Was v. Lekshmi Traders,(2012) (344 Itr 281). Hence Th

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 MONDAY, THE 31ST DAY OF MARCH 2014/10TH CHAITHRA, 1936 ITA.No. 123 of 2013 --------------------------- AGAINST THE ORDER IN IT(SS 52/2008 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 24-08-2012 ------------ APPELLANT/RESPONDENT/APPELLANT/ASSESSEE: --------------------------------------------------------------------------- V.H.YAHIYA, WINDSOR COURT APARTMENTS, ASHIRBHAVAN ROAD, KACHERIPADY, ERNAKULAM, KOCHI-18. BY ADVS.SRI.K.V.SIVASANKARAN SRI.SUNIL SHANKAR RESPONDENT/APPELLANT/RESPONDENT/ASSESSING AUTHORITY: ------------------------------------------------------------------------------------------------- THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), ERNAKULAM. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 14/03/2014 ALONG WITH ITA. 170/2013, ITA. 209/2013, THE COURT ON 31-03-2014, DELIVERED THE FOLLOWING: PJ ITA.No. 123 of 2013 --------------------------- APPENDIX PETITIONERS' ANNEXURES----------------------------------------- ANNEXURE A: COPY OF THE ASSESSMENT ORDER OF THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE II, ERNAKULAM 26/6/2003 ANNEXDURE B: COPY OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN APPEAL NO.E-066/03-04,30/11/2004APPEAL NO.E-066/03-04,30/11/2004 ANNEXURE C: COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN IT (S&S)A NO.40/COCH/2007, 20/11/2007IT (S&S)A NO.40/COCH/2007, 20/11/2007 ANNEXURE D: COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, KOCHI IN ITA NO.E-54/07-08, 28/1/2008(APPEALS)-I, KOCHI IN ITA NO.E-54/07-08, 28/1/2008 ANNEXURE E: CERTIFIED COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL COCHIN IN IT (S&S)A NO.52/COCH/2008 AND TRIBUNAL COCHIN IN IT (S&S)A NO.52/COCH/2008 AND CO.NO.59/COCH/2008, 24/8/2012 RESPONDENTS' ANNEXURES ------------------------------------------- NIL. / TRUE COPY / P.S. TO JUDGE Manjula Chellur, C.J. & A.M. Shaffique, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-=-=-=-= I.T.A. Nos. 123, 170 & 209 of 2013=-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-=-=-=Dated this, the 31[st]day of March, 2014. J U D G M E N T Shaffique, J. I.T. Appeal No. 123 and 170 of 2013 are filed againstthe common order in IT(SS)A No. 52/Coch/2008 and I.T.A.No 209/2013 is filed against the order passed in IT(SS)A No.51/Coch/2008 by the Income-tax Appellate Tribunal, CochinBench. Separate assessees are the appellants in thesecases. The assessment relates to the block period for whichassessment is made from 1.4.1990 to 6.9.2000. 2.The facts involved in I.T.A. No. 123/2013 woulddisclose that a search was conducted under Section 132 ofthe Income-tax Act (for short 'the Act) in the businesspremises of M/s. Harbour Syndicate. It resulted in seizureof documents showing undisclosed income of the assesseeMr. V.H. Yahiya. After recording the statement ofV.H.Yahiya under Section 132 (4), notice was issued underSection 158-BD calling upon him to file return. He did notfile any return of income even after the expiry of the periodprescribed therein. Subsequently, notice under Section 142(1) was issued to him and assessment was completed underSection 158BD read with Section 158BC and SectionSection 144 of the Act. The total undisclosed income for theblock period was Rs. 13,94,320/- and the assessee was I.T.A. Nos. 123, 170 & 209 of 2013 -: 2 :- I.T.A. Nos. 123, 170 & 209 of 2013 -: 2 :- called upon to pay tax of Rs. 10,77,086/-, whichincludes interest as well. The assessee preferred anappeal before the Commissioner of Income-tax(Appeals), which came to be rejected. A further appealis filed before the Tribunal. The Tribunal allowed theappeal and remanded the matter back to the C.I.T.(Appeals). The matter was again considered by theC.I.T. (Appeals) and the appeal was allowed. It is interalia found that since the search was in the cases of Sri.V.H.M. Rafeeq and Mr. V.H. Yahiya, the assessmentought to have been completed under Section 158BC. Itis further found that the Assessing Officer committed aserious error of law by invoking Section 158BD. It isfound that the assessment under Section 158BC shouldhave been completed within two years from 30.9.2000and since the block assessment is completed by theAssessing Officer only on 26.6.2003, the assessmentbeing not in accordance with the provisions of ChapterXIVB, is illegal and barred by limitation. The Revenuepreferred an appeal before the Tribunal and it washeard along with another appeal, which is the subjectmatter in I.T.A. No. 170/2013. The Tribunal proceededto form an opinion that the Assessing Officer wasjustified in making block assessment under Section158BD read with Section 158BC, relying upon the I.T.A. Nos. 123, 170 & 209 of 2013 judgment of this Court in CIT v. Lekshmi Traders,(2012) (344 ITR 281). Hence the matter was remittedback to the CIT (Appeals) for reconsideration on meritsincluding the question of limitation. 