Punjab & Haryana H.C : There was no warrant under section 132(1) of the Income-tax Act ignoring the fact that the order was passed by invoking the provisions of section 158BD for which execution of warrant was not a prerequisite

High Court Of Punjab & Haryana

CIT vs. Girdhari Lal Bassi

Block Periods : 1-4-1985 To 11-8-1995

Section : 158BE

Adarsh Kumar Goel And Ajay Kumar Mittal, JJ.

IT Appeal Nos. 130 And 133 Of 2005

August  4, 2010

JUDGMENT
 
Adarsh Kumar Goel, J.– This order will dispose of I.T.A. Nos. 130 and 133 of 2005 as a common question of law is involved. The facts have been taken from I.T.A. No. 130 of 2005.

2. This appeal has been preferred by the Revenue under section 260A of the Income-tax Act, 1961 (for short, “the Act”) against the order dated October 5, 2004 passed by the Income-tax Appellate Tribunal, Chandigarh Bench “B”, Chandigarh in I. T. A. No. 1065/Chandi/96 for the block period April 1, 1985 to August 11, 1995, proposing to raise the following substantial question of law :

“Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in cancelling the order passed under section 158BC holding that there was no warrant under section 132(1) of the Income-tax Act ignoring the fact that the order was passed by invoking the provisions of section 158BD for which execution of warrant was not a prerequisite ?”

3. The assessee is a Hindu undivided family. Search and seizure operation was conducted at the premises of the karta of the assessee on August 11, 1995. From the materials seized, it was found that the assessee had made a deposit of Rs. 10 lakhs on March 20, 1995 in the bank account. The assessee filed a return for the block period from April 1, 1985 to August 11, 1995 declaring nil income. On being confronted with the undisclosed deposit in the bank account, the karta of the assessee in his statement dated August 14, 1996 surrendered the amount for being taxed. Accordingly, the Assessing Officer assessed the amount as undisclosed income. On appeal, the addition was deleted, inter alia, on the ground that there being no search warrant in the name of the assessee, the provisions of section 158BC of the Act were not attracted.

4. We have heard learned counsel for the parties and perused the record.

5. Learned counsel for the Revenue challenges the finding recorded by the Tribunal as erroneous in law by submitting that the order under section 158BC was justified even in the absence of search warrants being in the name of the assessee. From the material found during the search, the liability of the assessee was clearly established. Learned counsel relies upon the judgment of the hon’ble Supreme Court in Manish Maheshwari v. Asstt. CIT [2007] 289 ITR 341 (SC).

6. Learned counsel for the assessee relies upon the judgment of the Bombay High Court in CIT v. Tirupati Oil Corporation [2001] 248 ITR 194 (Bom) and the judgment of the Delhi High Court in CIT v. Ms. Pushpa Rani [2007] 289 ITR 328 (Delhi).

7. It is not disputed by learned counsel for the assessee that satisfaction in terms of section 158BD was duly recorded on September 14, 1995 which fact has been omitted by the Tribunal from consideration as stated in para. 3 of the memo of appeal. The satisfaction was recorded before completion of block assessment of the person searched. The Assessing Officer, was thus, justified in proceeding under section 158BD, even though the said section has not been mentioned in the order of block assessment. The judgments relied upon by learned counsel for the assessee are distinguishable as therein satisfaction was not recorded in terms of section 158BD of the Act. In Manish Maheshwari [2007] 289 ITR 341 (SC), it has been held that if satisfaction is duly recorded, the person other than the searched person can also be proceeded against under section 158BD of the Act. Accordingly, the question has to be answered in favour of the Revenue and against the assessee. Ordered accordingly.

8. The appeals are allowed and order of the Tribunal is set aside.

[Citation : 336 ITR 255]

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