No Panchnama, No Material: ITAT Holds 153A Jurisdiction Not Established:

No Panchnama, No Material: ITAT Holds 153A Jurisdiction Not Established The Assessing Officer had framed assessments under Section 153A/143(3) with additions under Section 68 relating to share capital and premium. The CIT(A) annulled these assessments after observing that, though the warrant of authorisation carried the assessee’s name, it was executed at another company’s premises in Gurgaon. The assessee’s registered office was located in New Delhi, and neither a director nor a representative of the assessee signed the panchnama. Moreover, no material belonging to the assessee was found during the proceedings. On appeal, the Department argued that a warrant under Section 132 permits search at any place where assets or documents are suspected to be kept and relied upon judgments including MDLR Resorts Pvt. Ltd., Associated Mining Co., Zinzuwadia & Sons and MSG Finance India Pvt. Ltd. The assessee, however, contended that no search was initiated or conducted against it, no incriminating material was recovered, and no representation was made on its behalf during the said search. Issue raised: Whether Section 153A could be invoked when the warrant only mentioned the assessee’s name but no valid search was conducted against it, and whether Sections 292B/292BB could cure such a lack of jurisdiction. ITAT's Decision: The Tribunal held that Section 153A jurisdiction is not conferred unless a valid search is initiated and made against the assessee. In this case, though the warrant specified the assessee, the action was taken at another company's premises, nothing incriminating belonging to the assessee was seized, and no representative put signature in the panchnama.The Tribunal relied on Promain Ltd. and J.M. Trading Corporation to hold that such circumstances could not establish a valid search. It was also stated that Section 292B, dealing with procedural faults, and Section 292BB, curing defects of service of notice, cannot cure the lack of jurisdiction. As there was no valid search, the assessments were void ab initio. The Revenue's appeals were rejected, and cross-objections of the assessee were held as infructuous. To Read Full Judgment, Download PDF Given Below