Edifice of assessment cannot be created on foundation of a time-barred notice issued u/s 143(2)

Edifice of assessment cannot be created on foundation of a time-barred notice issued u/s 143(2)

The service of notice within a period of twelve months from the end of month in which return is filed is sine qua non for proceeding with the block assessment; if an assessment, in contravention of the provisions of proviso to section 143(2), is made, the same will be a nullity and not an irregular assessment.

ITAT, MUMBAI BENCHES 'B', MUMBAI

DCIT v.  National Refinery Pvt. Ltd.

IT(SS) A. No. 347/Mum/2003

March 5, 2010

RELEVANT EXTRACTS:

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5. Section 158BC(b) provides that where any search has been conducted u/s.132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply. One of the important questions raised in this appeal is whether the proviso to section 143(2) applies to the block assessment also. In other words is it incumbent upon the AO to issue notice u/s 143(2) within the prescribed period of twelve months from the end of the month in which the block return is filed?

8. As against the above view in favour of the assessee that the issuance of notice within the time prescribed under proviso to section 143(2) is a mandatory requirement for framing of block assessment, a contrary view also came to be

expressed by some judicial forums. The stand of the Revenue remained that the proviso to section 143(2) did not apply to the block assessment proceedings inasmuch as clause (b) of section 158BC included the words "so far as may be" in the context of applicability of section 143(2) and hence even if no notice was issued within twelve months from the end of the month in which the return was furnished, the assessment proceedings could validly go on. Eventually this issue has been recently set to rest by the Hon'ble Apex court in the case of ACIT Vs. Hotel Bluemoon [2010-TIOL-08-SC-IT]. The facts of the case are that search action was taken against that assessee u/s.132 of the Act. Whereas the assessee argued that issuance of notice u/s.143(2) of the Act within the prescribed time for the purpose of block assessment was mandatory for the assessing authority, the department took a view that the notice u/s.143(2) was not an essential requirement in the block assessment. The Tribunal affirmed the decision of the CIT(A) that non-issuance of notice u/s.143(2) was only a procedural irregularity and the same was curable. The Hon'ble Gauhati High Court did not concur with the view expressed by the Tribunal that the issuance of notice u/s.143(2) within the prescribed time limit was not an essential requirement for the purposes of making block assessment. The Revenue took up the matter before the Hon'ble Supreme Court. Vide judgment dated 2.2.2010, the Hon'ble Apex Court has held that if an assessment is to be completed u/s.143(3) r.w.s. 158BC, notice u/s.143(2) should be issued within one year from the end of the month in which block return is filed. It has further been held that the omission on the part of the assessing authority to issue notice u/s.143(2) cannot be a procedural irregularity and the same is not curable. With the advent of this judgment from the Hon'ble Summit Court, now it becomes unambiguous that the provisions of section 143(2) are applicable to the block assessment. Since issuance of notice u/s 143(2) is an essential requirement for making block assessment, such notice has necessarily to be issued with the time prescribed under proviso to section 143(2). Thus the service of notice within a period of twelve months from the end of month in which return is filed is sine qua non for proceeding with the block assessment. If no notice is issued u/s.143(2) within the prescribed period, the Assessing Officer will have to accept the returned income and he cannot be allowed to go ahead with the assessment. If an assessment, in contravention of the provisions of proviso to section 143(2), is made, the same will be a nullity and not an irregular assessment.

9. Adverting to the facts of the instant case it is found as an undisputed fact that the assessee filed its return for the block period on 15.5.2000. Going by the mandate of proviso to section 143(2), notice u/s.143(2) could have been validly issued on or before 31.5.2001. If the Revenue's contention is accepted that notice u/s.143(2) issued on 16.5.2000 was served upon the assessee through registered post, then of course such notice will be in time and no infirmity can be found in the block assessment order on this count. If however the view point of the assessee is accepted that the notice u/s.143(2) was issued for the first time on 24.12.2001, then such a notice would be time barred. Now we need to examine if any notice u/s.143(2) dated 16.5.2000 was issued and served on the assessee. The Revenue's  view point is that notice u/s.143(2) dated 16.5.2000 was issued and served on the assessee by registered post acknowledgement due. In support of this claim the Revenue has placed on record a copy of Postal Department acknowledgement at pages 6 and 7 of the paper book. On the perusal of these two pages it is found that the name of the assessee is mentioned against Sl.no.A-715. On the right side of this

page there is stamp impression of the Department of Posts which bears the date of 22.5.2000. The learned Departmental Representative canvassed the view that since the notice u/s.143(2) dated 16.5.2000 was sent through registered post, it may be deemed to be proper service. He relied on the following cases to bolster his submission that service of notice through Registered Post A.D. which was not received back unserved, raised the presumption of the service of notice on the assessee :-

(i) CIT Vs. Vins Overseas India Ltd. [(2008) 305 ITR 320 (Del.)]

