THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, MANGALURU vs. M/S. BLUELINE FOODS (INDIA) PVT. LTD.,, MANGALURU

Per George George K, Vice President :

Question raised by Hon’ble Vice President:

1. Whether on facts and circumstances of the case and in law, there was a valid search under section 132 of the Act in the case of the assessee and thus assessment completed under section 153A of the Act is valid?

Questions raised by Hon’ble Accountant Member :

1. Whether in the facts and circumstances of the case, the search conducted in the light of warrant of authorization issued in the name of the assessee company and the place of search mentioned in the warrant is the residence of the director of the assessee company, would constitute a valid search u/s.132 of the Act in the case of the assessee company itself, so as to initiate proceedings u/s.153A of the Act? 2. Consequently, the issue of notice u/s.153A of the Act is a valid notice and whether in the facts and circumstances of the case, a search was initiated, executed, completed and panchanamas drawn according to Form 45 in the case of assessee company for completing assessment u/s.143(3) r.w.s. 153A of the Act? 3. Whether, in the facts and circumstances of the case, proceedings u/s.153C of the Act could have been initiated?

2. The Hon’ble President nominated Shri. Mahavir Singh, Hon’ble Vice- President for a decision as Third Member on the point of difference between Hon’ble Vice President and Hon’ble Accountant Member constituting the Division Bench. The Third Member vide his order dated 22.07.2024, by agreeing with the view taken by the Hon’ble Vice President, decided the issue in favour of the assessee and against the Revenue as under :

Question raised by Ld. VP(JM) Decision 1. Whether on facts and circumstances of Answered in negative. I the case and in law, there was a valid search am concurring with Ld. under section 132 of the Act in the case of VP(JM) the assessee and thus assessment completed under section 153A of the Act is valid?

Questions raised by Ld. AM Decision 1. Whether in the facts and circumstances Answered in negative. I do not of the case, the search conducted in the light concur with ld. AM of warrant of authorization issued in the name of the assessee company and the place of search mentioned in the warrant is the residence of the director of the assessee company, would constitute a valid search u/s.132 of the Act in the case of the assessee company itself, so as to initiate proceedings u/s.153A of the Act?

2. Consequently, the issue of notice Answered in negative. I do not u/s.153A of the Act is a valid notice and concur with ld. AM whether in the facts and circumstances of the case, a search was initiated, executed, completed and panchanamas drawn according to Form 45 in the case of assessee company for completing assessment u/s.143(3) r.w.s. 153A of the Act? 3. Whether, in the facts and This question does not arise out circumstances of the case, of the orders of both ld.VP(JM) proceedings u/s.153C of the Act could have and ld. AM or that of the been initiated? Assessing Officer and CIT(A) and hence, need no answer.

3. In view of the majority opinion, the Order of the CIT(A) is upheld and the appeals filed by the Revenue are dismissed. It is ordered accordingly.

Pronounced in the open court on the date mentioned on the caption page.

Sd/- Sd/- (LAXMI PRASAD SAHU) (GEORGE GEORGE K) Accountant Member Vice President Bangalore. Dated: 07.08.2024. /NS/* Copy to:

1. 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore.

6. Guard file By order Assistant Registrar, ITAT, Bangalore.

आयकरअपील�यअ�धकरण, ‘बी’ �यायपीठ, ब�गलु� IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, BANGALORE �ीमहावीरिसंह, उपा�य�केसम� BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT आयकरअपीलसं./ITA Nos.: 182 & 183/BANG/2023 �नधा�रणवष�/Assessment Year: 2017-18 & 2018-19 The DCIT, M/s. Blueline Foods (India) Central Circle-1, v. Pvt. Ltd., Mangaluru Suite #406, Cystal Arc, Balmatta Road, Mangaluru – 575 011.

PAN: AACCB 8979J (अपीलाथ�/Appellant) (��यथ�/Respondent)

अपीलाथ�क�ओरसे/Appellant by : Shri Saravanan. B, CIT ��यथ�क�ओरसे/Respondent by : Shri B.S.N. Prasad, Advocate सुनवाईक�तार�ख/Date of Hearing : 03.05.2024 घोषणाक�तार�ख/Date of Opinion : 22.07.2024 OPINION U/S 255(4) OF THE INCOME-TAX ACT, 1961 There being difference of opinion between the Ld. Vice President (Judicial Member) and Ld. Accountant Member (AM) constituting the above captioned appeals. The President, ITAT vide U.O. No.F.29-Cent.Jd(AT)/2024 dated 14.03.2024 has nominated me for adjudicating the difference. The ld. VP (JM) has referred the following question for referring to third member:- 1. Whether on facts and circumstances of the case and in law, there was a valid search under section 132 of the Act in the case of the assessee and thus assessment completed under section 153A of the Act is valid?

Further, the ld. AM referred the following three questions:- 1. Whether in the facts and circumstances of the case, the search conducted in the light of warrant of authorization issued in the name of the assessee company and the place of search mentioned in the warrant is the residence of the director of the assessee company, would constitute a valid search u/s.132 of the Act in the case of the assessee company itself, so as to initiate proceedings u/s.153A of the Act?

2. Consequently, the issue of notice u/s.153A of the Act is a valid notice and whether in the facts and circumstances of the case, a search was initiated, executed, completed and panchanamas drawn according to Form 45 in the case of assessee company for completing assessment u/s.143(3) r.w.s. 153A of the Act?

3. Whether, in the facts and circumstances of the case, proceedings u/s.153C of the Act could have been initiated?

2. The brief facts are noted by the ld. VP (JM) in his order at para 3, which are not controverted and even, the ld.AM has not disputed the same. Hence, there is no need to repeat the same. The ld. VP (JM) has also noted the fact that the CIT(A) after considering the relevant provisions and judicial pronouncements held that, since there is no search u/s.132 of the Act in the premises of the assessee company, the precondition for issuance of notice u/s.153A of the Act are not satisfied, hence the assessment completed pursuant to the same for the assessment year 2013-14 to 2018-19 were quashed. The ld. VP (JM) has reproduced the findings recorded by CIT(A) for the assessment year 2017-18 in para 4. The first question raised by ld. VP (JM) and ld. AM seems to be identical and raises issue, which will give the same result. However, for the sake of clarity, I’m reproducing the question raised by ld. VP (JM), which reads as under:-

1. Whether on facts and circumstances of the case and in law, there was a valid search under section 132 of the Act in the case of the assessee and thus assessment completed under section 153A of the Act is valid?

The question raised by ld. AM reads as under:- 1. Whether in the facts and circumstances of the case, the search conducted in the light of warrant of authorization issued in the name of the assessee company and the place of search mentioned in the warrant is the residence of the director of the assessee company, would constitute a valid search u/s.132 of the Act in the case of the assessee company itself, so as to initiate proceedings u/s.153A of the Act?

2.1 Admittedly, a search u/s.132 of the Act was carried out on the residential premises of the three Directors of the assessee company namely, Blueline Foods India Pvt. Ltd., the present assessee, on 23.01.2019. These above captioned appeals are arising out of different orders of CIT(A) but the legal issue and facts are identical in both the assessment years i.e., 2017-18 & 2018-19. Hence, I will take the facts from assessment year 2017-18. The assessee before CIT(A) for the first time raised the jurisdictional issue for assuming jurisdiction by the AO for issuance of notice u/s.153A of the Act, by the following two grounds:- 1. The assessment order passed by the learned Assessing Officer (AO) in the case of the Appellant for Assessment year 2017-18 under section 143(3) read with section 153A of Income-Tax Act, 1961 (the Act) on 25.01.2021 (the impugned order) is erroneous, arbitrary and opposed to the facts and circumstances of the case and the law.

Before me, the ld. CIT-DR Shri B. Saravanan argued on behalf of Revenue whereas for assessee Dr.B.S.N. Prasad, Advocate argued.

3. The ld. CIT-DR argued that the search was conducted in the case of Blueline Foods India Pvt. Ltd. u/s.132 of the Act on 23.01.2019. He argued that the CIT(A) has committed factual error in his order by stating that no search u/s.132 of the Act was initiated or conducted in the case of the assessee company. He referred to the factual mistake in para 4.22 of CIT(A)’s order and the relevant para, he drew my attention, which reads as under:- “In the present case, the AO is on record admitting that no search under section 132 was initiated or conducted in the case of the Appellant company and stating categorically that only a survey under section 133A was carried out in the case of the company, as a result of which no Panchanama was drawn in its name.”

He argued that the CIT(A) has been factually incorrect in stating that no search u/s.132 of the Act was initiated and conducted in the case of the assessee company and no panchanama was drawn in the name of the company. He filed copies of three warrants of authorization executed in the case of Blueline Foods India Pvt. Ltd., to search the residential premises of Mr. Mohd. Fakir, the residential premises of Mr. Afthar Mohammed and the residential premises of Mr. Shawkath Showry and stated that the same have been submitted at page Nos. 16 to 21 of Departmental paper-book, as issued in Form No.45. The ld. CIT-DR argued that as could be seen from the warrants of authorization, the Pr.DIT(Inv.), Bengaluru, being in possession of information leading to reasons to believe that Blueline Foods India Pvt. Ltd., is in possession of money, bullion, jewellery or other valuable article or things representing undisclosed income, has issued the warrants of authorization in Form No.45, front page, the name of the assessee company, Blueline Foods India Pvt. Ltd., has been written. He further drew my attention to Form No.45 and argued that the Pr.DIT(Inv.), Bengaluru being in possession of information leading to reasons to suspect that such books of accounts, other documents, money, bullion, jewellery or other valuable article or things are kept in residential premises of Mr. Mohd. Fakir, Mr. Afthar Mohammed or Mr. Shawkath Showry, and consequently issued warrants of authorization to search residential premises in the case of Blueline Foods India Pvt. Ltd.

4. Consequently, the ld. CIT-DR argued that a search u/s 132 could be conducted in a case of person by covering multiple premises wherever there is a suspicion that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing representing undisclosed income are kept. In the instant case, the Pr. DIT(Inv.) had reasons to believe that Blueline Foods (India) Pvt Ltd was in possession of undisclosed income and assets and therefore authorized the search in the case of Blueline Foods (India) Pvt Ltd. Further, he had reasons to suspect that evidences relating to the unaccounted assets and income of Blueline Foods (India) Pvt Ltd would be kept at the residential premises of Mr. Mohd. Fakir, Mr. Afthar Mohammed and Mr. Shawkath Showry and accordingly, authorized this search at these residential premises. Thus, as could be seen from all these warrants which have been executed, the search has been initiated and conducted in the case of Blueline Foods (India) Pvt Ltd. As could be seen from above Panchanamas, the following have been filled up. Col. No. (A) giving "Warrant in the case of ---- Blueline Foods (India) Pvt. Ltd Col. No. (B) giving "Warrants to search (details and ownership of place of search)" ---- Residence of Mr. Mohammed Fakir Thus, from the above Panchanamas, it is very clear that search has been conducted in the case of Blueline Foods (India) Pvt Ltd at various premises including the residences of the directors and hence, the Ld. CITA) has been factually incorrect in stating that no search u/s 132 of the Act was initiated and conducted in the case of the assessee company and no panchanama was drawn in the name of the company. He explained the words, “Person” and “premises” and read out Section 132 of the Act. He argued that this section is person specific as could be seen from the language of the section as reproduced below: "Search and seizure. 132. (1) Where the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section l31 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub- section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income- tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (1l of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), ....... "(Emphasis given)

5. In the instant case, the person on whom the Pr. DIT(Inv.) had reasons to believe that such person was in possession of unaccounted income/assets was Blueline Foods (India) Pvt. Ltd. However, in the case of Blueline Foods (India) Pvt. Ltd, since the Pr. DIT(Inv.) had reasons to suspect that such person had kept its unaccounted income and assets in certain identified premises, such premises were authorized to be searched. He countered the order of CIT(A) by arguing that he has at various places in his order used the terms 'case' and premises' interchangeably. However, the case searched is different from the premises searched. In a particular case being searched, multiple premises can be covered u/s 132 of the Act. He in his written submissions brought out the differentia “person” and “premises” in tabular chart as under:- Income Tax Authority Authorizing the search Authorisation Person / Premises has REASONS TO BELIEVE Search authorized in the Searched person that a person is in case of the person possession of unaccounted income of assets REASONS to SUSPECT Warrant issued to search Premises may belong to that evidences relating to the premises where the any other person the unaccounted assets unaccounted assets and and income are kept income are kept. The search remains to be in the case of the first person From the above, it becomes clear that search has been authorized in the case of Blueline Foods (India) Pvt. Ltd. and concluded as evidenced from the warrants of authorization and Panchanamas submitted for the kind perusal and consideration of the Bench. Ld CIT DR also relied on various case laws, which I will discuss in later part of this order.

