C/Taxap/1/2017 Judgment v. C/Taxap/1/2017

C/TAXAP/1/2017 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1 of 2017With R/TAX APPEAL NO. 2 of 2017With R/TAX APPEAL NO. 5 of 2017With R/TAX APPEAL NO. 6 of 2017 FOR APPROVAL AND SIGNATURE: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE DR.JUSTICE A. P. THAKER ==========================================================1 Whether Reporters of Local Papers may be allowed to Yessee the judgment ?2 To be referred to the Reporter or not ? Yes3 Whether their Lordships wish to see the fair copy of the Nojudgment ?4 Whether this case involves a substantial question of law Noas to the interpretation of the Constitution of India or any order made thereunder ?==========================================================PRINCIPAL COMMISSIONER OF INCOME TAX 1,VersusDILIP AVTAR CONSTRUCTION PVT LTD==========================================================Appearance:MRS MAUNA M BHATT(174) for the APPELLANT (s) No. 1MR B S SOPARKAR(6851) for the RESPONDENT(s) No. 1========================================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANIand HONOURABLE DR.JUSTICE A. P. THAKER Date : 24/12/2018 COMMON ORAL JUDGMENT (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1.All these appeals arise out of a common order dated 15.2.2016 made by the Income Tax Appellate Tribunal, Ahmedabad Bench 'D' (hereinafter referred to as the “Tribunal”) in IT (SS)A No.530/Ahd/2012, IT (SS)A No.531/Ahd/2012,C.O.No.02/Ahd/2013andC.O. No.03/Ahd/2013. 2.By an order dated 16.1.2017, this court has admitted these appeals on the following substantial question of law:- “Whether the Appellate Tribunal has erred in facts and in circumstances in quashing the assessment proceedings under section 153C initiated against the assessee on the ground that authorization of search under section 132 of the Act was quashed in the case of the reached (sic. searched) person?” 3.The facts stated briefly are that a search came to be carried out under section 132 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) in the premises of Dr. Rajesh Rajora. Pursuant thereto, proceedings under section 153C of the Act came to be instituted against the respondent assessee. The Assessing Officer, by an order dated 30.12.2011, made under section 153A read with sections 153C and 143(3) of the Act, assessed the total income of the assessee at Rs.1,57,31,665/- and further directed initiation of penalty proceedings under section 271(1)(c) read with section 274 of the Act. The assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals), who by an order dated 21.8.2012 partly allowed the appeals. The respondent assessee filed cross objections, inter-alia, contending that the Madhya Pradesh High Court in the case of Rajesh Rajora v. Union of India, (2013) 40 taxmann.com 330 (MP) had quashed the issuance of search warrant and subsequent search and seizure proceedings against Rajesh Rajora and, hence, the consequent proceedings under section 153C read with section 153A of the Act in the hands of the respondent assessee ought to be quashed. 3.1Placing reliance upon an earlier order passed by the Tribunal in a case arising out of the search carried out in the case of Rajesh Rajora, by the impugned order, the Tribunal quashed the assessment proceedings by observing that the original point in the assessment order does not survive. The Tribunal held that once the search action itself stands quashed, the present proceedings have no legs to stand. Being aggrieved, the revenue filed the present appeals. 3.1Placing reliance upon an earlier order passed by the Tribunal in a case arising out of the search carried out in the case of Rajesh Rajora, by the impugned order, the Tribunal quashed the assessment proceedings by observing that the original point in the assessment order does not survive. The Tribunal held that once the search action itself stands quashed, the present proceedings have no legs to stand. Being aggrieved, the revenue filed the present appeals. 4.Mrs. Mauna Bhatt, learned senior standing counsel for the appellant, assailed the impugned order by submitting that the Tribunal was not justified in setting aside the assessment under section 153C of the Act merely because the search had been held to be invalid in the case of the searched person. In support of such contention, reliance was placed upon the decision of the Supreme Court in the case of Pooran Mal v. Director of Inspection (Investigation), (1974) 93 ITR 505, for the proposition that even if the search and seizure are in contravention of the provisions of section 132 of the Income Tax Act, still the material seized can be used subject to law before the Income Tax authorities against the person from whose custody it was seized. 4.1It was contended that the proceedings under section 153C of the Act are not dependent on the validity or otherwise of the authorisation under section 132 of the Act. The validity or otherwise of the authorisation under section 132 of the Act would be relevant for the purpose of assessment of the searched person under section 153A and that once satisfaction is reached under section 153C of the Act, the procedure of assessment is required to be followed. 