JOSE CYRIAC Vs. COMMISSIONER OF INCOME TAX COCHIN

JUDGEMENT

(1.) Connected appeals, one filed by the Assessee and three filed by the Revenue relate to the assessments of relatives and related concerns pursuant to search made under Section 132 and survey made under Section 133A of the Income Tax Act (hereinafter called "the Act"). We have heard Senior counsel Sri. P.K.R. Menon appearing for the Revenue and Adv. Sri. P. Balakrishnan appearing for the Assessees.

(2.) The facts leading to the controversy are the following. The following business concerns generally known as Carbo Group have their office in Carbo House, Old Railway Station Road, Cochin-18:

(3.) When the appeals were taken up by the CIT (Appeals) after remand, the Assessees for the first time raised a contention that the assessments Were invalid for the reason that search warrant was issued in the name of "Carbo Group of concerns" who are not Assessees and so much so, the search conducted under Section 132 is invalid which affects the validity of assessments. In fact, the appeals were restored to the Commissioner of Income Tax (Appeals) by the Tribunal with a specific direction to consider the assessments on merit. In other words, the validity of assessments on ground of alleged irregularity in the search warrant issued under Section 132 was not questioned in the first round of appeals which reached upto the Tribunal. Even though remand order issued by the Tribunal did not authorise the CIT (Appeals) to consider the validity of assessments on the alleged ground of irregularity in the search, the Commissioner still proceeded to consider the Assessees' contention in regard to validity of search. The CIT (Appeals) accepted the contention of the Assessees that the search carried out with warrant issued in the name of "Carbo Group of concerns" was an invalid search and consequently assessments were cancelled by him. When the Revenue took up the matter in appeals before the Tribunal, three appeals were heard and decided by one Bench of the Tribunal and the last appeal was heard by a different Bench which took a view entirely different from the view taken by the earlier Bench. In other words, both the Benches of the Tribunal issued divergent orders with regard to validity of assessments. Therefore, we have to only consider which order of the Tribunal is right. We notice that the later decision was rendered by the Tribunal in the order produced in I.T.A. No. 76/2010 which is the appeal filed by the Assessee wherein the Tribunal has explained how the other Bench order of the Tribunal is not tenable. Therefore, we proceed to consider the said order issued by the Tribunal in I.T.A. No. 207/Coch/2005 pertaining to the assessment of one of the partners Sri. Jose Cyriac.