6. On the other hand, the ld. Counsel for the assessee argued that crux of the issue in this appeal of Revenue is that the preconditions for issuance of notice u/s.153A of the Act are not met in the present case and hence, the CIT(A) has rightly held the notices issued by Revenue are ab initio and assessment proceedings concluded on the basis of such notices are invalid. The ld. counsel argued that the provisions of section 153A relates only to cases of search or requisition and cannot be invoked in non-search or non-requisition cases. The ld. counsel referred to the provisions of section 153A of the Act and the expression “in the case of a person where search is initiated u/s.132 or books of account, other documents or any assets are requisitioned u/s.132A” used in sub-section (1) of section 153A of the Act clearly restricts the application of section to cases of search or requisition only. He argued that the three panchanamas drawn are enclosed at pages 10 to 15 of revenue’s paper-book in consequence to warrant of authorization issued u/s.132 of the Act in the case of Blueline Foods (India) Pvt. Ltd., for searching the residence of its directors enclosed at pages 16 to 21 of Revenue’s paper-book clearly establishes that in the case of the assessee company, the Income-tax Department neither initiated a search u/s.132 of the Act nor made any requisition u/s.132A of the Act but only a survey was carried out u/s.133A of the Act. The ld. counsel for the assessee drew our attention to page Nos.146 & 147 of assessee’s paper-book and argued that this fact is borne out of “record of survey proceedings”, which states in paragraph 1 that authorization for survey u/s.133A of the Act was issued by the competent authority. The fact that only a survey u/s.133A of the Act as opposed to a search u/s.132 or a requisition u/s.132A of the Act was conducted in the case of the assessee and the same is manifest from several documents impounded during the course of survey which includes:- i. The order of impoundment of documents under section 133A(3)(ia) (pages 148 to 150) ii. The inventory of stock prepared under section 133A(3)(ii) (pages 151 to 152); iii. Statements recorded under sections 131, 131A and 133A(3)(iii) from various persons (as opposed to statements recorded under section 132(4) (pages 153 to 175) iv. The summons issued to the Appellant by the Authorized Officer under section 131 of the Act (page 176); and v. Repeated references by the learned AO in different parts of the impugned orders to the carrying out of the survey (pages 69 to 145).

It is not the case of Revenue also, the ld. counsel for the assessee argued, that the survey conducted u/s.133A of the Act in the case of the assessee was subsequently converted into a search u/s.132 of the Act. He argued that issue of warrant of authorization by the competent authority is a necessary precondition for initiation of search u/s.132 of the Act or a requisition u/s.132A of the Act, the Revenue is precluded from law by initiating assessment proceedings by issuing notices u/s.153A of the Act in the absence of such warrant of authorization. In the present case, the ld. counsel argued that while it is on record that three separate warrants of authorization had been issued in the names of the individual directors of assessee company for searching their residential premises but there is no evidence of warrant having been executed in the name of the assessee company or search conducted in the premises of the assessee company so as to initiate a search u/s.132 or requisition made u/s.132A of the Act. The ld. counsel for the assessee made statement at bar that though a warrant of authorization u/s.132 of the Act was issued in the name of the company but the search was conducted in the case of the director of the assessee company in his individual capacity, which cannot be used to initiate or issue notice u/s.153A of the Act in the case of assessee company. Hence, the ld. counsel argued that Revenue in an effort to make it appear as if a search was actually carried out in the assessee’s company case it has incorporated entries in the panchanamas prepared in the cases of the company’s directors in individual case during the course of searches carried out at their residences to the fact that warrant to initiate search has been issued in the case of the assessee company. The ld. counsel for the assessee argued that if it be the case, then a question arises as to why the Revenue chose to conduct a survey u/s.133A of the Act in the case of assessee company, it if was, in fact, authorized to carry out a search u/s.132 of the Act. The ld. counsel for the assessee relied on various case laws, which I will discuss in later part of this order.

and further, this Form No.45 contains that search was carried out at the residence of Mr. Shawkath Showry and the details are recorded in this Form No.45 as under:- “And whereas I have reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing have been kept and are to be found in the residence of Mr.Shawkath Showry Mohammed, Flat No.901/903, Presidency Flora, Sl Mathias Road, Attavar, Mangaluru, Karnataka – 575 001 (specify particulars of the Building/Place/Vessel/Vehicle/Aircraft). This is to authorize and require you as per overleaf (name of the Addl.Director or of the Addl.Commissioner or of the Joint Director of the Joint Commissioner of the Deputy Director or of the Deputy Commissioner or of the Assistant Director or of the Income-tax Officer).”

Identical warrant of authorization was issued in the name of other two directors namely Shri Mohd. Fakir and Shri Afthar Mohammed.

7.1 Consequent to the above search warrants in three director’s cases, the search was conducted on the residences of three directors and panchanamas were drawn. The relevant details in panchanamas read as under:-

A) Warrant in the case of M/s. Blueline Foods (India) Party No.BWR1 Private Limited B) Warrant to search The residence of Mr. Shawkath Showry Mohammed (Details & Ownership of Flat No.902/903, Presidency Flora, SL Mathias the search) Road, Attavar, Mangalore, Karnataka – 575 001. C) (A) and (B) assessed at

8. The search commenced on 23.01.2019 at 8.50 a.m/p.m. The proceedings were closed on 25.01.2019 at 6.10 a.m/p.m as finally concluded / as temporarily concluded for the day to be commenced subsequently for which purpose seals were placed on the entire place / on the bedroom of elder son of Mr. Shawkath Sowry Mohammed, Mr. Mohammed Adnan in the glass cupboard just opposite to the entrance of the room at Flat No.902/932, Presidency Flora, SL Mathias Road, ATtavar, Mangaluru, Karnataka – 575 001 in our presence.

9. The order (s) under section 132(3) of the I.T Act 1961 in respect of, the sealed premises as mentioned above was / were served on Shri / Smt. Shawkath Sowry Mohammed by the said authorized officers.

7.2 The Revenue’s argument before me is that the CIT(A) is factually incorrect in stating that no search u/s.132 of the Act was initiated and concluded in the case of the assessee company and no panchanama in the name of the company was drawn. The argument taken by the ld. CIT-DR is that a search u/s.132 of the Act can be conducted in the case of a person by covering multiple premises wherever there is a suspicion that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing representing undisclosed income are kept and hence, in the present case, the Pr.DIT(Inv.) had reasons to believe that Blueline Foods (India) Pvt. Ltd., was in possession of undisclosed income and assets and therefore, authorized the search in the case of Blueline Foods (India) Pvt. Ltd. It was argued that he had reason to suspect that evidences relating to unaccounted assets and income of Blueline Foods (India) Pvt. Ltd., would be kept at the residential premises of Mr. Mohd. Fakir, Mr. Afthar Mohammed and Mr. Shawkath Showry and accordingly, authorized the search at these residential premises. I have gone through the three warrants of authorization issued and executed for searching the residential premises of three directors of Blueline Foods (India) Pvt. Ltd., and admittedly, Form No.45 for issuance of warranty of authorization u/s.132 of the Act r.w.s 112(1) of the Rules categorically issued for search of the residential premises of three directors of Blueline Foods (India) Pvt. Ltd., but only the warrant issued in the name of Blueline Foods (India) Pvt. Ltd. Actually as per Panchanama drawn in these three cases, is also on account of search conducted at the residences of three directors of these companies. Admittedly, there is a warrant in the case of Blueline Foods (India) Pvt. Ltd., but search was conducted only at the residential premises of three directors as is evident from the panchanamas drawn during the course of search party.

7.3 As pointed out by ld. counsel for the assessee that the Income-tax Department on 23.01.2019 carried out a survey u/s.133A of the Act on the respondent assessee’s business and factory premises coinciding with simultaneous searches conducted u/s.132 of the Act at the residences of its directors. It means that no search and seizure proceedings u/s.132 of the Act was carried out in the case of the respondent assessee. The ld. counsel for the assessee drew my attention to page 146 of assessee’s paper-book, wherein authorization was issued for conducting survey u/s.133A of the Act and consequently, survey was conducted on 23.01.2019 and finally order u/s.133A(3)(ia) of the Act was issued impounding some of the books of accounts/documents/digital evidences vide order 25.01.2019. The entire impounded documents are detailed out in assessee’s paper-book at pages 146 to 176.

7.4 From the above two questions referred by ld. VP(JM) and ld. AM, there is no dispute about the legal position that search and seizure provisions u/s.132 of the Act are always in relation to a person and the competent authority under this provision can authorize the search of a person at any number of places. This, in fact, is precisely the point that the respondent seeks to make in arguing that a company being a corporate, a distinct legal entity and a taxable person under the Act cannot be considered to be the same as its directors or shareholders. I agree that for conducting a search, a warrant must be issued in the name of the person being searched and such a warrant must be executed at the place or places authorized to be searched and a valid panchanama must be drawn in the name of the person searched at the conclusion of a search. There is no doubt that panchanama being a critical document that records the name of the persons searched, the places where the search was conducted and the events that took place, during the search has evidentiary value. The argument put forth by LD-CIT DR that the search conducted at the residences of the directors of the respondent company has to be considered as search conducted at the company itself and can describe the directors residence as not more than places covered as part of search of respondent company and the panchanamas drawn at those places as those drawn in respect of respondent company. I cannot agree with the proposition canvassed by revenue. In such situation and to answer the above questions referred by ld. VP (JM) and ld. AM, which is almost indicating same meaning, I have to go through the case law cited by both the sides.

7.5 The case law cited by assessee in the case of CIT vs. J.M. Trading Corporation of Hon’ble Bombay High Court in Income Tax Appeal No.589 of 2009, LD CIT-DR tried to distinguish on the facts that the premises of the assessee was let out to one SSKI group but in the present case, accordingly held that though warrant and panchanama were in the name of the assessee firm, no search was initiated at the address of the assessee, neither books of the assessee were kept nor any valuables belonging to the assessee were found or seized in the searched premises. I have noted that in this case, the facts were that the assessee firm was constituted by three partners carrying on the business of yarn, fabrics and securities and commission agent. Search and seizure operation were carried out u/s.132 of the Act on SSKI group by warrant dated 01.08.2003 and name of the assessee firm was also in the said search warrant and hence, notice u/s.153A of the Act was issued to the assessee and assessment was framed u/s.153A of the Act. The Tribunal vide paras 21 to 24 decided this issue that when there is no search warrant executed, it cannot be held that search is initiated. The relevant question decided by co-ordinate Bench of Mumbai Tribunal in J.M. Trading Corporation in to 1438/Mum/2009 vide paras 21, 23 & 24 reads as under:- 21. The question for our determination is whether search was though initiated against the assessee was conducted on the assessee. The initiation of search and conduct of the search are two different aspects of search and seizure proceedings. In the present case, the search was initiated by issue of warrant of authorization. The conduct of search proceedings is an elaborated procedure enumerated under section 132 of the Income-tax Act, which in clause 1 categorically authorizes the officer to enter and search any building, place, vessel etc. where he has a reason to believe that the books of account. monev, bullion. jewellery or things belonging to the assessee are kept. The perusal of the panchnama reveals that the search was conducted in respect of SSKI Group wherein the search warrant was served on Mr.Hitesh M. Desai, who is the Manager of SSKI Group, his statement was recorded during the course of search. The books of account as per the Annexure A-1 and other valuables, locker, FD as per Annexure O-1 belonging to SsKI Group were found and seized. Other valuable articles including money as per note in 1, 2, 3, 4 were found but not seized. The assessee claims that none of his books of account were found or seized and in respect of the valuables also the assessee clarifies that none of his valuables were available at the above said address as the said premises were rented out to SSKI group by the assessee and its sister concerns. In the body of order under section 143(3) read with section 153A of the Income-tax Act, the Assessing Officer also observes that 'there was search and seizure action under section 132 of the Income-tax Act on SSKI Group and by warrant dated 1-8-2003, the assessee was also covered under the search. The premises whereas the assessee was found was not searched.

This was confirmed by the Hon’ble High Court of Bombay in Tax Case Appeal No.589 of 2009 dated 29.06.2009 as under:- “Heard learned Counsel for the parties. The question sought to be raised in this appeal is relating to the conduct of the search. The assessment made against the assessee under the provisions of section 143(3) read with section 153A of the Income Tax Act. The Tribunal has categorically recorded a finding of fact of initiation of the search that non compliance to the provisions of the Act by the Authorised Officer, such searches are invalid and illegal. No search was conducted against the assessee as the premises occupied by the assessee were not entered upon and searched by the Authorised Officer. Considering the factual aspect which is based on the appreciation of evidence and no substantial question of law is involved in the present appeal. In this view of the matter, appeal stands dismissed in limini for want of substantial question of law with no order as to costs.”

7.6 The other case laws relied on by the assessee in the case of Regency Mahavir Properties vs. ACIT of ITAT, Mumbai reported in [2018] 89 taxmann.com 444, ITAT, Delhi in the case of Aerens Jai Realty Pvt. Ltd., vs. ACIT in 6676 & 6677/Del/2017, order dated 23.02.2023, Hon’ble Gujarat High Court in the case of CIT vs. Parmar Builders & Developers reported in [2015] 62 taxmann.com 20 (Guj), Hon’ble Madras High Court in the case of Smt. Rajkumar Chandak vs. ACIT reported in [2015] 63 taxmann.com 10 (Mad) and ITAT, Delhi in the case of ACIT vs. Sarvamangalam Builders & Developers Pvt. Ltd., in ITA Nos.196 to 198/Del/2011 were not distinguished by the ld. CIT-DR.