3. In I.T.A. No. 170/2013, the assessee is theHarbour Syndicate. On 6.9.2000, there was a search inthe business premises of the assessee. The officersfound incriminating materials relating to theundisclosed income earned by the assessee.Proceedings were initiated against the assessee underSection 158BC by issuing a notice on 8.6.2001. Theassessee, though requested for time to produce thebooks of accounts and documents, there was no furtherresponse and accordingly notice under Section 142(1)of the Act was served on him for making the blockassessment. The assessee did not comply with theterms of the notice issued and the proposal made andtherefore a block assessment was made and the totalundisclosed income was arrived at Rs. 10,05,280/- andthe assessee was called upon to pay tax with interestand surcharge at Rs 8,29,205/-. The assessee preferredan appeal before the CIT (Appeals) which came to bedismissed. On a further appeal by the assessee, theTribunal had remanded the matter back to the CIT(Appeals). The CIT (Appeals) found that the Assessing I.T.A. Nos. 123, 170 & 209 of 2013 Officer had completed assessment under Section158BC, which, according to the Appellate Authority,was erroneous as the Panchanama shows that thesearch was in the cases of V.H.M. Rafeeq and Y.H.Yahiya and not in the case of the appellant-firm andhence it was found that the assessment was bad in lawand void ab initio. The Revenue preferred an appealbefore the Tribunal, which was heard along with theappeal filed by Y.H. Yahiya and by a common order, theTribunal allowed the Revenue's appeal and remittedback the matter to CIT (Appeal) for considering thematter on merits. 4.I.T.A. No. 209/2013 is filed by M/s. DORIC-CON, a partnership firm in which Sri. V.H. Yahiya is theManaging Partner. During the search operation at thebusiness premises of Harbour Syndicate, the appellantin I.T.A. No. 170/2013, certain documents showing realestate and construction business relating to theassessee firm were found and seized. Therefore,notice under Section 158BD was served on theassessee, for which there was no response andtherefore notice under Section 142(1) was issued. Theassessee informed the Department that he has noundisclosed income. However, the assessment wasmade ex parte as there was no material produced and 4.I.T.A. No. 209/2013 is filed by M/s. DORIC-CON, a partnership firm in which Sri. V.H. Yahiya is theManaging Partner. During the search operation at thebusiness premises of Harbour Syndicate, the appellantin I.T.A. No. 170/2013, certain documents showing realestate and construction business relating to theassessee firm were found and seized. Therefore,notice under Section 158BD was served on theassessee, for which there was no response andtherefore notice under Section 142(1) was issued. Theassessee informed the Department that he has noundisclosed income. However, the assessment wasmade ex parte as there was no material produced and I.T.A. Nos. 123, 170 & 209 of 2013 the assessee did not co-operate. The Assessing Officerfound that the undisclosed income would come toRs.21,04,950/- and the assessee was called upon to paytax and interest amounting to Rs. 16,26,054/-. Thoughan appeal was filed before the CIT (Appeals), the samecame to be dismissed. On further appeal by theassessee before the Tribunal, the matter wasremanded back to the CIT (Appeals). After remand,the CIT (Appeals) allowed the appeal and set aside theorder of assessment on the ground that the incomementioned in the agreement seized does not belong tothe appellant firm but to the parties mentioned in thesaid agreement and therefore the quantum of incomemade in such agreement should be assessed in thehands of the respective individuals. The AppellateAuthority therefore cancelled the undisclosed income ofRs. 18,26,622/- for the assessment year 1995-1996 andRs. 28,323/- for the assessment year 1994-1995. TheRevenue preferred an appeal before the Tribunal and across objection was filed by the assessee as well. TheTribunal found that the assessee did not co-operatewith the Assessing Officer by filing a block return anddid not furnish any information and therefore theAssessing Officer was constrained to complete theassessment to the best of judgment. It is observed I.T.A. Nos. 123, 170 & 209 of 2013 that the CIT (Appeals) has taken a decision in favour ofthe assessee without examining the partnership deed,which is necessary before taking any decision on theissue. Hence it was opined that the matter requires tobe reconsidered on merits and the matter wasremanded back to the CIT (Appeals). 5.As far as I.T.A. No. 209/2013 is concerned,we do not think that any of the substantial questions oflaw raised in the memorandum of appeal arises forconsideration. The Tribunal had only directed the CIT(Appeals) to consider the matter on merits. It is not indispute that materials were collected by the AssessingOfficer while conducting search operations in thepremises of M/s. Harbour Syndicate. The assesseeherein is another partnership firm and their recordswere also seized. The Assessing Officer clearlyindicates that notice under Section 158BD was issuedto the assessee. The procedure to be adopted whileissuing such notice is clearly indicated in the saidprovision itself. In so far as there is no illegality inissuing a notice under Section 158BD and theprocedure followed is 158BC, there is no infirmity inthe notice issued by the Assessing Officer. It iscontended that so far no notice was issued underSection 158BD. In fact, the issue of notice under I.T.A. Nos. 123, 170 & 209 of 2013 I.T.A. Nos. 123, 170 & 209 of 2013 Section 158BD is the notice under Section 158BC itself.Therefore, the appellant is not entitled to take such aground. The matter has been remanded back by theTribunal for reconsideration on the ground that the CIT(Appeals) did not consider the partnership deed beforearriving at conclusions on merits, which was requiredto be considered at the time of hearing the appeal. Theremand has been made by the Tribunal on purelyquestions of fact to be decided by the First AppellateAuthority. Hence, we do not think that any question oflaw arises for consideration in I.T.A. No. 209/203 andhence the said appeal is liable to be dismissed. 