COMMISSIONER OF INCOME TAX vs. JYOTI LIMBOO

ITA Nos.200/2010, 727/2009 & 691/2009 Page 1 of 4

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on:16th February, 2010

+ ITA No.200/2010

THE COMMISSIONER OF INCOME TAX ….. Appellant

- versus -

JYOTI LIMBOO PROP. M/S JYOTI & CO. 118, SUBBA FARMS MEHRAULI-GURGAON ROAD NEW DELHI

….. Respondent

WITH

ITA No.727/2009

THE COMMISSIONER OF INCOME TAX ….. Appellant

- versus -

JYOTI LIMBOO PROP. M/S JYOTI & CO. 118, SUBBA FARMS MEHRAULI-GURGAON ROAD NEW DELHI

….. Respondent

WITH

ITA No.691/2009

THE COMMISSIONER OF INCOME TAX ….. Appellant

- versus -

JYOTI LIMBOO PROP. M/S JYOTI & CO. 118, SUBBA FARMS MEHRAULI-GURGAON ROAD NEW DELHI

….. Respondent

2010:DHC:938-DB

ITA Nos.200/2010, 727/2009 & 691/2009 Page 2 of 4 Advocates who appeared in this case:

For the Appellant

: Mr Sanjeev Sabharwal For the Respondent

: Mr Manish Sharma

CORAM: HON’BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MR JUSTICE SIDDHARTH MRIDUL

SIDDHARTH MRIDUL, J

ITA Nos.200/2010, 727/2009 & 691/2009 Page 3 of 4 3. 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. 4. The Tribunal, following the decision of this Court in Dr. Nalini Mahajan & Others vs. Director of Income Tax (Investigation) & Others: 257 ITR 123 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. 5. 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 1st June, 1994, whereby the Additional Director has also been empowered to issue warrants of authorization. In view of this amendment, the impugned 2010:DHC:938-DB

ITA Nos.200/2010, 727/2009 & 691/2009 Page 4 of 4 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. 6. 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. 7. 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. 8. On these terms, the appeals stand disposed of.

SIDDHARTH MRIDUL, J

BADAR DURREZ AHMED, J

FEBRUARY 16, 2010 dn

2010:DHC:938-DB