4.2In support of her submission the learned Standing Counsel placed reliance upon the decision of a Division Bench of this court in the case of Gunjan Girishbhai Mehta v. Director of Investigation,(2014) 49 taxmann.com 69 (Guj.) wherein the petitioner had challenged the warrant of authorisation issued under section 132 of the Act as well as the assessment order framed under section 158BC of the Act and notices issued under section 158BD of the Act. The court, while upholding the validity of warrant of authorization, proceeded on the footing that the authorization for search under section 132 of the Act is found to be bad and illegal, and considered the question as to whether if during the search under section 132 of the Act, the Assessing Officer finds that any undisclosed income belongs to any person other than the person with respect to whom the search was made under section 132 of the Act, or whose books of account or other documents or any assets were requisitioned under section 132A of the Act is traced out, the proceedings under section 158BD of the Act against any other person, other than the person with respect to whom the search was made would be permissible and/or maintainable or not? The court turned down the contention that the notices under section 158BD the Act on the basis of material with respect to undisclosed income found against other persons, during the course of such search would not be permissible and/or maintainable. The petitioner thereafter carried the matter before the Supreme Court, which in the case ofGunjan Girishbhai Mehta v. Director of Investigation, 2017 (393) ITR 310, held that if the original search warrant is invalid, the consequential action under section 158BD of the Act would also not be rendered invalid. It was urged that the above decisions would be squarely applicable to the facts of the present case and that the appeals deserve to be allowed by answering the question in favour of the revenue and against the assessee. 4.3Reliance was further placed upon the decision of the Allahabad High Court in the case of Commissioner of Income Tax (Central) v. Gopi Apartment, 2014 (365) ITR 411, for the proposition that section 158BD is in pari materia with the provisions of section 153C of the Act. Reliance was also placed upon the decision of the Madhya Pradesh High Court in the case of Commissioner of Income Tax v. Mechmen, 2016 (380) ITR 591 (MP), for a similar proposition of law. 5.Opposing the appeal, Mr. B. S. Soparkar, learned advocate for the respondent submitted that the decisions of this court as well as the Supreme Court in the case of Gunjan Girishbhai Mehta (supra) were rendered in the context of sections 158BC and 158BD of the Act and would not be applicable to sections 153A and 153C of the Act. Reference was made to the provisions of section 158BD of the Act to submit that the same requires the Assessing Officer of the searched person to record satisfaction that any undisclosed income belongs to any person other than the searched person. It was submitted that while section 153C requires the Assessing Officer to record a satisfaction that certain articles belonging to a certain person other than the searched person as opposed to the satisfaction required under section 158BD of the Act. It was submitted that section 153C of the Act requires satisfaction of a fact that the money, bullion, articles etc. belong to a certain person, as opposed to the satisfaction that there is undisclosed income, and in that light the satisfaction of fact is to be determined that when the material belongs to a certain person and that such search is quashed, and the assessment of the searched person is also quashed, the residuary satisfaction of fact that this material belongs to a certain person cannot survive, more so, in view of the fact that assessment under section 153C of the Act is to be carried out in accordance with the provisions of section 153A. It was contended that section 153C of the Act does not contain the words “undisclosed income” and, therefore, no satisfaction is required to be recorded by the Assessing Officer that any undisclosed income is found. It was submitted that, therefore, the premise and satisfaction in which both these provisions rest are entirely different. Section 153C of the Act requires a factual finding of incriminating material having been found whereas section 158BD requires the Assessing Officer to form an opinion that some undisclosed income belongs to a person other than the searched person is found. It was submitted that section 153C of the Act does not require the Assessing Officer to record satisfaction regarding undisclosed income and the finding regarding undisclosed income takes place only at the stage of assessment under section 153C and that the seized documents are analysed only at the stage of assessment. According to the learned advocate, section 153C of the Act is a completely procedural section as opposed to section 158BD which requires the Assessing Officer to record a satisfaction that undisclosed income belongs to another person. It was submitted that it is the undisclosed income that triggers the proceeding under section 158BD of the Act, whereas section 153A and 153C go hand in hand. If a proceeding under section 153A of the Act falls, the proceeding under section 153C as a natural corollary would also fall. 5.1In support of such submission, the learned advocate placed reliance upon the decision of the Delhi High Court in the case ofSaraya Industries Limited v. Union of India and others, 2008 (306) ITR 189 (Delhi) for the proposition that section 153A and section 153C of the Act are in pari materia. 5.1In support of such submission, the learned advocate placed reliance upon the decision of the Delhi High Court in the case ofSaraya Industries Limited v. Union of India and others, 2008 (306) ITR 189 (Delhi) for the proposition that section 153A and section 153C of the Act are in pari materia. 5.2Reliance was placed upon the decision of this court in the case of Commissioner of Income Tax v. Ramesh D. Patel, 2014 (362) ITR 492 wherein the court placed reliance upon the decision of the Orissa High Court in the case of Siksha “O” Anusandhan v. CIT, 2011 (336) ITR 112. Reference was made to the above decision of the Orissa High Court wherein the court held that in absence of any search warrant in the name of an assessee, search conducted in its premises is not a valid search as contemplated under section 132 of the Income Tax Act. The court was further of the view that initiation of a valid search as contemplated under section 132 of the Act in case of a person is a prerequisite to issue notice for making assessment/reassessment under section 153C of the Act in respect of such person. It was submitted that, therefore, when the search itself has been held to be invalid the proceedings under section 153C of the Act would suffer from the same defect. 