Dr. K. Praveen Kumar,, Mysore v. ACIT, Mysore

ITSSA 11/BANG/2008 | misc
Pronouncement Date: 30-11-2011 | Result: Allowed

Appeal Details

RSA Number 1121116 RSA 2008
Assessee PAN AAUPK1033H
Bench Bangalore
Appeal Number ITSSA 11/BANG/2008
Duration Of Justice 2 year(s) 4 month(s) 6 day(s)
Appellant Dr. K. Praveen Kumar,, Mysore
Respondent ACIT, Mysore
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-11-2011
Date Of Final Hearing 17-11-2011
Next Hearing Date 17-11-2011
Assessment Year misc
Appeal Filed On 24-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. JUDICIAL MEMBER IT(SS)A NO. 11 & 12/BANG/2008 ASSESSMENT YEARS : BLOCK PERIOD - 01.04.1996 TO 0 8.08.2002 DR. K. PRAVEEN KUMAR M/S. KANNAN DIAGNOSTIC CENTRE PAN : AAUPK 1033H DR. N. KANNAN M/S. KANNAN PATHOLOGY LABORATORY PAN : AAFPN 9660E # 1484/M-55 SAYYAJI RAO ROAD MYSORE 570 021. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE MYSORE. APPELLANTS RESPONDENT APPELLANTS BY : SHRI S. VENKATESAN C.A. RESPONDENT BY : SMT. PREETHI GARG CIT(DR) DATE OF HEARING : 17.11.2011 DATE OF PRONOUNCEMENT : 30.11.2011 O R D E R PER N.K. SAINI ACCOUNTANT MEMBER THESE TWO APPEALS BY THE ASSESSEES ARE DIRECTED AG AINST THE SEPARATE ORDERS EACH DATED 28.1.2008 OF THE CIT(APP EALS) MYSORE. SINCE IT(SS)A NO.11 & 12/BANG/2008 PAGE 2 OF 12 COMMON ISSUES ARE INVOLVED IN BOTH THESE APPEALS WH ICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OF BY THIS CO NSOLIDATED ORDER. 2. FIRST WE WILL DEAL WITH IT(SS)A NO.11/BANG/200 8. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW EQUITY W EIGHT OF EVIDENCE PROBABILITIES FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE. 2. THE ORDER OF BLOCK ASSESSMENT PASSED BY THE LEAR NED A.O. IS BAD IN LAW IN AS MUCH AS THE SEARCH ITSELF IS I LLEGAL AS THE CONDITIONS SPECIFIED U/S. 132[1][A] AND [B] DID NOT EXIST AND IN SO FAR AS THE CONDITION U/S. 132[1][C] IS CONCERNED T HERE WAS NO MATERIAL INDUCING THE REASON TO BELIEVE THAT THE A PPELLANT WAS IN POSSESSION OF ANY MONEY OR OTHER ASSET WHICH THE AP PELLANT HAS NOT OR WOULD NOT DISCLOSE FOR THE PURPOSES OF INCOM E-TAX ACT TO ENABLE THE AUTHORISING OFFICER TO ISSUE THE WARRANT AND CONSEQUENTLY THE BLOCK ASSESSMENT REQUIRES TO BE A NNULLED. THE RATION OF THE DECISION OF THE HONBLE SUPREME COURT IN AJIT JAIN REPORTED IN 260 ITR 80 IS RELIED UPON. 3.[A] WITHOUT PREJUDICE TO THE ABOVE THE INCOME I S EXCESSIVE AND LIABLE TO BE REDUCED SUBSTANTIALLY AS ULTIMATE LY WHAT WAS FOUND AS ASCRIBED TO APPELLANT WAS CASH OF RS.1 00 000/- INVESTMENT IN MACHINERY OF RS.4 60 710/- AND GOLD J EWELLERY OF RS.16 00 000/- AND THEREFORE IN THE ABSENCE OF ANY EVIDENCE THAT ANY SUCH INCOME SO ASSESSED HAS BEEN EXPENDED AWAY THE ASSESSMENT OF INCOME IN EXCESS OF RS.21 60 710/- RE QUIRES TO BE DELETED. 4. THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGE D TO SURCHARGE LEVIED IN THE BLOCK ASSESSMENT WHICH UND ER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE DE SERVES TO BE CANCELLED. THE AUTHORITIES BELOW FAILED TO APPRECI ATE THAT SURCHARGE IS LEVIABLE ONLY ON THE TAX DETERMINED IN THE REGULAR ASSESSMENT AND DOES NOT APPLY TO BLOCK ASSESSMENTS FOR PROVISIONS OF SECTION 113 OF THE ACT PRESCRIBE THE RATE OF TAX. THEY FURTHER FAILED TO APPRECIATE THAT NEITHER THE RELEVANT FINANCE ACT HAS MADE APPLICABLE THE SURCHARGE TO THE TAX P AYABLE U/S. 113 OF THE ACT NOR HAS THE PROVISIONS OF SECTION 113 OF THE INCOME- TAX ACT 1961 PROVIDED THAT SURCHARGE AS APPLICABL E TO THE RELEVANT ASSESSMENT YEAR IS REQUIRED TO BE PAID IN ADDITION TO THE RATE OF TAX PRESCRIBED U/S. 113 OF THE ACT. THUS THE ACTION OF THE IT(SS)A NO.11 & 12/BANG/2008 PAGE 3 OF 12 AUTHORITIES BELOW IN LEVYING SURCHARGE IS CLEARLY O PPOSED TO LAW AND THE LEVY LIABLE TO BE CANCELLED. 5. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE C OSTS. 3. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUN D CHALLENGING THE JURISDICTION OF THE AO ON THE GROUND THAT THERE WAS NO WARRANT OF AUTHORIZATION IN THE INDIVIDUAL NAME OF THE ASSESSE E SO THE AO DID NOT ACQUIRE LEGAL JURISDICTION TO PASS THE ORDER U/S. 1 58BC OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT]. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE READS AS UNDER: THE ORDER OF ASSESSMENT MADE ON THE APPELLANT IN THE STATUS OF INDIVIDUAL U/S. 158BC OF THE ACT IS BA D IN LAW AS THE WARRANT OF SEARCH WAS NOT IN INDIVIDUAL NAME TO ASS UME SEARCH WAS INITIATED INDIVIDUALLY TO MAKE AN ASSESSMENT U/ S. 158BC BUT IN THE JOINT NAMES AND THEREFORE THE ASSESSMENT OU GHT TO HAVE BEEN MADE IN THE STATUS OF AOP HAVING REGARD TO T HE RATIO OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE P.J. KUMAR [SUPRA] AND THE DECISION OF THE HONBLE ITAT BANGALORE B BENCH IN THE CASE OF SRI CHANDRA REDD Y IN ITA NOS. 1156 TO 1159/BANG/2010 29.03.11. IT IS ALSO STATED THAT NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED BECAUSE ALL THE FACTS ARE ALREADY AVAILABLE ON RECORD OF TH E DEPARTMENT. A REQUEST HAD BEEN MADE FOR ADMISSION OF ADDITIONAL GROUND. RELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CAS E OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 ITR 383 (SC) . THE ASSESSEE REQUESTED TO ADMIT THE LEGAL GROUND AND STATES IN THE WRITTEN SUBMISSION AS UNDER: IT(SS)A NO.11 & 12/BANG/2008 PAGE 4 OF 12 THE APPELLANT BEGS TO SUBMIT THE UNDER MENTIONE D ADDITIONAL GROUNDS OF APPEAL WHICH WERE NOT SPECIF ICALLY URGED IN THE ORIGINAL GROUNDS OF APPEAL FILED AT THE TIME OF INSTITUTION OF APPEAL ALTHOUGH THE VALIDITY OF THE SEARCH WAS URG ED. THE COPIES OF THE WARRANT WERE NOT GIVEN AFTER SEARCH. LATER THE DEPARTMENT FILED THE COPIES OF THE WARRANTS OF SEARCH IN RESPO NSE TO THE