By TIOL News Service

MUMBAI, SEPT 06, 2016: THE issue is - Whether when Revenue has conducted only Survey u/s 133A, an assessment order passed u/s 153A without conducting a search u/s 132 is legally not susstainable. YES is the verdict.

Facts of the case

The assessee Company filed its return. The AO passed an order u/s 143(3) read with sec 153A of the Act. The CIT(A) upheld the order of AO. On further appeal before the Tribunal, the Assessee pointed out that there was no search under Section 132 of the Act but only a survey under Section 133A of the Act. Consequently, the entire proceedings of assessment u/s 153A of the Act, was without jurisdiction. The Tribunal upheld the contenson of the assessee and held that the assessment order was bad in law. Tribunal also did not consider the provisions of sec 292BB of Act.

On appeal, the HC held that,

++ the provisions under Section 153A of the Act are self evident, inasmuch as it clearly states that it applies only to persons in respect of whom search has been initiated under section 132 of the Act or documents are requisitioned under Section 132 of the Act;

++ to same effect is the decision of the Orissa High Court in Siksha "O" Anusandhan v. Commissioner of Income Tax And Others, wherein, the High Court has observed as under:

"The provisions of section 153A make it clear that only in the case of a person where a search is initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A after 31st day of March, 2003, the Assessing Officer shall after issuing notice assess or reassess the total income of such person for six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition made.........."

++ in the above view, question (A), as framed for our opinion, do not give rise to any substantial question of law;

++ so far as question (B) is concerned, Mr. Suresh Kumar, Counsel for the Revenue, very fairly states that although normally in law a defect or an omission to serve notice would not be fatal in view of Section 292BB of the Act, the same would not apply in the present facts. This is for the reasons that the Assessing Officer had no jurisdiction to issue notice so as to assess the Respondent Assessee under Section 153A of the Act. Therefore, Section 292BB of the Act would not apply. In the above view, question (B) does not raise a substantial question of law. Accordingly, not entertained.

(See 2016-TIOL-1987-HC-MUM-IT)