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I-T - Whether when legal heir of dead assessee participated in assessment proceedings and never raised the issue of invalid search prior to issue of notice u/s 158BD, same can be a ground before the Apex Court - NO: SC

By TIOL News Service

NEW DELHI, MAR 29, 2017: THE issue is - Whether when the legal heir of the dead assessee participated in the assessment proceedings and never raised the issue of invalid search prior to issue of notice u/s 158BD, the same can be a ground before the Apex Court. NO is the answer.

Facts of the case

Revenue issued Section 132 Notice in the name of a dead person but the same was duly received by the petitioner as the legal heir of the dead person. The petitioner had participated in the assessment proceedings after a notice u/s 158BC was served on him. Thereafter, a notice under Section 158BD of the Act was issued on the basis of information coming to light in the course of a search. A writ was filed which favoured the petitioner.

On appeal, the Apex Court held that,

++ the point urged before us is that if the original search warrant is invalid the consequential action under Section 158BD would also be invalid. We do not agree. The issue of invalidity of the search warrant was not raised at any point of time prior to the notice under Section 158BD. In fact, the petitioner had participated in the proceedings of assessment initiated under Section 158BC of the Act. The information discovered in the course of the search, if capable of generating the satisfaction for issuing a notice under Section 158BD, cannot altogether become irrelevant for further action under Section 158BD of the Act;

++ the reliance placed on the decision of the High Court of Punjab and Haryana in Commissioner of Income -tax, Karnal vs. Rakesh Kumar, Mukesh Kumar against which Special Leave Petition [SLP(C) NO...CC 3623/2009] has been dismissed by this Court and the decision of this Court in Assistant Commissioner of Income-tax, Chennai vs. A.R. Enterprises are on entirely different facts;

++ in Rakesh Kumar, Mukesh Kumar the challenge was to the proceedings of assessment under Section 158BC of the Act on the basis of a search warrant issued in the name of a dead person. The issue in A.R. Enterprises has no similarity to the issue in hand, namely, the validity of the proceedings under Section 158BD of the Act.

(See 2017-TIOL-137-SC-IT)


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