6.In respect of I.T.A. Nos. 123 and 170 of 2013,the main contention urged by the petitioner is thatafter conducting a search in the business premises ofthe M/s. Harbour Syndicate, the Assessing Officer hadissued notice under Section 158BC. It is the contentionof the appellants that the assessee was not the personagainst whom the search warrant was issued andtherefore when a search is conducted in order toascertain the undisclosed income of V.H.M. Rafeeq andV.H. Yahiya, the Assessing Officer ought to haveproceeded under Section 158BD, which provisioncontemplates a different method of making the blockassessment. In I.T.A.No. 123/2013 in which V.H. I.T.A. Nos. 123, 170 & 209 of 2013 Yahiya is the assessee, the contention is that in so faras the warrant of search was in his name, the noticeunder Section 158BC ought to have been issued andthe Assessing Officer had committed serious error oflaw in issuing notice under Section 158BD. This findingof the CIT (Appeals) had been set aside by the Tribunalbased on the judgment of this Court in LekshmiTraders'scase(supra),which is clearlydistinguishable on facts. Hence, the Tribunalcommitted serious error of law in remitting the matterback to the CIT (Appeals) for considering the matter onmerits when the entire procedure itself is bad in law, isthe argument. 7.The matter was heard at the admission stageitself after giving notice to the learned standing counselfor the Department. The short point to be considered inthese appeals is while conducting a search in thepremises of M/s. Harbour Syndicate, if documentsleading to the undisclosed income of V.H. Yahiya isobtained, what is the procedure to be followed inmaking a block assessment. Is it that the AssessingOfficer ought to have proceeded under Section 158BCor 158BD in respect of Yahiya and M/s. HarbourSyndicate? 8.The learned counsel for the appellants, while I.T.A. Nos. 123, 170 & 209 of 2013 relying upon the statutory provisions also, placedreliance on the judgment of the Supreme Court inManish Maheshwari & Another v. AssistantCommissioner of Income Tax & Others, CDJ 2007SC 205. That was a case in which the Supreme Courtwas considering the question as to whether theAssessing Officer has jurisdiction to proceed againstthe assessee for block assessment in terms of ChapterXIVB of the Act under Section 158BC, when no searchis conducted in the premises of the assessee underSection 132 of the Act. It is held that Section 158BDprovides for taking recourse to a block assessment interms of Section 158BC in respect of any other person,the conditions precedents are: (i) Satisfaction must berecorded by the Assessing Officer that any undisclosedincome belongs to any person, other than the personwith respect to whom search was made under Section132 of the Act; (ii) the books of account or otherdocuments or assets seized or requisitioned had beenhanded over to the Assessing Officer having jurisdictionover such other person and (iii) The Assessing Officerhas proceeded under Section 158BC against such otherperson. In short, based on the above judgment, theargument is that when a search is conducted withreference to the undisclosed income of a person, I.T.A. Nos. 123, 170 & 209 of 2013 I.T.A. Nos. 123, 170 & 209 of 2013 irrespective of the place where the search isconducted, if proceedings are to be initiated for blockassessment, the Assessing Officer can take onlyproceedings under Section 158BC in regard to theperson who is being searched and as far as any otherperson is concerned, including the business premisesof any other person which is searched other than theperson against whom the search is conducted,proceedings can be taken only under Section 158BDand after complying with the requirements thereof. 9.On the other hand, the learned standingcounsel relies on the very same judgment in ManishMaheshwari's case (supra) and contends that what isrelevant under Section 158BC is with reference totaking proceedings for block assessment in respect ofthe person searched. The argument is that when theperson searched is M/s. Harbour Syndicate, eventhough the reason for search is to find out theundisclosed income of V.H.M. Rafeeq and V.H. Yahiya,the Assessing Officer was justified in proceeding underSection 158BC. As far as Yahiya is concerned, sinceincriminating documents had been obtained from thepremises of the searched person, ie. M/s. HarbourSyndicate, proceedings were taken under Section158BD, which is valid and proper. Learned standing I.T.A. Nos. 123, 170 & 209 of 2013 counsel also relies upon paragraph 12 of of ManishMaheshwari's case (supra), which reads as under: “12.The conditions precedent for invoking theprovisions of Section 158BD, thus, are required to besatisfied before the provisions of the said chapter areapplied in relation to any person other than theperson whose premises had been searched or whosedocuments and other assets had been requisitionedunder Section 132A of the Act.” Therefore, the argument is that Section 158 BC andSection 158BD are to be read with reference to thesearched premises and the “person searched” will bethe premises of the person searched and if such a viewis taken, the Assessing Officer was justified in issuingnotices of the block assessment in respect of theaforesaid two assessees and the finding of the CIT(Appeals) was erroneous. 