5.3Reference was made to the decision of the Madhya Pradesh High Court in the case of Rajesh Rajora v. Union of India, (2013) 40 taxmann.com 330 (Madhya Pradesh), to submit that the said court has quashed the issuance of warrant of authorisation and consequent search and seizure proceedings. It was submitted that in the present case, the proceedings under section 153C of the Act have been initiated pursuant to search and seizure carried out in the case of Rajesh Rajora, and hence, when the search and seizure had been quashed, the proceedings under section 153C of the Act would not survive. 5.4It was submitted that insofar as section 153C of the Act is concerned, different parameters are required to be satisfied and that requirement of search and seizure are embedded therein which is missing in section 158BD of the Act. It was, accordingly, contended that the decision of this court and the Supreme Court in the case of Gunjan Girishbhai Mehta (supra) is not relevant for the interpretation of section 153C of the Act. 6.From the facts as emerging from the record, it is evident that till the date of the passing of the order of the Commissioner (Appeals), the judgment of the High Court setting aside the search in the case of Rajesh Rajora had not been passed. Therefore, before the Assessing Officer as well as the Commissioner (Appeals), no contention had been raised with regard to the validity of the search. It is only when the validity of the search was examined in the case of the searched person and held to be invalid, that this contention was raised in the cross objection filed by the assessee before the Tribunal. 7.Since the question raised in these appeals arises only out of the order of the Tribunal and was not raised before the Assessing Officer or the Commissioner (Appeals), it is not necessary to refer to the orders passed by either of the said authorities. Commissioner (Appeals), the judgment of the High Court setting aside the search in the case of Rajesh Rajora had not been passed. Therefore, before the Assessing Officer as well as the Commissioner (Appeals), no contention had been raised with regard to the validity of the search. It is only when the validity of the search was examined in the case of the searched person and held to be invalid, that this contention was raised in the cross objection filed by the assessee before the Tribunal. 7.Since the question raised in these appeals arises only out of the order of the Tribunal and was not raised before the Assessing Officer or the Commissioner (Appeals), it is not necessary to refer to the orders passed by either of the said authorities. 8.A perusal of the impugned order passed by the Tribunal reveals that before the Tribunal, it was pointed out during the course of hearing that in an identical case of DCIT v. Madhu Khurana, the Tribunal had dismissed identical appeals preferred by the revenue based on the very search action on the ground that the Madhya Pradesh High Court in the case of Rajesh Rajora v. Union of India (supra) has quashed the issuance of the search warrant itself. In that case, the Tribunal held that in view of the decision in the case of Rajesh Rajora (supra) which was the original point in that case, the assessment order does not survive and quashed the assessment proceedings. After considering the above decision, the Tribunal, in this case has held that there can hardly be any dispute that once the search action itself stands quashed, the proceedings in question have no legs to stand. 9.On behalf of the appellant, strong reliance has been placed upon the decision of this court in Gunjan Girishbhai Mehta v. Director of Investigation (supra), wherein the petitioners had challenged the warrant of authorisation issued under section 132 of the Act as well as the assessment order framed under section 158BC of the Act. In the facts of that case, on behalf of the respondent, it was contended that the only mandatory requirement of section 158BD of the Act is that the Assessing Officer of the searched person should be satisfied that undisclosed income belongs to some “other person” and upon recording this satisfaction, the books of account, etc. are required to be handed over to the Assessing Officer of such other person. Once these two mandatory requirements/conditions are fulfilled, the Assessing Officer of the 'other person’ is under a mandate to proceed against the other person. It was, accordingly, contended that it was incorrect on the part of the petitioners to contend that if the search is held to be invalid, the proceedings in the case of ‘other person’ cannot be undertaken. This court held that the search warrant cannot be said to be null and void. It then proceeded on the assumption that the authorisation for search is bad and illegal as it was against a dead person, and examined the issue as to whether when during the search under section 132 of the Act, the Assessing Officer finds that any undisclosed income belongs to any person other than the person with respect to whom the search was made under section 132 of the Act or is traced out, the proceedings under section 158BD of the Act against any other person, other than the person with respect to whom the search was made would be permissible/maintainable or not. The court held thus: - “5.5 Now, considering the aforesaid propositions of law laid down by the Hon’ble Supreme Court, the provisions of section 158BD of the Act and the issue/controversy raised in the present Special Civil Application is required to be considered. Section 158BD of the Act is held to be a machinery provision and inserted in the statute book for the purpose of