ITO Can Presume That Books Of A/C Found During Search U/s 132/ Survey U/s 133A Belongs To Person Upon Whom Said Action Is Initiated: Delhi ITAT

The Bench of M. Balaganesh (Accountant Member) and Yogesh Kumar U.S. (Judicial Member) reiterated while referring the decision of Orrisa High Court in the case of Shiva Cement Ltd. Vs. Director of Income Tax (Inv.), Bhubaneswar reported in (2021) 132 Taxmann.com 286 (Orissa) that “there is nothing in either in Section 132 or 133A of the Act that prohibits the Department from undertaking a survey of an entity exclusive to one location of its operations, whereas it may have credible information for search as regards the operations in another location. As rightly pointed out by the Department, search is qua a 'place' and not necessarily qua the 'Assessee'. Survey by its very nature could be of the entity and any place from where such entity may operate. It is perfectly possible that while conducting survey and search of the premises of an entity, for which an authorisation has been issued, the Department can come across material pertaining to some other person or entity. The provisions like Section 153C of the Act deal with such contingencies.” (Para 10)

As per the brief facts of the case, a search and seizure operation u/s 132 was conducted, wherein the assessee case was also covered. The assessment proceedings were initiated against the assessee u/s 153A, in response to the same, the assessee filed return of income declaring total income of Rs. 22,05,280/-. The Assessment Order came to be passed by making addition to the tune of Rs. 10,80,000/- u/s 56(2)(vii) on account of purchase of property below the circle rate and further made addition of Rs.35,80,000/- on account of unexplained credit in the bank account of the assessee.

The CIT(A) restricted the addition by adopting circle rate of the property at Rs. 18,000/- instead of 20,000/- considered by the A.O. and deleted the remaining addition.

The Bench noted that the assessee contended before the CIT(A) that there was no legal and proper search warrant/panchnama in the name of the assessee, which was verify from the AO and it was communicated by the AO that the search warrant was executed in the name of the assessee.

The Bench observed by the plain reading of section 292CC of the Finance Act, 2012, that it shall not be necessary to issue an authorization u/s 132 of the Act separately in the name of each person where the authorization has been issued mentioning thereon more than one person.

The Bench further observed while referring to the case of Commissioner of Income Tax Vs. Devesh Singh (2012) 24 Taxmann.com 26 (All.) (FB) that the assessments made in the individual capacity of each person named in the warrant of authorisation was perfectly within the jurisdiction of the Assessing Authority and the Commissioner of Income Tax (Appeals) as also the Tribunal were not justified in annulling the assessment on the ground that if the warrant of authorisation was issued jointly in the name of more than one person, the assessment could not have been made in the capacity of an individual.

The Bench observed while referring the decision of Orrisa High Court in the case of Shiva Cement Ltd. Vs. Director of Income Tax (Inv.), Bhubaneswar reported in (2021) 132 Taxmann.com 286 (Orissa) that the warrant of authorization for search issued u/s 132(1) was qua 'premises'- and not qua 'assessee' common search warrant, a common panchnama and common warrant of Authorization issued against two assessees who were two separate group companies engaged in different businesses but operating from one premises.

Therefore, ITAT dismissed the appeal filed by the assessee.

Counsel for Appellant/ Assessee: Gautam Jain & Lalit Mohan

Counsel for Respondent/ Revenue: Waseem Arshad

Case Title: Smt. Kusum Mittal verses DCIT

Case Number: ITA No.808/Del/2022

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