(ii) CIT Vs. Yamu Industries Ltd. [(2008) 306 ITR 309 (Del.)]

(iii) CIT Vs. Madhsy Films P.Ltd. [(2008) 301 ITR 69 (Del.)]

(iv) CIT Vs. Shanker Lal Ved Prakash [(2008) 300 ITR 243 (Del.)]

 

14. Certain salient features of this case need to be taken note of –

(i). Block return was filed on 15.5.2000. According to section 143(2) at the relevant time : `Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return'. Ordinarily it is only on the perusal of the return of income filed by the assessee that the Assessing Officer requires the attendance or production of some evidence in support of the assessee's claim. The filing of return on a Receipt counter on one day and the issuance of notice u/s.143(2) on the very next day would mean that all the steps from the receipt of return on the Receipt counter till the issuance of notice got completed within one day's time. Such steps would include the receipt of return on the Receipt counter of the department; the Receipt clerk, after entering the necessary particulars in the relevant register, handing over the same to the office of the concerned Assessing Officer; the office of the AO receiving it from the receipt clerk; placing of such return before the AO; the AO pursuing the return and all the accompanying documents; jotting down the points on which the explanation of the assessee is required ; finalizing such points and accordingly sending the notice. It is vital to note that it is a case of block assessment and the return was filed pursuant to the search action. It is but natural that before issuance of notice u/s.143(2) the Assessing Officer will take note of Appraisal Report of search and other relevant documents vis-à-vis the particulars disclosed in the return. It is difficult, if not impossible, to issue notice u/s.143(2) on the very next

day of the filing of the block return.

(ii). The Revenue has made out a case that the notice dated 16.5.2000 was issued u/s.143(2). The copy of said notice is available at page 4 of the paper book. No doubt such notice is shown as dated 16.5.2000, but against Column No.1 giving the date on which the return for the block period was filed, it has been mentioned as 15.11.2000. It is axiomatic that notice u/s.143(2) can be issued only when the return has already been filed. It is an admitted position that the assessee filed the block return on 15.5.2000. As against that the said notice dated 16.5.2000 mentions the date of return as 15.11.2000. Moreover the notice containing reference to return filed on 15.11.2000 can be issued only after such date and not prior to that. Hence it is impossible for the said notice dated 16.5.2000 to have reference to the return filed on 15.11.2000, which is a later date.

(iii). Even if we go ahead with the presumption that the notice, as contended by the Revenue, was actually issued on 16.5.2000 then it would have contained some requirements of the Assessing Officer supposed to be furnished in support of certain claims made by the assessee. Along with the said notice u/s.143(2) dated  16.5.2000, copy of which is available in the Departmental Paper Book, there is no reference for the production of any accounts / document or any particular information. Except for mentioning the date on which the attendance is required on 6.6.2000, it is silent on the documents or evidence required from the assessee in support of the claims made in the block return. On the contrary we find that the

notices dated 20.12.2001 issued on 24.12.2001, copy placed at pages 1 to 3 of the paper book, has a questionnaire requiring the assessee to tender explanation on various documents found at the time of search. This questionnaire is running into two pages.

(iv). According to the department it issued second notice u/s.143(2) on 24.12.2001 whereas according to the assessee that was only the first and the only notice. It is not understandable as to how the swiftness shown by the Assessing Officer in issuing notice u/s.143(2) on the very next day from the filing of the return on 16.5.2000 came to halt all of a sudden and it was only after a time gap of more than one and half years that the so called second notice was issued on 24.12.2001, against which the assessment was completed on 31.1.2002. If the Assessing Officer had been genuinely so fast in examining the return of the assessee and issuing notice u/s.143(2) on the next day, then he would have taken some action against the assessee for non-compliance and not kept quiet for such a long period in issuing the second notice requiring compliance by the assessee just a week ahead of the limitation period for the completion of block assessment.