carrying out assessments of a person other than the searched person under section 132 or 132A of the Act. The special provisions under Chapter XIVB more particularly section 158BD of the Act are devised to operate in the distinct field of undisclosed income and are clearly in addition to the regular assessments covering the previous orders falling in the block period, intended to provide a mode of assessment of undisclosed income, which has been detected as a result of search. A bare reading of the section 158BD of the Act makes it clear that for invoking a block assessment, there must be a search conducted under section 132 of the Act, or documents or assessed requisitioned under section 132A and the AO is satisfied that there exists any undisclosed income which may belong to other person other than the person with respect to whom the search was conducted or requisition was made. Therefore, when during the course of a search conducted under section 132 of the Act or from the documents or assessed requisitioned under section 132A the AO finds that there exists any undisclosed income of a person other than the person with respect to whom a search was conducted, such other person is subjected to block assessment under section 158BD of the Act. Section 158BD of the Act does not speak about a valid search conducted under section 132 of the Act. The moment any undisclosed income of a person other than the person with respect to whom the search was conducted or a requisition was made is traced out and/or detected and the AO is satisfied that there exists any undisclosed income of a person other than a person searched under section 132 or 132A, section 158BD would be attracted an such other person with respect to whom undisclosed income is traced out is subjected to block assessment under section 158BD of the Act. Any other view more particularly contention on behalf of the petitioners is accepted, in that case, it would be defeat the object and purpose of enacting section 158BD of the Act. Even otherwise the word used under section 158BD of the Act is “where the AO is satisfied that any undisclosed belongings to any person, other than the person with respect to whom search was made under section 132” and it does not say that “where the AO is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom the valid and legal search was made under section 132”. Under the circumstances and assuming without prejudice to the aforesaid findings with respect to the authorization under section 132 of the Act, that the search was against a dead person and not valid, in that case also, the block assessment proceedings initiated under section 158BD of the Act by the impugned notices cannot be said to be illegal and/or contrary to the provisions of the statute.” 10.The above decision was challenged by the assessee before the Supreme Court, which, in its decision rendered in the case Gunjan Girishbhai Mehta v. Director of Investigation (supra) did not agree with the contention that if the original search warrant is invalid, the consequential action under section 158BD would also be invalid. The court recorded that the issue of invalidity of search warrant was not raised at any point of time prior to the notice under section 158BD and that in fact, the petitioner had participated in the proceedings of assessment initiated under section 158BC of the Act; and held that the information discovered in the course of search, if capable of generating the satisfaction for issuing a notice under section 158BD, cannot altogether become relevant for further action under section 158BD of the Act. 11.On behalf of the respondent assessee, it has been contended that the above referred decision would not be applicable when it comes to interpretation of section 153C of the Act. The learned advocate for the respondent has tried to draw a distinction between the provisions of section 158BD and section 153C of the Act as referred to hereinabove. 12.At this juncture, reference may be made to the provisions of section 158BC, 158BD, 153A and 153C of the Act, which read as under:- “158-BC. Procedure for block assessment. - Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132-A, in the case of any person, then, - (a) the Assessing Officer shall - (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30[th] day of June, 1995 but before the 1[st] day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1[st] day of January, 1997 serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period: Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter: Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return; (b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158-BB and the provisions of section 142, sub-sections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply; (c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) the assets seized under Section 132 or requisitioned under section 132-A shall be dealt with in accordance with the provisions of section 132-B. 158-BD. Undisclosed income of any other person. - (b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158-BB and the provisions of section 142, sub-sections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply; (c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) the assets seized under Section 132 or requisitioned under section 132-A shall be dealt with in accordance with the provisions of section 132-B. 158-BD. Undisclosed income of any other person. - Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132-A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158-BC against such other person and the provisions of this Chapter shall apply accordingly. 153-A. Assessment in case of search or requisition.-Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132-A after the 31[st] day of May, 2003, the Assessing Officer shall - (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Providedfurtherthatassessmentor reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section pending on the date of initiation of the search under section 132 or making of requisition under section 132-A, as the case may be, shall abate. Explanation.