Commissioner of Income Tax vs Swiss Times and Electronics

C.N. Ramachandran Nair, J.—The connected appeals arise from the order of the Tribunal dismissing an appeal and cross-appeal pertaining to the assessment of the very same assessee. Assessment was one completed u/s 158BC of the Income Tax Act, 1961, after search conducted in the residential premises of the partner of the assessee-firm and after conducting survey in the business premises of the assessee on the same day. In first appeal, the assessee contested the validity of the assessment u/s 158BC and the additions on the merits. The Commissioner of Income Tax (Appeals) allowed the appeal by holding that the assessment should have been made u/s 158BD as the search was not pursuant to warrant issued in the name of the assessee-firm. When the Department filed an appeal against this order before the Tribunal the assessee filed cross-appeal to contest the matter on the merits. The Tribunal upheld the order of the Commissioner of Income Tax (Appeals) and consequently did not consider the assessee''s cross-appeal on the merits. The Department and the assessee are in appeal before us against the common order issued by the Tribunal.

During hearing of the appeal before us the senior counsel appearing for the Department brought to our notice the order of the Tribunal issued in I.T(S&S)A No. 27(Coch)/2003, dated March 11, 2004, which is an appeal filed by the managing partner of the assessee-firm wherein an exactly opposite finding is rendered by the Tribunal for allowing that appeal. In fact, the specific finding of the Tribunal is that warrant was issued for search in the name of the firm Messrs. Swiss Time and Electronics, Ernakulam, which is the assessee, the assessment of which is involved in these two appeals. The finding of the Tribunal impugned in these two appeals is that warrant was issued in the name of the partner and so much so assessment cannot be made u/s 158BC against the firm. This order of the Tribunal is patently wrong and unsustainable because the very same Bench in the subsequent order issued in the name of the partner held that warrant was in the name of the firm and not against the partner. We are told that the partner''s assessment cancelled by the Tribunal''s order above referred stands confirmed and is accepted by both sides. In the circumstances, we allow the appeals by cancelling the orders of the Tribunal and that of the first appellate authority and remand the case back to the first appellate authority to consider the assessment on the merits that is pertaining to the amounts assessed and not on the jurisdictional question which stands concluded by this judgment.