TaxTMI 
TaxTMI 
2022 (8) TMI 1065
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....ssues raised in Ground No 1 to 3,which read as under: 1. On the facts and in the circumstances of the case and in law, the order passed by the assessing officer u/s 153A r.w.s.143(3) is bad in law, without jurisdiction and void ab initio and the Ld. CIT (Appeals) has erred in confirming the same. The Ld. CIT (Appeals) failed to appreciate that the order has been passed pursuant to notice u/s 153A which itself was issued under erroneous assumption that the appellant firm was subject to search u/s 132. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) failed to appreciate that survey action u/s 133A initiated against the assessee firm does not entitle /authorize the assessing officer to initiate proceedings u/s 153A. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) failed to appreciate, that even if any incriminating documents relating to partnership firm are found during search at the residential premises of the partners action against the assessee firm can be initiated only u/s 153C and not u/s 153A of the act. Order passed u/s 153A is therefore void ab initio. 3. Brief facts for the years under co....
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....ch mentioned therein is the residence of partnersi.e2nd Floor, Deshmukh Apartment, 40 Dattatray Nagar, Nagpurand so the warrant authorised the authorised officers named in the warrant, only to enter and search the specified building i.e. 2nd Floor, Deshmukh Apartment, 40 Dattatray Nagar, Nagpur. Thus, the only place that could have been searched on the strength of warrant of authorization was the residential premises of partners and not any other place. The Ld. counsel for assessee also submitted that the premises searched does not belong to or is owned by the assessee firm and mere mention of the name in the warrant does not mean that the search has actually been initiated and conducted at the assessee's business premises. There is no office of partnership firm at the residential premises of partners given in the warrant of authorisation. The Ld. counsel for assessee further contended that no statement under the provisions of section 132(4) of the Act of any of the partners of the assessee firm with reference to search was recorded and no Panchanama was made in the name of assessee firm to affect any seizure as a result of any such search operation shows that there was no search a....
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.... impounding and retaining such books in his custody. The Inventory memo marked as Annex B & BA prepared by AO (Kindly refer Page No 2-4 of Paper Book) shows that the word "Search" has been cancelled on all the pages. In view of above facts, it is submitted that only survey action under the provisions of section 133A was conducted and no search as contemplated in the provisions of section 132 of the act was ever conducted at the sole business premises of the appellant firm. This survey action does not entitle the AO to initiate proceedings u/s 153A.That survey u/s 133A was conducted on assessee-firm premises, which never got converted into search, supports that revenue never intended to conduct any search on assessee firm. Since no search action was initiated and conducted in the case of the assessee, the AO had no jurisdiction to issue notice and pass order u/s 153A of the Income Tax Act. c) It is further submitted that search and seizure operation on the strength of warrant of authorisation dated 18/04/2012 (Kindly refer Page No 5-7 of Paper Book) was conducted u/s 132 of the act at 2nd Floor, Deshmukh Apartment, 40 Dattatray Nagar, Nagpur which is the residential premises o....
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.... with reference to search was recorded and no Panchanama was prepared / drawn in the name of appellant firm to affect seizure of any cash, loose papers or documents etc. relating to firm was made from its business premises at Medical College Road, Ajni, so as to give an impression that any action contemplated under the provisions of section 132 of the Act was taken in the appellant's case. Admittedly no search was conducted at the business premises of the firm. f) It has been held that mere mentioning the name of assessee in the search warrant in the absence of conduct of actual search at the premises of assessee i.e. where the assessee actually resides or is available or is normally found or belonging to assessee resulting in impounding or seizure of cash, books of accounts etc relating to assessee from the searched person cannot lead to an inevitable conclusion that a valid search was conducted in his case and that warrant of authorisation has to be executed against the assessee and considering the provisions of section 153A(1)(b) not only initiation of search is mandatory but conduct of actual search is also material and such conduct of person specific and premises specific s....