-For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153-B and section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. Providedfurtherthatassessmentor reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section pending on the date of initiation of the search under section 132 or making of requisition under section 132-A, as the case may be, shall abate. Explanation.-For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153-B and section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 153-C. Assessment of income of any other person.--(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153-A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153-A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132-A in the second proviso to section 153-A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153-A.” 13.The learned advocate for the respondent has placed reliance upon the words “undisclosed income” as appearing in section 158BD of the Act, to submit that the same requires the Assessing Officer to be satisfied that any undisclosed income belongs to any person before he hands over the books of accounts and other documents or assets seized or requisitioned to the Assessing Officer having jurisdiction over made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153-A.” 13.The learned advocate for the respondent has placed reliance upon the words “undisclosed income” as appearing in section 158BD of the Act, to submit that the same requires the Assessing Officer to be satisfied that any undisclosed income belongs to any person before he hands over the books of accounts and other documents or assets seized or requisitioned to the Assessing Officer having jurisdiction over such other person, whereas section 153C requires the Assessing Officer to be only satisfied that money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs to the person other than the person referred to in section 153A. Insofar as the distinction that is sought to be drawn by the learned advocate for the respondent between the provisions of section 158BD and 153BC of the Act is concerned, reference may be made to the definition of “undisclosed income” as defined under section 158B of the Act, which reads thus: (b) “undisclosed income” includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false.”jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false.” 14.Therefore, while section 158BD of the Act uses the expression “undisclosed income belongs to”, which expression includes any money, bullion, jewellery or other valuable article of thing or any income based on any entry in the books of account or other documents or transactions, section 153C employs the words any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs to a person other than the searched person. Under section 158BD, the Assessing Officer of the searched person has to record satisfaction that such undisclosed income belongs to a person other than the searched person, whereas under section 153C, the Assessing Officer of the searched person has to record satisfaction that 14.Therefore, while section 158BD of the Act uses the expression “undisclosed income belongs to”, which expression includes any money, bullion, jewellery or other valuable article of thing or any income based on any entry in the books of account or other documents or transactions, section 153C employs the words any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs to a person other than the searched person. Under section 158BD, the Assessing Officer of the searched person has to record satisfaction that such undisclosed income belongs to a person other than the searched person, whereas under section 153C, the Assessing Officer of the searched person has to record satisfaction that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs to a person other than the searched person. Since the definition of “undisclosed income” includes money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, the distinction sought to be drawn by the learned advocate for the respondent does not carry any weight inasmuch in effect and substance both the provisions are more or less in pari materia. Under the circumstances, this court is of the view that the decision of this court in the case of Gunjan Girishbhai Mehta (supra) as confirmed by the Supreme Court would be squarely applicable to the facts of the present case and section 153C of the Act would be required to be interpreted accordingly. 15.Insofar as the proviso to section 153C of the Act is concerned, the same provides for reference to the date of initiation of search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. Pertinently, while in case of assessment under section 153A of the Act, the limitation under section 153B of the Act has to be computed with reference to the end of the financial year in which the last of the authorisations of search under section 132 of the Act or for requisition under section 132A of the Act was executed, in case of assessment under section 153C, under the proviso to section 153B, the limitation has to be computed with reference to the end of the financial year in which the books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person. Therefore, for the purpose of assessment under section 153A of the Act, the validity of the authorisation is imperative; whereas in case of an assessment under section 153C, it is handing over of the books of account or documents or assets seized or requisitioned which is material. Therefore, once the Assessing Officer of the other person is in receipt of the books of account or documents or assets seized or requisitioned, and proceeds further with the assessment, such assessment would not be rendered invalid on account of the search having subsequently held to be invalid. 