(v). There is no reference, in the assessment order, to the said alleged notice dated 16.5.2000 issued u/s.143(2). Further when the assessee was called upon to be present on 6.6.2000, there should have been some reference, at least to the non- attendance of the assessee, in the assessment order.  (vi). Order sheet is a record of proceedings, which is placed in the beginning of the file recording various dates on which the proceedings for assessment continued along with the requirements called for by the Assessing Officer from

time to time during the course of assessment. It is obligatory on the part of the Assessing Officer to mention the gist of proceedings in the Order sheet starting with the date of filing of the return up to the finalization of the assessment. Wherever some details are called for or case is adjourned to next date, the signature of the assessee or its representative is taken. This Order sheet also contains reference of all the notices issued from time to time by the A.O. In order to conclusively resolve the controversy about the issuance of the said notice u/s 143(2) on 16.5.2000, the Bench directed the learned Departmental Representative to produce the assessment record. Such record was produced before the Bench. Albeit the order sheet is there but the learned Departmental Representative could not point out any entry in the Order sheet of the A.O. for the issuance of the alleged notice on 16.5.2000. 15. The above discussed points in the foregoing para do go to show that no notice u/s.143(2) , as claimed by the Revenue authorities, was issued on 16.5.2000. Only the notice dated 20.12.2001 was served on the assessee on 24.12.2001. As the block return was filed on 15.5.2000 and according to the Hon'ble Supreme Court in Hotel Bluemoon (supra) the provisions of section 143(2) are attracted in the block assessment, it was mandatory for the AO to serve notice on the assessee on or before 31.05.2001. Since the only notice dated 20.12.2001 issued by the A.O. u/s.143(2) was served upon the assessee on 24.12.2001, the same became time barred. It is simple and plain that the edifice of the assessment cannot be created on the foundation of a time barred notice issued u/s.143(2). The resultant proceedings flowing out of such invalid notice cannot have legal legs to stand on. We, therefore, hold that the consequential block assessment order passed in this case deserves to be and is hereby quashed. In view of our decision on this legal ground raised by the assessee in its Cross objection, there is no need to dispose off the departmental appeal on merits.

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INCOME TAX REPORTS (ITR) HIGHLIGHTS ISSUE DATED 15-3-2010 Volume 321 : Part 4

INCOME TAX REPORTS (ITR) HIGHLIGHTS

ISSUE DATED 15-3-2010

Volume 321 : Part 4

 

 

HIGH COURT JUDGMENTS

>> No necessity for assessee to show precise identity of amount of written back to be relating to any particular year : CIT v. Hindustan Zinc Ltd. (Raj) p. 388

>> Matter remanded to Tribunal where lack of details in respect of agreement entered into by assessee and foreign collaborator : CIT v. Elgi Ultra Industries Ltd. (Mad) p. 390

>> Prima facie adjustments : Assessee does not have right to claim that uninformed about judgment : Marlborough Polychem Ltd. v. CIT (Raj) p. 395

>> In a case of rejection of accounts and estimation of net profit on best judgment basis, depreciation allowable : Shri Ram Jhanwar Lal v. ITO (Raj) p. 400

>> Liability for additional tax u/s 143(1B) not abrogated even in the case of revised return filed with audit report : CIT v. Kothari Impex (Raj) p. 404

>> S 35E not applicable where objects of assessee not including mining of ores or minerals or commercial production : CIT v. Acc Rio Tinto Exploration Ltd. (Delhi) p. 426

>> Tribunal finding reassessment on mere change of opinion and without jurisdiction : Finding of fact : CIT v. Goetze (India) Ltd. (Delhi) p. 431

>> Revision u/s 263 not proper where Tribunal finding loan liability never claimed or allowed as deduction by way of loss, expenditure or trading liability : CIT v. Goyal M G Gases Ltd. (Delhi) p. 437

>> Tribunal finding borrowed funds diverted to sister concern without commercial expediency for business exigencies : Finding of fact : Gautam Cable Industries v. Dy. CIT (Delhi) p. 440

>> Disallowance of deduction u/s 80HHC to be worked out on basis of adjusted book profit : CIT v. Ambika Cotton Mills Ltd. (Mad) p. 448

>> Sales commission to directors for purpose of securing orders as well for personal guarantee given by them revenue expenditure : CIT v. Premier Poly Sacks P. Ltd. (Mad) p. 450

>> Interest paid on borrowings allowable where no proof that borrowed amount diverted to investment : CIT v. Premier Poly Sacks P. Ltd. (Mad) p. 450

>> Payment made for title sponsorship and benefits in respect of cricket tournament : Payment does not amount to royalty : Director of Income-tax v. Sahara India Financial Corporation Ltd. (Delhi) p. 459

>> Undertaking entitled to deduction u/s 80-I to be treated as an independent unit : CIT v. Sona Koyo Steering Systems Ltd. (Delhi) p. 463

>> Tribunal finding amount available with assessee as undisclosed income : Finding of fact : Such Chain Chits P. Ltd. v. CIT (P&H) p. 471