DIRECTION OF THE HONBLE BENCH AND REPELLING AND DI STINGUISHING THE DECISION CITED OF THE DECISION OF THE HONBLE I TAT CHENNAI BENCH IN THE CASE OF ANJUGA CHIT FUNDS P. LTD. REP ORTED IN 113 ITD 67 A SUBMISSION WAS MADE BY THE MEMO FI LED IN WRITING DATED 27/10/2009 IN WHICH RELYING UPON THE DECISION IN THE CASE OF SRI GURU CHARAN SINGH IN ITA NO.172/LUC/2004 DATED 28/08/2008 WHERE A CO-ORDINATE BENCH HAS HELD THAT A JOINT WARRANT AGAINST TWO PERSONS I S BAD IN LAW AND SUCH WARRANT COULD NOT GIVE JURISDICTION TO PROCEED WITH ASSESSMENT U/S. 158BC OF THE ACT BY ENCLOSING THE COPY OF THE SAID DECISION AND FURTHER PRAYING IN VIEW OF THE DI VERGENT VIEWS BETWEEN TWO BENCHES OF THE HONBLE ITAT THE MATTER MIGHT BE REFERRED TO THE HONBLE PRESIDENT TO CONSTITUTE SPE CIAL BENCH. THAT ALTHOUGH THE MATTER WAS ARGUED BY ME LEARNED AUTHORISED REPRESENTATIVE A SPECIFIC GROUND HAS NOT BEEN URGE D SPECIFICALLY IN THE GROUNDS OF APPEAL BY MY LEARNED AUTHORISED REPRESENTATIVE. 2. IN THE MEANTIME THE HONBLE ITAT BANGALORE BEN CH IN THE CASE OF P.J. KUMAR & OTHER IN ITA[SS]A NOS.2/BA NG/208 AND 34/BANG/2006 NOTICING THE AFORESAID DECISIONS O F THE HONBLE ITAT LUCKNOW B BENCH IN THE CASE OF SRI GRURU CHARAN SINGH AND ALSO NOTICING THE DECISION OF THE HONBLE ITAT CHENNAI D BENCH IN THE CASE OF ANJUGA CHIT PVT. LTD. REPORTED IN 113 ITD 67 AND ALSO THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF VANDANA VERMA H ELD THAT THE WARRANT ISSUED JOINTLY WOULD NOT AUTHORIZE MAKING ASSESSMENT INDIVIDUALLY BY THE ORDER DATED 16/02/20 10 AND AGGRIEVED BY THE HONBLE ITAT THE DEPARTMENT TOOK UP THE MATTER BEFORE THE HONBLE HIGH COURT CIRCUIT BENCH GULBARGA WHICH BY ITS ORDER IN ITA NOS. 6005 AND 6006/2010 D ATED 17/09/2010 HELD FOLLOWING THE DECISION OF THE HONB LE ALLAHABAD HIGH COURT IN THE CASE OF VANDANA VERMA WHEN WARRA NT WAS ISSUED JOINTLY ASSESSMENT CANNOT BE MADE INDI VIDUALLY BUT AS AOP OR A BOI. ALTHOUGH THE DECISION WAS AVAILA BLE SPECIFIC GROUND WAS NOT TAKEN UP BY FILING ADDITIONAL GROUND BY MY AUTHORISED REPRESENTATIVE DUE TO HIS INADVERTENCE A ND THE CASE CAME TO BE ADJOURNED AWAITING THE DECISION OF THE H ONBLE HIGH COURT IN THE CASE OF SRI RAMAIAH REDDY [AGAINST THE DECISION OF THE HONBLE ITAT SPECIAL BENCH] WHEREIN IT HAD TA KEN THE VIEW IT(SS)A NO.11 & 12/BANG/2008 PAGE 5 OF 12 THAT THE HONBLE ITAT WAS NOT COMPETENT TO ADJUDICA TE THE ISSUE ABOUT THE VALIDITY OF SEARCH. ALTHOUGH THE ORDER O F THE HONBLE HIGH COURT IN THE CASE OF SRI RAMAIAH REDDY IS DATE D 08/09/2010 IT CAME TO BE RELEASED TO THE ADVOCATE IN THE SAID CASE OF THE APPELLANT I.E. SRI RAMAIAH REDDY ONLY ON 30/08/201 1 AND THEREFORE TILL THEN THE CASE OF THE APPELLANT CAME TO BE ADJOURNED AWAITING THE ORDER IN THE SAID CASE. A COPY OF ABO VE ORDER IS NOW ENCLOSED HEREWITH AS ANNEXURE-1. 