Delhi H.C : Tribunal accepted said plea and set aside assessment – On instant appeal, revenue pointed out that by virtue of Finance (No. 2) Act, 2009, an amendment has been introduced in section 132(1) with retrospective effect from 1-6-1994 whereby Additional Director has also been empowered to issue warrant of authorization

High Court Of Delhi

CIT, Central-II vs. P.C. Jain (HUF)

Assessment Year : 2001-02

Section : 132

Badar Durrez Ahmed And Siddharth Mridul, JJ.

ITA Nos. 155 And 169 And Cm Nos. 1577 And 1578 Of 2010

February 16, 2010

JUDGMENT

ITA Nos. 155/2010 and 169/2010

1. These two appeals arise out of the common order passed by the Income-tax Appellate Tribunal on 22-4-2009 pertaining to the assessment year 2001-02 and in respect of two appeals, one by the Revenue and one by the assessee in ITA Nos. 2138/Delhi/2008 and 1326/Delhi/2008 respectively, filed before the said Tribunal.

2. In the assessee’s appeal one of the points taken was that the warrant of authorization had been issued by the Additional Director of Income-tax (Investigation) who was not authorized to issue such a search warrant and, therefore, the assessment made in consequence of such an invalid search warrant, was itself invalid and was liable to be quashed.

3. The Tribunal, following the decision of this Court in the cases of Dr. Nalini Mahajan v. Director of Income-tax (Investigation) [2002] 257 ITR 123, CIT v. Pawan Kumar Garg[2009] 178 Taxman 491 (Delhi) and Prem Gandhi in [IT Appeal No. 90 of 2009, dated 2-3-2009] accepted the plea taken by the assessee and held that the Additional Director of Income-tax (Investigation) was not authorized to issue the search warrant and consequently the search warrant became invalid as did the assessment which followed thereafter. In view of the fact that the entire proceedings were held to be invalid, the other grounds taken by the assessee in his appeal were not gone into by the Tribunal. Similarly, the revenue’s appeal was also not examined because the assessment itself had been quashed on the first ground taken by the assessee before the Tribunal.

4. The learned counsel for the revenue now points out before this Court that by virtue of the Finance (No. 2) Act, 2009, an amendment has been introduced in section 132(1) with retrospective effect from 1-6-1994 whereby the Additional Director has also been empowered to issue warrants of authorization. In view of this amendment, the impugned order is liable to be set aside and the matter is to be remitted to the Tribunal to consider the appeals filed by the assessee as well as by the revenue on all the other grounds urged by the parties.

5. Consequently, we set aside the impugned order and remit the matter back to the Tribunal with the direction that the revenue’s appeal before the Tribunal gets revived and so does the assessee’s appeal before the Tribunal on all the other points originally urged before the Tribunal.

6. The appeals stand disposed of on these terms.

[Citation : 344 ITR 202]

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