Search and seizure -- Search on holding company and assessee name not mentioned in warrant--Notice under section 153A issued to assessee

Dorf Ketal Chemicals LLC v. Dy. CIT

Search and seizure--Assessment under section 153A-- Search on holding company and assessee name not mentioned in warrant--Notice under section 153A issued to assessee

Facts:

Assessee-company was a 100 per cent subsidiary of Indian Company D and had its control and management in India. A search and seizure action under section 132(1) was carried out at the business premises of D and also on the residential premises of the directors of the said company. A notice under section 153A was issued to the assessee and thereafter the assessment was completed under section 143(3) read with section 153A. Assessee contended that there was no initiation of search under the provisions of section 132 as the name of the assessee was not mentioned in the warrant of authorization and, therefore, the issue of notice under section 153A and the consequent assessment framed were void ab initio.

Held:

For the purpose of assumption and exercise of powers under section 153A in case of a person, the initiation of search in terms of section 132 or 132A on the said persons was mandatory and, therefore, whether there was no initiation of search as contemplated under section 132, the fundamental conditions for issuance of notice under section 153A was not fulfilled. Thus, the person in respect of whom the search was initiated under section 132 was the same persons against whom the notice is to be issued under section 153A. In view of this legal position, since no search had been initiated under section 132 in the case of assessee, therefore, notice issued under section 153A was without jurisdiction and the consequent assessment so framed under section 143(3) read with section 153A was also void ab initio.