DCIT,CENTRAL CIRCLE-1,, LUCKNOW vs. SHRI MONISH IQBAL, LUCKNOW

PER SUBHASH MALGURIA, J.M.: The present appeal has been filed by the revenue challenging the impugned order dated 09/01/2009 passed by the learned Commissioner of Income Tax (Appeals)-III, Lucknow [“learned CIT(A)”] for the assessment year 2005-06. The grounds of appeal of the revenue are as under: -

“1. The Ld. CIT (A)-III, Lucknow has erred in law in quashing the assessment as having been made without jurisdiction. 1(i) That in doing so, the Ld. CIT (A)-III, Lucknow has wrongly assumed, that the Addl. DIT(Inv) cannot issue warrant of search and the decision on which he has placed reliance, has not been accepted by the Department. 1(ii) That in doing so, the Id. CIT(A)-III, Lucknow has exceeded his jurisdiction as the validity of search could only be challenged by way of writ petition under article 226/227 of the Constitution of India as held’ by the Special Bench, ITAT, Delhi in Promain Ltd. Vs. Dy.CIT(2005) 95 ITD 489. . 2. That the Ld. CIT (A)-III, Lucknow has erred in law in quashing the assessment on the ground that the assessment could not have been made in the name of the assessee when the warrant of authorization for search are issued in the joint names of the assessee and his wife.

ITA No. 231/LKW/2009 Page 2 of 6 2(i) That in doing so, the Ld. CIT (A)-III, Lucknow has relied on the decision of the Hon’ble ITAT Lucknow Bench in the case of Vandana Verma Vs. ACIT, which has not been accepted by the department. 3. That the order of the Id. CIT(A) being erroneous in law and on facts be vacated and the order of the AO be restored. 4. That the appellant craves leave to amend anyone or more of the grounds of the appeal as stated as and when need for doing so may arise.” (1.1) In this case, the assessment order dated 28/12/2007 was passed by the Assessing Officer u/s 153A/143(3) of the Income Tax Act, 1961 (hereinafter referred as “the Act”), wherein the assessee’s total income was determined at Rs.20,50,170/- as against the return of income of Rs.67,595/-. The aforesaid assessment order was passed upon the assessee after search and seizure operation u/s 132 of the Act dated 10/11/2005 in group of cases to which the assessee belongs. The assessee filed appeal against the assessment order in the office of the Ld. CIT(A). Vide order dated 09/01/2009, the Ld. CIT(A) quashed the aforesaid assessment order dated 28/12/2007, holding that the Assessing Officer had no jurisdiction to pass order u/s 153A of the Act. The Ld. CIT(A) did not decide the appeal on merits of the additions made in the assessment order, stating: “The assessee’s appeal are allowed on the legal ground/issues, so it is not necessary to deal with the other grounds. I think it appropriate not to discuss the issues on merits raised by the assessee”.

(1.2) Revenue filed an appeal against the aforesaid impugned appellate order dated 09/01/2009 of the Ld. CIT(A). Vide order dated 29/05/2009 of Co-ordinate Bench of Income Tax Appellate Tribunal, Lucknow, appeal of Revenue was dismissed, upholding the impugned order of the Ld. CIT(A), and stating that the Assessing Officer had no jurisdiction to pass order u/s 153A of the Act.

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(1.2.1) The Revenue filed appeal against the aforesaid impugned appellate order dated 09/01/2009 of the Ld. CIT(A) in Lucknow Bench of Hon'ble Allahabad High Court. Vide order dated 02/02/2017 in Income Tax Appeal No.166 of 2009, the Lucknow Bench of Hon'ble Allahabad High Court allowed Revenue’s appeal. The aforesaid order dated 29/05/2009 of Co-ordinate Bench of Income Tax Appellate Tribunal, Lucknow was set aside and the matter was remanded to Income Tax Appellate Tribunal to pass fresh order. The relevant portion of the aforesaid order dated 02/02/2017 of the Lucknow Bench of Hon'ble Allahabad High Court is reproduced as under: -

