Tapasya Projects Ltd. vs Assistant Commissioner of Income Tax

Sushil Harkauli and Rakesh Sharma, JJ.—We have heard learned Counsel for the petitioner and Sri Shamboo Chopra for the respondent Income Tax Department.

The petitioner is a company and Sri Som Arora and Sri Praveen Arora are its directors admittedly. A search has been conducted on the premises of the said two directors and as a result of the search, notice u/s 153A of the Income Tax Act, 1961, has been issued to the petitioner. The petitioner has challenged that notice on the ground of that search conducted on the individuals namely the two directors, does not amount to a search of the petitioner company u/s 132 read with Rule 112, and accordingly notice could not have been issued u/s 153 A to the petitioner company.

For issue of notice u/s 153A one of the two conditions given below must be satisfied.

either a search should be initiated u/s 132, or;

books of account, etc. should be requisitioned u/s 132A.

It is not the department''s case that the case is covered by any requisition u/s 132A.

The question is whether the search conducted on the premises of these two directors should be treated to be a search initiated in respect of the petitioner company. The crucial words in Section 153A are "in the case of a person where a search is initiated u/s 132." Much emphasis has been laid on the definition of "person" given in Section 2(31) of the Act. The definition would be applicable unless the context otherwise requires.

We are not inclined to give such a restricted interpretation to the word "person" as used in Section 153A, so as to exclude the servants and agents of that ''person'' because of the obvious undesirable results to which such strict interpretation would lead. The matter was taken up on 17th December 2007. We required the Sri Chopra to obtain instructions whether the premises of these two directors were searched in their capacity as directors of the petitioner company or in their capacity either as individuals or as directors of some other company. Today, Sri Chopra has produced a photocopy of the authorisation warrant which specifically mentions the name of the petitioner company. Prima facie, it would appear that these two directors have been searched as directors of the petitioner company. The omission to mention this specific detail that they have been searched as directors of the petitioner company in the punchnama prepared consequent to the search, would not necessarily mean, in. the face of the express words of the authorisation warrant that these two directors have not been searched in their capacity as directors of the petitioner company.

In these circumstances, we decline to interfere in this writ petition with the notice u/s 153A. It is clarified that the findings recorded above are only prima facie findings on the basis of the record before us. They will not bind the Income Tax Authorities in further proceedings. The writ petition is accordingly dismissed.