TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 839
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.... been culled out from the pleadings are that against the petitioner company search and seizure operation was conducted under Section 132 of the Act on 30.06.2011. Pursuant to the search proceedings, the assessments for A.Y. 2006-07 to 2012-13 were framed. Notice under Section 153A of the Act was issued on 28.12.2012 and the petitioner company was asked to furnish the return of total income including the undisclosed income. Final assessment was framed under Section 153A of the Act vide Assessment Order dated 28.02.2014. The returned income of Rs. 70,15,770/- was accepted. 3. It is submitted that thereafter in 2016 a search and seizure operation was conducted against M3M India Limited company at its office at Paras Twin, Tower-B, 6th Floor, Golf Course Road, Sector-54, Gurgaon, which was its registered office and business premises. However, while preparing panchnama drawn at the Paras Twin Tower-B, Gurgaon, name of the petitioner company was also added although it is asserted that no authorization for search and seizure under Section 132 of the Act was issued in the name of the petitioner nor any search or seizure was conducted at the premises or registered office of the petitioner ....
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....ld not be assessed as undisclosed income in the hands of the petitioner. 6. Reply was filed and the petitioner raised objections relating to issuance of notice to it under Section 153A of the Act. The petitioner thereafter also moved settlement application before Interim Board for Settlement but it rejected the application on 29.03.2023 under Section 245D (4) of the Act. Addendum order was issued on 31.03.2023 whereafter the assessing officer issued letter to the petitioner on 09.09.2023 and subsequent letters for reassessing their income. 7. The petitioner has filed response on 27.11.2023 asking to provide incriminating material revealing undisclosed income. The respondents informed stating about the search conducted at the house of Gaurav Jain on 16.07.2016 where incriminating material was found from his laptop and also at the office where the panchnama was prepared. 8. The petitioner company submitted its response on 24.01.2024, 29.01.2024 and 30.01.2024 raising objections regarding the proceedings initiated under Section 153A of the Act to be without jurisdiction and without authority in law. The petitioner has been served with a show cause notice dated 30.01.2024 for additi....
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....nder Section 153C of the Act. He submits that in fact there was no new material available and the record relating to the land transactions of Bhiwadi were already mentioned in the record and it is a case of mere change of opinion which cannot be allowed to be sustained. 12. It is further submitted that new material alleged to have been recovered from the cloning of laptop of Gaurav Jain, is without compliance of Section 65B of the Indian Evidence Act and no conclusions can be drawn on the basis of such inadmissible documents. Thus, the action of the respondents is without jurisdiction. 13. Learned counsel for the petitioner further submits that the procedure laid down under Section 153C of the Act was sacrosanct and submits that if a particular procedure has been laid down under the statute, the respondents were obliged to conduct themselves accordingly and a different procedure cannot be adopted. Further submits that the order of imposing Rs. 400/- crores by issuing a fresh assessment order under Section 153A of the Act is based on complete non application of mind. He submits that there is no flow of proceeds of such money traceable to the books of accounts of the petitioner and....
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....s enumerated of clause (a) (b) and (3) of Section 132 of the Act were satisfied. The search operation ought not to be interfered with by this Court as the same denies opportunity to the revenue to derail the layering money as the same ought not to be entertained after passing of the assessment order. 16. It is further submitted that the petitioner cannot be allowed to question the search after participation in pursuance to the search under Section 132 of the Act and submits that the petitioner had moved an application under Section 245C (1) of the Act before the Income Tax Settlement Commission, which was rejected on 29.03.2023 on the ground that the disclosure is not full and true and there is a deficiency in explaining the facts gathered by the department. The order of assessment is, thus, also appealable and on that count the respondents have objected to. 17. Learned counsel for the respondents further submitted that as the panchnama mentioned the name of the petitioner upon search if any documents are received, the proceedings were required to be conducted under Section 153A(1) of the Act alone and there was no occasion to resort to provisions of Section 153C of the Act. It i....
