TaxTMI 
TaxTMI 
2017 (2) TMI 645
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....its by directing the opp.parties to release the seized documents as per the Panchanama dated 02.12.2014 vide Annexure-1." 2. The brief fact leading to the institution of this writ petition is that search warrant was issued by opposite party no.1 on 01.12.2014 by the Income Tax Department in exercise of the powers conferred under Section 132 of the Income Tax Act, 1961, hereinafter to be referred to as "the Act, 1961", in short. The authorities of the Income Tax Department conducted search, but no incriminating material has been recovered, rather they found cash amounting to Rs. 40,050/- and gold jewellery of 906 grams belonging to two married ladies of the family, which are within the permissible limits as prescribed by the Income Tax Department and accordingly, Panchanama was prepared showing inventory of cash worth of Rs. 40,050/-, golden jewellery valued at Rs. 22,00,714/-, but not seized. 3. Opposite party no.2 after search and seizure, issued a notice under Section 153 of the Act, 1961 on 06.08.2015 calling upon the petitioner to prepare a true and correct return for the assessment year 2009-10 and furnish the same within a period of 30 days. In compliance to the notice, the....
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....documents in the premises of the petitioner, it was found that there was some undisclosed income, which has not been disclosed by the petitioner while submitting the return under Section 139 of the Act, 1961 and as such, it cannot be said that there was no reason for making search and seizure. He further submits that the competent authorities of the Income Tax Department had issued notice under Section 153-A of the Act, 1961 in which he has made objection, which has been answered by the petitioner and in the meanwhile the assessment order has also been passed by the competent assessing authority and as such, at this moment, the writ petition itself is not maintainable because there is an assessment order and if the petitioner is at all aggrieved, he may challenge the same before the appropriate forum. He further submits that since the order of assessment has been passed by the authority, he ought to have approached the alternative remedy of appeal under the Statute, but instead of doing so, he has approached this Court invoking the extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India, and hence, this writ petition is not maintainable even....
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.... or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), [then,- (A) the [Principal Director General or] Director General or [Principal Director or] Director or the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B) such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to-] (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that s....
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....ner or] Commissioner] having jurisdiction over such person may be prejudicial to the interests of the revenue : Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or 6 control thereof that he shall not remove, part with or otherwise deal with it, except with the previous permission of such authorised officer and such action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii): Provided also that nothing contained in the second proviso shall apply in case of any valuable article or thing, being stock-in-trade of the business: Provided also that no authorisation shall be issued by the Additional Director or Additional Commissioner or Joint Director or Joint Commissioner on or after the 1st day of October, 2009 unless he has been empowered by the Board to do so. [(1A) Where any [Principal Chief Commissioner or] Chief Commi....
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....s of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any 7 proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. Explanation.-For the removal of doubts, it is hereby declared that the examination of any person under this sub- section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. (4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true ; and (iii) that the signature and every other part of such b....
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.... shall be handed over by the authorised officer to the Assessing Officer having jurisdiction over such person within a period of sixty days from the date on which the last of the authorisations for search was executed and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such Assessing Officer. (10) If a person legally entitled to the books of account or other documents seized under sub-section (1) or sub-section (1A) objects for any reason to the approval given by the [Principal Chief Commissioner or] Chief Commissioner, [Principal Commissioner or] Commissioner, [Principal Director General or] Director General or [Principal Director or] Director under sub- section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents and the Board may, after giving the applicant an opportunity of being heard, pass such orders as it thinks fit. (11) [***] (11A) [***] (12) [***] [(13) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so far as m....
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....cified books of account or other documents and fails to do so. But in clause (b) the basis is somewhat different. In the latter case, the Commissioner must have reason to believe that the person to whom a summons has been issued under clause (a) or might be issued, will not produce or cause to be produced any books of account or documents which will be useful and relevant to an income tax proceeding. Under clause (b), unless summons under clause(a) has been issued, no specification is possible. In such a case the basis is that the 10 assessee will suppress books of account and documents which will be required. The income tax authorities require the power furnished by clause (b) for the very reason that they do not know what the relevant books of account and documents are, and are afraid that they will be concealed or suppressed. The power of seizure under section 132 shall be exercised in accordance with sub-rules (2) to (14). Sub-rule (2) provides that the commissioner must first of all record his reason for issuing a warrant of authority. It then provides as to what should be the form of such warrant and the commissioner after going through the relevant records will reduce the r....