10.Learned counsel for the appellants wouldfurther submit that the Tribunal had considered thisissue on a different footing and the Tribunal proceededon the basis that even though proceedings ought tohave been issued against M/s. Harbour Syndicate underSection 158BD in so far as the procedure to be followedis issuing notice under Section 158BC, there is noillegality in issuing such a notice. It is contended thatin the Panchanama, it is clearly indicated that notices I.T.A. Nos. 123, 170 & 209 of 2013 were issued in the case of V.H.M. Rafeeq and V.H.Yahiya and the Tribunal also proceeded on the basisthat the notices were not proper but relying upon thejudgment in Lekshmi Traders's case (supra) it isfound that when the procedure for assessment of aperson other than the person searched under Section158BD, is the same procedure under Section 158BCand when there is no prescribed notice under Section158BD, the officer can only call for return in Form 2Bprescribed under Rule 12(1)(c) for assessment underSection 158BC of the Act. The learned counsel reliesplaces exception to the above finding by relying uponManish Maheshwari's case (supra) and contendingthat if the notice is bad in law, the entire assessmentproceedings become illegal. 11.Having regard to the nature of contentionsurged by both sides, what is required to be consideredis the scope and effect of Sections 158BC and 158BDwith reference to the factual situation arising in thesecases. It is not in dispute that in Harbour Syndicate'scase, notice is issued under Section 158 BC and in V.H.Yahiya's case, notice is issued under Section 158BD.According to the learned counsel for the appellants, itought to have been vice versa whereas according to theDepartment, it is the proper method. -: 13 :- 11.Having regard to the nature of contentionsurged by both sides, what is required to be consideredis the scope and effect of Sections 158BC and 158BDwith reference to the factual situation arising in thesecases. It is not in dispute that in Harbour Syndicate'scase, notice is issued under Section 158 BC and in V.H.Yahiya's case, notice is issued under Section 158BD.According to the learned counsel for the appellants, itought to have been vice versa whereas according to theDepartment, it is the proper method. -: 13 :- 12.Sections 158BC and 158BD read as under: “158BC.Where any search has been conductedunder section 132 or books of account, otherdocuments or assets are requisitioned under section132A, in the case of any person, then,- (a) The Assessing Officer shall-- (i)in respect of search initiated or books of accountor other documents or any assets requisitioned afterthe 30[th] day of June, 1995, but before the 1[st] day ofJanuary, 1997, serve a notice to such person requiringhim to furnish within such time not being less thanfifteen days; (ii)in respect of search initiated or books of accountor other documents or any assets requisitioned on orafter the 1[st] day of January, 1997, serve a notice tosuch person requiring him to furnish within such timenot being less than fifteen days but not more thanforty-five days, as may be specified in the notice a return in theprescribed form and verified in the same manner as areturn under clause (i) of sub-section (1) of Section142, setting forth his total income including theundisclosed income for the block period: xxxxxx (b)the Assessing Officer shall proceed to determinethe undisclosed income of the block period in themanner laid down in section 158BB and the provisionsof Section 142, sub-sections (2) and (3) of section 143,section 144 and section 45 shall, so far as may be,apply; (c)the Assessing Officer, on determination of theundisclosed income of the block period in accordancewith this Chapter, shall pass an order of assessmentand determine the tax payable by him on the basis ofsuch assessment; I.T.A. Nos. 123, 170 & 209 of 2013 (d)the assets seized under section 132 orrequisitioned under section 132A shall be dealt with inaccordance with the provisions of section 132B. 158BD.Where the Assessing Officer is satisfiedthat any undisclosed income belongs to any person,other than the person with respect to whom searchwas made under Section 132 or whose books ofaccount or other documents or any assets wererequisitioned under Section 132A, then, the books ofaccount, other documents or assets seized orrequisitioned shall be handed over to the AssessingOfficer having jurisdiction over such other person andthat Assessing Officer shall proceed under Section158BC against such other person and the provisions ofthis Chapter shall apply accordingly.” The learned standing counsel also brought to our noticethe file regarding the search conducted. According tolearned counsel, several raids were conducted indifferent premises when information was received thatthe aforesaid persons were having substantialundisclosed income and was not paying income tax.Section 132 of the Act deals with search and seizure,which reads as under: “132. Search and seizure.