16.At this juncture, reference may also be made to the decision of the Supreme Court in the case of Pooran Mal v. Director of Inspection and Investigation(supra), wherein the court has held thus: 16.At this juncture, reference may also be made to the decision of the Supreme Court in the case of Pooran Mal v. Director of Inspection and Investigation(supra), wherein the court has held thus: “In other words search and seizure for the purposes of preventing or detecting crime reasonably enforced was not inconsistent with the constitutional guarantee against search and seizure. It was held in that case that the search of the appellant by a Police Officer was not justified by the warrant nor was it open to the Officer to search the person of the appellant without taking him before a Justice of the Peace. Nevertheless it was held that the Court had a discretion to admit the evidence obtained as a result of the illegal search and the constitutional protection against search of person or property without consent did not take away the discretion of the Court. Following Kuruma v. Queen the Court held that it was open to the Court not to admit the evidence against the accused if the Court was of the view that the evidence had been obtained by conduct of which the prosecution ought not to take advantage. But that was not a rule of evidence but a rule of prudence and fair play. It would thus be seen that in India, as in England, where the test of admissibility of evidence lies in relevancy, unless there is an express or necessarily implied prohibition in the Constitution or other law evidence obtained as a result of illegal search or seizure is not liable to be shut out. 25. In that view, even assuming as was done by the High Court that the search and seizure were in contravention of the provisions of Section 132 of the Income Tax Act still the material seized was liable to be used subject to law before the Income tax authorities against the person from whose custody it was seized and, therefore, no Writ of Prohibition in restraint of such use could be granted. It must be, therefore, held that the High Court was right in dismissing the two writ petitions. The appeals must also fail and are dismissed with costs.” 17.Thus, what is held in the above decision is that unless there is an express or necessarily implied prohibition in the Constitution or other law, evidence obtained as a result of illegal search or seizure is not liable to be shut out. In other words any evidence, be it undisclosed income belonging to a person other than the searched person as contemplated under section 158 BD; or money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belonging to a person other than the searched person as contemplated under section 153C of the Act, in the absence of an express or necessarily implied prohibition in the Constitution or other law, the evidence obtained as a result of an illegal or invalid search or seizure cannot be shut out. Consequently, merely because in the case of the searched person the issuance of warrant of authorisation and the consequent search and seizure proceedings have been quashed, the evidence obtained during the course of such illegal search cannot be shut out. While there is some substance in the submission advanced on behalf of the respondent-assessee that in case of an invalid search, on the basis of the seized material proceedings ought to be initiated under section 148 of the Act and not section 153C of the Act, in view of the fact that the controversy involved in this case stands more or less concluded by the decision of this court as well as the Supreme Court in the case of Gunjan Girishbhai Mehta (supra), it is not possible to accept such contention. illegal search cannot be shut out. While there is some substance in the submission advanced on behalf of the respondent-assessee that in case of an invalid search, on the basis of the seized material proceedings ought to be initiated under section 148 of the Act and not section 153C of the Act, in view of the fact that the controversy involved in this case stands more or less concluded by the decision of this court as well as the Supreme Court in the case of Gunjan Girishbhai Mehta (supra), it is not possible to accept such contention. 18. In the light of the decision of the Supreme Court in Pooran Mal (supra) as well as Gunjan Girishbhai Mehta (supra), merely because the original search is held to be invalid, the consequential action under section 153C of the Act would not become invalid. As held by the Supreme Court in Gunjan Girishbhai Mehta (supra), when the assessee has participated in the proceedings for assessment, the information discovered during the course of search, if capable of generating satisfaction for issuing notice under section 153C, cannot altogether become irrelevant for further action under section 153C of the Act. 19.In the light of the above discussion, the appeals succeed and are accordingly allowed. The question is answered in the affirmative that is, in favour of the revenue and against the assessee. The Income Tax Appellate Tribunal has erred in quashing the assessment proceedings under section 153C of the Act initiated against the assessee on the ground that the authorisation of search under section 132 of the Act was quashed in the case of the searched person. 20.The cross objections filed by the respondent assessee are hereby partly rejected. IT (SS)A No.530/Ahd/2012 and IT (SS)A No.531/Ahd/2012 preferred by the revenue as well as the cross objections being C.O. No.02/Ahd/2013 and C.O. No. 03/Ahd/2013 to the extent the same challenge the order of the Commissioner (Appeals) on merits are hereby restored to the file of the Tribunal to be decided in accordance with law, after affording reasonable opportunity of hearing to the parties. (HARSHA DEVANI, J) Z.G. SHAIKH (A. P. THAKER, J)