7.7 The ld. CIT-DR tried to distinguish another case law of ITAT, Ahmedabad Bench in the case of Dr. Mansukh Kanjibhai Shah vs. ACIT reported in [2011] 129 ITD 376 (Ahd.Trib.) by stating that search warrants were not served on the assessee in whose case search u/s.132 of the Act was to be taken. Hence, he stated that warrant was executed but in the case of respondent assessee Blueline Foods (India) Pvt. Ltd., as evidenced by signatures of directors on the warrants, the search was conducted on the respondent assessee company. I have gone through the decision of Ahmedabad Tribunal in the case of Dr.Mansukh Kanjibhai, supra and noted that this squarely fits into the facts of the present case and it cannot be distinguished. The Tribunal in para 9.3 & 9.5 has recorded its decision on facts as under:- 9.3. Section 153A would be applicable where a search is initiated under section 132 or books of accounts or other documents or any assets are requisitioned under section 132A of the Act after 31st May, 2003. Therefore, before invoking the provisions of section 153A of the Act it would be necessary to comply with the provisions contained under section 132(1) of the Act. Salient feature of section 132(1) is that where the Director General or Director or the Chief Commissioner or Commissioner, in consequence of information in his possession has reason to believe that any person failed to produce books of accounts or other documents in response to summons or that any person to whom summons have been issued has not or might not or would not produce any books of accounts or documents or that any person is in possession of any money, bullion, jewellery or other valuable article in his possession, which has not been or would not be disclosed for the purpose of this Act (hereinafter referred to as ‘undisclosed income’ or ‘property’) then the Director General, Director or Chief Commissioner or Commissioner, as the case may be, may authorize any Joint Director, Assistant Director, Assistant Commissioner of Dy. Commissioner of Income tax, called the authorized Officer, to enter and search any building, place, vessel, vehicle or air-craft, etc. where he has reason to suspect that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing are kept, break open the lock of any door, etc., search any person who is about to go from the above premises, require any person to account for the books of accounts or documents, seize any such books of accounts or documents, money, bullion, jewellery, etc. or things found as a result of such search and may place mark of identification on any books of accounts or other documents or take copy thereof and to prepare inventory of the same. The purpose of section 132 for issue of warrant of authorization is to unearth, detect and to take possession of the unaccounted/undisclosed income or property. The mere issue of warrant of authorization without there being search of the premises mentioned in the warrant of authorization would be meaningless and would not serve the purpose of section 132 of the Act. It may be illustrated by taking an example that if warrant of authorization under section 132 is issued in the name of “A” after 31.5.2003 but his premises is not searched for the purpose of executing the warrant of authorization and the warrant of authorization is kept unexecuted, the question arises whether the Assessing Officer still should proceed under section 153A of the Act for the purpose of framing the assessment or reassessment of the six assessment years immediately preceding the assessment years relevant to the previous year in which such search is initiated or requisition is made without executing the search warrant. The answer would be ‘No’ because it would be a futile exercise. It may be added here that jurisdiction can be assumed by the Assessing Officer to initiate assessment proceedings to issue notices once search is initiated under section 132/requisition made under section 132A. He gets actual jurisdiction only on issue of notice, which could be issued under section 153A (unlike section 158BC(a) in block assessment) with no necessity for inference of escapement of income or under- assessment as under section 147. Should it mean that a mere search will enable reassessment proceedings by-passing or ignoring the requirements of section 147. The only part of procedure dispensed with under section 153A of IT Act on comparison with section 147 is that there is no reason for recording reasons and for approval by higher authorities before issue of notice of reassessment. Further, there cannot be automatic jurisdiction for 6 back years even for those entities which may not be in existence for all the six years indicating that the provision is expected to be reasonably exercised. It should therefore follow that there should be prima facie inference of liability for invoking jurisdiction under section 153A of the IT Act. We may add that in section 153A(b) it is specifically provided that the Assessing Officer shall assess or reassess the total income of six years immediately preceding the assessment years relevant to the previous year in which such search is conducted or requisition is made. It would, therefore, clarify that not only the warrant of authorization is to be issued in the name of the assessee but search shall have to be necessarily conducted or in case of requisition under section 132A, the requisition is to be made actually. Hon’ble Allahabad High court in the case of Chandra Prakash Agrawal v. CIT; 287 ITR 172 considering the definition of requisition under section 132A of the Act as is referred to in section 158BA of the Act observed that the word “requisition” means taking of actual possession. The requisition is complete only when the seized books of accounts and other documents which have been requisitioned have been delivered to the requisitioning authority. The provisions of section XIV-B of the Act would come into play only when the books of accounts or other documents or assets are actually received by the Assessing Officer pursuant to the requisition made under section 132A. It was held –

Held, that no search under section 132 had been conducted by the Incometax Department. The search, if any, was conducted on June 7/8 of 2001 by the Central Excise Department. The Incometax Department had sent a requisition on March 27, 2002 under section 132A of the Act requisitioning the books of accounts and other documents seized by the Central Excise Department. The record of the proceeding dated April 18, 2002 showed that the requisition was not fully executed as all the books of account and other documents had not been delivered to the requisitioning authority. The proceedings initiated under section 148 were valid. However in the proceedings for reassessment under section 148 of the Act, material or evidence relatable to the documents for which the requisition had been sent under section 132A could not be taken into consideration.

The learned Departmental Representative filed copies of warrant of authorization under section 132 of the Act dated 29-10-2004 which are issued in the name of K. M. Shah Charitable Trust, Mansukhbhai K. Shah, with the direction to find valuable articles or things in Indian Overseas Bank at different branches. In the said warrant of authorization also, the authorized Officer was directed to enter and search the building, etc. persons and to seize books of accounts, documents, money, bullion, jewellery, etc. as are provided under section 132 of the Act noted above. According to Section 132(14), execution of an authorization shall have same meaning assigned in Explanation 2 to Section 158BE, which provides authorization is deemed to have been executed on conclusion of search as recorded in Panchnama. Therefore, actual search shall have to be carried out necessarily before proceeding u/s 153A. Rule 112 of IT Rules is also not satisfied in case of assessee. Service of warrant on Bank Manager of Trust is not service on assessee in individual case of assessee.

9.4 ………….

9.5 Considering the above provisions as noted above in the light of the provisions of section 153A of the Act, it would be clear that once the warrant of authorization or requisition is issued and search is actually conducted, Panchnama is drawn, the completed assessments for all the relevant years would get reopened irrespective of whether any incriminating material is found or not in relation to a particular assessment year. However the warrant of authorization shall have to be executed by the authorized Officer in order to justify invoking of the jurisdiction by the Assessing Officer under section 153A of the Act. Considering section 153A particularly read with sub-clause (b), it is clear that not only initiation of search is mandatory but conduct of the search is also material. The decision of the Allahabad High Court noted above also supports the above findings. As is noted above, it is undisputed fact that though warrant of authorization is issued in the name of the assessee being Managing Trustee of the Trust, but it is admitted fact that no search operation was conducted in the premises of the assessee. Even in the warrant of authorization, the address of the place to be searched is not the address of the assessee individual. Admittedly, no Panchnama is also drawn in pursuance with the warrant of authorization in the case of the assessee. No documents were seized or impounded as such during the course of search from the assessee. The warrant of authorization dated 29.10.2004 in the name of the Trust and the assessee stands unexecuted in the case of assessee individual. Since in this case only survey operation under section 133A is conducted in the premises of the assessee’s Trust, it would not satisfy the requirements of section 153A of the Act. As such, the Assessing Officer was not justified in initiating proceedings or assuming valid jurisdiction under section 153A of the Act against the assessee. In view of the above discussions, we do not find these to be the fit cases for initiating the proceedings u/s 153A of the IT Act against the assessee in his individual status. We accordingly hold that the proceedings u/s153A of the IT Act are invalid and bad in law, resultantly, the orders of the authorities below are set aside and quashed.

I do not agree with ld. CIT-DR that the facts in the present case can be distinguished from the facts of Dr. Mansukh Kanjibhai Shah, supra. In the case of Dr.Mansukh Kanjibhai, supra, the facts are that though warrant of authorization issued in the name of assessee being managing trustee of the trust but it is admitted fact that no search was conducted in the premises of the Trust assessee and even in the warrant of authorization, the address of the place to be searched is not the address of the assessee individual but was of the Trust. Admittedly no panchanama is drawn in pursuance of the warrant of authorization in the case of the assessee. In the present case before us, the facts are clear that no panchanama was drawn in the case of Blueline Foods (India) Pvt. Ltd., the respondent assessee company, but only drawn in the case of three directors of the respondent assessee company in their individual capacity. There is no search material or seized material relating to the respondent assessee company from the search conducted on the three directors.

7.8 Similarly, the ld. CIT-DR also tried to distinguish the judgment of Hon’ble Bombay High Court in the case of CIT vs. Tirupati Oil Corporation reported in [2001] 248 ITR 194 (Bom), Hon’ble Orissa High Court in the case of Siksha “O” Anusandhan vs. CIT reported in [2012] 336 ITR 112 and Co-ordinate Bench of Mumbai Tribunal in the case of Unique Star Developers vs. DCIT reported in [2017] 83 taxmann.com 83.

A Panchnama is to be executed only in case of a search action. Since, only survey was conducted Panchnama need not be executed and hence it does not exist w.r.t the office/factory premises of M/s Blueline Foods (India) Pvt. Ltd. I noted from the arguments of both the sides and facts of the case that it is not the case of Revenue that any books of accounts, other documents or any asset pertaining to the respondent company was requisitioned u/s.132A of the Act so as to attract the provisions of section 132A of the Act. Admittedly, there is warrant of authorization to search the residences of the directors of the assessee company, which were executed and only name is mentioned on the search warrants authorizing the department to conduct the searches at the residential premises of the directors. Admittedly, there is no search warrant on the respondent assessee executed or search initiate u/s.132 of the Act. As the Revenue is not in a position to establish existence of warrant of authorization executed and consequent initiation of search in the respondent assessee company, the inescapable conclusion has to be that no warrant of authorization seems to have ever been executed in the case of the respondent assessee company, either to conduct a search u/s.132 of the Act or to make a requisition u/s.132A of the Act nor was any search or requisition initiated against it. For this proposition, I’m relying on the decision cited by ld. counsel for the assessee of Hon’ble Bombay High Court in the case of Bansilal B. Raisoni & Sons vs. ACIT reported in [2019] 101 taxmann.com 20 (Bom), wherein it is held that in order to issue a notice u/s.153A of the Act, there must be initiation of search u/s.132 of the Act and mere search authorization would not be sufficient. The Hon’ble Bombay High Court considered this issue as under:-

6. As noted above, the broad facts before us are that the search authorization was issued against the petitioner partnership firm, one of its partners and another person. Actual search was carried, as pointed 4 of 10 Uday S. Jagtap 13391-18-WP-904=.doc out by the petitioner, at three different locations namely at the residential premises of one of the partners and two other residential premises, one of them belonging to the brother of the partner of the partnership firm. In the context of such broad facts, if we refer to Section 153A of the Act, we notice that in sub-section (1) thereof, notwithstanding anything contained in Sections 139, 147, 148, 149, 151 and 153 of the Act, in case of a person where search is initiated under Section 132 or books of accounts, other documents are requisitioned under Section 132A, the Assessing Officer would have the authority to issue notice to such person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years and thereafter carry out the assessments accordingly. In the present case, we have no hesitation in accepting the petitioner's contention that in order to issue notice under sub-section (1) of section 153A, there must be initiation of search in case of the noticee. Mere search authorization would not be sufficient. There is clear distinction between search authorization and conduct of the search. In sub- section (1) of Section 153A of the Act, therefore, the legislature has advisably used expression "where a search is initiated under Section 132".

8.1 Even this issue is covered by the decision of Hon’ble Karnataka High Court in the case of Canara Housing Development Co. Vs. DCIT reported in [2014] 49 taxmann.com 98 (Kar) wherein exactly on identical facts the Hon’ble High Court held that the condition precedent for application for section 153A of the Act, there must be a search u/s.132 of the Act. The Hon’ble High court in para 10 in middle lines has noted as under: “The condition precedent for application of Section 153A is there should be a search under section 132. Initiation of proceedings under Section 153A is not dependent on any undisclosed income being unearthed during such search.”

8.2 I also got strength from the decision of Hon’ble Gujarat High Court wherein the Hon’ble High Court in the case of CIT vs. Ramesh D Patel reported in [2014] 42 taxmann.com 540 (Guj) held as under:- In the present case, the Tribunal came to a factual finding that no search authorization was produced. This was necessary because the Assessing Officer had made contradictory references to the assessee being subjected to search or not. In absence of a search authorization, the Tribunal correctly held that assessment orders under section 153A could not have been passed. Reliance of the Revenue to section 124(3) of the Act would be of no avail. Section 124 pertains to jurisdiction of the Assessing Officers. Sub-section (1) thereof concerns the situation where, by virtue of any order or direction under sub-sections (1) or (2) of O/TAXAP/347/2013 ORDER section 120, the Assessing Officer has been vested with jurisdiction over any area within the limits of such area. Sub-section (2) of section 124 provides, inter alia, that where a question arises under the said section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Director General or the Chief Commissioner, etc. Sub-section (3) thereof provides as under:

(3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer – (a) Where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section ()1) of section 115WH or under section 148 for making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier.

