* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on:16th February, 2010
+ ITA No.200/2010
THE COMMISSIONER OF INCOME TAX ..... Appellant
- versus -
JYOTI LIMBOO
PROP. M/S JYOTI & CO.
118, SUBBA FARMS
MEHRAULI-GURGAON ROAD
NEW DELHI ..... Respondent
WITH
ITA No.727/2009
THE COMMISSIONER OF INCOME TAX ….. Appellant
– versus –
JYOTI LIMBOO
PROP. M/S JYOTI & CO.
118, SUBBA FARMS
MEHRAULI-GURGAON ROAD
NEW DELHI ..... Respondent
WITH
ITA No.691/2009
THE COMMISSIONER OF INCOME TAX ..... Appellant
- versus -
JYOTI LIMBOO
PROP. M/S JYOTI & CO.
118, SUBBA FARMS
MEHRAULI-GURGAON ROAD
NEW DELHI ..... Respondent
ITA Nos.200/2010, 727/2009 & 691/2009 Page 1 of 4
Advocates who appeared in this case:
For the Appellant : Mr Sanjeev Sabharwal
For the Respondent : Mr Manish Sharma
CORAM:
HON’BLE MR JUSTICE BADAR DURREZ AHMED
HON’BLE MR JUSTICE SIDDHARTH MRIDUL
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the
Digest?
SIDDHARTH MRIDUL, J
1. ITA No.691/2009 and 727/2009 arise out of the common order
passed by the Income Tax Appellate Tribunal on 21 st November, 2008
pertaining to the block assessment period 1st April, 1989 to 23rd June,
1999 and in respect of two appeals, one by the assessee and one by the
Revenue in I.T.(SS) A.No.151(DEL)/2006 and I.T.(SS)
A.No.158(DEL)/2006 respectively filed before the said Tribunal.
2. ITA No.200/2010 is an appeal by the Revenue and arises out of the
order passed by the Income Tax Appellate Tribunal on 10th June, 2009
pertaining to the block assessment period 1st April, 1989 to 23rd June,
1999 and in respect of an appeal filed by the Revenue being I.T.(SS) A
No.23/Del/2008 before the said Tribunal. The impugned order in ITA
No.200/2010 was passed in pursuance to order dated 21st November,
2008 of the Tribunal whereby the block assessment had been held to be
bad in law and resultantly quashed.
ITA Nos.200/2010, 727/2009 & 691/2009 Page 2 of 4
3. In the assessee’s appeal before the Tribunal one of the points taken
was that the warrant of authorization had been issued by the Additional
Director of Income Tax (Investigation), who was not authorized to issue a
search warrant and, therefore, the assessment made in consequence of
such an invalid search warrant, was itself invalid and was liable to be
quashed.
4. The Tribunal, following the decision of this Court in Dr. Nalini
Mahajan & Others vs. Director of Income Tax (Investigation) &
Others: 257 ITR 123 accepted the plea taken by the assessee and held
that the Additional Director of Income Tax (Investigation) was not
authorized to issue search warrants and consequently the search warrant
became invalid as did the assessment which followed thereafter. In view
of the fact that the entire proceedings were held to be invalid, the other
grounds taken by the assessee in his appeal were not gone into by the
Tribunal. Similarly, the Revenue’s appeals were also not examined
because the assessment itself was quashed on the first ground before the
Tribunal.
5. The learned counsel for the Revenue now points out before this
Court that by virtue of The Finance (No.2) Act, 2009, an amendment has
been introduced in Section 132(1) with retrospective effect from 1 st June,
1994, whereby the Additional Director has also been empowered to issue
warrants of authorization. In view of this amendment, the impugned
ITA Nos.200/2010, 727/2009 & 691/2009 Page 3 of 4
order is liable to be set aside and the matter is to be remitted to the
Tribunal to consider the appeals filed by the assessee as well as by the
Revenue on all the other grounds urged by the parties.
6. Consequently, we set aside the impugned orders and remit the
matters back to the Tribunal with the direction that the Revenue’s appeals
before the Tribunal get revived and so does the assessee’s appeal before
the Tribunal on all points originally urged before the Tribunal.
7. As requested by the learned counsel for the respondent/assessee,
this order passed by us today is without prejudice to the assessee’s right
to challenge the constitutional validity of the amendment introduced by
The Finance (No.2) Act, 2009 whereby the amendments were introduced
in Section 132(1) empowering the Additional Director of Income Tax to
issue a warrant of authorization with retrospective effect.
8. On these terms, the appeals stand disposed of.
SIDDHARTH MRIDUL, J
BADAR DURREZ AHMED, J
FEBRUARY 16, 2010
dn
ITA Nos.200/2010, 727/2009 & 691/2009 Page 4 of 4