SHRI FASEEH AHMED vs THE DEPUTY COMMISSIONER OF INCOME TAX

- 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 17TH DAY OF DECEMBER 2013 P R E S E N T THE HON’BLE MR. JUSTICE N. KUMAR A N D THE HON’BLE MRS. JUSTICE RATHNAKALA INCOME TAX APPEAL NO.586 OF 2007

BETWEEN:

SHRI FASEEH AHMED, NO.18, ASAD VILLA, 17TH CROSS, ROSE GARDEN, BAZAAR STREET, NEELASANDRA, BANGALORE.

... APPELLANT

(BY SRI A. SHANKAR & SRI M. LAVA, ADVS.)

AND:

THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), BANGALORE.

...RESPONDENT

(BY SRI E. SANMATHI INDRAKUMAR, SR. COUNSEL.)

THIS ITA IS FILED UNDER SEC.260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 05-04- 2007 PASSED IN IT(SS)A 49/BANG/2004 FOR THE BLOCK ASSESSMENT YEARS 1991-92 TO 2001-02,

- 2 - PRAYING THAT FOR THE REASONS STATED THEREIN THIS HON'BLE COURT MAY BE PLEASED TO:

I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN,

II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY ITAT IN IT(SS)A 49/BANG/2004 DATED 05-04-2007 FOR THE BLOCK ASSESSMENT PERIODS 1991-92 TO 2001-02, IN THE INTEREST OF JUSTICE AND EQUITY.

THIS APPEAL IS COMING ON FOR HEARING THIS DAY, N. KUMAR, J., DELIVERED THE FOLLOWING: -

JUDGMENT

This appeal is preferred by the assessee challenging the order passed by the Tribunal holding that the tribunal has no power to decide the validity of search, following the judgment of the Division Bench of this Court in ITA Bi,1154/2006 referring to the judgment of C RAMAIAH REDDY VS. ASSISTANT COMMISSIONER OF INCOME TAX (IMV) AT PARA 61, has held as under:- “61. Therefore, in an appeal filed challenging the block assessment order, it is open to the assessee to contend that this foundation for block assessment is an illegal search. Therefore, it is obligatory on the part of the Tribunal first to go into the

- 3 - jurisdictional aspect and satisfy itself that the said search was valid and legal. It is only then it can go into the correctness of the order of block assessment. Therefore, it cannot be said merely because the assessee did not choose to challenge the search conducted in his premises on the aforesaid grounds by way of a writ petition under Article 226 of the Constitution before the High Court, he cannot challenge the said order in appeal. In the absence of a specific provision provided under the Act for appeal against such orders, in the appeal filed against the assessment order, the Tribunal is not estopped from going into such question.”

In fact, the Tribunal followed the judgment of the Special Bench of the Tribunal in the very same case of Ramaiah Reddy, which was reversed by this Court in the said appeal. For the reasons set out in the said order of this Court, where it has been declared that the Tribunal has jurisdiction to go into this question, the impugned order is set aside and the matter is remitted back to the Tribunal for fresh consideration in accordance with law as laid down by this Court in

- 4 - Ramaiah Reddy’s case. Accordingly, the appeal is allowed and remanded back to the Tribunal.

Sd/- JUDGE

nvj

SHRI FASEEH AHMED vs. THE DEPUTY COMMISSIONER OF INCOME TAX