Thus, section 124 of the Act pertains to territorial jurisdiction of an Assessing Officer vested under sub-section (1) or (2) of section 120. An objection to such jurisdiction can be raised in terms of section 124(2). In terms of sub-section (3) of section 124, right to raise such objection shall be foregone beyond the stages mentioned therein. The said provisions are clearly concerning with the dispute of the assessee with respect to the territorial jurisdiction of the Assessing Officer and has no relevance in so far as the inherent jurisdiction for passing an order of assessment under section 153A of the Act is concerned, when no search O/TAXAP/347/2013 ORDER authorization under section 132 was issued or requisition under section 132A of the Act was made.

8.3 Further, the Hon’ble Rajasthan High Court considering that search u/s.132 of the Act has to be person specific and held in the case of CIT vs. Smt. Umlesh Goel reported in [2016] 74 taxmann.com 37 (Raj) as under:- 6.3 Since by the exercise of the power a serious invasion is made upon the rights, privacy and freedom of the taxpayer, the power must be exercised strictly in accordance with law and only for the purposes for which the law authorises it to be exercised. If the action of the officer issuing the authorisation or of the designated officer is challenged, the officer concerned must satisfy the court about the correctness of his action. Therefore, in our considered view a search under Section 132(1) has to be "person specific". The Authority authorising search has to have information in his possession in respect of a person and such a person should be specifically named in search warrant and since names of the assessees having not figured in the authorisation of warrant as having been proved on the basis of Form 45 which has been reproduced by us in para 16 hereinbefore, the AO has exceeded its jurisdiction in issuing the notice under Section 158-BC and initiation of the proceedings being invalid, all subsequent action of A.O. including order of assessment is not sustainable in law.

8.4 In similar circumstances, the Hon’ble High Court of Madras in the case of Smt. Rajkumari Chandak vs. ACIT reported in [2015] 63 taxmann.com 10 (Mad) has held as under:- 17. The above document, which is undisputed and forms part of the Court records, makes it clear that the confusion has apparently happened because search under Section 132 of the Act commenced in the case of other assessees as well and, therefore, all similarly placed persons were clubbed together and assessment orders were passed. However, neither in the course of passing the assessment order nor during the appeal proceedings before the Tribunal or this Court, attention was drawn to the survey proceedings under Section 133A of the Act, insofar as the present assessee is concerned. Since all the cases were taken up together as one lot and assessment orders were passed, the error could have happened. Since the earlier order of the Tribunal dated 12.4.99 does not deal with each one of the assessee, but based on a common order passed by the Tribunal, the error in the present case is apparent on the face of the record. This error was also not brought to the notice of this Court in the earlier round of litigation. The typed set of documents filed in the earlier round of litigation by the assessee in TCA Nos.240 and 241/2000 shows that it is a case of only survey u/s 133A and search has been clearly deleted. There is no dispute on this fact, as the same is borne out by document. If it is a case of survey under Section 133A of the Act, as is evident from the document, the block assessment, invoking the provisions of Sections 158BC does not arise, as there is no search in terms of Section 132 of the Act. In view of the above, the 2nd substantial question of law, on the question of jurisdiction, is answered in favour of the appellant/assessee and against the respondent/Revenue.

8.5 I have considered the facts and noted the arguments of Ld. CIT-DR that there is no need to establish that any search was actually conducted on the assessee because section 153A of the Act uses the word `initiation' of search. Pointing out a distinction between the initiation and actual conduct of the search, the ld. CIT-DR relied on the order passed by the Jodhpur Bench in Suraj Prasad Soni vs. ACIT (2007) 106 ITD 321 (Jodhpur), in which the meaning of the word `initiation of search' has been dealt with. We fully agree with the ld. CIT-DR that, firstly, what is significant for the issue of notice u/s 153A of the Act is the initiation of search and secondly, there is a marked distinction between `initiation' and `commencement' of search. In common parlance, 'Initiation' means the beginning of a process or, in other words, a first step in the entire process. Search commences with the issue of authorization by the competent authority. Thus, the 'initiation' of search commences with the issue of authorization by the DIT. 'Execution' of search warrant, which is a step after the initiation of search, takes place later on, which leads to the actual conduct of the search at the premises of the person searched. Going by the contention of the ld. CIT-DR, seen in the context of section 153A of the Act, there remains no doubt that notice u/s 153A of the Act can be issued where a search is initiated u/s 132 of the Act or, in other words, a warrant of authorization is issued. Per contra, in the absence of a warrant of authorization on the assessee, no notice u/s 153A of the Act can follow. I have gone through the copy of Warrant of authorization in this case, from which it is apparent that although the assessee is named therein but it is addressed to the directors of the assessee respondent. Even, there is no mention of any permanent account number of the assessee in that.

8.6 On going through the mandate of the judgment of the Hon'ble Supreme Court, it becomes evident that the challenge before it was to the notice u/s 158BD of the Act, being the notice for assessment of income of any person other than the person searched. Whereas section 158BC of the Act in the earlier provisions of assessment of search cases under Chapter XIV-B dealt with the assessment of a person searched, section 158BD of the Act dealt with the assessment of `any other person'. In the successor provisions, dealing with search, introduced w.e.f. 1.6.2003, section 153A of the Act deals with the assessment of a person searched and section 153C of the Act with the assessment of `any other person'. In other words, section 153A of the Act is a parallel of section 158BC of the Act and section 153C of the Act is a parallel of section 158BD of the Act. In the instant case, it is the assessment of person allegedly searched, which is disputed before me, unlike the notice issued for the assessment of `other person' before the Hon'ble Supreme Court. Even otherwise, the issue of invalidity of the search warrant in that case was not raised at any point of time prior to the notice under section 158BD of the Act. On the contrary, the assessee contested the validity of search before the AO at the very threshold, immediately on receipt of notice u/s 153A of the Act. Moreover, in that case, a search operation actually took place and the defect, if any, claimed was in the warrant of authorization. In the impugnation, the Revenue has failed to demonstrate that any search action was, in fact, taken on the assessee. I am reminded of the celebrated judgment of the Hon'ble Supreme Court in Pooran Mal vs. Director of Inspection (1974) 93 ITR 505 (SC) laying down that the material seized in an illegal search can be validly used by the income-tax authorities. The judgment in Gunjan Girishbhai Mehta (supra) is reiteration of almost the same view, when it held that `the information discovered in the course of the search, if capable of generating the satisfaction for issuing a notice under Section 158BD of the Act, cannot altogether become irrelevant for further action under Section 158BD of the Act.' What to talk of some `information discovered in the course of search' in the case under consideration, the Revenue has not proved the basic fact that the assessee was subjected to any search.

8.7 In view of the aforesaid discussion, provisions of the Act, precedents cited above and facts of the case, I’m of the view that the provisions of section 153A of the Act makes it clear that only in the case of a person on whom a search is initiated and conducted u/s.132 of the Act or books of accounts or other documents or any assets or requisition u/s.132A of the Act, the AO shall after issuing notice u/s.153A of the Act assess or reassess the total income of such person for six assessment years immediately preceeding the assessment year relevant to the previous year in which such search is conducted or requisition is made. I’m of the view that the legislative intent is very clear from the use of the expression “such person” in section 153A(1)(a) of the Act. The expression clearly relates to a person in respect of whom search u/s.132 of the Act has been initiated and conducted as provided in section 153A of the Act. In the present case before me, in view of the aforesaid discussion and facts noted, there is no search conducted u/s.132 of the Act in the case of respondent assessee company Blueline Foods (India) Pvt. Ltd. In view of the foregoing discussion, it is clear beyond any shadow of doubt that the notice u/s 153A of the Act was issued without any jurisdiction. The natural corollary, which therefore, follows is that all the proceedings flowing from such invalid notice, including the resultant assessment order, are bad in law and hence, quashed.

8.8 In term of the above, I agree with the ld.VP (JM) upholding the order of CIT(A) quashing the assessment framed u/s.153A of the Act by the AO. Hence, I answer this question framed by ld.VP(JM) in the negative and concurring with him. AS regards to the question framed by ld.AM, the same is also answered in negative and do not concur with him.

8.9 The second question framed by ld.AM is answered in negative and do not concur with him.

8.10 The third question framed by ld.AM is not arising out of the facts of the case and orders, hence need no answer.

9. To sum up: Question raised by Ld. VP(JM) Decision 1. Whether on facts and circumstances of the case and in law, there was a valid search under section 132 of the Act in the case of the Answered in negative. I assessee and thus assessment am concurring with Ld. completed under section 153A of the VP(JM) Act is valid?

Questions raised by Ld. AM Decision

1. Whether in the facts and circumstances of the case, the search conducted in the light of warrant of Answered in negative. I authorization issued in the name of the do not concur with ld. AM assessee company and the place of search mentioned in the warrant is the residence of the director of the assessee company, would constitute a valid search u/s.132 of the Act in the case of the assessee company itself, so as to initiate proceedings u/s.153A of Answered in negative. I the Act? do not concur with ld. AM

2. Consequently, the issue of notice u/s.153A of the Act is a valid notice and whether in the facts and circumstances of the case, a search was initiated, This question does not executed, completed and arise out of the orders of panchanamas drawn according to Form both ld.VP(JM) and ld. AM 45 in the case of assessee company for or that of the Assessing completing assessment u/s.143(3) Officer and CIT(A) and r.w.s. 153A of the Act? hence, need no answer.

3. Whether, in the facts and circumstances of the case, proceedings u/s.153C of the Act could have been initiated?

Sd/- (महावीर�संह ) (MAHAVIR SINGH) उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 22nd July, 2024 RSR IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER 183/Bang/2023 Assessment Years : 2017-18, 2018-19 DCIT, M/s. Blueline Foods (India) Pvt. Ltd., Central Circle – 1, Suite # 406, Crystal Acr, Mangaluru. Vs. Balmatta Road, Mangaluru – 575 001. PAN : AACCB 8979 J APPELLANT RESPONDENT Assessee by : Shri. B. S. N. Prasad, Advocate Revenue by : Dr. G. Manoj Kumar, CIT(DR), ITAT, Bengaluru. Date of hearing : 27.09.2023 Date of Pronouncement : 06.10.2023 O R D E R Per George George K, Vice President :

These appeals at the instance of the Revenue are directed against two Orders of CIT(A) (orders of the CIT(A) are dated 16.12.2022), passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Years are 2017-18 and 2018-19.

2. Common issues are raised in these appeals; hence, they were heard together and are being disposed off by this consolidated order. Identical grounds are raised for both the Assessment Years. The grounds raised read as follows:

1. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) erred in allowing the appeal of the assessee on technical ground without appreciating the fact that there was a valid search initiated u/s 132 of the IT Act in the case of the assessee and thus notices issued u/s 153A of the Act were valid? 2. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) erred in not considering the facts that the search assessments were rightly initiated u/s 153A of the IT Act, since the warrant of authorization was in the name of the assessee-company. 3. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred in not considering the fact that the assessee had complied with the notices issued u/s 153A of the Act and had declared the undisclosed income admitted? 4. Whether on the facts and circumstances of the case the order of CIT(A) is perverse as he has failed to note that warrant executed at the residence of the directors was in the case of the assessee company and duly executed? 5. Whether on the facts and circumstances of the case in law the Ld.CIT(A) erred in not considering the fact that the search warrant is in the name of M/s Blueline Foods(India) Pvt.Ltd. and panchanama was drawn in the course of search proceeding of M/s Blueline Foods (India) Pvt Ltd. At the residence of the Directors of the company? 6. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) failed to appreciate the fact that as per the Warrant of Authorisation i.e. Form No.45, the search was initiated in the name of assessee-company? 7. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred in not appreciating the fact that the jurisdiction under section 153A of the Act is conferred on the AO immediately on initiation of search u/s 132 of the Act and thus notices issued u/s 153A of the Act and consequent returns of income filed are valid? 8. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) failed to appreciate that there is no requirement in law that the business premises of the assessee should also be searched for purpose of invoking provision of Section 153A of the Act?

9. Whether on the facts and circumstances of the case and in aw the order of CIT(A) is perverse in holding that the search warrant in name of assessee-company was never executed although the same was duly executed and panchanama was drawn at the premises searched, being residence of directors? 10.For the above grounds and any additional that may be urged during the course of hearing it is prayed that the order of the Ld. CIT(A)-2, Panaji may be quashed and that of the AO restored. 3. Brief facts of the case are as follows:

Assessee is a company engaged in the business of manufacturing, processing and trading of dry fish, fish meal and fish oil. A survey under section 133A of the Act was carried out at the business premises of the assessee on 23.01.2019. Simultaneously, on the same day, a search under section 132 of the Act was carried out at the residential premises of the Directors of the assessee. It is pertinent to note that warrant of authorization under section 132 of the Act, dated 21.01.2019 were issued in the name of the assessee and the premises to search in the said warrants were the residents of the Directors of the assessee. On the above basis, the Revenue issued notice under section 153A of the Act dated 06.01.2020 for Assessment Years 2013-14 to 2018-19. The assessee filed the returns of income for the respective Assessment Years in response to the notices under section 153A of the Act. The assessee raised an objection against initiation of proceedings under section 153A of the Act on the ground that no search under section 132 of the Act has been carried out in its own case. The AO passed the Assessment Order under section 143(3) r.w.s. 153A of the Act for the aforesaid years on 25.01.2021.