—(1) Where theDirector General or Director or the Chief Commissioneror Commissioner or Additional Director or AdditionalCommissioner], [or Joint Director or Joint Commissioner]in consequence of information in his possession, hasreason to believe that— (a) any person to whom a summons under sub-section (1)of Section 37 of the Indian Income Tax Act, 1922 (11 of1922), or under sub-section (1) of Section 131 of this Act, “132. Search and seizure.—(1) Where theDirector General or Director or the Chief Commissioneror Commissioner or Additional Director or AdditionalCommissioner], [or Joint Director or Joint Commissioner]in consequence of information in his possession, hasreason to believe that— (a) any person to whom a summons under sub-section (1)of Section 37 of the Indian Income Tax Act, 1922 (11 of1922), or under sub-section (1) of Section 131 of this Act, or a notice under sub-section (4) of Section 22 of theIndian Income Tax Act, 1922 (11 of 1922), or under sub-section (1) of Section 142 of this Act was issued toproduce, or cause to be produced, any books of accountor other documents has omitted or failed to produce, orcause to be produced, such books of account, or otherdocuments as required by such summons or notice, or (b) any person to whom a summons or notice asaforesaid has been or might be issued will not, or wouldnot, produce or cause to be produced, any books ofaccount or other documents which will be useful for, orrelevant to, any proceeding under the Indian Income TaxAct, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion,jewellery or other valuable article or thing and suchmoney, bullion, jewellery or other valuable article orthing represents either wholly or partly income orproperty which has not been, or would not be, disclosedfor the purposes of the Indian Income Tax Act, 1922 (11of 1922), or this Act (hereinafter in this section referredto as the undisclosed income or property), then,— (A) the Director-General or Director or the ChiefCommissioner or Commissioner, as the case may be, mayauthorise any [1c][Additional Director or AdditionalCommissioner or] Joint Director, Joint Commissioner,Assistant Director or Deputy Director, AssistantCommissioner or Deputy Commissioner or Income TaxOfficer, or (B) such Additional Director or Additional Commissioneror] Joint Director or Joint Commissioner, as the case maybe, may authorise any Assistant Director or DeputyDirector,AssistantCommissionerorDeputyCommissioner or Income Tax Officer, (the officer so authorised in all cases being hereinafterreferred to as the authorised officer) to— (i) enter and search any building, place, vessel, vehicleor aircraft where he has reason to suspect that such I.T.A. Nos. 123, 170 & 209 of 2013 books of account, other documents, money, bullion,jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe,almirah or other receptacle for exercising the powersconferred by clause (i) where the keys thereof are notavailable; (ii-a) search any person who has got out of, or is about toget into, or is in, the building, place, vessel, vehicle oraircraft, if the authorised officer has reason to suspectthat such person has secreted about his person any suchbooks of account, other documents, money, bullion,jewellery or other valuable article or thing; (ii-b) require any person who is found to be in possessionor control of any books of account or other documentsmaintained in the form of electronic record as defined inclause (t) of sub-section (1) of Section 2 of theInformation Technology Act, 2000, to afford theauthorised officer the necessary facility to inspect suchbooks of account or other documents;] (iii) seize any such books of account, other documents,money, bullion, jewellery or other valuable article orthing found as a result of such search: (iv) place marks of identification on any books of accountor other documents or make or cause to be madeextracts or copies therefrom; (v) make a note or an inventory of any such money,bullion, jewellery or other valuable article or thing: (ii-b) require any person who is found to be in possessionor control of any books of account or other documentsmaintained in the form of electronic record as defined inclause (t) of sub-section (1) of Section 2 of theInformation Technology Act, 2000, to afford theauthorised officer the necessary facility to inspect suchbooks of account or other documents;] (iii) seize any such books of account, other documents,money, bullion, jewellery or other valuable article orthing found as a result of such search: (iv) place marks of identification on any books of accountor other documents or make or cause to be madeextracts or copies therefrom; (v) make a note or an inventory of any such money,bullion, jewellery or other valuable article or thing: (1-A) Where any Chief Commissioner or Commissioner,in consequence of information in his possession, hasreason to suspect that any books