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....e occupied by any person in respect of whom he exercises jurisdiction, or (c) any place in respect of which he is authorised for the purposes of this section by such income-tax authority, who is assigned the area within which such place is situated or who exercises jurisdiction in respect of any person occupying such place, at which a business or profession is carried on, whether such place be the principal place or not of such business or profession, and require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, the carrying on of such business or profession- (i) to afford him the necessary facility to inspect such books of account or other documents as he may require and which may be available at such place, (ii) to afford him the necessary facility to check or verify the cash, stock or other valuable article or thing which may be found therein, and (iv) to furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceeding under this Act. Explanation.-For the purposes of this sub-section, a place where a business or profession is carried on shall also ....
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....incipal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Director General or the Principal Commissioner or the Commissioner or the Principal Director or the Director therefor, as the case may be,] (ii) make an inventory of any cash, stock or other valuable article or thing checked or verified by him, (iii) record the statement of any person which may be useful for, or relevant to, any proceeding under this Act : [Provided that no action under clause (ia) or clause (ii) shall be taken by an income-tax authority acting under sub-section (2A).] (4) An income-tax authority acting under this section shall, on no account, remove or cause to be removed from the place wherein he has entered, any cash, stock or other valuable article or thing. (5) Where, having regard to the nature and scale of expenditure incurred by an assessee, in connection with any function, ceremony or event, the income-tax authority is of the opinion that it is necessary or expedient so 13 to do, he may, at any time after such function, ceremony or event, require the assessee by whom such expenditure has been incurred or any person who, in the opinion of the income-tax a....
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.... Section 153-A reads as follows:- "153A. Assessment in case of search or requisition (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of 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 t....
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....ithin 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 to assess or re-assess the total six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. This provision confers power for making assessment after the search and seizure as contemplated under the provision of sec.132 and sec.133-A in order to reassess the income due to suppression or concealment of the documents of the undisclosed income. These statutory provisions have been taken note by the Hon‟ble Supreme Court as well as by various High Courts dealing with the power of search and seizure. The Hon‟ble Apex Court while discussing the issue in the case of Pooran Mal Vrs. Director of Inspector, reported in 1974 93 ITR 505 SC has been pleased to hold the constitutional validity of Sec.132 and it has been laid down that the necessity of recording of reasons in support of the reasonab....
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.... premises of the assessee in order to know the real fact as to whether the income disclosed by way of income tax return for a particular year is in consonance with the income being possessed by the said assessee. If authorities have found from any sources that the income disclosed by the income tax return, yearly basis, is less than the entire assets and property, then certainly the statute confers power upon the authorities U/s.132 to conduct a search and seizure although there is provision of Sec.147 of I.T. Act which deals with the provision for making assessment of escaped assessment. 12. In the case at hand, as we have gathered from the materials available on record, the search and seize operation under Section 132 of the Act, 1961 had been conducted on 2.12.2014 on the basis of the search warrant issued on 1.12.2014 and after its conclusion inventory of cash was found but not seized to the tune of Rs. 40,050/-, inventory of account book found and seized, inventory of jewellery making a valuation of the same to the tune of Rs. 22,00,714/- and thereafter a notice under Section 153-A of the Act, 1961 was issued on 6.8.2015 asking the petitioner-assessee to prepare true and corr....
