Question And Answer
Subject: Validity of 153A notice
Querist: Rohan
Answered by:
Tags: ,
Date: January 17, 2022
Query asked by Rohan

Search warrant is issued in the name of Mrs X and her son Y. Mrs X owns Flat no 1 in first floor and her son Mr Y owns Flat no 20 in 3rd floor. Only Flat no 1 is mentioned in the search warrant containing the names of Mrs X and Mr Y. This issue was not contested at the time of search

Mr Y was not in the premises at the time of search, summons were issued only to Mrs X and not Mr Y. Now, 153A notices are issued to Mr Y also seeking him to file returns for the last 6 years. Can we contest that search did not take place in the address mentioned in IT returns/Pan Data/Income tax online profile of Mr Y.
Mr Y doesn’t reside in Flat no 1 but in Flat no 20, since there was no search in Flat no 20, there is no basis for 153A. If yes, is it better to wait for the assessment to conclude and then raise objection, so that the assessing officer is not antagonized. Can we raise this issue in the appeal stage, if needed

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Answer given by

Once search warrant is issued in the name of Mrs X and her son Y. The revenue must have prepared the panchanama and also statement in the course of search proceedings . The validity of search proceedings can be challenged by writ and not in appeal proceedings . However if no incriminating material was found the assessee can challenge the addition in the addition in the assessment and appellate proceedings .

Explanation to section 132 was inserted by the Finance Act , 2017 , w.e.f 1-4-1962 which reads as under . “ Explanation – For the removal of doubts , it is hereby declared that the reason to believe , as recorded by the income -tax authority under this sub-section , shall not be disclosed to any person or any authority or the Appellate Tribunal “.

Appellate Authority or Appellate Tribunal cannot call for the records to verify the satisfaction note . The High Court under writ jurisdiction has the power to call the satisfaction note of the Revenue Authority who have recorded the satisfaction note.
In Promain Ltd. v. Dy. CIT (2005) 95 TTJ 825 / 95 ITD 489 / (2006) 281 ITR (AT) 107 (SB)(Delhi)(Trib.) has held that Tribunal has no power to decide the validity of search.

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