR Developes & Promoters P. Ltd. MDLR House, S.C.O. 2, 3,4, OJC Jharsa Road, Gurgaon Flat no. -4, RR Apartments, 3&4, Manglapuri, Mehrauli, New Delhi-30 MDLR Hotels P. Ltd. Gali Khazanchian Wali, Bhadra Bazar, Sirsa MDLR House, S.C.O. 2, 3,4, OJC Jharsa Road, Gurgaon Tara Baba Ki Kutiya, Sirsa Flat no. -4, RR Apartments, 3&4, Manglapuri, Mehrauli, New Delhi-30 Shivgori Builders Pv. Ltd. 436/16, Civil Lines Gurgaon Flat no. -4, RR Apartments, 3&4, Manglapuri, Mehrauli, New Delhi-30 C-12, B.M. Rohtagi Apartment, 1, Ram Kishore Road, Civil Lines, Delhi-110054 Vinman Estate P. Ltd. MDLR House, S.C.O. 2, 3,4, OJC Jharsa Road, Gurgaon Flat no. -4, RR Apartments, 3&4, ....
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....ect of whom the search warrant had been issued. 11. Names of parties to be subjected to search have been mentioned at two separate places on the first page of search warrants Form No. 45. The first point or place refers to preconditions mentioned in Section 132(1)(a) and (b) and the second point or place refers to the preconditions stipulated in Section 132(1)(c). Second page of the form requires mentioning the address where the suspected books of accounts, other documents, money, bullion, jewellery, valuable articles etc. were kept, by the persons who were being subjected to search. 12. In the panchnamas relating to MDLR Estate Private Limited, MDLR Hotels Private Limited and Shivgori Builders Private Limited, it was noticed that their names were not included in the names of the persons mentioned in the column relating to clauses (a) and (b) of Section 132(1) of the Act. However, their names were mentioned in the column relating to Section 132(1)(c) of the Act. In these circumstances, suspicion of the petitioners is not affirmed. It does not impel us to form and decide the contention in favour of the petitioners. 13. The contention with regard to their addresses being dif....
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....a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assess....
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....ent years abate subject to sub-section (2). 17. What is noticeable that the mandate and language Section 153A(1) does not make any reference to panchnama or the date of panchnama. It does not state that the panchnama is a pre-condition for invoking the said Section. The words used by the Legislature are "search is initiated under Section 132 ......" The word "initiate' means to commence or start. The section is invoked and applicable when the search is "initiated'. In other words, the section ticks of and comes into play when the search commences or is undertaken against a person. The expression "initiate' had come up for interpretation before the Karnataka High Court in Commissioner of Income Tax vs. WIPRO Finance Ltd. (2010) 323 ITR 467 in relation to Sections 158BC, 158BD etc., and it was observed that as per the dictionary meaning, the said word refers to beginning, commencement or start of proceedings. Reference was made to the decision of the Supreme Court in Om Prakash Jaiswal vs. G.K. Mittal AIR 2000 SC 1136, wherein expression "initiate any proceedings for contempt' in Section 20 of the Contempt of Courts Act 1971, was interpreted. It was held that the word "initiate' m....
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....132A was executed. Section 153B(2) states that the authorization is deemed to have been executed in case of search, on conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case, warrant of authorization was executed. Thus, the time limit for completion of the assessment is reckoned and has to be counted for "search" under Section 132 from the date as recorded in the last panchnama drawn in relation to any person. The contention is that Section 153B(1) & (2), refers to panchnama and when there is no panchnama, proceeding in respect of 22 petitioners cannot be validly initiated under section 153A of the Act. 20. We have examined Section 153A(1) above and now examine whether in the facts of the present case failure to mention names, affects validity of the notices issued under Section 153A of the Act? 21. The aforesaid contention of the 22 petitioners has to fail in the present cases for several reasons. The said contention was not raised against the first order under Section 153A passed by the Assessing Officer which was made subject matter of challenge in a revision before the Commissioner under Section 264 of the Act. The Commissione....
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....here nothing is found or seized in the search. 23. There is certainly lapse and failure to comply with the requirements of search and seizure manual as the panchnama did not contain names of the 22 petitioners and does not record any suspension of search. Even the obstruction and presence of third persons were not mentioned in the panchnamas. But this would not affect the validity of the search. We only record that panchnamas in the present case to this extent are defective, but the search or initiation of search cannot be disputed. However, the respondents should take remedial steps and ensure that such lapses do not occur in future, otherwise similar allegations will get repeated, entailing litigation. 24. Panchnama is an important document because it informs the person from whose premises the articles are seized or the person searched as to the name of the person or the building etc. where the search was carried out and the officers who were authorized and had carried out the search and the articles, if any, seized. We are informed that copy of the warrant of search is only shown to the occupant or persons against whom it is issued and their signatures obtained but no copy....
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....Omarji v. The State: AIR 1963 Guj 145 noted that "a Panchanama is essentially a document recording certain things which occur in the presence of Panchas and which are seen and heard by them.' Again in The State of Maharashtra v. Kacharadas D. Bhalgar: (1978) 80 BomLR 396, a panchnama was stated to be "a memorandum of what happens in the presence of the panchas as seen by them and of what they hear'. 16. We have examined the meaning of the word panchnama in some detail because it is used in Explanation 2(a) to Section 158BE of the said Act although it has not been defined in the Act. A panchnama, as we have seen is nothing but a document recording what has happened in the presence of the witnesses (panchas). A panchnama may document the search proceedings, with or without any seizure. A panchnama may also document the return of the seized articles or the removal of seals. But, the panchnama that is mentioned in Explanation 2(a) to section 158BE is a panchnama which documents the conclusion of a search. Clearly, if a panchnama does not, from the facts recorded therein, reveal that a search was at all carried out on the day to which it relates, then it would not be a panchnama rela....
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.... would not be correct to bifurcate the objections against the assessment orders and hear a part of the objections in the writ proceedings, while the other objections relating to "merits" of the assessment order are permitted and allowed to be raised in the pending appeals before the appellate authority. This bifurcation shall not serve the cause of justice and may result in ambiguous or even conflicting orders. 28. In view of the alternative remedy which is efficacious and provided by the statute itself, we do not want to delve into the said issues. 29. In view of the aforesaid discussion, we do not find any merit in the present writ petitions and the same are dismissed. We clarify that the observations made in the judgment are for the purpose of disposal of the writ petitions and the appeals against the assessment order under Section 153A of the Act on merits will be decided in accordance with law and the observations relating to merits of the addition made hereinabove will not be considered as binding. The petitioners will pay costs as per the Delhi High Court Rules to the respondents. ============= Document 1 1. S.No. Name of the Assessee M/s Alankar Saphire Dev....