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.... be added to his total income being the Director, but he has not submitted the details about M/s.Vasumati Builders Pvt. Ltd. The petitioner thereafter has approached this Court questioning the search warrant conducted in exercise of the powers under Section 132 of the Act, 1961 on the ground that the search cannot be conducted merely on surmises and conjectures and there must be reason to believe and further on the ground that no incriminating things have come out after conclusion of search and as such, it cannot be said that there was reason to believe for conducting search in the premises of the petitioner. 13. In the light of these factual aspects we have appreciated the argument advanced on behalf of learned counsel for the petitioner by taking into consideration the statutory provisions as contemplated U/s.132, 133-A, 142(1) and 143(2) of the Act, 1961. 14. There is no dispute about the fact that the provision of Section 132 of the Act, 1961 confers a power upon the authorities to conduct search and seizure, but subject to the fact that if the authorities has got information on the basis of which he has reason to believe that any person to whom summons under sub-section (1) ....
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....arding receipt of Rs. 5.00 Lakhs by M/s. Vasumati Builders Pvt. Ltd. from Shri Dhoi Sahu of Patia. You are the Director of Vasumati Builders Pvt. Ltd. You are requested to show the books of M/s. Vasumati Builders Pvt. Ltd. to proof this transactions. It may be stated that the above page shows payment of Rs. 5.00 lakhs to Dillip Motwani. The books of M/s. Vasumati Builders Pvt. Ltd. should show such transactions failing which it shall be added to the total income of yours because you are the Director. 3. Please refer to page-13 of ASPI-10 regarding receipt of Rs. 2,15,000/- from Shri Siba Behera, Nuagaon as advance for land and payment of Rs. 2.00 lakhs to Shri Ravi Bisoi, Sisupalgarh for purchase of land. This is stated by you as a transaction of your company i.e. M/s.Vasumati Builders Pvt. Ltd. The books of M/s. Vasumati Builders Pvt. Ltd. should show such transactions failing which it shall be added to the income of yours because you are the Director. 4. Please refer to page 30 of ASPI regarding payment of advance of Rs. 2.75 Lakhs to Bhasia Bhai. It was stated by you that it is the transaction by the company i.e. failing which it shall be added to the income of yours because....
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....ion is available from the documents seized from your premises. 10. Please refer to page-36 of ASPI-03 regarding various expenses of Rs. 3,34,500/-. It is stated by you that these expenses relate to M/s. Vasumati Builders Pvt. Ltd.. You are requested to explain all such expenses through the cash book and ledger of the Company failing which it shall be added to the total income of yours because you are the Director & the information is available from the documents seized from your premises. 11. Please refer to page-21,27 & 32 of ASPI-10 regarding cash receipts from Hi-Tech Estate and Promoters Pvt. Ltd. Please show the relevant books of account to prove the receipts otherwise it shall be treated as unexplained receipt in your hand." 17. We after going through the explanation given by the Assistant Commissioner of Income Tax, Central Circle-2, Bhubaneswar that although at the initial stage, no bullion or jewellery has been recovered, since it was in permissible limit, documents have been seized and in course of their examination, the authorities have come to a definite conclusion that certain income has not been disclosed and as such, for being satisfied, a notice under Section 1....
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....s not questioned in this writ petition. 23. We have also thought it proper to deal with two judgments relied upon by the learned counsel for the petitioner in the cases of Commissioner of Income Tax, Punjab and others v Vol.101 (19075) ITR and we after going through the said judgment have found that the said judgment has been passed taking into consideration the judgment rendered by the Hon‟ble Apex Court in the case of Pooran Mal (supra), which we have already discussed hereinabove. So far as the judgment relied upon by the learned counsel for the petitioner in the case of Commissioner of Income-tax, Gujarat v. Vijaybhai N.Chandrani, AIR 2013 SC 3518, is concerned, the fact of the said case is that the assessee has invoked the jurisdiction of the Gujarat High Court against the notice issued under Section 153C of the Act, 1961 and the said writ petition was entertained by the Gujarat High Court, which was assailed before the Hon‟ble Supreme Court and while dealing with the case, the Hon‟ble Apex Court has been pleased to observe at paragraphs 16 and 17 that the High Court should not have entertained the writ petition at the first instance without first exhausting....