of account, otherdocuments, money, bullion, jewellery or other valuablearticle or thing in respect of which an officer has beenauthorised by the Director-General or Director or anyother Chief Commissioner or Commissioner or Additional Director or Additional Commissioner][or Joint Directoror Joint Commissioner]to take action under clauses (i) to(v) of sub-section (1) are or is kept in any building, place,vessel, vehicle or aircraft not mentioned in theauthorisation under sub-section (1), such ChiefCommissioner or Commissioner may, notwithstandinganything contained in Section 120, authorise the saidofficer to take action under any of the clauses aforesaidin respect of such building, place, vessel, vehicle oraircraft. (2) The authorised officer may requisition the services ofany police officer or of any officer of the CentralGovernment, or of both, to assist him for all or any of thepurposes specified in sub-section (1) or sub-section (1-A)and it shall be the duty of every such officer to complywith such requisition. (3) The authorised officer may, where it is notpracticable to seize any such books of account, otherdocuments, money, bullion, jewellery or other valuablearticle or thing, for reasons other than those mentionedin the second proviso to sub-section (1), serve an orderon the owner or the person who is in immediatepossession or control thereof that he shall not remove,part with or otherwise deal with it except with theprevious permission of such officer and such officer maytake such steps as may be necessary for ensuringcompliance with this sub-section. Explanation.—For the removal of doubts, it is herebydeclared that serving of an order as aforesaid under thissub-section shall not be deemed to be seizure of suchbooks of account, other documents, money, bullion,jewellery or other valuable article or thing under clause(iii) of sub-section (1). (4) The authorised officer may, during the course of thesearch or seizure, examine on oath any person who isfound to be in possession or control of any books ofaccount, documents, money, bullion, jewellery or othervaluable article or thing and any statement made bysuch person during such examination may thereafter be I.T.A. Nos. 123, 170 & 209 of 2013 used in evidence in any proceeding under the IndianIncome Tax Act, 1922 (11 of 1922), or under this Act. Explanation.—For the removal of doubts, it is herebydeclared that the examination of any person under thissub-section may be not merely in respect of any books ofaccount, other documents or assets found as a result ofthe search, but also in respect of all matters relevant forthe purposes of any investigation connected with anyproceeding under the Indian Income Tax Act, 1922 (11 of1922), or under this Act. (4-A) Where any books of account, other documents,money, bullion, jewellery or other valuable article orthing are or is found in the possession or control of anyperson in the course of a search, it may be presumed— I.T.A. Nos. 123, 170 & 209 of 2013 used in evidence in any proceeding under the IndianIncome Tax Act, 1922 (11 of 1922), or under this Act. Explanation.—For the removal of doubts, it is herebydeclared that the examination of any person under thissub-section may be not merely in respect of any books ofaccount, other documents or assets found as a result ofthe search, but also in respect of all matters relevant forthe purposes of any investigation connected with anyproceeding under the Indian Income Tax Act, 1922 (11 of1922), or under this Act. (4-A) Where any books of account, other documents,money, bullion, jewellery or other valuable article orthing are or is found in the possession or control of anyperson in the course of a search, it may be presumed— (i) that such books of account, other documents, money,bullion, jewellery or other valuable article or thingbelong or belongs to such person; (ii) that the contents of such books of account and otherdocuments are true; and (iii) that the signature and every other part of such booksof account and other documents which purport to be inthe handwriting of any particular person or which mayreasonably be assumed to have been signed by, or to bein the handwriting of, any particular person, are in thatperson’s handwriting, and in the case of a document,stamped, executed or attested, that it was duly stampedand executed or attested by the person by whom itpurports to have been so executed or attested. (8) The books of account or other documents seizedunder sub-section (1) or sub-section (1-A) shall not beretained by the authorised officer for a period exceeding[thirty days from the date of the order of assessment[under Section 153-A or clause (c) of Section 158-BC]]unless the reasons for retaining the same are recordedby him in writing and the approval of the [ChiefCommissioner, Commissioner, Director-General orDirector] for such retention is obtained: [(8-A) An order under sub-section (3) shall not be in forcefor a period exceeding sixty days from the date of theorder:] Provided that the Director or, as the case may be,Commissioner] shall not approve the extension of theperiod for any period beyond the expiry of thirty daysafter the completion of all the proceedings under this Actin respect of the years for which the books of account,other