3. THE HONBLE ITAT NOTICING THE AFORESAID DECISION OF THE HONBLE HIGH COURT IN THE CASE OF SRI P.J. KUMAR & OTHERS IN ITA NOS. 6005 & 6006/2010 CANCELLED THE ASSESSM ENT MADE IN THE CASE OF ONE SRI CHANDRA REDDY IN ITA NOS.115 6 TO 1159/BANG/2010 DATED 29/03/2011 [COPY ENCLOSED AS A NNEXURE- 2] PURSUANT TO A JOINT WARRANT. 4. SINCE THE MATTER WAS BEING ADJOURNED FROM TIME TO TIME AWAITING THE ORDER IN THE CASE OF C. RAMAIAH REDDY [SUPRA] IT DID NOT OCCUR TO MY REPRESENTATIVE TO SPECIFICALLY FILE THIS LEGAL GROUND DUE TO SHEAR INADVERTENCE AS AND WHEN THE MA TTER CAME UP FOR HEARING AND WAS BEING ADJOURNED AND THIS MORNIN G WHEN THE MATTER CAME UP FOR HEARING AGAIN THE HONBLE BENCH POINTED OUT THAT SPECIFIC LEGAL GROUND HAD NOT BEEN URGED. AFT ER NOTICING THE INADVERTENCE LAPSE THE APPELLANT HAS BEEN ADVISED BY THE LEARNED AUTHORISED REPRESENTATIVE TO FILE THIS ADDITIONAL G ROUND WHICH MAY KINDLY BE ADMITTED AND DISPOSED OFF ON MERITS F OR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE HAVING REGARD TO THE RATIO OF THE HONBLE SUPREME COURT IN 229 ITR 383 A ND KARNATAKA HIGH COURT IN 70 ITR 70. THE RELEVANT FACTS FOR APPRECIATION OF THE ADDITION AL GROUND ARE THESE:- 1. PURSUANT TO THE WARRANT OF AUTHORIZATION ISSUED BY THE LEARNED DIRECTOR OF INCOME-TAX (INV.) BANGALORE T HERE WAS A SEARCH IN THE OFFICE PREMISES OF THE APPELLANT ON 0 8/08/2002 AND IN THE RESIDENTIAL PREMISES OF THE APPELLANT ON 08/ 08/2002. COPIES OF THE PANCHANAMA DRAWN ARE PLACED AT PAGES NO.1 TO NO.89 OF THE PAPER BOOK NO.II. THE COPIES OF THE W ARRANT WERE NOT GIVEN TO THE APPELLANT AT THAT TIME AND LATER D URING THE COURSE OF HEARING THE HONBLE ITAT UNDER THE DIRECTIONS O F THE HONBLE ITAT PHOTOSTAT COPIES OF THE TWO WARRANTS WERE GIVE N FROM WHICH IT WAS NOTICED THAT THE WARRANTS WERE IN THE JOINT NAMES OF DR. N. KANNAN DR. R. LAKSHMAN AND DR. K. PRAVEEN KUMAR AND NOT SEPARATELY. THUS SEARCH WAS NOT INI TIATED AGAINST THE APPELLANT INDIVIDUALLY TO MAKE AN ASSES SMENT U/S. 158BC OF THE ACT. IT(SS)A NO.11 & 12/BANG/2008 PAGE 6 OF 12 2. THE ASSESSMENT MADE ON THE APPELLANT IN THE STAT US OF INDIVIDUAL IS PLAINLY OPPOSITE TO THE RATIO OF TH E DECISION OF THE HONBLE KARNATAKA HIGH COURT CIRCUIT BENCH GULBARG A IN THE CASE OF P.J.KUMAR IN ITA NOS.6005 TO 6006/2010 AND THE DECISION OF THE HONBLE ITAT BANGALORE B BENCH I N THE CASE OF SRI CHANDRA REDDY [SUPRA] AND THEREFORE THE ASSE SSMENT REQUIRES TO BE CANCELLED ON THIS ASPECT OF THE LEG AL GROUND. 4. THE LD. COUNSEL FOR THE ASSESSEE PRAYED TO ADMIT THE ADDITIONAL GROUND WHILE THE LD. CIT(DR) IN HER RIVAL SUBMISSIO NS STATED THAT AT THIS STAGE THE ADDITIONAL GROUND MAY NOT BE ADMITTED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. AS REGARDS TO THE AD MISSION OF LEGAL GROUND RAISED BY THE ASSESSEE IS CONCERNED THE HONBLE SU PREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 I TR 383 (SC) HAS HELD AS UNDER: UNDOUBTEDLY THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS T HERE IS NO REASON WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN O RDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. 