The Commissioner Of Income Tax v. Capital Power Systems Ltdb-40, Sector 4, Noida

*IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on 22.11.2011 +ITA 1115/2008 THE COMMISSIONER OF INCOME TAX versus ..... Appellant CAPITAL POWER SYSTEMS LTDB-40, SECTOR 4, NOIDA ..... Respondent WITH +ITA 1228/2011 THE COMMISSIONER OF INCOME TAX versus ..... Appellant CAPITAL POWER SYSTEMS LTDB-40, SECTOR 4, NOIDA ..... Respondent Advocates who appeared in this case:For the Appellant: Ms Suruchi AggarwalFor the Respondent: Mr. Piyush Kaushik CORAM:HON'BLE MR. JUSTICE BADAR DURREZ AHMEDHON'BLE MS. JUSTICE VEENA BIRBAL 1. Whether Reporters of local papers may be allowed to see thejudgment?judgment? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported in Digest? BADAR DURREZ AHMED (ORAL) 1.ITA No. 1115/2008 and 1228/2011 arise out of the common orderpassed by the Income Tax Appellate Tribunal on 08.02.2008 pertaining to theblock assessment period 01.04.1989 to 17.12.1999 and in respect of twoappeals filed by the assessee and the revenue in I.T. (SS) A.No. 58 (Del) 2005and I.T. (SS) A. No. 125 (Del) 2005, respectively, before the said Tribunal. 2.ITA No. 1115/2008 and ITA No. 1228/2011 are appeals by the revenueand both arise out of the common order passed by the Income Tax AppellateTribunal on 08.02.2008 pertaining to the block assessment period 01.04.1989to 17.12.1999 in respect of appeals filed by the assessee and revenue being I.T(SS) A. No. 58/Del/2005 and I.T (SS) A. No. 125/Del/2005, respectively,before the said Tribunal. 3.In the assessee’s appeal before the Tribunal one of the points taken wasthat the warrant of authorization had been issued by the Joint Director ofIncome Tax (Investigation), who was not authorized to issue a search warrantand, therefore, the assessment made in consequence of such an invalid searchwarrant, was itself invalid and was liable to be quashed. 4.The Tribunal, following the decision of this court inDr. NaliniMahajan & Others v. Director of Income Tax (Investigation) & Others:257ITR 123, accepted the plea taken by the assessee and held that the Joint Director of Income Tax (Investigation) was not authorized to issue searchwarrants and consequently the search warrant became invalid as did theassessment which followed thereafter.In view of the fact that the entireproceedings were held to be invalid, the other grounds taken by the assessee inhis appeal were not gone into by the Tribunal. Similarly, the revenue’s appealwas also not examined because the assessment itself was quashed on the firstground before the Tribunal. 5.The learned counsel for the revenue now points out before this court thatby virtue of The Finance (No.2) Act, 2009, an amendment has been introducedin section 132 (1) with retrospective effect from 01.10.1998 whereby the JointDirector has also been empowered to issue warrants of authorization. In viewof this amendment, the impugned order is liable to be set aside and the matter isto be remitted to the Tribunal to consider the appeals filed by the assessee aswell as by the revenue on all the other grounds urged by the parties. 6.Consequently, we set aside the impugned order and remit the mattersback to the Tribunal with the direction that the revenue’s appeal before theTribunal gets revived and so does the assessee’s appeal before the Tribunal onall points originally urged before the Tribunal. 7.As requested by the learned counsel for the respondent/assessee, thisorder passed by us today is without prejudice to the assessee’s right tochallenge the constitutional validity of the amendment introduced by The Finance (No.2) Act, 2009 whereby the amendments were introduced in section132 (1) empowering the Joint Director of Income Tax to issue a warrant ofauthorization with retrospective effect. 8.On these terms, the appeals stand disposed of. BADAR DURREZ AHMED, J November 22, 2011kb VEENA BIRBAL, J