documents, money, bullion, jewellery or othervaluable articles or things are relevant. (9) The person from whose custody any books of accountor other documents are seized under sub-section (1) orsub-section (1-A) may make copies thereof, or takeextracts therefrom, in the presence of the authorisedofficer or any other person empowered by him in thisbehalf, at such place and time as the authorised officermay appoint in this behalf. [(9-A) Where the authorised officer has no jurisdictionover the person referred to in clause (a) or clause (b) orclause (c) of sub-section (1), the books of account orother documents, or any money, bullion, jewellery orother valuable article or thing (hereafter in this sectionand in Sections 132-A and 132-B referred to as theassets) seized under that sub-section shall be handedover by the authorised officer to the Assessing Officerhaving jurisdiction over such person within a period ofsixty days from the date on which the last of theauthorisations for search was executed and thereuponthe powers exercisable by the authorised officer undersub-section (8) or sub-section (9) shall be exercisable bysuch Assessing Officer.] (10) If a person legally entitled to the books of accountor other documents seized under sub-section (1) or sub-section (1-A) objects for any reason to the approval givenby the [Chief Commissioner, Commissioner, Director-General or Director] under sub-section (8), he may makean application to the Board stating therein the reasonsfor such objection and requesting for the return of the I.T.A. Nos. 123, 170 & 209 of 2013 (10) If a person legally entitled to the books of accountor other documents seized under sub-section (1) or sub-section (1-A) objects for any reason to the approval givenby the [Chief Commissioner, Commissioner, Director-General or Director] under sub-section (8), he may makean application to the Board stating therein the reasonsfor such objection and requesting for the return of the I.T.A. Nos. 123, 170 & 209 of 2013 books of account or other documents and the Board may,after giving the applicant an opportunity of being heard,pass such orders as it thinks fit]. (13) The provisions of the Code of Criminal Procedure,1973 (2 of 1974), relating to searches and seizure shallapply, so far as may be, to searches and seizure undersub-section (1) or sub-section (1-A). (14) The Board may make rules in relation to any searchor seizure under this section; in particular, and withoutprejudice to the generality of the foregoing power, suchrules may provide for the procedure to be followed bythe authorised officer— (i) for obtaining ingress into any building, place, vessel,vehicle or aircraft to be searched where free ingressthereto is not available; (ii) for ensuring safe custody of any books of account orother documents or assets seized. Explanation 1.—For the purposes of sub-section (9-A),“execution of an authorisation for search” shall have thesame meaning as assigned to it in Explanation 2 toSection 158-BE. Explanation 2.—In this section, the word “proceeding”means any proceeding in respect of any year, whetherunder the Indian Income Tax Act, 1922 (11 of 1922), orthis Act, which may be pending on the date on which asearch is authorised under this section or which mayhave been completed on or before such date andincludes also all proceedings under this Act which maybe commenced after such date in respect of any year.” The officer authorizing the search and seizure isentitled to invoke the said powers to enter and searchany building, place, vessel, vehicle or aircraft where he I.T.A. Nos. 123, 170 & 209 of 2013 has reason to suspect that any books of account orother documents, money, bullion etc., are kept, if hehas reason to believe that any person referred to undersub-clauses (a) to (c) of Section 132(1) has failed toprovide the information sought for therein. Accordingto the learned counsel for the appellants, Section 132(1) can be invoked only when there is failure on thepart of persons mentioned under clauses (a) to (c) incomplying with the summons or notice issued or if anyperson is in possession of any of the items specified inclause (c) and which is undisclosed. It is thecontention that only such persons mentioned in clauses(a), (b) and (c) are to be treated as “any person”referred to in Section 158 BC. This contention is basedon the language of Section 158BD, which refers to theundisclosed income of any person “other than theperson with respect to whom search was made underSection 132” or “whose books of account or otherdocuments or any assets were requisitioned underSection 132A.” Therefore, M/s. Harbour Syndicate isnot the person against whom the search was madeunder Section 132 and therefore Harbour Syndicate isany other person referred therein. 