6. IN THE PRESENT CASE ALSO ALL THE RELEVANT MATER IAL IS AVAILABLE ON THE RECORD COPY OF SEARCH WARRANT IS ALSO PLACED ON RE CORD AND NO FURTHER INVESTIGATION IS REQUIRED THEREFORE KEEPING IN VIE W THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE AFORESAID REFERRED TO CASE THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED. IT(SS)A NO.11 & 12/BANG/2008 PAGE 7 OF 12 7. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE IS RUNNING A DIAGNOSTIC CENTRE KNOWN AS KANNAN DIAGNOSTIC CENTR E IN THE PREMISES WHEREIN KANNAN PATHOLOGY LABORATORY IS ALSO FUNCT IONING. IN THE SAID DIAGNOSTIC CENTRE THE ASSESSEE IS RUNNING HIS X-RA Y AND SCANNING CENTRE. IN THIS CASE SEARCH U/S. 132 OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT] WAS CONDUCTED O N 8.8.2002 IN THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE. DURING THE COURSE OF SEARCH PROCEEDINGS CASH REGISTERS PERTAINING TO X -RAY AND SCANNING BILL NOOKS JEWELRY ITEMS ETC. WERE FOUND AND SEIZED. THE ASSESSING OFFICER ISSUED NOTICE DATED 31.12.2002 U/S. 158BC IN RESPO NSE TO THAT THE ASSESSEE FILED HIS BLOCK RETURN OF INCOME ON 31.12. 2002 DECLARING AN UNDISCLOSED INCOME OF RS.55 79 710. HOWEVER THE ASSESSMENT WAS FARMED AT AN INCOME OF RS.84 48 750 VIDE ORDER DATE D 31.08.2004. AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE L D. CIT(APPEALS) AND CHALLENGED THE VALIDITY OF SEARCH AND ALSO CONTESTE D THE ADDITIONS MADE BY THE AO HOWEVER THE LD. CIT(A) DISMISSED THE APPEA L OF THE ASSESSEE VIDE IMPUGNED ORDER DATED 28.01.2008. NOW THE ASSESSEE IS IN APPEAL. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CASE THE WARRANT OF AUTHORISATION WAS ISSUED IN THE JOINT NA MES OF DR. N. KANNAN DR. K. LAKSHMAN AND DR. K. PRAVEEN KUMAR AND NOT IN THE INDIVIDUAL NAME OF THE ASSESSEE THUS THE SEARCH WAS NOT INITIATED AG AINST THE ASSESSEE INDIVIDUALLY THEREFORE THE ASSESSMENT FRAMED WAS N OT VALID. IT WAS FURTHER SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF CIT GULBARGA V. P.J.KUMAR IN ITA NOS.6005 TO 6006/2010 ORDER DATED IT(SS)A NO.11 & 12/BANG/2008 PAGE 8 OF 12 17.9.2010 AND THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. SMT. VANDANA VERMA [2009] 227 CTR (ALL) 388. 