4. Assessee filed appeals before the First Appellate Authority [CIT(A), Panaji]. The CIT(A) agreeing with the objections raised by the assessee, passed the orders for Assessment Years 2013-14 to 2018-19 on 16.12.2022 quashing the Assessment Orders passed under section 153A of the Act. The CIT(A), after considering the relevant provisions and the judicial pronouncements, held that since there is no search under section 132 of the Act in the premises of the assessee company, the precondition for issuance of notice under section 153A of the Act are not satisfied and the Assessment Orders completed pursuant to the same were quashed. The issues raised on merits were not adjudicated by the CIT(A) since the legal issue was decided in favour of the assessee. The relevant finding of the CIT(A) for the Assessment Year 2017-18 reads as follows:

“4.68 In the light of the above, respectfully following the binding judgments of the Hon'ble Supreme Court, the Hon'ble jurisdictional High Court of Karnataka and the Hon'ble Special Benches of the ITAT and those of the various other Hon'ble Courts discussed in the preceding paragraphs, it is held that the preconditions for issue of notices under section 153A of the Act are not satisfied in the present case and therefore, the impugned notices issued to the Appellant company under section 153A of the Act are void ab initio and without jurisdiction. As the returns of income filed in response to the invalid notices under section 153A of the Act are non -est in the eyes of the law, the finality of the intimations issued under section 143(1) or the regular assessment orders passed under section 143(3) of the Act, as the case may be, in respect of the original returns filed by the company prior to the initiation of the survey under section 133A of the Act cannot be disturbed and is hereby restored. Accordingly, the impugned assessment order passed under section 153A for the Assessment Year under consideration, in pursuance of the invalid notices issued under that section is held to be bad in law and stands annulled. 4.69 Ground 2 is accordingly allowed. In light of this, the other grounds of appeal raised by the Appellant are rendered infructuous and it is not deemed necessary adjudicate the same.”

5. Aggrieved by the orders passed by the CIT(A), Revenue has preferred the appeals against Assessment Years 2017-18 and 2018-19. For the other Assessment Years, the Revenue was prevented from filing appeals considering the tax effect being lower than the limit prescribed by the CBDT.

The Ld. CIT(A) has held that preconditions for issue of notice under section 153A of the Act are not satisfied in this case as there has been no valid search in the case of the Assessee company and in the absence thereof, the provisions of section 153A of the Act could not have been validly invoked in this case. The Ld. CIT(A) has also incorrectly claimed in Para 4.48 at page of 51 of the appellate order that Panchanamas were duly drawn in the cases of Managing Director and Directors of the assessee company. The Ld. AR had also raised a number of points such as Panchnamas were not drawn in the name of the assesse company, the warrants cannot be said to be in the name of the assesse company, business premises were covered under survey therefore it is not a case of search against the assesse company, in the Remand Reports the Ld. AO had accepted that no search had taken place in the name of the assesse company and so forth. These assertions and conclusions are baseless for the reasons listed below: The scheme of search and seizure provisions prescribed under section 132 of the Act envisages the concept of a person" who is searched and a "place" that is searched. For ready reference the section is reproduced hereunder: " Search and seizure. 132. (1) Where the Principal Director General or Diretor General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner in consequence of information in his possession, has reason to believe that— (a) any person to whom a summons under sub-section (1) of section 37 of the Indian income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to Is hom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), then,— (A) the Principal Director General or DirectIr General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or (B)such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorise any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to— (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept;……….” A perusal of the above provisions reveals that search is always carried out in the case of a person and in connection with his case any place where certain documents, valuables etc. are kept may be entered and searched. Nowhere in the section is it mentioned that the place being searched has to belong to the person being searched, or his business premises have to be compulsorily covered under search. Thus, for a search to be a valid search under the Act, a Warrant must be issued in the name of the person being searched. This warrant must be executed at any place or places where there is a suspicion that the above referred documents or articles are kept. Thereafter, a valid Panchnama is drawn in the case of the person who was searched after the search has been conducted. The Panchnama is a critical document that records in whose case the search was conducted, the place where the search was conducted and the events that took place during the search. It has a very high evidentiary value. In the present case all three ingredients are present. The warrants of search that were issued in the case were in the name of the assesse company. The warrants were executed at the residence of Directors and Managing Director as it was suspected that at these places relevant documents and articles could be found. Panchnamas were drawn in the name of the assesse company and not Directors of the company. The copy of Warrants and Panchnamas have already been placed before the Bench and the Ld. AR. The Warrants are mentioning the name of the assesse company alone and place that is to be searched arc mentioned as the residential addresses of the Directors of the Company. it has been informed by the Ld. AR that the Directors were assessed under section 153C of the Act. The business premises were not covered under search under section 132 because there was no need to cover them under search. Search and Surveys are two different tools that are used to gather information/documents/material. At a place where only survey is required, the use of a drastic tool of search may be considered as unnecessary. It is not necessary that all premises are covered under search or the business premises have to be covered under search. As long as there is a warrant in the case of the assesse and it has been Duly executed at any place referred in the preceding paras and a valid Panchnama exists in the name of the assesse, then a valid search is said to have taken place in the case of that assesse and proceedings under section 153A must necessarily follow. A case was also sought to be made out that Assessing Officer has admitted in his Remand Reports submitted to Ld. CIT(Appeals) that no search was conducted in the case of the Assessee company. This is not correct. All that the Assessing Officer is stating is that the business premises of the assesse company were covered under survey and since no search action has been conducted at the business premises therefore no Panchnama was drawn at those places. He has also clearly mentioned that Warrants of Authorisation were in the name of the Assessee company and the premises that were searched under those warrants were the residential premises of the Directors of the Assessee Company. The Remand Report of the Assessing Officer gives no support to the Respondent. In any case when the Warrants and Panchnamas have already been placed on record, the facts of the case have become crystal clear and subjective interpretation of the Remand Report is unnecessary. In view of the above it is kindly requested that the order of Ld. CIT(A)-2, Panaji may be quashed and that of the AO restored.”

7. The learned AR, on the other hand, strongly supported the finding of the CIT(A). In response to the learned DR’s written submissions, the learned AR filed reply and same reads as follows:

“1. The Respondent in the above case submits for kind consideration of the Hon’ble Tribunal the following rejoinder to the written submissions filed by the Appellant on 29.08.2023: 2. There is no dispute about the fact that search and seizure provisions enshrined in section 132 of Income-Tax Act, 1961 (the Act) are always in relation to a person and that the competent authority under this provision can authorize the search of a person at any number of places. This, in fact, is precisely the point that the Respondent seeks to make in arguing that a company – being a body corporate, a distinct legal entity and a taxable person under the Act – cannot be considered to be the same as its directors or shareholders.

4. The dispute arises where the learned DR attempts to portray the searches conducted at the residences of the directors of the Respondent company as searches conducted in the case of the company itself and describes the directors’ residences as no more than places covered as part of a search of the company and the panchanamas drawn at those places as those drawn in respect of the company.

5. Merely because the name of the Respondent company is mentioned in the warrants of authorization issued to search the residential premises of the company’s directors, those searches cannot be held to constitute initiation of a valid search in the company’s own case, as held by the Hon’ble Mumbai Tribunal in Unique Star Developers v. DCIT [2017] 83 taxmann.com 83 (Mum. Trib.), where it has been held that: “… In the present case before us search has been initiated as the name of the assessee’s AOP appear on the warrant of authorization issued u/s 132(1) besides mentioning the names of the members of assessee AOP at all but the search was not conducted on the premises of the AOP, whereas the search was conducted on the members of AOP with no incriminating material relating to assessee was found in the premises searched belonging to the members of the assessee AOP. Finally, the search was concluded in the name of the members of AOP where authorization was drawn duly but no authorization was drawn in the name of the assessee - AOP and therefore, the limbs and contents to be satisfied for assessment of jurisdiction u/s 153A were not satisfied.” (Paragraph 9) “…search at the residence of the members of the appellant AOP would not fulfill the prescribed conditions to authorize search and the assessment order u/s 153A of the Act. It is therefore, very clear that where no authorization has been drawn it can be presumed that no search has taken place to provide a legal basis for search and consequent assessment under section 153A of the Act and it would be totally illegal to assume that once the warrant has been signed there is initiation of proceedings u/s 153A of the Act. We, therefore are not in agreement with the conclusion drawn by the ld. CIT(A) that once the warrant issued in the name of the assessee and authorization was drawn though the assessee’s name was not there in the panchnama, there was a proper execution of search justifying the action u/s 153A of the Act.” (Paragraph 10) “…in order to initiate assessment proceedings u/s 153A of the Act, the premises of the appellant has to be searched and authorization has to be specifically drawn in the name of the assessee but in the present case before us no search was carried out at the business premises of the assessee and so much so that no incriminating documents were found and seized from premises searched of others and no authorization was drawn in the name of the assessee…” (Paragraph 11) 6. Further, the mere fact of issue of warrants of authorization in the name of a company cannot by itself be considered as initiation of a search in its case, as held in the following judgments: (i) CIT v. Wipro Finance Ltd. [2009] 323 ITR 467 (Kar.): “…we may safely assign to the expression ‘search initiated’; the meaning ‘search taken’ or ‘search commenced’ or ‘making beginning of the search’. If this is meant by the expression ‘search initiated’ it cannot be held that the only signing of the authorisations by the DIT, Bangalore, on 30-12-1996 to make a search in the premises of the respective assessees would amount to ‘initiation of search’. The ‘signing of the authorisations’ would at best amount to ‘taking of the decision by the said authority to initiate search’ in the premises of respective assessees but not initiation of search itself.” (Paragraph 24) “…the expression ‘search initiated’ has to be interpreted to mean the commencement and conducting of the ‘initial search’ i.e., the first search in the case…” (Paragraph 26) (ii) Promain Ltd. V. DCIT [2005] 95 ITD 489 (Del. Trib.)(SB): “…the Legislature has used two words ‘initiated’ and ‘conducted’ with reference to the search under section 132. The word ‘initiated’ is understood in legal sense as ‘commenced’ while the word ‘conduct’ is understood as ‘carry on’. If these words are read together, it would mean commencement of search, the actual carrying on/execution of search and completion of search. Therefore, validity of search referred to for consideration of the Special Bench has to be understood with reference to the authorizon/commencement of the search, actual conducting of search and final execution of search vis-a-vis the powers/functions/duties of the Assessing Officer under the provisions of Chapter XIV-B.” (Paragraph 48) “…A search is a physical act of the party making search and therefore, a search can be said to have begun or commenced when the first act to enter the premises is taken by the search party…” (Paragraph 52) “…the Assessing Officer is only required to see that search has been initiated and conducted and nothing more…” (Para 53) “…the Assessing Officer gets the jurisdiction to proceed under section 158BC merely on the basis of the factum of the initiation of search by virtue of section 158BA, and once the fact of search is established, he gets authority to proceed under Chapter XIV-B to complete the assessment under section 158BC…” (Para 71) (iii) Dr. Mansukh Kanjibhai Shah v. ACIT [2011] 129 ITD 376 (Ahd. Trib.): “…if warrant of authorization under section 132 is issued in the name of “A” after 31-5-2003 but his premises is not searched for the purpose of executing the warrant of authorization and the warrant of authorization is kept unexecuted, the question arises whether the Assessing Officer still should proceed under section 153A of the Act for the purpose of framing the assessment or reassessment of the six assessment years immediately preceding the assessment years relevant to the previous year in which such search is initiated or requisition is made without executing the search warrant. The answer would be ‘No’ because it would be a futile exercise. It may be added here that jurisdiction can be assumed by the Assessing Officer to initiate assessment proceedings to issue notices once search is initiated under section 132/requisition made under section 132A…in section 153A(b) it is specifically provided that the Assessing Officer shall assess or reassess the total income of six years immediately preceding the assessment years relevant to the previous year in which such search is conducted or requisition is made. It would, therefore, clarify that not only the warrant of authorization is to be issued in the name of the assessee but search shall have to be necessarily conducted…” (Paragraph 9.3) 7. The expression “in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A” used in sub-section (1) of section 153A, read with the provisions of section 132, means that both sections 132 and 153A are person-specific and not premises- specific and, although several warrants of authorization may be issued under section 132 to search different premises in relation to a person, a single assessment order is required to be passed under section 153A in respect of the person who is searched and not multiple orders in respect of each premise searched. Reliance is placed in this context on the following judgments: (i) Siksha “O” Anusandhan v. CIT [2012] 336 ITR 112 (Ori.): “…to exercise powers under section 153A in the case of a person the mandatory requirement is that there must be initiation of a search as contemplated under section 132 or requisition under section 132A of the Income-tax Act, 1961 in respect of such person. In a case where there is no initiation of search as contemplated under section 132, the basic condition for issuance of notice under section 153A does not exist. In order to assume jurisdiction to assess a person under section 153A, there must be initiation of a valid search in respect of such person under section 132 of the Income-tax Act, 1961. The word "person" appearing in section 132 and in section 153A of the Income-tax Act, 1961, is one and the same person. Thus the person, in respect of whom search under section 132 is initiated, is the same person against whom notice under section 153A is to be issued for making assessment/reassessment under that section.” (Paragraph 13) (ii) CIT v. Tirupati Oil Corporation [2001] 248 ITR 194 (Bom.): “The facts of this appeal are as follows: A search operation under section 132 of the Act was carried out at the residences of the partner pursuant to which notice under section 158BC of the Income-tax Act was issued to the firm on August 5, 1996, requiring the assessee-firm to furnish its return of income for the block period in question. The Assessing Officer came to the conclusion that since a partnership firm is not a legal entity the assessee-firm was liable with regard to the material detected at the residence of its partner. The Tribunal in appeal, however, rightly came to the conclusion that under the Income-tax Act, a registered firm is a taxable unit and if the Assessing Officer wanted to proceed under Chapter XIV- B of the Income-tax Act with regard to the undisclosed income of the partner for the purposes of making block assessment on the assessee-firm, then the Assessing Officer was required to invoke section 158BD which has not been done in the present case and, therefore, the block assessment made on the firm without following the procedure under section 158BD was bad in law. We do not find any error of law in the judgment of the Tribunal.” (iii) Dorf Ketal Chemicals LLC v. DCIT [2017] 167 ITD 25 (Mum. Trib.): “…it is clear that for the purpose of assumption and exercise of powers u/s 153A of the Act in case of a person, the initiation of search in terms of section 132 of the Act or 132A of the Act on the said persons is mandatory and therefore whether there is no initiation of search as contemplated u/s 132 of the Act, the fundamental conditions for issuance of notice u/s 153A is not fulfilled. Thus, the person in respect of whom the search is initiated u/s 132 of the Act is the same persons against whom the notice is to be issued u/s 153A of the Act…” (Paragraph 9) (iv) Dr. Mansukh Kanjibhai Shah v. ACIT [2011] 129 ITD 376 (Ahd. Trib.): “…it is undisputed fact that though warrant of authorization is issued in the name of the assessee being Managing Trustee of the Trust, but it is admitted fact that no search operation was conducted in the premises of the assessee. Even in the warrant of authorization, the address of the place to be searched is not the address of the assessee individual. Admittedly, no Panchnama is also drawn in pursuance with the warrant of authorization in the case of the assessee. No documents were seized or impounded as such during the course of search from the assessee. The warrant of authorization dated 29-10-2004 in the name of the Trust and the assessee stands unexecuted in the case of assessee individual…” (Paragraph 9.5) (v) Unique Star Developers v. DCIT [2017] 83 taxmann.com 83 (Mum. Trib.):