>> Reassessment to withdraw deduction not a case of escapement of income but of change of opinion : CIT v. K. K. Palanisamy (Mad) p. 474

>> Tribunal need not blindly follow earlier decision if it did not reflect correct position of law : CIT v. Hi Tech Arai Ltd. (Mad) p. 477

>> Assessee engaged in manufacture of oil seeds, etc., setting up additional wind mill after 31-3-2002 increasing power generation entitled to additional depreciation : CIT v. Hi Tech Arai Ltd. (Mad) p. 477

>> Assessee engaged in production of agricultural motors and pump sets installed new wind mills entitled to additional depreciation : CIT v. Texmo Precision Castings (Mad) p. 481

>> AO having jurisdiction over person searched adding sum on substantive basis in his assessment on account of investment and no satisfaction recorded in case of assessee on investment : Assessment against assessee not justified : CIT v. Anupam Sweets (Delhi) p. 485

>> Service charges paid to mutual funds for undertaking to subscribed to fully convertible debentures of sister concern allowable : CIT v. RBG Investment and Finance Ltd. (Delhi) p. 488

>> Application for stay pending appeal : CIT (A) to pass order on application expeditiously : Smita Agrawal (Individual) v. CIT (All) p. 491

>> Approval of concerned authority before service of notice required : CIT v. Smt. Suman Waman Chaudhary (Bom) p. 495

>> Penalty cannot be imposed where assessment proceedings barred by limitation : CIT v. Pradeep Banker (All) p. 496

>> Interest deductible on borrowed capital where funds utilised for acquiring capital asset : CIT v. Srishti Securities P. Ltd. (Bom) p. 498

>> Employees of contractor not employees of assessee for claiming deductions u/ss 80HHC(2)(iv) and 80-I(2)(iv) : Venus Auto P. Ltd. v. CIT (All) p. 504

>> Provident fund and ESI contributions made before filing return allowable : CIT v. Aimil Ltd. (Delhi) p. 508

>> Sum received by assessee on retirement from firm of solicitors upon superannuation not a "benefit arising from profession" : Balkrishna Hiralal Wani v. ITO (Bom) p. 519

>> Reassessment invalid where Tribunal finding no material to believe agricultural land sold by assessee was a capita asset : CIT v. Batra Bhatta Co. (Delhi) p. 526

AUTHORITY FOR ADVANCE RULINGS

>> Team of architects and designers in Germany producing designs and drawings and delivering them to Government on internet : Receipt by non-resident amounts to "fees for technical services" : gmp International GmbH, In re p. 411

>> Discretion of AAR to admit second application of applicant on same points : Yongnam Engineering and Construction (Pte) Ltd., In re p. 442

STATUTES

From our Reporter at the Supreme Court :

>> Additional tax on undistributed profits : Whether assessee a company in which public are substantially interested p. 165

>> Appeal to High Court : Costs on Department for failure to file vakalatnama p. 165

>> Block assessment : Limitation from date of last panchnama p. 165

>> Business expenditure : Loss on fluctuation of foreign exchange rates p. 166

>> Business expenditure : Provision for estimated warranty expenses whether contingent liability p. 166

>> Business expenditure : Recovery of tax attachment and sale of property p. 166

>> Business expenditure : Service charges paid to mutual fund p. 166

>> Deduction of tax at source : Application for refund made in belated application p. 167

>> Deduction of tax at source : Whether employee bound to deduct tax at source on salary received by employee from another employer p. 167

>> Settlement of cases : Admission of writ petitions challenging validity of provisions and interim directions to Settlement Commission p. 167

>> Settlement of cases : Whether Settlement Commission had acted without jurisdiction in determining additional income p. 170


C. B. D. T. Circulars :

>> Circular No. 1 of 2010 : Clarification-Clarification regarding deduction in respect of contribution to pension scheme under section 80CCD of Income-tax Act p. 171

>> Circular No. 3 of 2010, dated 2nd March, 2010-Tax deduction at source on payment of interest on time deposits under section 194A of the Income-tax Act, 1961 by banks following Core-Branch Banking Solutions (CBS) software-Reg. p. p. 174

Rules :

>> I. T. (First Amendment) Rules, 2010 p. 137

Notifications :

>> Income-tax Act, 1961 : Notification under section 2(48) : Zero coupon bond p. 171

>> Income-tax Act, 1961 : Notification under section 10(15)(iv), item (h) : Exemption of interest payable on bonds issued by public sector companies p. 172

>> Income-tax Act, 1961 : Notifications under section 10(23C)(vi) : Institutions approved for purpose of section 10(23C)(vi) p. 173

