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A Search warrant need not be restricted to mentioning only the registered place of business; it can mention any place which the Revenue has reason to believe, harbors unaccounted assets: Karnataka HC

2019-TIOL-1718-HC-KAR-IT

IN THE HIGH COURT OF KARNATAKA

AT DHARWAD

ITA No.100015/2017

1) THE PRINCIPAL COMMISSIONER OF INICOME TAX, (CENTRAL)
CENTRAL REVENUE BUILDING, QUEENS ROAD
BENGALURU, PIN:560001

2) THE DEPUTY COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE 1(3), BENGALURU

Vs

M/s ASSOCIATED MINING COMPANY
NO.18/35, 2ND LINK ROAD, PARVATHI NAGAR
BALLARI-583101, PAN NO:AAFHA3896P

Aravind Kumar & Bellunke A S, JJ

Dated: July 22, 2019

The Revenue conducted search upon the assessee during the course of which various documents came to be seized. Based on the materials recovered, notices u/s 153A for the the AYs 2005-06 to 2010-11 were served on the assessee at its new address and not the address where the search was conducted. The AO also served notices on the erstwhile partner of the assessee who refused to acknowledge the notice on the grounds that he was no longer a part of the firm. The AO passed the assessment order after recording the statements of existing partners. The validity of notices on the ground that notices were issued at a different address than the one where the actual search happened, was called into question. The CIT(A) refused to set aside the notices, following which the ITAT held that address given by the assessee in its return for the AY 2010-11 was different and not the address of the premises which came to be searched. Hence, holding the search itself improper, the notices were quashed.

Having heard the parties, the High Court held that,

Whether in order to conduct a valid search, it is imperative for the search warrant to mention only the official/registered place of business and not any other place where the Department has reason to believe that the information related to unaccounted assets of the assessee is kept – NO: HC

++ from the perusal of section 132 r/w section 153A, the intention of the legislature is clear. It provides that location of the premises is in relation to the satisfaction to be reached by the authorities mentioned therein and authorized officer would be empowered to search any place mentioned in the warrant as well as any other place where he suspects that books of accounts belonging to the assessee have been kept. Thus, change in the address of firm, action initiated u/s 132 in respect of the erstwhile premises of the firm would not invalidate the search. Address mentioned in the warrant of search and panchanama need not be registered office or head office of the company, but it has to be placed where search has to be conducted which in fact would be place where books of account, documents, jewels and unaccounted assets, can be located;

++ having perused the warrant of authorisation, it clearly indicates that the warrant was issued for conducting the search of the assessee expressing thereunder that authority contemplated u/s 132 has reason to suspect that such books of account, other documents of the noticee, are to be found in the premises. What has been disputed is, that such premises did not belong to the assessee. The language or expression of sub-section (1) of Section 132 is clear and unambiguous. The location of the premises is in relation to the satisfaction reached by the authorities mentioned therein and the authorised officer can search any place mentioned in the warrant including any other place where he suspects that the books of accounts belonging to the assessee are kept. As such, the mere change of address of the assessee even being in the know-how of the income tax department by itself would not vitiate or invalidate the search conducted u/s 132.

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