Introduction
Section 153A provides the procedure for completion of assessment in case of a person where a search is initiated under Section 132 or books of account or other documents or any assets are requisitioned under Section 132A after 31st May, 2003 but on or before the 31st Day of March'2021. In such case, the Assessing Officer shall issue notice to such person requiring him to furnish, within such period as may be specified in the notice, return of income in respect of six assessment years (plus additional specified years by virtue of insertion in shape of 4th proviso to Section 153A of the act by Finance Act 2017 w.e.f. 01-4-2017) immediately preceding the assessment year relevant to the previous year in which the search was conducted under Section 132 or requisition was made under Section 132A. Though the Section 153A has been made otiose for the searches initiated on or after the 1st Day of April'2021, the issue is still having vide ramifications for the searches conducted on or before 31st Day of March'2021.
Before going deeper into the issue, let us go through the relevant provisions of section 132 and 153A of the act along with Rule 112 of the Income Tax Rules'1962, which are reproduced herein under:-
Relevant part of Section 153A of the act
Assessment in case of search or requisition
153A. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 but on or before the 31st Day of March'2021 , the Assessing Officer shall -
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(a) |
issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; |
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(b) |
assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made [and for the relevant assessment year or years] : |
Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years]
Relevant part of Section 132 of the act
"132. (1) Where the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner in consequence of information in his possession, has reason to believe that-
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(a) |
any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or |
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(b) |
any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or |
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(c) |
any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act (hereinafter in this section referred to as the undisclosed income or property), |
then,-
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(A) |
the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may authorise any Additional Director or Additional Commissioner or Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or |
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(B) |
such Additional Director or Additional Commissioner or Joint Director, or Joint Commissioner, as the case may be, may authorize any Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income- tax Officer, (the officer so authorized in all cases being hereinafter referred to as the authorized officer) to - |
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Relevant part of Rule 112 of the Income Tax Rules' 1962
112 . (1) The powers of search and seizure under section 132 shall be exercised in accordance with sub-rules (2) to [(14)].
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57[(2) (a) |
The authorization under sub-section (1) of section 132 (other than an authorization under the proviso thereto) by the [Director-General or Director] or the [Chief Commissioner or Commissioner] or any such [Deputy Director] or [Deputy Commissioner] as is empowered by the Board in this behalf shall be in Form No. 45; |
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(b) |
the authorization under the proviso to sub-section (1) of section 132 by a [Chief Commissioner or Commissioner] shall be in Form No. 45A; |
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(c) |
the authorization under sub-section (1A) of section 132 by a [Chief Commissioner or Commissioner] shall be in Form No. 45B. |
(2A) Every authorization referred to in sub-rule (2) shall be in writing under the signature of the officer issuing the authorization and shall bear his seal.
Therefore a harmonious reading of relevant provisions of section 132 and 153A of the act along with Rule 112 of the Income Tax Rules'1962 brings home the point that the trigger point of applicability of Section 153A is the initiation of search u/s 132 of the act in case of person after 31st May, 2003 but on or before the 31st Day of March'2021. The search is initiated on the strength of warrant of authorization issued by the authorizing officer to the authorized officer in terms of Section 132 of the act read with Rule 112 of the Income Tax Rules'1962. Search warrant can be issued against any person who is falling within the scope of either or more of the conditions as mentioned in clause (a),(b) or (c) of section 132(1) and against whom "reasons to believe" has been formed based on the possession of information. Therefore, the warrant of authorization so issued should specify the name of the person or persons against whom it is issued along with the complete address of the premises to be searched. In other words, if a warrant of authorization has not been issued in case of a person ,the provisions of Section 153A cannot be initiated in his case.
Section 132 prescribes that the competent authorities are empowered to permit the authorized officers to enter, search, break open, seize, place marks of identification and take other steps as contemplated under sub-clauses (i) to (v). However, such powers can be exercised against a person upon fulfilment of certain conditions. Firstly, the competent authority must have information in its possession and, secondly, on the basis of such information it must have reason to believe that the conditions as stipulated in sub-clauses (a), (b) and (c) of section 132(1) of the Income-tax Act, 1961 exist. Sub-clauses (a), (b) and (c) of section 132(1) speak of any person. Search and seizure cannot be sustained unless it is clearly shown that it was done by the authority duly authorized, and all the conditions precedent in relation thereto existed. Thus, before issuance of search warrant in order to take recourse under section 132 of the Income-tax Act, 1961, the authority competent to issue search warrant must be satisfied that search under section 132(1) is needed in respect of a definite person. Satisfaction required under section 132(1) of the Act 1961 is qua the person whose name appears in the warrant of authorization. If search as contemplated under section 132 of the Income-tax Act, 1961 is conducted in the premises of a person without any warrant of authorization in the name of the person searched, or on the basis of a warrant of authorization in the name of some other persons, that would be a clear case of non-application of mind of the empowered income-tax authorities and such a search cannot be held to be valid. It is so, because the belief which forms the foundation of search relates to a definite person who is to be subjected to search. If the contrary is the fact situation, the same would amount to serious lapses and would be in clear violation of the provisions contained in section 132(1) of the Income-tax Act, 1961, as it does not stand the test of section 132 of the Income-tax Act, 1961. Therefore, the most serious content of the warrant of authorization is the name and description of the person whose premises, etc., are sought to be searched. Thus in absence of any search warrant in the name of an assessee, search conducted in its premises is not a valid search as contemplated under section 132 of the Income-tax Act, 1961 and therefore no question of initiation of assessment proceedings u/s 153A of the act.
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