Commissioner of Income Tax vs Jyoti Limboo

Siddharth Mridul, J.—I. T. A. No. 691 of 2009 and 727 of 2009 arise out of the common order passed by the Income Tax Appellate Tribunal on November 21, 2008 pertaining to the block assessment period April 1, 1989 to June 23, 1999 and in respect of two appeals, one by the assessee and one by the Revenue in I. T. (SS) A. No. 151(Del)/2006 and I. T. (SS) A. No. 158(Del)/2006 respectively filed before the said Tribunal.

I. T. A. No. 200 of 2010 is an appeal by the Revenue and arises out of the order passed by the Income Tax Appellate Tribunal on June 10, 2009, pertaining to the block assessment period April 1, 1989 to June 23, 1999 and in respect of an appeal filed by the Revenue being I. T. (SS) A No. 23/De1/ 2008 before the said Tribunal. The impugned order in I. T. A. No. 200 of 2010 was passed in pursuance to order dated November 21, 2008 of the Tribunal whereby the block assessment had been held to be bad in law and resultantly quashed.

In the assessee''s appeal before the Tribunal one of the points taken was that the warrant of authorization had been issued by the Additional Director of Income Tax (Investigation), who was not authorized to issue a search warrant and, therefore, the assessment made in consequence of such an invalid search warrant, was itself invalid and was liable to be quashed.

The Tribunal, following the decision of this Court in Dr. Nalini Mahajan, Ram Lal Mahajan Charitable Trust, Shri Rakesh Mahajan, Pan Foods Ltd. and Others and Mahajan Industries Pvt. Ltd. and Others Vs. Director of Income Tax (Inv.) and Others, accepted the plea taken by the assessee and held that the Additional Director of Income Tax (Investigation) was not authorized to issue search warrants and consequently the search warrant became invalid as did the assessment which followed thereafter. In view of the fact that the entire proceedings were held to be invalid, the other grounds taken by the assessee in his appeal were not gone into by the Tribunal. Similarly, the Revenue''s appeals were also not examined because the assessment itself was quashed on the first ground before the Tribunal.

The learned Counsel for the Revenue now points out before this Court that by virtue of the Finance (No. 2) Act, 2009, an amendment has been introduced in Section 132(1) with retrospective effect from June 1, 1994, whereby the Additional Director has also been empowered to issue warrants of authorization. In view of this amendment, the impugned order is liable to be set aside and the matter is to be remitted to the Tribunal to consider the appeals filed by the assessee as well as by the Revenue on all the other grounds urged by the parties.

Consequently, we set aside the impugned orders and remit the matters back to the Tribunal with the direction that the Revenue''s appeals before the Tribunal get revived and so does the assessee''s appeal before the Tribunal on all points originally urged before the Tribunal.

As requested by the learned Counsel for the respondent/assessee, this order passed by us today is without prejudice to the assessee''s right to challenge the constitutional validity of the amendment introduced by the Finance (No. 2) Act, 2009, whereby the amendments were introduced in Section 132(1) empowering the Additional Director of Income Tax to issue a warrant of authorization with retrospective effect.

On these terms, the appeals stand disposed of.