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....ta Jain reported in 384 ITR 543 &Pr.CIT V. Meeta Gutgutia Prop. Ferns N Petals-395 ITR 526held that in absence of any incriminating material found as a result of search, assumption of jurisdiction was also not in accordance with law. The SLP- 18121/2018 filed by the department in the case of Smt Meeta Gutgutia has been dismissed by Hon'ble Supreme Court. j) It is further submitted that incriminating material/ documents etc. on the basis of which assessment has been framed u/s 153A r.w.s. 143(3) for AY 2011-12& 2012-13 have been found and impounded during survey u/s 133A of the act at the business premises of the appellant firm and it is a well settled law that the same cannot be considered as relevant material for computation of income under block assessment proceedings. Reliance is placed on the following decisions: 1) G.K Senniappan 284 ITR 220 (MAD HC) 2) Ajit Kumar (2008) 300 ITR 152(MAD HC) Thus, at no point of time, the appellant firm, was ever subjected to search proceedings u/s 132 and the appellant firm not being a person searched, notice u/s 153A served on it was invalid and assessment orders framed u/s 143(3) r.w.s. 153A in consequence thereof for all assessm....
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....place of the business of the assessee, any assessment can be made by issuing notice u/s.153A of the Act. We find that, in the present case the search warrant on the basis of which search has been conducted at the premises 40, Deshmukh Apartments, Dattatray Nagar bears the name of the appellant firm along with the name of partners but the premises searched does not belong to the appellant firm nor the firm was carrying on any business from the said place. The premises searched by the authorised officers is the residence of the partners and not the business place of the assessee firm. The address of the premises from where the appellant firm conducts its business as mentioned in the firm's partnership deed, notice issued u/s 133A, return of income, all correspondences made with the department and as per IT database is 16 &17, Medical College Road, TB Ward Chowk, Ajni, Nagpur, which is not disputed. The address of the business premises of the firm is not mentioned in the search warrant. We find merit in the contention of the Ld. Counsel for assessee that the search warrant authorises the authorised officer, only to enter and search the specified building i.e.,40, Deshmukh Apartments, ....
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....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. 153B. (1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment, - (a) in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section (1) of section 153A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search undersection 132 or for requisition under section 132A was executed; (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed: (2) The....
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....s the Assessing Officer to assessee or reassess the income of six assessment years immediately preceding assessment years relevant to the previous year in which the search has been conducted or requisition is made. The said subsection using the term "search is conducted" had also specified assessment year for which the re-assessment proceedings are triggered after search. It is clear from the above that the provisions of section 153A of the Act come into play only after search has been conducted. The provisions of section 153B of the Act provides that authorization of warrant shall be deemed to be executed upon the conclusion of search as recorded in the last panchnama drawn in relation to the persons in whose case the warrant or authorization has been issued. So, in all the sections the term used is important that last panchnama drawn in relation to any person. Thus, in order to complete the search, there is an initiation of proceedings u/s 132(1) of the Act, actual conduct of search in terms of search warrant issued which includes search in the premises of the assessee and other places and also the last stage panchnama which is conclusive proof of conclusion of search from which ....
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....tle the revenue to initiate proceedings u/s 153A. Having searched the residence of partners the revenue could have initiated action against the assessee firm only u/s 153C had any document pertaining to assessee firm were seized from the residential premises. The search conducted qua the assessee firm was not a valid search. In such cases proceedings u/s 153A are invalid". b) The Hon'ble ITAT, Mumbai bench in the case of Regency Mahavir Properties v. ACIT (Supra) observed and held "The search has been initiated in the name of the assessee along with other assessee's appearing on the warrant of authorization issued u/s 132(1) but it did not mention the address of the premises from where the assessee conducts business. No incriminating material relating to the assessee was found in the premises where the search was carried out. The search was concluded but no panchnama was drawn in the name of the assessee. Therefore, the conditions as stipulated for assuming the jurisdiction u/s. 153A have not been satisfied. The assessment in consequence of such notice is invalid and void ab initio". c) The Hon'ble ITAT, Mumbai bench in the case of J.M. Trading Corpn. Vs. ACIT (Supra) held th....