TaxTMI 
TaxTMI 
2019 (9) TMI 153
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....l year 2012-13. Originally, the petitioner dealt in only wholesale trading and with effect from 6.7.2016, it began retail trading. The petitioner filed return of income for assessment year 2017-18 on 31.10.2017 declaring income of Rs. 26,39,110/-. A search action took place at the residential premises of the partners and a survey action took place at the business premises of the petitioner on 24.1.2017. The first respondent, thereafter, framed assessment under section 143(3) read with section 153A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") at Rs. 9,42,82,954/- on alleged bogus sales through backdating entries under section 68 of the Act (Rs. 7,88,85,082/-) and on alleged excess stock under section 69B of the Act (Rs. 1,27,58,762/-). 2.1 By a letter dated 30.1.2019, the petitioner requested the first respondent to keep the demand in abeyance till the appeal is decided by the CIT (Appeals). By the impugned order dated 8.2.2019 passed under section 220(6) of the Act, the first respondent rejected the application of the petitioner and asked the petitioner to make payment of 20% of the demand in three days. Thereafter, vide letter dated 18.2.2019, the petitioner....
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....he search is place specific and that there being no search at the premises of the petitioner, though authorisation was issued against it, the entire proceedings under section 153A of the Act are bad, and hence, the petitioner is entitled to unconditional stay of the demand until the appeal is decided by the Commissioner of Income Tax (Appeals). 3.3 In support of his submissions, the learned advocate placed reliance upon the decision of the Bombay High Court in the case of Bansilal B. Raisoni & Sons v. Asstt. CIT 2018 (12) TMI 223 - BOMBAY HIGH COURT, for the proposition that in order to issue notice under sub-section (1) of section 153A of the Act, there must be initiation of search in case of the noticee and a mere search authorisation would not be sufficient. 3.4 Next, it was submitted that though there is a consistent delay on the part of the authorities in deciding the petitioner's application under section 220(6) of the Act, immediately after the passing of the order by the second respondent, the respondents have resorted to coercive measures. On the merits of the additions, it was submitted that the amount of Rs. 7,88,85,082/- has been offered for sales and hence, no ad....
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....to submit that the name of the petitioner is duly reflected in the said warrant and therefore, it is factually incorrect to contend that no search was conducted at the premises of the petitioner. It was submitted that the search was authorised, commenced and initiated and, therefore, as a necessary corollary, assessment was required to be made under section 153A of the Act. 4.2 It was submitted that under section 220(6) of the Act, the Assessing Officer will see if the case falls within any of parameters laid down under the circular issued by the CBDT. In this case, the Assessing Officer, after considering the facts of the case, was satisfied that 20% of the demand should be deposited. It was submitted that the having regard to the facts of the present case, this is a case for upward revision of the amount to be deposited, however, the Assessing Officer has duly exercised discretion and restraint in not going for an upward revision considering the facts and circumstances of the case. 4.3 Referring to the application made by the petitioner before the first respondent, it was submitted that there is not even a whisper regarding no search having been conducted in its case and that t....
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....petitioner could not have been subjected to proceedings under section 153A of the Act. 5.2 Next, it was submitted that the material used to frame assessment under section 153A of the Act is not material found during the course of search but is based upon the documents found during the course of survey and no order could have been passed under section 153A on the basis of such material. Reliance was placed upon the decision of the Delhi High Court in the case of MDLR Resorts (P.) Ltd. v. CIT [2013] 361 ITR 407, wherein the court has held thus:- "13. The contention with regard to their addresses being different, is misconceived and mere ipse dixit. Address of a company will normally mean its registered office, head office etc. A person can operate from or keep documents, money etc. at different places and not necessarily from the registered office etc. or from where business is conducted. The address mentioned in the warrant and the panchnama need not be the registered office or the head office but it has to be the place where the search was to be conducted and was conducted. The address at which search could be conducted would be the place or location, where books of accounts, do....
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....ot be curtailed on the ground that such objection was raised beyond the period referred to in subsection (3) of Section 124 of the Act. Section 124 of the Act pertains to jurisdiction of Assessing Officers. Subsection (1) of Section 124 lays down territorial jurisdiction of the Assessing Officer. Subsection (2) of Section 124 provides that where the question arises under said section, as to whether an Assessing Officer has jurisdiction to assess any person, such question shall be determined by the authority prescribed under the said subsection. Subsection (3) of section 124 provides time limits for a person to call in question jurisdiction of an Assessing Officer. Clause (c) of subsection (3) of section 124 provides that no person shall be entitled to call in question jurisdiction of an Assessing Officer where an action has been taken under Section 132 or section 132A, after the expiry of one months from the date on which he was served with a notice under subsection (1) of Section 153A or subsection (2) of Section 153C of the Act or after the completion of the assessment, whichever is earlier. In clear terms, the time limit for raising objection to the jurisdiction of the Assessing....