13.This argument, we do not think, is justifiableespecially on an interpretation of the language used I.T.A. Nos. 123, 170 & 209 of 2013 13.This argument, we do not think, is justifiableespecially on an interpretation of the language used I.T.A. Nos. 123, 170 & 209 of 2013 under Sections 158BC, 158BD read with Section 132 ofthe I.T. Act. Under Section 132, the officer is entitledto search any building, place, vessel, vehicle or aircraft.Here, the business premises of Harbour Syndicate isadmittedly searched. In other words, the personsearched is Harbour Syndicate and not V.H.M. Rafeeqor V.H. Yahiya. Section 2(31) defines a person asincluding an association of persons or a body orindividuals whether incorporated or not and everyartificial juridical person, not falling within any of thesub-clauses mentioned in the Section. Therefore,Harbour Syndicate, which is apparently the name of aconcern, which belongs to certain persons, is also aperson under the Income-tax Act. Section 158BCspecifically refers to a search conducted under Section132 in the case of any person. The person searchedapparently is Habour Syndicate and not V.H. Yahiya.It may be true that the reason for searching HarbourSyndicate is non-compliance of the summons or noticeissued to V.H.M. Rafeeq and V.H. Yahiya in terms ofSection 132(1)(a) of the Act. But the fact remains thatwhen the search is conducted in the business premisesof Harbour Syndicate, they alone become the “person”mentioned in Section 158BC. According to the learnedcounsel for the appellants, a reading of Section 158BD I.T.A. Nos. 123, 170 & 209 of 2013 will clarify the fact that the person mentioned inSection 158BC is the person to whom notice is issuedunder Section 132(1)(a) of the Act. As per Section158BD, it contemplates satisfaction of the AssessingOfficer that any undisclosed income belonging to anyperson other than the person with reference to whomsearch was made under Section 132. If we are of theopinion that the person searched under Section 158BCread with Section 132 is Harbour Syndicate, thenSection 158BD contemplates taking proceedingsagainst the person “other than the person withreference to whom search was made under Section 132”or in other words it contemplates a person other than aperson referred to in Section 158BC. Apparently, theprocedure to be followed by the Assessing Officer whileinvoking Section 158BD is his satisfaction that anyundisclosed income belonged to any other person otherthan the person with reference to whom a search wasmade. Then the books of account and other documentsor assets seized shall be handed over to the AssessingOfficer having jurisdiction over “such other person” andthat the Assessing Officer shall proceed under Section158BC against such other person. We are fortified inthe view taken by us based on the observation made bythe Supreme Court in Manish Maheshwari's case I.T.A. Nos. 123, 170 & 209 of 2013 (supra), taking into account the statement of lawreferred to in paragraph 12 of the said judgment.Further, while considering the scope and effect of blockassessment under Chapter XIVB, the Supreme Court inAssistant Commissioner of Income Tax andanother v. Hotel Blue Moon, [(2010) 3 SCC 259] hasheld in paragraph 15 as follows: “15.Section 158-B defined “undisclosedincome”, and “block period” which are the two basicfactors for framing the block assessments. Section158-BA is an enabling section, empowering theAssessing Officer, to assess “undisclosed income” as aresult of search initiated or requisition made after 30-6-1995, in accordance with the provisions of thisChapter and tax the same at the fixed rate specified inSection 113. Section 158-BB provides themethodology for computation of undisclosed income ofthe block period. Section 158-BC prescribes theprocedure for making the block assessment of thesearched person. Section 158-BD enables assessmentof any person, other than the searched person.” “15.Section 158-B defined “undisclosedincome”, and “block period” which are the two basicfactors for framing the block assessments. Section158-BA is an enabling section, empowering theAssessing Officer, to assess “undisclosed income” as aresult of search initiated or requisition made after 30-6-1995, in accordance with the provisions of thisChapter and tax the same at the fixed rate specified inSection 113. Section 158-BB provides themethodology for computation of undisclosed income ofthe block period. Section 158-BC prescribes theprocedure for making the block assessment of thesearched person. Section 158-BD enables assessmentof any person, other than the searched person.” The Supreme Court clearly specifies in the abovejudgment that Section 158BC prescribes the procedurefor making block assessment of the searched personand Section 158BD enables assessment of any person,other than the searched person. In this case, we haveno hesitation to hold that searched person is M/s.Harbour Syndicate and therefore as far as M/s.Harbour Syndicate is concerned, the Assessing Officer I.T.A. Nos. 123, 170 & 209 of 2013 was justified in issuing notice under Section 158BC andin respect Y.H. Yahiya, the Assessing Officer wasjustified in issuing notice under Section 158 BD. Thequestion of law raised in this regard is answered infavour of the Revenue. In the light of the above discussion, we are of theview that the order of remittance by the Tribunal isjustified though not for the reasons stated in theTribunal's order. The Assessing Officer was justified ininvoking Sections 158BC and 158BD in the respectivecases and therefore the matter requires to beconsidered on merits by the CIT (Appeals). Havingformed such an opinion, these appeals are liable to bedismissed and accordingly, we dismiss the appeals. Sd/- Manjula Chellur, Chief Justice. Sd/- A.M. Shaffique, Judge. Tds/