TaxTMI 
TaxTMI 
2005 (3) TMI 79
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....ed and further objected to this action of search and seizure, as there was no search warrant in the name of the petitioner, but in the name of the company in which he was a director. It was explained that the petitioner ceased to be a director of the aforesaid private limited company and further by a family arrangement the premises in question were allotted to the petitioner as owner thereof and the same no longer belonged to either Sashi Kumar Modi or the said private limited company. In spite of this objection, the books of account and other documents were retained and, in fact, extension of such retention period was granted, purporting to be with the approval of the appropriate officials. Such retention of the books of account beyond the statutory period is without any authority of law as no notice of extension was given to the petitioner. The last extension, which was granted, has lost its force and there was no further extension. In spite of that these books of account are still kept by the Revenue Department. During the pendency of the writ petition there was subsequent event. As such the petitioner filed the aforesaid application whereby and whereunder the petitioner prayed....
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....the person other than the person mentioned in the aforesaid section 158BC, meaning thereby section 158BD can be proceeded against the person who has not been searched nor has been intended to be searched. According to him, therefore, when the Revenue started proceedings against the petitioner initially under section 158BC and further decided to drop then without any reservation for any reason, it must be presumed that the petitioner was intended to be proceeded against under section 158BC treating him to be the noticee of the search warrant. Subsequent notice under section 158BD relates to the same search and seizure exercise and the same is absolutely invalid and illegal and this must be set aside and quashed. On the question of retention of the books of account, he contends drawing my attention to section 132(8) and (9A) of the said Act that in order to constitute a valid retention of the books of account there are conditions to be fulfilled. One of such conditions is that reasons must be recorded as to why such longer period of retention of books of account is required. Such order of authorisation for a longer period must be communicated to the petitioner or the person from whom....
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....ontention is that even if search and seizure is assessed to be illegal and bad, the matter or the evidence collected therefrom can be utilised for any proceedings under the law. Therefore, this evidence and materials arising out of the search and seizure can be utilised or may be made useful in the proceedings under section 158BD. In support of his submission he has relied on the decisions of the Supreme Court, reported in Pooran Mal v. Director of Inspection (Investigation) [1974] 93 ITR 505 and Dr. Partap Singh v. Director of Enforcement [1985] 155 ITR 166. He submits that when it was detected that the initial notice under section 158BC was issued against Sanjay Kumar Modi wrongly and erroneously, subsequent notice was issued immediately after withdrawal of the first notice. He submits this confusion arose because of the abbreviated name of S. Modi in the warrant of search and seizure notice. Actually in this case the proceeding should have been initiated under section 158BD. Therefore, there is no illegality or invalidity for retention of the books of account or in the proceedings itself. It will appear from the statement and admission of Sanjay Modi himself that he did not dis....
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....justice. The basic object of the justice delivery system is to put an end to the controversy between the parties as early as possible and comprehensively, even taking note of the subsequent development, particularly when the subsequent development has nexus or having origin to the fundamental controversy involved in the petition. Upon a plain reading of Chapter XIV-B of the said Act it will appear that the procedure for block assessment started with search and seizure initially claimed to be valid by the Revenue and it is the basis to initiate proceedings under the aforesaid Chapter under sections 158BC and 158BD. By necessary implication it appears from said section that valid and lawful search and seizure is a condition precedent for holding a proceeding under section 158BD of the said Act also. As such I hold that the writ petition has not become infructuous so far as it relates to the grievance of legality and validity of the search and seizure and the retention of the books of account and other documents. I shall be dealing with the first question as to the legality and validity of the search and seizure carried out under section 132 of the said Act. In the panchanama it ap....
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....still belonged to the members of the joint family including the writ petitioner, has issued the search warrant and executed panchanama. It is an admitted position that the order of authorisation of the search of the said building was not in the name of Sanjay Modi being the writ petitioner herein, it was done in the name of Sashi Modi being the brother of the writ petitioner, K.R. Modi, and the family private limited company, namely, K.R. International Pvt. Ltd. On the date of the search and seizure K.R. Modi was dead obviously the search cannot be carried out against a dead person but search in the name of Sashi Modi was valid and lawful. Sashi has not come forward to challenge the search and seizure, nor has the company, K.R. International Private Limited challenged it. In his representation the writ petitioner did not raise the legality and validity of the said search and seizure. For the first time the writ petitioner challenged the legality and validity in this proceeding. Therefore I hold, that search and seizure at least in the name of Sashi is lawful and valid. It is also permissible while making search and seizure the third parties' obligation to pay tax namely against w....
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....isdiction to make assessment of the petitioner. Therefore, it is perfectly within the legitimate authority of the Revenue to seize the seizure of the petitioner's books of account, documents, articles in the said search and seizure exercise though there was no authorisation in his name. Mr. Murarka, on behalf of the writ petitioner, contends that the proceedings under section 158BC against the writ petitioner in connection with the said search and seizure are invalid and illegal, is now become academic, since it is dropped. It appears the writ petitioner on receipt of the said notice under section 158BC, made representations that such proceeding is invalid and illegal in view of the fact that no search and seizure was made in the name of the writ petitioner. The position of law is very clear to uphold the contention of Mr. Murarka in principle in this respect. The language of section 158BC which is quoted hereunder, is very clear to understand. "158BC. Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then,- (a) the Assessing Officer shall- (i) in respect of sear....
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....s of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly." Therefore, the difference between the two sections is clearly discernable. Section 158BD can be resorted to against any person when the Assessing Officer is satisfied that undisclosed income belongs to that person against whom no search and seizure was made under section 132. The procedure is that books of account or other documents or assets seized shall be handed over to the Assessing Officer having jurisdiction over such person and that Assessing Officer shall proceed under section 158BC against such other person. In this case, as had been already pointed out by Mr. Som that when it was found upon scrutiny that the search and seizure ordered to be made against Sashi Modi, K.R. International and M.R. Modi is not fruitful or objective the proceeding under section 158BC was dropped. Intimation in this regard was also given to the writ petitioner. In my view, even after dropping, the proceeding under sect....