· The assessee company was engaged in export of iron ore. A search was carried out in assessee's premises and thereupon, a notice was issued under section 153A of the Act.
· The assessee filed instant petition contending that since no notice had been issued under section 131(1A), search and seizure conducted by department itself was illegal and thus, pursuant thereof, notice issued under section 153A had also got no sanctity in the eye of law.
· The Hon’ble Court scrutinized the fact that the difference in the wordings of clauses (a) and (b) of sub-section (1) of section 132 is that under clause (a) action may be taken if a person is searched with a summon to produce or cause to be produced, specified books of account or other documents and fails to do so. But in clause (b) the basis is somewhat different. In the latter case, the Commissioner must have reason to believe that the person to whom a summons has been issued under clause (a) or might be issued, will not produce or cause to be produced any books of account or documents which will be useful and relevant to an income tax proceeding.
· The Court further held that Section 131(1A) confers power upon the competent authority that if there is reason to suspect that any income has been concealed, or is likely to be concealed by any person or class of persons within his jurisdiction, then, for the purposes for making any inquiry or investigation relating thereto, it shall be competent to exercise powers conferred under sub-section (1) on the income tax authorities referred to in that sub-section, notwithstanding that no proceeding with respect to such person or class of persons are pending before him or any other revenue authority.
· The Court, therefore, concluded that a perusal of the provisions of section 131(1A) shows that there is no precondition stipulated for issuance of notice upon the assessee before invoking the jurisdiction conferred under the provisions of section 132.
For further reading, refer the attachment.
Further Reading