GURCHARAN SINGH vs. C I T

The appellant has filed this appeal under section 260A of the Income Tax Act, 1961 (in short, ‘the Act’) against the orders of the ITAT Chandigarh Bench ‘B’ in IT (SS) A No.13(CHD)/2001 for the block period starting from 1.4.1987 and ending 9.10.1997 against order dated 11.12.2007. 2. Though in para 11 of the appeal, eight questions have been set out, at the time of hearing, only question Nos.I and II have been proposed, which are as under:- “I. Whether on the facts and circumstances of the case, the ITAT was justified in confirming the action of the authorities below in ignoring the provisions of Sections 124/1237 of the Income Tax Act, 1961 thereby usurping the juri iction of Block Assessment without giving reasonable opportunity of hearing to the appellant and without recording the reasons which is mandatory in view of express provisions of law and as held by the Hon’ble Supreme Court of India? II. Whether on the facts and circumstances of the case, the ITAT was justified in confirming the action of the authorities below in not adjudicating the issue of legality/illegality of search operations under section 132 of the Income Tax Act, 1961 and held that it is only the High Court that can adjudicate the validity/legality of the search so that so vide this present the appellant disputes the very legality of search operations under section 132 of the Income Tax act, 1961?”

The assessee is a Government employee. A search was conducted at his premises at Mohali alogwith group cases of one S.Daljit Singh and his other concerns, who were engaged in construction business. The assessee who was a Junior Engineer with PWD department, was staying in the house of S.Daljit Singh. Certain incriminating documents were found on search. Notice was issued to the assessee under section 158 BC of the Act and thereafter, assessment was made. The CIT(Appeals) granted partial relief to the assessee and the Tribunal also gave further relief by deleting some of the additions.

We have heard learned counsel for the assessee.

As regards Question No.(II), this Court has already held vide order dated 16.9.2008 in ITA No.93 of 2004 (The Commissioner of Income Tax, Karnal v. M/s Paras Rice Mills, Kurukshetra) that issue of legality of search could not be gone into by the assessing authority. In view of the said order, Question No.(II) cannot be held to be substantial question of law.

As regards Question No.(I), the finding of the tribunal is to the following effect:- “30. On merits, we find that the assessee has challenged the juri iction of the Assessing officer to make the assessment. The assessee was required to object to the juri iction of the assessing officer in the course of assessment proceedings within specified time. As per the evidence on record the assessee had only expressed his intention to challenge the juri iction during the course of assessment proceedings. Reference to letter dated 3.12.1998 written to the assessing officer by the assessee is relevant. Para 3 of the letter placed on record by the assessee is pertinent and is accordingly reproduced hereunder:-

Although assigning over my case at Amritsar is legally suspect but I may succumb it after obtaining legal advice and weighting the same as to its practical difficult.

So however subsequently the juri iction of the assessing officer was not challenged. The assessee has responded to the queries of the assessing officer from time to time. The three letters placed on record are the testimony to this fact. We, therefore, do not find any merit in these additional grounds of appeal raised by the assessee.

It is also observed that the assessing officer had issued notice under section 143(2) in this case after the assessee had filed the return of income. There is thus no such infirmity as alleged. The additional ground of appeal raised by the assessee in this regard is thus dismissed.”

Learned counsel for the assessee submitted that the assessee having raised a question of territorial juri iction, the same was required to be adjudicated upon under section 124 of the Act.

In view of the finding of the Tribunal that the assessee did not press his objection, we are unable to hold that the question raised is substantial question of law.

Accordingly, the appeal is dismissed. (Adarsh Kumar Goel) Judge December 5, 2008 (L.N.Mittal) ‘gs’ Judge 5