TaxTMI 
TaxTMI 
2016 (5) TMI 321
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....sessee firm and no search as contemplated in the provisions of section 132 was ever conducted at the sole business premises of the firm nor any requisition was made under the provision of section 132A. Therefore, the jurisdiction assumed by the AO u/s 153A was null and void. The tribunal vide order dated 02-02-2010 had restored these appeals to the file of CIT (Appeals) to adjucticate the legal ground first and if necessary to adjudicate the legal ground first and if necessary to adjudicate the remaining ground. 3.Pursuant to the above direction of the ITAT, learned CIT (Appeals) adjucticate the issue and held as under: "4.1 I have gone through the original assessment orders, the appellate orders and the submissions of the appellant. I have also perused the records made available by the A.O.The records show that only survey under Sec. 133A of the Act was cinducted at the business premises of the appellant Near Railway crossing, Khamatarai, Raipur. The material on record in the shape of statement of the partner and employees recorded, inventory of stock kept in the cold storage; inventory of books of account, order passed u/s.133A (3) (ia) impounding books of accounts etc and ....
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.... of the appellant firm and no material whatsoever found or seized from the aforesaid residential premises of the partners relates to the appellant firm. In view of the above factual and legal matrix, I am of the considered opinion that no search and seizure operation was ever conducted at the business premises of the appellant firm, which is sin qua non'for framing search assessments and hence, the consequential notices issuedand assessments framed under the provisions of section 153 A r.w.s 153B of the Act for A.Yrs. 20002-03 to 2007-08 are declared as null and void, and accordingly, cancelled. Since, I have already decided the appeals for these years in favour of the appellant on legal grounds, it is not considered necessary to fo into the merits of the case and adjudicate the others grounds raised by the appellant as directed by the Hon'ble ITAT , Bilaspur Bench , Bilaspur and all other grounds are accordingly, dismissed." 4. Against the above, Revenue is in appeal before us. 5. We have heard both the counsel and persued the records. Learned D.R. submitted that the learned CIT (Appeals) has totally erred in cancelling the assessments. Learned D.R> submitted that section 15....
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....urvey operation statements of shri Gurpreet singh chandhok, Partner and Shri Trilochan Nayak, Manager was recorded on 16 July 2007 and a in the concluding statement of shri Gurpreet Singh Chandhok , Partner was recorded on 19 July 2007 under the provisions of section 133A itself, copy of statements (extracts) are enclosed (Refer Page No. 52 to 60 of the paper book). The survey operation continued is july 2007 toi 19 July and was concluded on 19^th July 2007, wherein various books of accounts loose papers & documents were impounded and an inventory Memo marked as Annexure A-I was prepared and inventorised with Sl.No. I to 144 and various books of accounts, loose paper and documents were found but not impounded and an inventory Memo marked as Annexure was prepared inventorised with SI.No. I to 156 and further, inventory of stock of goods kept in cold storage was also prepared, copy of extracts of Inventory Memo are enclosed (Refer Page No. 28 to 51 of the Paper Book) iii) In Pursuance of books of accounts loose papers, documents etc. found during the course of survey operation (inventorised as Annexure A-I, SI No. I to 144). The authporized officer acting under section 133 A of th....
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....sis of which assessments for seven assessment years i.e. from assessment Year 2002-03 to 2008-09 have been framed under the provisions of section 153A r.w.s. 143(3) of the LT Act have been impounded only during the course of survey under section 133A of the LT Act (Refer Sl.No. 137 & SL.No. 142&143 at Page No. 38 of the Paper Book) and admittedly no search was ever conducted under section 132(1) on the premises of the respondent firm. It is further submitted that no preliminary or concluding statements under the provisions of 132(4) have been recorded from the partners of the respondent etc. with reference to any search and no warrant of authorization was issued to conduct search operation in the premises of the respondent firm and no Panchanama was ever drawn in respect of the respondent firm to effect any seizure as a result of any such search operation and even the survey was not converted/translated into search which itself is indicative of the fact that the department never intended to conduct any search operation against the respondent. vi) It is further submitted that a search & seizure operation under section 132 of the LT ACT was conducted at the residential premises be....