“..though the warrant of authorisation was prepared in the name of the assessee, yet there was no commencement or initiation of search in pursuance of the said warrant. When there is no commencement of search at all, the question of invoking the provisions of sec. 153A shall not arise…” (Paragraph 10) 8. Even if, for the sake of argument, searches carried out under section 132 in the residential premises of the directors of the Respondent company were to be regarded as searches conducted “in connection with” or “in relation to” or “in the case of” the company for the reason that the company’s name is mentioned at item (A) of the Panchanamas drawn in those premises, entries at item B immediately below item (A) under the caption “Warrant to search (details and ownership of the search)” clearly show that the “persons searched” in pursuance of the warrants issued in the name of the company were individuals and the premises searched were their personal residences. There is thus no merit in the learned DR’s allegation that the learned CIT(A) HAD incorrectly claimed in paragraph 4.48 at page 51 of his orders that Panchanamas were duly drawn in the cases of the individuals (who happened to be managing director and directors of the assessee company).

10. As regards invoking of section 153C in the cases of the individual assessees, the assessees concerned had challenged the same before the learned CIT(A) on the ground that the assessment proceedings concluded in their cases under section 143(3)/144 read with section 153C were void ab initio and invalid, inasmuch as no notices under section 153A had been issued to them even though a search under section 132 was initiated in their own cases and the notices issued to them under section 153C could not be sustained in law for the reason that such notices could be issued only to persons other than persons referred to in section 153A.

11. Though the learned CIT(A) dismissed these grounds holding that no prejudice had been caused to the assessees by issue of a notice under the wrong section, he has clearly stated that it was an undisputed fact that there was a search warrant in the name of the assessee and that jurisdiction for framing the impugned assessment orders had been wrongly issued under section 153C of the Act instead of section 153A of the Act. As the learned CIT(A) invoked section 292B of the Act to prevent invalidation of these notices and the revenue effects of the additions sustained in the appeals were relatively low, the assessees chose not to proceed with further appeals in their cases. Copies of the appellate orders passed by the learned CIT(A) in these appeals are enclosed at pages 17 to 28.

15. As it is on record that only a survey under section 133A was carried out at the business and factory premises of the company that are listed in the learned AO’s Remand Report dated 21.09.2022 and there is no material on record to suggest that such survey was ever converted into a search under section 132, it would be instructive to go through the following judgments that hold that proceedings under section 153A can be initiated only in the case of a search and not that of a survey: (i) Union of India v. Ajit Jain [2003] 129 Taxman 74 (SC): “…the respondent being a regular assessee in New Delhi, survey operation under section 133A having been conducted by the authorities at Delhi and the entire action of the search ultimately culminating in the block assessment under Chapter XIV-B by the Assessing Officer based in New Delhi, not only form a part of cause of action but substantial cause of action arose within the territorial jurisdiction of the Delhi High Court; accordingly, that objection was rejected. Hence, the impugned authorization issued under section 132 and all further actions/proceedings in consequence thereof, including the block assessment, were quashed. We see no reason to interfere with the decision of the Delhi High Court in Ajit Jain v. Union of India [2000] 242 ITR 302. Accordingly, the civil appeal is dismissed. There shall be no order as to costs.” (ii) CIT v. Parmar Builders & Developers [2015] 62 taxmann.com 20 (Guj.): :…it was a case of survey and there was no search of the premises of the assessee under Section 132 of the Income Tax Act. Whatever the material was collected, was/were during the course of survey at the site office of the Parmar Builders and Developers, Emperor Building, Vapi. Under the circumstances, the material used for framing assessment under Section 158BC was collected during the survey and not search proceedings under Section 132 of the Income Tax Act. In view of the above, it cannot be said that the learned Tribunal has committed any error in holding the assessment proceedings under Section 158BC of the Act has invalid. The learned Tribunal has rightly quashed and set aside the assessment under Section 158BC of the Act on the ground that material collector during the survey was used while framing the assessment under Section 158BC of the Act…” (Paragraph 3)

(iii) Smt. Rajkumari Chandak v. ACIT [2015] 382 ITR 312 (Mad.): “… If it is a case of survey under Section 133A of the Act, as is evident from the document, the block assessment, invoking the provisions of Sections 158BC does not arise, as there is no search in terms of Section 132 of the Act…” (Paragraph 17) (iv) Dr. Mansukh Kanjibhai Shah v. ACIT [2011] 129 ITD 376 (Ahd. Trib.): “…The warrant of authorization dated 29-10-2004 in the name of the Trust and the assessee stands unexecuted in the case of assessee individual. Since in this case only survey operation under section 133A is conducted in the premises of the assessee’s Trust, it would not satisfy the requirements of section 153A of the Act. As such, the Assessing Officer was not justified in initiating proceedings or assuming valid jurisdiction under section 153A of the Act against the assessee. In view of the above discussions, we do not find these to be the fit cases for initiating the proceedings under section 153A of the Income-tax Act against the assessee in his individual status. We accordingly hold that the proceedings under section153A of the Income-tax Act are invalid and bad in law, resultantly, the orders of the authorities below are set aside and quashed.” (Paragraph 9.5) 16. The next contention of the learned DR is that there is no requirement in law that a business premises of a person have to be compulsorily covered under a search. If this contention were to be accepted, it would mean that a search of a company can only be accomplished by carrying out searches at the residences of its directors or shareholders, given that a company, as a body corporate, would only have business premises.

19. The facts ascertained by the learned CIT(A) from the AO are also stated in the latter’s letter dated 01.06.2023 addressed to the ITO attached to the learned DR himself (enclosed at page ). Clause (ii) of this letter states that “…It is pertinent to note here that there was no Warrant u/s 132 executed at the premise (as discussed in the remand report briefly)” (sic).

20. Moreover, the learned CIT(A)’s conclusion about the absence of a search under section 132 in the case of the Respondent company is vindicated by the following judgments: (i) Manish Maheshwari v. ACIT [2007] 159 Taxman 258 (SC): “Condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A…The provisions contained in Chapter XIV-B are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, it would bear repetition to state, only if a raid is conducted…” (Paragraph 7)

(ii) Canara Housing Development Co. v. DCIT [2014] 274 ITR 122 (Kar.): “…The condition precedent for application of Section 153A is there should be a search under Section 132…” (Paragraph 10) (iii) C. Ramaiah Reddy v. ACIT [2003] 87 ITD 439 (Beng. Trib.)(SB): “…The jurisdictional fact that needs to be satisfied before the Assessing Officer can issue notice under section 158BC is that a search under section 132 should have been conducted on the assessee. The ITAT, therefore, needs to satisfy itself that a search was indeed conducted with reference to the assessee in question. We note that the search should not merely have been initiated, but conducted. Hence, the ITAT is required to verify whether the jurisdictional facts exist before notice can be issued under section 158BC. Further, it is also necessary for the ITAT to scrutinize the Panchnamas and connected documents in order to ensure that the assessment order passed is not barred by limitation as provided for under section 158BE of the Act…” (Paragraph 6.3) “…An order under section 158BC(c) can be passed in case of a person in whose case action under section 132 has been conducted. Thus it is pre-supposed that there should be action under section 132…” (Paragraph 6.5) “…There is no right of appeal to the Tribunal against search proceedings under section 132 and therefore questioning before the Tribunal cannot arise regarding the validity of authorization issued under section 132 or even the mode of conduct of search pursuant to authorization including impugning the validity of prohibitory order issued under section 132(3), except to the extent of those aspects of search as are necessary to adjudicate the point of limitation, including as to whether the search was actually conducted on the named person or whether the authorization was actually issued in the assessee’s name or whether the last panchnama was issued as per legal requirements such as whether the authorized officer has signed it or whether specified number of witnesses signed it and the like.” (Paragraph 20.2)

(iv) Promain Ltd. v. DCIT [2005] 95 ITD 489 (Del. Trib.)(SB): “…the scheme of Chapter XIV-B requires the Assessing Officer to examine such aspects at three stages. The first stage is when the Assessing Officer has to issue notice under section 158BC. At this stage, he is required to satisfy himself that search has been initiated and carried out in the case of an assessee on whom such notice is to be served. In this connection he should see the authorization issued under section 132(1) and the panchnama prepared by the search party so as to satisfy himself that search was initiated and carried out in the case of the person on whom notice under section 158BC is to be served. The scope of examination is very limited, i.e., to ascertain that search operation was carried out in the case of such person and nothing more. If the Assessing Officer does not satisfy himself in this regard, then the assessee has the right to object to the validity of the assessment before the appellate authority on the ground that no search was initiated/conducted in the case of the appellant…” (Para 72) “…A search can be said to be executed when it is concluded in terms of section 132…Finally, the panchnama has to be prepared which can be considered as an evidence for concluding the search. Though there is no specific mention of preparation of panchnama in section 132, it can be logically inferred from Explanation 1 after section 132(14). This Explanation provides that ‘execution of an authorization for search’ shall have the same meaning as assigned to it in Explanation 2 to section 158BE. The later Explanation provides that authorization of search shall be deemed to have been executed when the last panchnama is drawn in relation to a person in whose case warrant of authorization is issued. The above discussion shows that search comes to an end when the last panchnama is drawn with reference to the last of the authorizations. It is the date of such panchnama which is relevant for determining the period of limitation for passing the order under section 158BC by the Assessing Officer…” (Paragraph 74) (v) Bansilal B. Raisoni & Sons v. ACIT [2019] 101 taxmann.com 20 (Bom.):

