THE issue before the Bench is - Whether before the provisions of Section 158BD are invoked against a person other than the person whose premises have been searched u/s 132 or documents and other assets have been requisitioned u/s 132A, the conditions precedent have to be satisfied. And the assessee's writ is allowed.
Facts of the case
On 2nd May, 1998, three persons namely Shri Mahesh Kumar Khandelwal, Shri Vijay Kumar Soni and Shri Phool Raj Singh were going on a Rickshaw to board the Prayagraj Express Train for going to Delhi. They were detained by the police and a total sum of Rs. 17,00,000/- was recovered from their possession. On interrogation, all the three persons stated that the money belongs to the assessee i.e. Anil Kumar Chaddha alias Guddu, who in reply to the query by the police stated that the cash belonged to the Firm M/s. Chaddha & Others. Finally, the matter was referred to the Income Tax Department, who had issued a notice u/s 158BC in the name of the assessee and made the addition being undisclosed income alongwith the income of Rs. 1,11,700/- disclosed by the assessee in his return. Finally, the undisclosed income of Rs. 18,11,700/- was taxed in the hands of the assessee. On appeal, CIT(A) confirmed the addition made by AO, but the Tribunal had deleted the addition by observing that no search warrant was issued u/s 132 in the name of the assessee. So, no notice can be issued in the name of the assessee u/s 158BC.
Held that,
++ from the record, it appears that the police recovered a sum of Rs. 17,00,000/- from the possession of three persons. It is evident that there was no search warrant in the name of the assessee nor assets were requisitioned from the assessee. Therefore, the provisions of Section 158BC is not applicable in the instant case. Further, no warrant or requisition was issued either in the name of the Firm or the assessee. In the instant case, at the best the seized amount might have been added in the hands of the assessee u/s 158BD. An opportunity was provided by this Court to the Department to produce the original records, but the Department expressed its inability to produce the records as stated by Senior Counsel of the Department. It may be mentioned that Section 158BC and Section 158BD are not identical, both have the different purposes. The SC in the case of Manish Maheshwari vs. ACIT and Another 2007-TIOL-24-SC-IT observed that before the provisions of Section 158BD are invoked against a person other than the person whose premises have been searched u/s 132 or documents and other assets have been requisitioned under Section 132A, the conditions precedent have to be satisfied;
++ in the instant case Rs. 17,00,000/- were requisitioned from the S.H.O. Kotwali, Allahabad u/s 132A, which was seized from three persons. Therefore, the provision of Section 158BD is applicable in the instant case, but the same was not applied by the Department. The assessment was framed after issuing notice under Section 158BC which is not applicable in the instant case, since the assessee was neither searched nor assets were requisitioned from him u/s 132A. Further, there were no warrant of authorization in the name of the assessee. In view of the above discussion and by considering the totality of the facts and circumstances of the case, it appears that no substantial question of law is emerging from the impugned order. When it is so, then we find no reason to interfere with the impugned order passed by the Tribunal, the same is hereby sustained alongwith the reasons mentioned therein. In the result, the appeal filed by the Department is dismissed. In the writ petition, the assessee has made the request for issue a writ order or direction in the nature of Mandamus commanding the respondents to refund forthwith the cash of Rs. 17,00,000/- seized on 2nd May, 1998 alongwith the interest. After considering the rival submissions, it is evident that the addition in the hands of the assessee has been deleted by the Tribunal as well as by this Court. The petitioner's application for refund is pending consideration before the authority concerned. We accordingly direct the authority to decide the application within a period of four months from the date of production of certified copy of this order, the writ petition filed by the assessee is accordingly disposed of.
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