Ita/211/2012 Of M/S. A.m. Motors v. The Deputy Comissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE WEDNESDAY, THE 23RD DAY OF OCTOBER 2013/1ST KARTHIKA, 1935 ITA.No. 211 of 2012 ----------------------- AGAINST THE ORDER IN IT(SS)A.NO.22/COCH/2007 OF INCOME TAX APPEALLTE TRIBUNAL,COCHIN BENCH,COCHIN .... APPELLANT(S):RESPONDENT: ---------------------------------------------- M/S. A.M. MOTORS, VARANGODE, MALAPPURAM, PAN: BY ADVS.SRI.ANIL D. NAIR SRI.J.R.PREM NAVAZ SRI.R.SREEJITH SMT.NIVEDITA A.KAMATH RESPONDENT(S):APPELLANT: ----------------------------------------------- THE DEPUTY COMISSIONER OF INCOME TAX, CENTRAL CIRCLE, THRISSUR - 680 001. BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 23-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA.NO.211/2012 APPENDIX APPELLANT'S ANNEXURES: ANNEX.A:COPY OF THE ORDER OF ASSESSMENT FOR THE BLOCK PERIOD ¼/1996 TO 28/8/2002 ISSUED TO THE APPELLANT. ANNEX.B:COPY OF THE APPEALLATE ORDER DTD. 22/01/2007. ANNEX.C:COPY OF THE GROUNDS OF APPEAL FILED BY THE REVENUE. ANNEX.D: COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL. RESPONDENT'S ANNEXURES: N I L /TRUE COPY/ P.A.TO JUDGE Kss MANJULA CHELLUR,C.J. & A.M.SHAFFIQUE, J. = = = = = = = = = = = = = = = = I.T.A No.211 of 2012 = = = = = = = = = = = = = = = = = = = = = Dated this the 23 rd day of October, 2013 Manjula Chellur,CJ JUDGMENT This appeal came up for admission before us. After hearingthe learned counsel arguing for the appellant, we have gonethrough the orders of the Assessing Officer and the Tribunal. 2. The main contention of the appellant is, the materialsecured and impounded during a survey conducted by thedepartment in the premises of the appellant assessee firm underSection 133A of the Income Tax Act (for short the Act) cannot beused for proceedings under Section 158BD as there is nopresumptive value for such material as happens under Section132(4) search and seizure. 3. The brief facts that led to the filing of the present appealare as under. 4. A search and seizure was conducted in the premises ofone Mr.P.Mohammed Sherief, one of the partners of the present appellant-assessee firm. So far as the assessment pertaining toMr.Mohammed Sherief, the matter was remanded back to thefile of the Assessing Officer as substantive additions were made.When the assessment of the present appellant-assessee came upon protective basis, according to learned counsel for theappellant, similar exercise was adopted which is uncalled in thelight of Section 133A having no presumptive value. 5. The Tribunal at paragraph 4 of the orders after referring to Section 158BB(1) analyses that undisclosed incomehas to be computed only on the basis of material found duringthe course of search operation or the information which isrelatable to the material found during the course of searchoperation. This provision if read along with Section 132(4) of theAct, then the question of presumptive value comes into play. 6. According to the appellant, the material against theappellant-assessee was not relatable to search and seizure underSection 132(4), but it is under Section 133A. What the tribunalhas considered is, proper exercise that has to be adopted by theassessing authority with reference to the materials seized duringthe search, if any, related to the appellant firm independently and nothing to do with the material recovered during the surveyunder Section 133A. 6. According to the appellant, the material against theappellant-assessee was not relatable to search and seizure underSection 132(4), but it is under Section 133A. What the tribunalhas considered is, proper exercise that has to be adopted by theassessing authority with reference to the materials seized duringthe search, if any, related to the appellant firm independently and nothing to do with the material recovered during the surveyunder Section 133A. 7. The Tribunal was justified in saying that the materialfound during the course of survey operations is independent andhas nothing to do with the material found during the course ofsuch operation. Therefore, ultimately what one couldunderstand from the orders of the Tribunal is that if there is anymaterial found during the course of survey operation though itdoes not form basis for proceedings so far as protectiveassessment under Section 132 proceedings read with Section158, but it has to be independently dealt with in accordance withthe procedure. Again it does not mean that if any material ispointing out against the appellant firm, still on account of surveyunder Section 133A, no action could be taken against theappellant firm. 8. In other words, if any material is disclosed against theassessee-appellant during the search and seizure proceedingsconducted in the premises of Mohammed Sherif the authoritieshave to proceed against the assesseee in accordance with theprocedure contemplated so far as protective basis. So far asmaterial recovered during the course of survey, it has to be in accordance with the procedure contemplated under Section 133A.Such material could be considered for relevant action as providedunder the Act but not for any course of action so far as Section132A search and seizure. This is what the Tribunal has done andthe Tribunal's opinion is justified because so far as the additionsmade in the hands of the partner, that is Mohammed Sherif, wasremitted back to the authorities for fresh assessment and if in theexercise of powers by the assessing officer to make fresh ordersthey are at liberty to consider the case of the appellant assesseealso only in accordance with the procedure under Section 132(4)read with provisions under Section 158 of the Act.This shallnot come in the way of the authorities taking independent course ofaction if any under that provision on account of material collectedby them during the survey. Accordingly the appeal is dismissed. MANJULA CHELLUR, CHIEF JUSTICE A.M.SHAFFIQUE, JUDGE.