“…the broad facts before us are that the search authorization was issued against the petitioner partnership firm, one of its partners and another person. Actual search was carried, as pointed out by the petitioner, at three different locations namely at the residential premises of one of the partners and two other residential premises, one of them belonging to the brother of the partner of the partnership firm…In the present case, we have no hesitation in accepting the petitioner's contention that in order to issue notice under sub-section (1) of section 153A, there must be initiation of search in case of the notice. Mere search authorization would not be sufficient. There is clear distinction between search authorization and conduct of the search. In sub- section (1) of Section 153A of the Act, therefore, the legislature has advisably used expression "where a search is initiated under Section 132". (Paragraph 6) “We are also in agreement with the contention of the Counsel for the petitioner that the petitioner's objection to the jurisdiction of the Assessing Officer on the ground that if no search was initiated, notice under Section 153A of the Act could not have been issued…” (Paragraph 7) (vi) ACIT v. K.G. Finvest (P.) Ltd. [2017] 88 taxmann.com 627 (Del. Trib.): “…initiation of search u/s 132 is a pre-requisite for issuing notice u/s 153A, though assessment has to be made of the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is 'conducted'. In other words, unless a searched is initiated on a person u/s 132, the Assessing Officer cannot acquire jurisdiction for issuing notice u/s 153A of the Act. The case of the assessee before us is that no search was initiated on it and hence notice u/s 153A of the Act is bad in law.” (Paragraph 4) “Not being searched, a person cannot suffer the consequences of an 'intended search', which is not initiated.” (Paragraph 5)

(vii) Indo Pacific Finlease Ltd. v. ACIT [2017] 83 taxmann.com 265 (Chd. Trib.): “The undisputed facts in the present case are that there was no search conducted at the assessee's premises, no one from the Department visited it to execute any search and seizure proceedings and no panchnama in assessee's name was ever drawn. On top of that the Department itself has admitted the fact that no search warrant in the name of the assessee was issued. In view of the same, the notice issued by the Assessing Officer under section 153A of the Act and subsequent proceedings are held to be void ab initio and is hereby quashed.” (Paragraph 14) (viii) Regency Mahavir Properties v. ACIT [2018] 64 ITR(T) 628 (Mum. Trib.): “…the provisions of section 153A of the Act come into play only after search has been conducted. The provisions of section 153B of the Act provides that authorization of warrant shall be deemed to be executed upon the conclusion of search as recorded in the last panchnama drawn in relation to the persons in whose case the warrant or authorization has been issued. So, in all the sections the term used is important that fresh panchnama drawn in relation to any person. Thus, in order to complete the search there is a initiation of proceedings u/s 132(1) of the Act, conduction of search in terms of search warrant issued which includes search in the premises of the assessee and other places and also the last stage panchnama which is conclusive proof of conclusion of search from which the period of limitation will be calculated as provided u/s 153B of the Act. The provisions of Act very clearly and unambiguously provide for initiation of search, conduct of search and conclusion of search and only then the Assessing Officer can assume jurisdiction u/s 153A of the Act. In the present case before us, we noted that the search has been initiated in the name of the assessee along with other assessees appearing on the warrant of authorization issued u/s 132(1) but did not mention the address of the premises from where the assessee conducts business. No incriminating material relating to the assessee was found in the premises where the search was carried out. The search was concluded but no panchnama was drawn in the name of the assessee. Therefore, the conditions as stipulated for assuming the jurisdiction u/s. 153A, in our view, have not been satisfied...In view of these facts, we are of the opinion that the conditions stipulated u/s. 153A, for the issue of notice, are not satisfied. Until and unless the Assessing Officer assumes the valid jurisdiction u/s. 153A the assessment made in consequence of the notice issued u/s. 153A, in our view is invalid and void ab initio. We accordingly quash the assessment made by the Assessing Officer.” (Paragraph 7) (ix) Dr. Mansukh Kanjibhai Shah v. ACIT [2011] 129 ITD 376 (Ahd. Trib.): “…the warrant of authorization shall have to be executed by the authorized Officer in order to justify invoking of the jurisdiction by the Assessing Officer under section 153A of the Act. Considering section 153A particularly read with sub-clause (b), it is clear that not only initiation of search is mandatory but conduct of the search is also material…it is undisputed fact that though warrant of authorization is issued in the name of the assessee being Managing Trustee of the Trust, but it is admitted fact that no search operation was conducted in the premises of the assessee. Even in the warrant of authorization, the address of the place to be searched is not the address of the assessee individual. Admittedly, no Panchnama is also drawn in pursuance with the warrant of authorization in the case of the assessee. No documents were seized or impounded as such during the course of search from the assessee.” (Paragraph 9.5)

8. The learned AR, on conclusion of the hearing, had given a written summary of the oral arguments which reads as follows:

The Respondent is a domestic company having its registered office in  Mangaluru. A survey u/s 133A was conducted at the business premises of the  Respondent on 23.01.2019. Searches u/s 132 were conducted at three residential premises belonging  to the directors of the company on the basis of three warrants containing the name of the company as well as those of the directors and three Panchanamas were drawn in respect of each director. No warrant was issued for search of the business premises of the  company, nor was any Panchanama drawn at those premises. Respondent’s contention is that a search at the residential premises of  the directors of a company cannot be deemed to be a search of the company itself merely because the name of the company is mentioned in the warrants and the Panchanama, for the following reasons:

(1) The warrants and the Panchanamas contain the names of the individuals who are separate taxable entities distinct from the company and the premises searched belonged to such individuals and not the company; (2) A company can have only business premises and when no authorization was issued for search of such premises, no search u/s 132 was initiated and no Panchanama was drawn at such premises, execution of warrants of authorization at the residences of the individuals cannot be held to be execution of warrant in the case of the company. CIT(A) has held (in para 4.35, p. 41-42) that there was no initiation and  conduct of search and hence no execution of warrant in the case of the company and the AO could not issue notices u/s 153A to it. The department argues that since the warrants and the Panchanamas  executed in the residential premises of the directors contain the name of the company, there was no need to search the business premises of the company and therefore, the notices issued u/s 153A are valid. CIT(A) has held (in para 4.50, p. 51-52) that searches conducted at the  residences of the directors of the company and not at its own business premises cannot form the basis for issue of notices u/s 153A to the company, where a search was neither initiated, nor conducted, nor a Panchanama drawn, as a company is a distinct and separate person.

(2) Dr. Mansukh Kanjibhai Shah (Ahmedabad Tribunal). Para 9.5 on page 24 of Digest of case Laws filed earlier: The mere issue of warrant of authorization without there being search of the premises would be meaningless and would not serve the purpose of section 132. If warrant of authorization is issued in the name of ‘A’ but his premises is not searched for the purpose of executing the warrant and the warrant is kept unexecuted, the question arises whether the AO should still proceed u/s 153A for the purpose of framing the assessment. The answer would be ‘No’ because it would be a futile exercise. It is undisputed fact that though warrant of authorization is issued in the name of the assessee but it is admitted fact that no search operation was conducted in the premises of the assessee. Even in the warrant of authorization, the address of the place to be searched is not the address of the assessee. Admittedly, no Panchanama was drawn in pursuance of the warrant of authorization in the case of the assessee.

(3) Aerens Jai Realty (Delhi Tribunal) Para 14 on page 15 of this submission: From the copies of the warrant of authorization u/s 132 of the Act dated 16.08.2011 and panchnama drawn on the conclusion of search and seizure operation on 18.08.2011, we note that though the name of the assessee has been mentioned along with two other entities, but, the address mentioned in the said warrant of authorization and panchnama does not belong to the assessee and, neither any officer bearer or staff member participated in the said search and seizure operation which was concluded on 18.08.2011. Para 15 on page 15 of this submission: Therefore, as per the scheme of the Act and provisions of section 153A of the Act, the AO assumes valid jurisdiction to issue notice u/s 133A of the Act and to frame assessment order u/s 153 r.w.s. 143(3) of the Act only on the entity on which the search u/s 132(4) was initiated, conducted and concluded. In the present case from the warrant of authorization and panchnama although it seems that the name of the assessee has been mentioned therein, but, the address is different and, at the time of initiation of search, during the course of search and on conclusion of the search neither any office bearer nor any staff member of the assessee company participated and the search team did not visit the actual business premises of the assessee situated at 1411, Chiranjivi Tower and 1603, Chiranjivi Tower, 43, Nehru Place, New Delhi. Therefore, when there was no search and seizure operation on the assessee, then, the AO was not validly entitled and empowered to issue notice u/s 153A of the Act and to frame assessment u/s 153A r.w.s. 143(3) of the Act on the assessee on the strength of such irrelevant warrant of authorization and Panchnama. (4) Sarvmangalam Builders (Delhi Tribunal) Para 11 on page 26 of this submission: Undisputedly, the premises searched does not belong to the assessee. The department’s appeal in the case of JM Trading Corporation was dismissed in limine for want of substantial question of law by the Hon’ble High Court of Bombay. While doing so, the finding of the Tribunal to the effect that non-compliance of the provisions of the Income-tax Act by the authorized officer renders a search invalid and illegal. The Hon’ble Supreme Court has also dismissed the SLP filed by the department. Para 13 on page 26 of this submission: Since no search was conducted on the premises of the assessee and the search conducted was conducted on a premises not owned by the assessee, the proceedings u/s 153A of the Act are invalid and bad in law. Accordingly, the orders of the authorities below are set aside and quashed. (5) Indore Construction (Indore Tribunal) Para 17 on page 39 of this submission: That no search was carried out at the business premises of Indore Construction Co. (P.) Ltd. is contrary to what has been stated by the AO in the opening paragraph of the assessment order. As admitted by the revenue before us that no search was conducted at the business premises of the assessee-company on 21.11.1995, the question of seizure of incriminating account books and documents from the business premises of the assessee company on 21.11.1995 does not arise at all. Para 18 on pages 39-40 of this submission: Search u/s 132(1) in the case of the company’s director R.B. Maheshwari and his wife and survey u/s 133A at the business premises of the company at 380, Jawahar Marg, Indore. Nonetheless, the AO exercised jurisdiction over Shri R.B. Maheshwari, Director in the company as also over Indore Construction (P.) Ltd. The AO had entertained erroneous impression that a search was conducted in the business premises of the assessee-company and accordingly proceeded to frame the assessment in the case of the company under section 158BC of the Act. This he could not do in the absence of warrant of authorisation in the case of the company to search its business premises and the categorical admittance now by the revenue that no search had, in fact, been conducted at the business premises of the company on 21-11-1995. Framing of assessment by issuing notice under section 158BC without search warrant and without conduct of search in the case of the company is void for want of jurisdiction. In taking this view, we are supported by the decision of Madras Bench of the Tribunal in Urmila Chandak’s case (supra). Para 19 on page 40 of this submission: Right from the beginning, he proceeded against the assessee- company as if search had been conducted in its case and it was in this background that he issued notice to the Company under section 158BC clearly mentioning in the notice itself that the search had been conducted in the month of November, 1995. If the Assessing Officer intended to proceed against the assessee- company in whose case search warrant was not issued nor search had taken place at its business premises, then he should have framed the assessment under section 143(3) read with 158BD. This has not been done. Para 29 on page 42 of this submission: The assessee, thus, succeeds in its preliminary grounds. We, therefore, do not propose to deal with the ground Nos. 4 to 14 assailing the impugned additions made on the basis of the reports of the Valuation Cell and certain presumptions made by the Assessing Officer which are beyond the scope of Chapter XIV-B.

(6) Unique Star Developers (Mumbai Tribunal) Para 9 on page 32 of Digest of Case Laws filed earlier: In the present case before us, search has been initiated in the name of the assessee’s AOP appear on the warrant of authorization issued u/s 132(1) besides mentioning the names of the members of assessee AOP, but the search was not conducted on the premises of the AOP at all, whereas the search was conducted on the members of the AOP with no incriminating material relating to assessee was found in the premises searched belonging to the members of the assessee AOP. Finally, the search was concluded in the names of the members of the AOP where Panchanamas was drawn duly but no Panchanama was drawn in the name of the assessee AOP and therefore, the limbs and contents to be satisfied for assessment of jurisdiction u/s 153A were not satisfied. Para 10 on page 33 of Digest of Case Laws filed earlier: It is very surprising that according to the AO and FAA, the search was conducted on the assessee but the business premises of the assessee were spared from proceedings u/s 132(1) and even no incriminating material was found and seized from the premises of the members of the AOP assessee. In view of the fact that there was no search conducted in the premises of the assessee and no Panchanama was drawn up, the assessment proceedings u/s 153A were without valid jurisdiction. The case of the assessee also finds support from the decision in the case of J M Trading Corpn. Para 11 on page 33 of Digest of Case Laws filed earlier: In Order to initiate assessment proceedings u/s 153A of the Act, the premises of the appellant has to be searched and Panchanama has to be specifically drawn in the name of the assessee, but in the present case before us, no search was carried out at the business premises of the assessee and so much so that no incriminating documents were found and seized from premises searched of others and no Panchanama was drawn in the name of the assessee.

(7) Siksha O Anusandhan (Ori.) Para 13 on page 21 of Digest of Case Laws filed earlier: The word “person” appearing in section 132 and 153A is one and the same person. Thus the person in respect of whom search u/s 132 is initiated is the same person against whom notice u/s 153A is to be issued for making assessment under that section.

(8) Regency Mahavir Properties (Mumbai Tribunal)

Para 7 on page 30 of Digest of Case Laws filed earlier: In order to complete the search there is initiation of proceedings u/s 132(1), conduction of search in terms of search warrant issued which includes the search in the premises of the assessee and other places and also the last stage Panchanama which is conclusive proof of conclusion of search.