“2. This appeal under Section 260A of Income Tax Act, 1961 (hereinafter referred to as the "Act, 1961") has arisen from judgment and order dated 29.05.2009 passed by Income Tax Appellate Tribunal, Lucknow Bench, Lucknow (hereinafter referred to as the "Tribunal") in I.T.A. No. 231/Luc/2009 for Assessment Year 2005-06. 3. Though appellant has formulated four substantial questions of law but the actual substantial question of law which has arisen in appeal is, "whether the order of Tribunal is tenable in view of amendment made in Sections 132(1) and 132A(1) by Finance (No.2) Act, 2009 with retrospective effect from 01/06/1994 to the effect that Additional Director or Additional Commissioner of Income Tax may issue of authorization." 4. Learned counsel for the parties at the outset stated that aforesaid question has already been considered and answered in favour of Revenue by this Court in Income Tax Appeal No. 134 of 2009 (The Commissioner of Income Tax Vs. Raja Bhaiya Youth Brigade Kunda, Pratapgarh) decided on 17.01.2017 wherein this Court has passed following order: "1. Heard learned counsel for parties and perused the record. 2. This appeal under Section 260A of Income Tax Act, 1961 (hereinafter referred to as “Act, 1961") has arisen from judgment and order dated 24.04.2009 passed by Income Tax Appellate Tribunal, Allahabad Bench, Allahabad (hereinafter referred to as "Tribunal") in Income Tax Appeal No. 245 Alld. 2009 for Block Period of 01.04.1996 to 16.12.2002 and was admitted on following two substantial questions of law: "(i) Whether on the facts and circumstances of the case and in law Tribunal was right in holding that issuance of notice under Section 158BC and computation of undisclosed income in this case was without jurisdiction? (ii) Whether the order of Tribunal is tenable in view of amendment made in Sections 132(1) and 132A(1) by Finance (No.2) Act, 2009 with retrospective effect from 01.06.1994 to the effect that Additional Director or Additional Commissioner of Income Tax may issue of authorization."

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In view of aforesaid, we are of the opinion that the Income Tax Appellate Tribunal erred in holding that the annulment of the assessment orders by the Commissioner of Income Tax (Appeals) was justified. We are of the opinion that in view of the amendment brought by Finance (No. 2) Act, 2009, the Additional Director has the power under Section 132 (1) of the A:t to issue search and seizure warrant. In the result, these appeals are allowed. The impugned order dated 27.06.2008 passed by the Income Tax Appellate Tribunal, Lucknow is set aside and ‘the matter is remitted back to it for reconsideration in accordance with law. In the facts and circumstances of the case, there shall be no order as to costs."

"In view of above, being respectful in agreement with the Division Bench Judgment (supra), we allow the appeal and set aside the Tribunal's order and answered the question framed in favour of the revenue and against the assessee. The order of the assessing authority is restored and the matter is remitted back to the Tribunal to decide the appeal a fresh on merit keeping in view the observation made in the body of the present judgment.

ITA No. 231/LKW/2009 Page 5 of 6 (2). Subsequent to the aforesaid order dated 02/02/2017 of the Lucknow Bench of Hon'ble Allahabad High Court, hearings were fixed in Income Tax Appellate Tribunal from time to time. The last hearing was fixed on 26/09/2024. At the time of hearing, the Revenue was represented by Shri Manu Chaurasia, CIT-DR and Assessee was represented by none. Although, a letter seeking adjournment was filed by Shri B. P. Yadav, Advocate; it was not accompanied with “Vakalatnam” in favour of Shri B. P. Yadav. Being of the view that the appeal can be disposed of, the request for adjournment was rejected. In the absence of any representation from assessee’s side; we heard the Ld. CIT-DR for Revenue. He submitted that the Ld. CIT(A) in the aforesaid order dated 09/01/2009, did not decide the issues regarding additions made in the assessment order, on merits. He drew our attention to the fact that the assessment order was quashed by the Ld. CIT(A) on the technical ground that the Assessing Officer did not have jurisdiction to pass order u/s 153A of the Act. He submitted that the issues in dispute regarding merits of the additions made by the Assessing Officer in the aforesaid assessment order dated 28/12/2007 should be restored to the file of the Ld. CIT(A) with a direction to pass fresh appellate order in accordance with law, on merits of the additions made in the AO, after providing reasonable opportunity to the assessee.

(2.1) We have heard the Ld. CIT-DR for Revenue. We have perused the materials available on records. We are in agreement with the submissions made by the Ld. CIT-DR for Revenue. Accordingly, we restore all the issues in dispute regarding merits of the additions made in the aforesaid assessment order dated 28/12/2007, to the file of the Ld. CIT(A) with a direction to pass denovo appellate order in accordance with law, on merits of the additions made in the assessment order, after providing

ITA No. 231/LKW/2009 Page 6 of 6 reasonable opportunity to the assessee. All the grounds of appeal raised in the aforesaid appeal before us are treated as disposed of in accordance with aforesaid directions.

Order pronounced in the open Court on 30/09/2024.

Sd/- Sd/- [ANADEE NATH MISSHRA] [SUBHASH MALGURIA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/09/2024 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard file By order //True Copy// Assistant Registrar