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....e Court has held as under:- "5. A little after the dawn of the Constitution, a Constitution Bench of this Court in its decision reported in 1958 SCR 595 (State of Uttar Pradesh vs. Mohd. Nooh) had the occasion to observe as follows: "10. In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute, (Halsbury's Laws of England, 3rd Edn., Vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But this rule requiring the exhaustion of statutory remedies before the writ will be granted ....
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....ding to the only conclusion that the assessment orders were legally correct and that the final orders impugned in the writ petition were passed upon assuming a jurisdiction which the Revisional Authority did not possess. We find, the orders impugned were passed wholly without jurisdiction. Since a jurisdictional issue was raised by the appellant in the writ petition questioning the very competence of the Revisional Authority to exercise suo motu power, being a pure question of law, we are of the considered view that the plea raised in the writ petition did deserve a consideration on merits and the appellant's writ petition ought not to have been thrown out at the threshold." Thus, in view of the above, this Court under Article 226 of the Constitution of India would be well within its jurisdiction to entertain the petitions where it has to examine whether the power exercised for conducting search and seizure is by duly competent authority. This Court would also entertain petitions where the challenge is to the jurisdiction exercised by the authority also in cases where there is interpretation of the provisions of the Income Tax Act. In the appeal, even if a final order has been pa....
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....rein, to make extracts or copies therefrom and also to make a note or an inventory of any articles or other things found in the course of the search. Since by the exercise of the power a serious invasion is made upon the rights, privacy and freedom of the tax-payer, the power must be exercised strictly in accordance with the law and only for the purposes for which the law authorizes it to be exercised. If the action of the officer issuing the authorization, or of the designated officer is challenged the officer concerned must satisfy the Court about the regularity of his action. If the action is maliciously taken or power under the section is exercised for a collateral purpose, it is liable to be struck down by the court. If the conditions for exercise of the power are not satisfied the proceeding is liable to be quashed. But where power is exercised bona fide, and in furtherance of the statutory duties of the tax officers any error of judgment on the part of the officers will not vitiate the exercise of the power. Where the Commissioner entertains the requisite belief and for reasons recorded by him authorises a designated officer to enter and search premises for books of accou....
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....ng to that company were found during the search at the premises. A panchnama, therefore, cannot be treated to mean authorization issued to the authorities under Section 132 of the Act. 27. Thus, we conclude that based on the name being mentioned in the panchnama alone cannot be a conclusion that there was authorisation to conduct search against the petitioner under Section 132 of the Act and the authorisation to conduct search was only against M3M India Limited having their registered office. If during search in their premises any incriminating articles/ documents/ objects or any material relating to the petitioner was recovered, which is found to be sufficient for the purpose of reassessment by the assessing officer, he was required to follow the procedure laid down under Section 153C of the Act. 28. In Nazir Ahmad vs King Emperor 63 Indian Appeals 372, wherein the Privy Council held as under:- "The rule which applies is a different and not less well recognized rule-namely, that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden. This doctrine has often been appl....
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....ceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated." 30. Thus, we find that a particular procedure has been prescribed, as above. Following the salutary principles of law as laid down in Nazir Ahmad and followed in Rao Shiv Bahadur Singh and Singhara Singh's cases (supra), we find that the respondents were obliged to compulsorily follow the procedure for reassessment of the petitioner company in the manner as prescribed under Section 153C (1) alone and in no other manner. However, we find that the respondents have invoked and initiated proceedings under Section 153A of the Act, although neither there is any search initiated under Section 132 of the Act as against the petitioner nor it can be said that the search was conducted at its premises. Similar view has been taken by Gujarat High Court in Hitesh Ashok Vaswani and Subhash Khattar's cases (supra). Thus, the proceedings initiated under Section 153A are found to be vitiated. 31. In Abhisar Buildwell's case (supra....