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....particularly, considering the fact that the demand is unreasonably high-pitched. 8. On behalf of the revenue, it has been pointed out that the warrant of authorisation has been issued in respect of the petitioner whereas the places mentioned therein are places other than the business premises of the petitioner. It has been contended that the search is qua a person and not location specific as is sought to be contended on behalf of the petitioner and that it is factually incorrect to say that no search had been conducted in respect of the petitioner. On the merits of the assessment order, it has been contended that what is shown as sales by the petitioner are in fact not sales, but the petitioner's own cash in old higher denomination notes which have been sought to be legalised by showing cash receipt in respect of sales; that such fact is supported by the fact that excess stock was found at the premises of the petitioner which indicates that in fact there were no sales. 9. Insofar as the first contention namely that in the absence of search at the premises of the petitioner, no proceedings could have been taken against the petitioner under section 153A of the Act is concerned....
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....he 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 such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; (ii-a) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or ....
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....reading of rule 112 as a whole, there is nothing therein to indicate that search is location specific as is sought to be contended on behalf of the petitioner. 12. In this regard, reference may be made to the decision of the Bombay High Court in Bansilal B. Raisoni & Sons (supra), on which reliance has been placed by the learned advocate for the petitioner, wherein the court has prima facie found that there is no provision which would restrict the department's search action only to the registered office of a partnership firm. The court held that the conduct of search at these places in relation to the partnership firm and its business need to be examined in proper perspective keeping in mind the objections of the partnership firm and such exercise should be allowed to be done at the level of the Assessing Officer. 13. Reference may also be made to the decision of the Delhi High Court in MDLR Resorts (P.) Ltd. (supra), on which reliance has been placed by the learned advocate for the petitioner, wherein the court has held thus:- "13. The contention with regard to their addresses being different, is misconceived and mere ipse dixit. Address of a company will normally mean its....
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....e in mind. Therefore, bearing in mind the context in which the expression 'search initiated' has been used under various sections of IT Act including ss. 158BA(1), 158BC, 158BD, 158BE(1)(a) and (b) and 253A(1)(a) and (b) and also in the light of examining the dictionary meaning of the word 'initiate' as extracted by the High Court of Rajasthan at para No. 34 of its judgment in the case of Rajasthan Udyog referred to supra and also in the light of the above observations of the Hon'ble Supreme Court in the case of Omprakash Jaiswal (supra) we may safely assign to the expression 'search initiated'; the meaning 'search taken' or 'search commenced' or 'making beginning of the search'. If this is meant by expression 'search initiated' it cannot be held that the only signing of the authorizations by the Director of IT, Bangalore, on 30th Dec., 1996 to make a search in the premises of the respective assessees would amount to 'initiation of search'. The signing of the authorizations' would at best amount to 'taking of the decision by the said authority to initiate search' in the premises of respective assessees ....
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....re available with the Assessing Officer and relatable to such evidence" occurring in Section 158-BB of the Act. In the present case, the Assessing Officer was justified in taking the adverse material collected or found during the survey or any other method while making the block assessment." 18. In the opinion of this court, prima facie the above cited decision would not be applicable to proceedings under section 153A of the Act inasmuch as section 158BB of the Act relates to undisclosed income of the assessee for the block period which has to be computed on the basis of the evidence found as a result of the search or requisition of books of account or other documents or such other materials or information as may be available with the Assessing Officer; whereas section 153A of the Act is much wider and does not specify the basis on which the income is to be computed. In case of section 153A of the Act, the search or requisition are the trigger points, and once the trigger operates the Assessing Officer is required to assess or reassess the total income of the assessee for six assessment years preceding the assessment year relevant to the previous year in which the search is carrie....
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....the Tribunal are not in dispute and the conclusion, which has been drawn by the Tribunal on the basis of the factual analysis also does not suffer from any error. 6. So far as the issue of the deletion of Rs. 10 lakhs (rupees ten lakhs), which were added on account of cash found during the course of survey is concerned, during the survey an amount of Rs. 10 lakhs (rupees ten lakhs) was surrendered on account of unrecorded sale of bardana and further Rs. 10 lakhs (rupees ten lakhs) were found as cash. The Tribunal has found that after completion of survey, the alleged unaccounted sale of bardana of Rs. 10 lakhs (rupees ten lakhs) was entered in the books of account by the assessee on December 27, 2001. The assessee's explanation has been accepted that cash of Rs. 10 lakhs (rupees ten lakhs) found during the course of survey were on account of realisation from above sale of bardana of Rs. 10 lakhs (rupees ten lakhs). Thus the amount of Rs. 10 lakhs cash found during the course of survey was duly entered in the books of account and the same did not remain unrecorded and it was not unaccounted. The Tribunal noted that the addition of the same amount again during the assessment pr....