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No Valid Search Warrant: Orissa HC quashes Assessment Proceedings u/s 153A of Income Tax Act

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No Valid Search Warrant: Orissa HC quashes Assessment Proceedings u/s 153A of Income Tax Act

A division bench has quashed the assessment proceedings under section 153A of the Income Tax Act, 1961 on the ground that the income tax department did not provide a valid search warrant under section 132 of the Act.

The Respondent is a Society registered under the Societies Registration Act,1860 and was created for charitable purpose for imparting technical education. It has established several education institutions in Bhubaneswar and has been conferred upon the status of ‘Deemed University’ by the University Grants Commission. Pursuant to such search and seizure operation, proceedings under Section 153A of the Act were initiated against the Respondent Assessee. A tax demand of Rs.15,35,75,989/- was raised for the aforementioned seven AYs i.e. 2000-01 to 2006-07.

On appeal, the appellate authorities including the ITAT granted relief to the assessee holding that since no search warrant had beenissued, much less served on the Assessee, the proceedings initiated under Section 153A of the Act were without legal basis.

Dismissing the appeal by the income tax department, Chief Justice Dr. S. Muralidhar and Justice M.S. Raman held that “Before this Court also the Revenue has not been able to demonstrate that there exists in the records of the Revenue a valid search warrant authorizing the searches that were conducted in the premises of the Respondent-Assessee on 9th and 10th August, 2005.”

Upholding the order of the appellate authorities, the High Court held that “De hors such search warrant, validly issued to authorize the search, the question of initiating proceedings under Section 153A of the Act simply did not arise. Since the issue has turned purely on facts, the Court is unable to find any error having been committed by the ITAT in concluding that the entire assessment proceedings under Section 153A of the Act against the Respondent-Assessee were invalid.”

Commissioner of Income Tax vs Sikhya ‘O’ Anusandhan

Counsel for Appellant:   Mr. Radheshyam Chimanka and Mr. Avinash Kedia

Counsel for Respondent:   Mr. Siddhartha Ray and Mr. K. K. Sahoo CITATION:   2023 TAXSCAN (HC) 113

 
Posted : 06/01/2023 12:51 am
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