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II. Direct Taxes Case Law:
1. Shah-E-Naaz Judge Vs. Addl. DIT (Inv), W.P.(C) No. 5937/2016, Date of Decision: 30.11.2018, High Court of Delhi
Issue:
Whether locker search warrant and proceedings u/s 153A be
quashedif the authority failed to prove that such locker contained
undisclosed income?
Answer: Yes
Brief facts:
Search & seizure operation was conducted at the premises of
Karamjit Singh Jaiswal i.e. cousin of the petitioner.During the course
of search, three lockers keys were found which were belonged to the
petitioner.Search warrant was issued in respect of three lockers.
Nothing was found and seized in two lockers whereas jewellery was found
in the third locker which was in the name of Shah-E-Naaz Judge and
Nagina Judge i.e. cousin of the petitioner.The satisfaction note is
silent on any business connection, link and association between the
petitioners and the Jaiswal Group or Karamjit Singh Jaiswal, who had
been subject to search and seizure operations. Lockers were not
subjected to search to unearth undisclosed and concealed assets of
Jaiswal Group or Karamjit Singh Jaiswal. Satisfaction note does not
state that any attempt was made to verify and ascertain facts post
discovery of the locker key.
Held:
The Hon’ble Court held that the respondent authorities had failed to
disclose the material and information on the basis of which they had
entertained the belief recorded that the lockers contained money,
jewellery, valuables and other articles representing disclosed income.
Formation of belief by the authorities justifying the search must be
based upon relevant information or material to satisfy the mandate of
Section 132 (1) of the Act. This decision clearly holds that the law
requires existence of “reasons to believe” and not “reasons to suspect”.
Validity of search has to be decided and adjudicated on the basis of
satisfaction note; whether satisfaction note satisfies the statutory
requirements and the respondents have acted in accordance with law. For
these reasons, the question is answered in favour of the petitioner and
against the revenue.
Hence, the appeal was held against the revenue and in favour of the petitioner.
Cases cited:
Pooran Mal Vs. the Director of Inspection (Inv.), (1974) 1 SCC 345 (SC)
Madhu Gupta Vs. DIT (Inv.) (2013) 350 ITR 598 (Delhi- High Court)
Lajpat Rai v. CIT(1995) 215 ITR 608 (Allahabad- High Court)
Ameeta Mehra Vs. Addl. DIT (2017) 395 ITR 185 (Delhi- High Court)
(Please click here for judgment)
2. Rajender Kumar Sehgal Vs. ITO, W.P.(C) No. 11255/2017, Date of Decision: 19.11.2018, High Court of Delhi
Issue:
Whether notice u/s 148 issued against a deceased assessee be
quashed and renders the revenue liability of a deceased individual
imposing upon a legal representative fatal and prohibit the AO from
conducting proceedings for reassessment if the Act does not provide any
mechanism for issuing and carrying on reassessment in respect of a dead
person?
Answer: Yes
Brief facts:
The deceased assessee had filed return for AY 2010-2011& was
processed, in a routine manner and the deceased assessee was intimated
about it. The assessee was died on 17.01.2015. A notice under section
148 of the Act was issued to the deceased assessee on 29-03-2017 for
A.Y.2010-11. The Petition was filed by Rajendra Kumar Sehgal, the legal
representative of the deceased.The petitioner approached the court,
seeking the reliefs that she has claimed, on the ground that the Act
does not provide any mechanism for issuing and carrying on reassessment
in respect of a dead person, if the reassessment notice is issued
against a deceased.
Held:
The Hon’ble Court held that when the notice was issued, the assessee
was already dead. If the Department intended to proceed under Section
147 of the Act, it could have done so prior to 31st March 2017 by
issuing a notice to the LRs of the deceased. Beyond that date it could
not have proceeded in the matter even by issuing notice to the LRs of
the assessee. If the original assessee had lived and later participated
in the proceedings, then, by reason of Section 292BB, she would have
been precluded from saying that no notice was factually served upon her.
When the notice was issued in her name- when she was no longer of this
world, it is inconceivable that she could have participated in the
reassessment proceedings. Held that the absence of any provision in the
Act, to fasten revenue liability upon a deceased individual, in the
absence of pending or previously instituted proceeding, renders fatal
the effort of the revenue to impose the tax burden upon a legal
representative. For these reasons, the question is answered in favour of
the assessee and against the revenue.
Hence, the appeal was held against the revenue and in favour of the assessee.
Cases cited:
Vipin Walia Vs. ITO (2016)382 ITR 19 (Delhi HC)
(Please click here for judgment)
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