(9) Dorf Ketal Chemicals (Mumbai Tribunal) Para 9 on page 31 of Digest of Case Laws filed earlier: The person in respect of whom the search is initiated u/s 132 is the same person against whom the notice is to be issued u/s 153A.

(10) Bansilal B. Raisoni & Sons (Bom.) Para 6 on pages 19-20 of Digest of Case Laws filed earlier: …the broad facts before us are that the search authorization was issued against the petitioner partnership firm, one of its partners and another person. Actual search was carried, as pointed out by the petitioner, at three different locations namely at the residential premises of one of the partners and two other residential premises, one of them belonging to the brother of the partner of the partnership firm… In the present case, we have no hesitation in accepting the petitioner's contention that in order to issue notice under sub-section (1) of section 153A, there must be initiation of search in case of the noticee. Mere search authorization would not be sufficient. There is clear distinction between search authorization and conduct of the search. In sub-section (1) of Section 153A of the Act, therefore, the legislature has advisably used expression "where a search is initiated under Section 132". Para 7 on page 20 of Digest of Case Laws filed earlier: We are also in agreement with the contention of the Counsel for the petitioner that the petitioner's objection to the jurisdiction of the Assessing Officer on the ground that if no search was initiated, notice under Section 153A of the Act could not have been issued.

As the premises of the company were covered under a Survey u/s  133A, assessment proceedings u/s 153A could not be initiated in its case, for the following reasons: (1) the survey was not converted into a search by issue of a consequential warrant; and (2) a case cannot be covered both under search and survey at the same time, as provisions for assessment of search and non- search cases are mutually exclusive and cannot be applied interchangeably. CIT(A) has held (in para 4.55, p. 53) that section 153A cannot be  invoked in cases where only a survey u/s 133A is carried out. (1) Smt. Rajkumari Chandak (Mad.) Para 17 on page 20 of Digest of Case Laws filed earlier: If it is a case of survey u/s 133A of the Act, as is evident from the document, the block assessment, invoking the provisions of section 158BC, does not arise, as there is no search in terms of section 132 of the Act. (2) Dr. Mansukh Kanjibhai Shah (Ahmedabad Tribunal) Para 9.5 on page 24 of Digest of Case Laws filed earlier Since in this case only survey operation u/s 133A is conducted in the premises of the assessee Trust, it would not satisfy the requirements of section 153A of the Act. As such, the AO was not justified in initiating proceedings u/s 153A against the assessee. (3) Parmar Builders (Guj.) Para 3 on page 46 of this submission: It was a case of survey and there was no search of the premises of the assessee under Section 132 of the Income Tax Act. Whatever the material was collected, was/were during the course of survey at the site office of the Parmar Builders and Developers, Emperor Building, Vapi. Under the circumstances, the material used for framing assessment under Section 158BC was collected during the survey and not search proceedings under Section 132 of the Income Tax Act. In view of the above, it cannot be said that the learned Tribunal has committed any error in holding the assessment proceedings under Section 158BC of the Act has invalid. The learned Tribunal has rightly quashed and set aside the assessment under Section 158BC of the Act on the ground that material collector during the survey was used while framing the assessment under Section 158BC of the Act. No substantial question of law arises in the present appeals. On the contrary, we affirm the view taken by the learned Tribunal. Consequently, both these appeals deserve to be dismissed and are accordingly dismissed.

9. We have heard the rival submissions and perused the material on record. The CIT(A), in the impugned order, had elaborately deliberated the facts and the law involved in this matter, for reaching his conclusions. We deem it appropriate to highlight the touchstones of his order to decide the appeal. The CIT(A) initially sought for a remand report seeking clarification from the AO on whether search was conducted in assessee’s case. The AO, in the remand report dated 21.09.2022, had stated as under:

'In the instant case, search -action u/s 132 was carried out at the residences of its directors, namely:  Mr. Mohammed Shawkath Showry, Managing Director  Mr. Mohammed Fakir, Director  Mr. Mohammed Afthar, Director Simultaneously, survey u/s 133A was carried out at three places, namely:  The head office premises of M/s Blueline Foods (India) Pvt. Ltd., 4th Floor, Suite No. 406, Crystal Arc, Balmatta Road, Hampankatta, Mangalore, Karnataka  Factory #1 of 10/s Blueline Foods India) Pvt. Ltd.  Azad Nagar, Ullal, Mangaluru, Karnataka  Factory #2 of M/s Blueline Foods (India) Pvt. Ltd.  Mudupi Road, Phajeer, Mangaluru, Karnataka It is pertinent to note here that the Warrant of Authorization u/s 132 was in the name of M/s Blueline Foods (India) Pvt. Ltd. but the premises searched were the residences of the Directors of the said company. Such a Warrant acts as a source of power for both Surveys and Searches. The office and factory of M/s BluelineFoods (India) Pvt. Ltd. happen to be its business premises therefore a Survey was considered as sufficient. Since, search -action u/s 132 was carried out at the residences of the o Directors of the company, search warrant and Panchnama exists for these. Copies of the Panchanamas, Search warrants and Survey authorisations are attached herewith as proof (Annexure A). A Panchanama is to be executed only in case of a search - action. o Since, only survey was conducted, Panchanama need not be executed and hence, it does not exist w.r.t. the office/factory premises of M/s Blueline Foods (India) Pvt. Ltd."

10. The CIT(A), not being satisfied with the above report, sought for another report specifically asking whether a search under section 132 of the Act was conducted in the case of the assessee. The AO, in the second remand report dated 11.10.2022, clarified as under:

The Warrant of Authorisation u/s 132 was drawn in the name of the o appellant company M/s Blueline Foods (India) Pvt. Ltd. The premise of the appellant company i.e., M/s Blueline Foods (India) o Pvt. Ltd. has not been searched u/s 132 of the Income -tax Act, 1961. Instead, a survey u/s 133A was conducted in the said premises. Assessment order in the case of the appellant company M/s Blueline o Foods (India) Pvt. Ltd. was passed u/s 153A because the Warrant of Authorisation u/s 132 was in the name of the said appellant company, as stated above.

12. The first relevant issue considered by the CIT(A) is whether a warrant of authorization without a search being carried out is sufficient to invoke the provisions of section 153A of the Act. The crux of this discussion, in his order, is summarized as below.

17. The next relevant issue considered by the CIT(A) (point 5 in CIT(A)’s order at page 51) is whether the search conducted at the residence of the director of the of the assessee-company, would constitute the search of the company itself. The CIT(A) held that a company is a distinct and separate person under section 2(31) of the Act. Thus, the searches at the residences of the directors of the company and not at its own business premises, cannot form the basis for issue of notice under section 153A of the Act, to the company. The CIT(A) relied on the decision in the case of Dr. Mansukh Kanjibhai Shah v. ACIT [2011] 129 ITD 376 (Ahd. Trib.) wherein the facts were identical to the present case. The relevant observations of the Tribunal are as follows:

As is noted above, it is undisputed fact that though warrant of authorization is issued in the name of the assessee being Managing Trustee of the Trust, but it is admitted fact that no search operation was conducted in the premises of the assessee. Even in the warrant of authorization, the address of the place to be searched is not the address of the assessee individual. Admittedly, no Panchnama is also drawn in pursuance with the warrant of authorization in the case of the assessee. No documents were seized or impounded as such during the course of search from the assessee. The warrant of authorization dated 29-10-2004 in the name of the Trust and the assessee stands unexecuted in the case of assessee individual. Since in this case only survey operation under section 133A is conducted in the premises of the assessee Trust, it would not satisfy the requirements of section 153A of the Act. As such, the Assessing Officer was not justified in initiating proceedings or assuming valid jurisdiction under section 153A of the Act against the assessee.

“9. ………..The provisions of Act very clearly and unambiguously provide for initiation of search, conduct of search and conclusion of search and only then the AO can assume jurisdiction u/s 153A of the Act. In the present case, before us search has been initiated as the name of the assessee's AOP appear on the warrant of authorization issued u/s 132(1) besides mentioning the names of the members of assessee AOP at all but the search was not conducted on the premises of the AOP, whereas the search was conducted on the members of AOP with no incriminating material relating to assessee was found in the premises searched belonging to the members of the assessee AOP. Finally, the search was concluded in the name of the members of AOP where panchanama was drawn duly but no panchanama was drawn in the name of the assessee - AOP and therefore, the limbs and contents to be satisfied for assessment of jurisdiction u/s 153A were not satisfied.

10. From the above discussion, we are of the view that in order to initiate assessment proceedings, u/s 153A of the Act, the premises of the appellant has to be searched and panchanama has to be specifically drawn in the name of the assessee but in the present case before us no search was carried out at the business premises of the assessee and so much so that no incriminating documents were found and seized from premises searched of others and no panchanama was drawn in the name of the assessee....... We are therefore of the considered view that no search has been conducted in the case of the assessee in view of the discussion hereinabove and accordingly, we are of the considered view that the order of the ld. CIT(A) deserved to be set aside and accordingly, we hold that the proceedings under section 153A of the Act is without any valid jurisdiction so is the consequent assessment order also passed u/s 143(3) rw.s.153(A) of the Act and hence quashed.”

The facts of this appeal are as follows: A search operation under section 132 of the Act was carried out at the residences of the partner pursuant to which notice under section 158BC of the Income-tax Act was issued to the firm on August 5, 1996, requiring the assessee firm to furnish its return of income for the block period in question. The Assessing Officer came to the conclusion that since a partnership firm is not a legal entity the assessee-firm was liable with regard to the material detected at the residence of its partner. The Tribunal in appeal, however, rightly came to the conclusion that under the Income-tax Act, a registered firm is a taxable unit and if the Assessing Officer wanted to proceed under Chapter XIV-B of the Income-tax Act with regard to the undisclosed income of the partner for the purposes of making block assessment on the assessee-firm. then the Assessing Officer was required to invoke section 158BD which has not been done in the present case and therefore, the block assessment made on the firm without following the procedure under section 158BD was bad in law. We do not find any error of law in the judgement of the Tribunal.

21. The next issue considered by the CIT(A) (point 6 at Page 52 of CIT(A)’s order) was whether section 153A of the Act could be invoked for making a non- search assessment, i.e., in the case of a survey under section 133A of the Act. In this connection, the CIT(A) relied on the judgment of the Hon'ble Madras High Court in Smt. Rajkumari Chandak Vs. ACIT (2016) 382 ITR 312 (Mad.). In this case, the Hon’ble High Court held that if it is a case of survey under section 133A of the Act, without a search in terms of section 132 of the Act, invoking provisions of section 158BC of the Act, does not arise. The Tribunal in Dr. Mansukh Kanjibhai Shah's case (supra) also held that where only a survey was conducted, it would not satisfy the requirement under section 153A. The CIT(A) thus concluded that section 153A of the Act, being a special provision enacted for making assessments in search cases it cannot be invoked in cases where only a survey under section 133A of the Act, is carried out. The learned AR had additionally relied on the judgment of the Hon’ble Supreme Court in the case of Union of India v Ajit Jain reported in 260 ITR 80 (SC) which held that provisions of Chapter XIV-B could not be invoked in the absence of a valid search. 22. The last issue addressed by the CIT(A) is whether the participation of the assessee company in the proceedings initiated under section 153A of the Act, would prevent it from questioning the validity of the said proceedings. The CIT(A) held that mere participation of the assessee in the proceeding under section 153A of the Act, would not bestow jurisdiction which otherwise is not legally inherent in the hands of the AO. The CIT(A) placed reliance in the case of ACIT Vs. K.G. Finvest (P.) Ltd [2017] 88 taxmann.com 627 (Delhi - Trib.). In this case, the Tribunal held as follows: "It goes without saying that if no search is initiated or carried out, a simple participation by the assessee pursuant to notice of assessment, and that too, after registering a protest against ad proceedings, cannot validate the jurisdiction of AO, if such jurisdiction is, in fact, absent.”

23. The CIT(A) also considered the applicability of sections 292B and 292BB of the Act, in the present case. The CIT(A) held that section 292B of the Act protects only procedural errors of omission or commission, but does not contemplate extrapolation of section 153A of the Act, so as to bring within its ambit non-search cases. It was further held that the said section cannot be used as a tool to bypass the conditions precedent to the operation of section 153 of the Act; viz., the execution of a warrant of authorization issued under section 132 of the Act, by initiation of a search and drawing up a panchnama in the case of the person in whose name warrant might have been issued. Reliance in this regard was placed on the judgments in the case of PCIT Vs. Maruti Suzuki India Ltd (2019) 107 taxmann.com 375 (SC); Mrs. Vanitha Gopal Shetty Vs. ACIT (2021) 129 taxmann.com 163 (Karnataka); and PCIT Vs. Cherian Abraham (2022) 444 ITR 420 (Karnataka). In the context of section 292BB of the Act, it was held that the said section only deals with the limited aspect of service of a notice. It was thus held that the section 292BB of the Act, does not confer the AO with any kind of jurisdiction where it legally does not exist.

24. For all the aforesaid reasons and discussion, the CIT(A) quashed the assessment orders passed under section 153A of the Act. We are in complete agreement with the reasoning and the conclusion drawn thereon by the CIT(A).

Pronounced in the open court on the date mentioned on the caption page.