TaxTMI 
TaxTMI 
2006 (8) TMI 177
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....cers of the Union of India in its Income-tax Department. The petitioners challenge the order dated July 29, 1992, passed by respondent No. 1-Commissioner of Income-tax in proceedings under section 132(12) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). In short their contention is that they are exempt from the provisions of the Income-tax Act because of exemption available to public trust in view of section 10(22) of the Act and, hence in appeal under section 132(12), respondent No. 1 was duty bound to record a finding about this status of the petitioners and as that has not been recorded, the said order dated July 29, 1992, is liable to be quashed and set aside. They also sought stay of assessment proceedings undertaken....
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....this court in Writ Petition No. 380 of 1992 and challenged the order dated June 13, 1991, and in the alternative sought direction to respondent No. 1 to dispose of their application under section 132(11) immediately. A Division Bench of this court on March 5, 1992, disposed of the said writ petition after recording the submission of respondent No. 1 that appeal (application under section 132(11)) could be disposed of by April 15, 1992, and directed deferring of proceedings under section 148 of Act till its disposal. Accordingly, respondent No. 1 has disposed of the said proceedings on July 29, 1992, and this order has been challenged in the present petition. 3. I have heard senior advocate M. G. Bhangade with advocate V. V. Bhangade for ....
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....r 132(12) are not final but of interlocutory nature passed only with a view to determine whether entire assets or securities discovered in search need to be retained till finalization of assessment. He argues that the question of entitlement of the petitioner to claim exemption will be considered in section 148 proceedings and at present no interference in the matter is warranted. Reliance is placed upon the judgment of the hon'ble apex court reported at Aditanar Educational Institution v. Addl. CIT [1997] 224 ITR 310; AIR 1997 SC 1436, to show that exemption is required to be considered for each year separately and independently and, hence, the same can be done more conveniently while finalizing the liability of the petitioner, if any, und....
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....epresent undisclosed income. It is further observed that if there is any violation in exercise of that power by the income-tax authority, the proper remedy is to lodge an appeal before the appellate authority. The hon'ble Division Bench, therefore, refused to interfere with the order under section 132(5) on the contention raised that Officer passing that orders relied upon certain statements without giving assessee an opportunity to cross-examine those persons, as the assets recovered were to be held in custody by the officer till completion of assessment proceedings. It is, therefore, clear that the assessee there had remedy of filing appeal under section 132(11) and he approached the hon'ble High Court without exhausting it. The judgment ....
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..... The provision being in favour of the assessee and that too in a taxing statute, it needs to be interpreted liberally in favour of the assessee. The provision is made only to see that power of search is not misused to the prejudice of the citizen and the officer must find out the quantum of asset or security which reasonably is sufficient to meet the total existing liability of tax with interest upon undisclosed income discovered in such search. If assets or securities with him are in excess, he has to return the same to assessee forthwith. Though this order is not final and subject to assessment orders made in regular proceedings, still the Legislature has taken precaution to see that there is no unnecessary harassment of the assessee in ....
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....ds tax liability if undisclosed income is otherwise explained. 8. In the present case, respondent No. 1 has refused to consider the claim for exemption on the ground that it would result in premature decision of matters which need to be decided during course of regular assessment proceedings. It is obvious that there is failure to exercise jurisdiction on the part of respondent No. 1. The said order, therefore, to that extent is unsustainable and matter needs to be remanded back to respondent No. 1 to prima facie consider correctness or otherwise of the claim for exemption made by petitioners and its appreciation by respondent No. 3 in its order dated June 13, 1991 under section 132(5) of the Act. 9. Accordingly, the impugned order da....