9. IN HER RIVAL SUBMISSIONS THE LD. CIT(DR) STRONG LY SUPPORTED THE ORDER OF THE LD. CIT(APPEALS) AND FURTHER SUBMITTED THAT THE FACTS OF THE PRESENT CASE ARE DIFFERENT FROM THE FACTS INVOLVED IN THE CASES RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. IT WAS CONTENDED THA T THE ASSESSEE HAD FILED RETURN OF INCOME AND PAID THE TAXES THEREFORE AT T HIS STAGE THE ASSESSEE CANNOT RAISE THE ISSUE OF VALIDITY OF THE ASSESSMEN T ORDER PASSED BY THE AO. RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASE S: (I) MADHUPURI CORPORATION V. PRABHAT JHA DDIT (INV.) (2002) 256 ITR 498 (GUJ) (II) DR. OSWAL ANTHONY V. CIT [2004] 270 ITR 204 (PAT) (III) ANJUGA CHIT FUNDS P. LTD. V. DCIT [2008] 304 ITR (A T) 374 (CHENNAI) (IV) CIT V. INDORE CONSTRUCTIONS P. LTD. [2005] 279 ITR 545 (M.P.) (V) BANDEL TRADERS P. LTD. V. UOI [2003] 263 ITR 431 (D EL) 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE IT IS NOTICED THAT THE WARRANT OF AUTHORIZATI ON DATED 5.8.2002 WAS IN THE JOINT NAMES OF DR. N. KANNAN DR. K. LAKSHMAN A ND DR. K. PRAVEEN KUMAR. A COPY OF THE SAID DOCUMENT I.E. WARRANT O F AUTHORISATION DATED 5.8.02 IS AVAILABLE ON THE RECORD THEREFORE THERE IS NO DOUBT TO THIS FACT THAT THE WARRANT OF AUTHORIZATION WAS IN THE JOINT NAMES BUT THE ASSESSMENT HAS BEEN FRAMED IN THE INDIVIDUAL NAME OF THE ASSESSEE. ON A SIMILAR ISSUE IT(SS)A NO.11 & 12/BANG/2008 PAGE 9 OF 12 THE HONBLE ALLAHABAD HIGH COURT LUCKNOW BENCH IN THE CASE OF CIT V. SMT. VANDANA VERMA [2011] 330 ITR 533 (ALL) HAS HELD AS UNDER: A WARRANT OF AUTHORIZATION MUST BE ISSUED INDIVID UALLY IF IT IS NOT ISSUED INVIDIDUALLY THEN THE ASSESSMENT CANNOT BE MADE IN AN INDIVIDUAL CAPACITY. IT HAS FURTHER BEEN HELD THAT SINCE THE WARRANT OF AUTHORIZATION HAD BEEN I SSUED IN THE JOINT NAMES OF MV AND VV WHO WERE HUSBAND AND WIFE LIVING TOGETHER IN A SINGLE PREMISES IT WAS NOT OPEN FOR THE ASSESSING AUTHORITY TO ASSESS VV ALONE ON THE BASIS OF THE AS SETS AND DOCUMENTS SEIZED DURING THE COURSE OF SEARCH BY INV OKING THE PROVISIONS OF CHAPTER XIV-B IN AN INDIVIDUAL CAPACI TY. 11. SIMILARLY THE HONBLE JURISDICTIONAL HIGH COUR T IN THE CASE OF CIT V. P.J. KUMAR (SUPRA) HAS HELD THAT IT IS SETTLED LAW THAT THE SEARCH TO BE CONDUCTED SHOULD BE STRICTLY IN ACCORDANCE WITH LAW. IF AN AUTHORIZATI ON IS ISSUED IN THE NAME OF TWO PERSONS AND IF BLOCK ASSESSMENT ORD ER TO BE PASSED IT SHOULD BE PASSED IN THE NAME OF TWO PERS ONS. IF THE ORDER IS PASSED IN THE NAME OF AN INDIVIDUAL AND NO T IN RESPECT OF BOTH THE PERSONS MENTIONED IN THE AUTHORISATION O N THE FACE OF IT THE PROCEEDINGS INITIATED AND THE ASSESSMENT ORDER PASSED IS ILLEGAL. 12. IN THE PRESENT CASE ALSO NO INDIVIDUAL WARRANT OF AUTHORISATION WAS ISSUED AND WARRANT OF AUTHORISATION OF SEARCH WAS I N THE JOINT NAMES THEREFORE KEEPING IN VIEW THE RATIO LAID DOWN IN TH E AFORESAID REFERRED TO CASES WE ARE OF THE VIEW THAT IN THE PRESENT CASE THE ASSESSMENT FRAMED U/S. 158BC IS NOT MAINTAINABLE. WE ORDER ACCORDING LY. IT(SS)A NO.11 & 12/BANG/2008 PAGE 10 OF 12 13. AS REGARDS TO THE CASES RELIED BY THE LD. CIT(D R) IS CONCERNED IT IS NOTICED THAT THE FACTS IN THE SAID CASES ARE DIFFER ENT FROM THE FACTS OF THE PRESENT CASE BECAUSE IN THE CASE OF MADHUPURI CORPORATION V. PRABHAT JHA DDIT (INV.) (2002) 256 ITR 498 (GUJ) A COMMON AUTHORISATION U/S. 132(1) OF THE ACT WAS ISSUED SINCE THE COMPETENT AU THORITY HAD REASON TO BELIEVE THAT A NUMBER OF PERSONS WERE INVOLVED IN I NTER-CONNECTED TRANSACTIONS BUT IN THE PRESENT CASE NOTHING IS BR OUGHT ON RECORD TO SUBSTANTIATE THAT THERE WAS ANY INTER-CONNECTED TRA NSACTION. 