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.... of section 2(7) r.w.s 2(31) and a search in the residential premises of the partners of the partnership firm cannot be considered as a search in the case of partnership firm. Reliance in support is palced upon the following judicial pronouncements : c) CIT Vs. Tirupati Oil corporation (2001) 248 ITR 194 (Bom. HC) d) Nemal Shankarlal parmer Vs. ACIT (1992) 195 ITR 582 (Kar. HC) ix) It is further submitted that incriminating material/loose papers/documents etc. on the basis of which the assessments have been framed under the provisions of section 153A r.w.s. 143(3) of the IT Act for the assessment Year 2002-03 to 2008-09 has been impounded/gathered during the course of survey under section 133A of the LT Act at the business premises of the respondent firm only it is a settled law that the material gathered during the course of survey under section 133A cannot be regarded as relevant material for the computation of undisclosed income in block assessment proceedings as relevant material foe the computation of undisclosed income in block assessment proceedings. Reliance in support is placed upon the following judicial pronouncements: • CIT Vs G.K. Senn....
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....and articles were found in search. This is not at all the case in the present case as no article was found nor there was any participation of the partners of the assessee firm. Residence of the partners of the assessee firm. No books of accounts, documents etc. relating to the firm was found during that seach. No statement of the partners of the firm was recorded. No requisition was made u/s 132A of the IT Act. There is no evidence that notice of seach was ever issued on the partners. On the same date i.e. 16 July 2007 a survey operation was conducted u/s 133A at the business premises of the assessee firm. In pursuant of survey operation, statement of partners was recorded. The survey operation continued from 16 July 2007 to 19 July 2007 and various books, documents, papers etc. were found and impounded. In this background we have to examine as to whether the search u/s 132 of the IT Act in this case gives jurisdiction to the AO u/s 153A of the IT Act. Now the assessee's plea and the learned CIT (Appeals) view is that in these facts no search and seizure operation was ever consucted at the business premises of the assessee firm which is a sine qua non for assuming assessments u/....
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....tion of section 153A us that there should be a search u/s 132 That initiation of proceedings u/s153A is not dependant income be unearthed during search. The facts of this case were that a search had taken place in the premises of the assessee. In the case of search, incriminating materials leading to undisclosed income was seized and the issue related to when once preecedings u/s 153A of the Act is intiated, whether CIT can invoke the power u/s 263 of the Act. Hence this case law is totally inapplicable. 10.Now we deal with the case laws referred by the learned counsel of the assessee. i) CIT vs. Tirupati Oil corporation 248 ITR 194 (Bom.) In this case it was held that a registered firm is a taxable unit and if the AO wanted to proceed under chapter XIV-B of the Income-tax with regard to the undisclosed income of the partner foir the purposes of making block assessment on the assessee firm then the AO was required to invoke section 158 BD which has not been done in the present case and therefore the block assessment made on the firm without following the procedure u/s 158 BD was bad in law. ii) Nemal Shankarlal parmer Vs. ACIT (1992) 195 ITR 582 (Kar. HC) In....
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....ble Bombay high Court decision in the case of M/s J.M. Trading Corporation (supra) we hold that since the assessment u/s 143(3) read with section 153a in this case has been done in pursuance of an invalid search, the same deserves to be declared as null and void. 12.We also note that on the same date of search the Revenue had conducted survey operation at the business premises of the assessee firm in which materials are seized. This survey does not entitle the Revenue to initiate proceedings u/s 153A. having searched the residence of partners of the assessee firm Revenue could have initiated action against the assessee firm only u/s 153C had any document pertaining to the firm were seized from the residential premises. Since no material was seized, the revenue could not have initiated proceedings against the assessee firm u/s 153C. in these circumstances in our considered opinion the revenue cannot take shelter of provisions of section 153A for initiating action against the assessee which we have found to be not a valid one qua the assessee firm. 13. on a query from the bench as to why a search was not conducted at the business premises of the asssessee firm when search was c....