NITI WADHAWAN Vs. DCIT CENTRAL CIRCLE-10

JUDGEMENT

(1.) <DJG> S .RAVINDRA BHAT</DJG>The following questions of law arise in the present cross appeals by the assessee and the Revenue against a common order of the Income Appellate Tribunal ("ITAT") dated 20.04.2012 in IT (SS) A. No 242/Del/2006 and IT (SS) A. No. 8/Del/2007. The following questions of law arise for consideration:

(2.) ON 27.05.2003, a search and seizure action under Section 132 of the Income Tax Act, 1961, ("the Act") was carried out in the case of Mr. Y.C. Wadhawan, the assessee's husband. As a result of that search, carried out on Mr. Y.C. Wadhawan (a separate assessee), the evidence and material were seized in the form of a draft agreement to sell and the carbon copy of a receipt. Shri Wadhwan was proprietor of M/s R.R. Enterprises (India). The business premises of M/s R.R. Enterprises were covered under Section 133A of the Act. Notice under Section 158BC of the Income Tax Act was issued. These assessees were served by affixture on two separate dates for filing a return of income for the Block Period within 15 days. A "nil" return of income was filed on 15.03.05. Notice under Sections 142(1) and 143(2) were issued. These remained unanswered. Even the final show cause notice dated 12.05.05 remained unanswered. Therefore, the AO completed the assessment on the basis of the material available on record.

(3.) THE assessee appealed to the ITAT, contending that the order under Section 158BC together with Section 144 was unsustainable and a nullity in the absence of neither a search warrant nor a panchnama ever having been drawn in her name. Given that these prerequisites for a valid assessment under Section 158BC had not been met, the proceedings were sought to be quashed. It was contended that the findings of the lower authorities that the notice under Section 158BC did not suffer from any illegality was erroneous. The submission on the merits of the addition was that the AO and CIT (Appeals) had drawn wrong inferences in holding that the balance sale consideration was Rs.49,25,000/ -, allegedly received in cash. It may be mentioned that the AO had directed addition of the entire amount. The reasoning of the AO had been affirmed but the CIT (Appeals) directed assessment of only half of the amount in the appellant's hands.