14. SIMILARLY IN THE CASE OF CIT V. INDORE CONSTRUCTIONS P. LTD. [2005] 279 ITR 545 (M.P.) A SEARCH WARRANT WAS ISSUED IN THE NAME OF DIRECT OR BUT UNDISCLOSED INCOME OF THE COMPANY WAS DISCOVERE D. THE HONBLE MADHYA PRADESH HIGH COURT HELD THAT IN SUCH A CASE NO SEPARATE AUTHORISATION AS CONTEMPLATED U/S. 132 OF THE ACT W AS REQUIRED. HOWEVER IN THE PRESENT CASE THERE WAS NO RELATIONSHIP OF D IRECTOR AND THE COMPANY AS SUCH THE CASE RELIED BY THE LD. CIT(DR) IS ON DI FFERENT FACTS. 15. ANOTHER CASE RELIED BY THE LD. CIT(DR) IS THE C ASE OF DR. OSWAL ANTHONY V. CIT [2004] 270 ITR 204 (PAT) THAT CASE WAS RELATING TO THE LIMITATION FOR FRAMING THE ASSESSMENT BUT IN THE P RESENT CASE THE FACTS ARE DIFFERENT BECAUSE THE ISSUE IS NOT RELATING TO THE TIME PERIOD BUT TO THE AUTHORISATION WHICH WAS NOT IN THE INDIVIDUAL NAME OF THE ASSESSEE. 16. IN THE CASE OF BANDEL TRADERS PVT. LTD. V. U.O.I. 263 ITR 431 (DEL ) RELIED BY THE LD. CIT(DR) THE ASSESSEES BUSINESS WAS INTERLINKED WITH THAT OF A SPECIFIED GROUP OF COMPANIES AND THAT SPECIFIE D GROUP WAS INVOLVED IN CLANDESTINE TRANSACTIONS BUT IN THE PRESENT CASE N O SUCH FACTS ARE INVOLVED THEREFORE THE SAID CASE IS ALSO DISTINGUI SHABLE ON FACTS. IT(SS)A NO.11 & 12/BANG/2008 PAGE 11 OF 12 17. IN VIEW OF THE AFORESAID DISCUSSION WE ARE OF THE VIEW THAT IN THE PRESENT CASE SINCE THE WARRANT OF AUTHORISATION WA S IN THE JOINT NAMES AND NOT IN THE INDIVIDUAL NAME OF THE ASSESSEE THEREFO RE THE ASSESSMENT FRAMED U/S. 158BC WAS NOT MAINTAINABLE. ACCORDINGL Y THE ASSESSMENT FRAMED BY THE AO U/S. 158BC IS ANNULLED. 18. IN THE CASE OF DR. N. KANNAN IN IT(SS)A NO.12/B ANG/08 THE FACTS ARE IDENTICAL AS WERE INVOLVED IN THE CASE OF DR. K . PRAVEEN KUMAR IN IT(SS)A NO.11/BANG/08 (SUPRA) THEREFORE OUR FINDIN GS GIVEN IN THE FORMER PART OF THIS ORDER IN RESPECT OF THE LATTER CASE SH ALL APPLY MUTATIS MUTANDIS IN THE CASE OF DR. N. KANNAN ALSO. 19. SINCE WE HAVE DECIDED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEES AND ASSESSMENTS FRAMED U/S. 158BC ARE ANNULLED THE REFORE NO SEPARATE FINDINGS ARE BEING GIVEN ON THE GROUNDS RAISED ON MERIT OF THE CASE. 20. IN THE RESULT THE APPEALS BY THE ASSESSEES ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF NOVEMBER 2011. SD/- SD/- ( GEORGE GEORGE K. ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 30 TH NOVEMBER 2011. DS/- IT(SS)A NO.11 & 12/BANG/2008 PAGE 12 OF 12 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.