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Judgment
Badar Durrez Ahmed
ITA No. 1115/2008 and 1228/2011 arise out of the common order passed by the Income Tax Appellate Tribunal on 08.02.2008 pertaining to
the block assessment period 01.04.1989 to 17.12.1999 and in respect of two appeals filed by the assessee and the revenue in I.T. (SS) A.No. 58
(Del) 2005 and I.T. (SS) A. No. 125 (Del) 2005, respectively, before the said Tribunal.
ITA No. 1115/2008 and ITA No. 1228/2011 are appeals by the revenue and both arise out of the common order passed by the Income Tax
Appellate Tribunal on 08.02.2008 pertaining to the block assessment period 01.04.1989 to 17.12.1999 in respect of appeals filed by the assessee
and revenue being I.T (SS) A. No. 58/Del/2005 and I.T (SS) A. No. 125/Del/2005, respectively, before the said Tribunal.
In the assessee''s appeal before the Tribunal one of the points taken was that the warrant of authorization had been issued by the Joint 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 Joint 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 appeal was 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 01.10.1998 whereby the Joint 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 order and remit the matters back to the Tribunal with the direction that the revenue''s appeal before
the Tribunal gets 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 Joint Director of Income Tax to issue a warrant of authorization with retrospective effect.
On these terms, the appeals stand disposed of.