>> Special Economic Zones Act, 2005 : Notification under section 1(3) : Commencement of sections 20, 21, 22 p. 175

>> Special Economic Zones Act, 2005 : Notification under section 11(1) : Rescission of previous notification p. 176

>> Special Economic Zones Act, 2005 : Notifications under section 21(2) : Notified offences p. 175

JOURNAL

>> Direct Tax proposals : An overview (S. Rajaratnam) p. 1

>> Charitable nature of educational institutions : View of Uttarakhand High Court (S. K. Tyagi) p. 8

NEWS-BRIEF

>> Accounting watch dog under tax-net likely

Accounting watchdog Institute of Chartered Accountants of India (ICAI), which regulates auditors, is currently facing the prospect of meeting an income-tax penalty of Rs. 16 crore, after the Income-tax Department withdrew tax exemptions on the institute.

ICAI's newly-elected president, confirmed the tax, but played down the issue saying that the institute is contesting the I-T Department's assessment. The move comes at a time when the Government is exploring the feasibility of having an independent regulator for auditors, a proposal that has been opposed by ICAI as it could significantly prune the current role of the institute.

Under section 10(23C) of the Income-tax Act of 1961, the ICAI, which was formed by an Act of Parliament, is exempted from paying income-tax as it had been established for the purpose of education and for advancement of projects of general public utility. A tax assessment panel is also understood to have said that the ICAI allegedly failed to get accounts signed by auditors and of allegedly providing loans to partners without guarantee and interest, said people connected with the development.

ICAI's President said since the matter is sub-judice, he cannot comment on the topic. The Director exemptions at the I-T Department, also declined to comment on the issue. The need for an independent regulator for auditors has been doing the rounds in the Government, especially in the Ministry of Corporate Affairs. [Source : www.economictimes.com dated February 16, 2010]

>> Pay tax only when interest credited to fixed deposit account

No income-tax at source will be deducted if banks have only made a provision for interest on fixed deposits and not actually paid it to the depositor, the Finance Ministry has clarified.

Until now, tax was supposed to be deducted by banks even if only provisioning was made for interest payment.

The Indian Banks' Association in a representation to the Income-tax Department had said that for banks using the CBS software, interest payable on fixed deposits is calculated generally on a daily or a monthly basis but is parked in the provisioning account for monitoring only.

The interest is actually credited to the depositor's account either at the end of the financial year or at periodic intervals or on maturity of the deposits.

According to a Finance Ministry official, CBDT clarified that since no credit is given to the depositors while calculating interest on fixed deposits on daily or monthly basis in the CBS software used by banks, tax need not be deducted at source on such provisioning of interest.

"In such cases, tax shall be deducted at source on accrual of interest," the board clarified, according to a source. Income-tax is charged at the rate of 10 per cent. on interest income of more than Rs. 10,000 in a year. [Source : www.economictimes.com dated March 7, 2010]

>> FICCI disappointed at MAT rate hike

Apex industry chamber FICCI decried a 3 per cent. hike in the Minimum Alternate Tax in Budget 2011, saying it over weighed the concessions in the corporate tax and the Government should look at reducing the peak rate to 25.6 per cent. from over 30 per cent. now.

" . . . as the rates come down, the revenue growth is much sharper . . the world around, the figure is 25.6 per cent. India should start considering to look at the same tax rate over a period of time . . . It would be more in line with international standards," FICCI President said.

On the hike in MAT rates, he said, "They (the government) have reduced the surcharge (on corporate tax) but increased MAT. It is a disappointment for the industry".

The Budget proposals announced last month, raised MAT to 18 per cent. from 15 per cent., and cut surcharge on corporate tax to 7.5 per cent. from 10 per cent.

He said the reduction was "not at all" beneficial as the Government had reduced surcharge, but hiked the MAT rate.

Pointing to several other areas that needed push for better economic growth, the new FICCI President said the Budget could have hiked the FDI limit in the insurance sector to 49 per cent. from 26 per cent. at present and opened up the multi-brand retail sector.

He added that the Government could have also extended more tax benefits for investments in sectors like agriculture, food processing and cold chains, for a more liberalised regime and better growth in 2010-11. [Source : www.economictimes.com dated March 7, 2010]

>> Services rendered from outside India to be taxed

Services rendered from outside India for use within the country will now come under the tax net, following the recent amendment to the Income-tax Act.

The amendment in section 9 of Income-tax Act, proposed in the Budget, will now bring all services, including fees on technical service or royalty that are typically charged as consultation fees, under the tax net. This would also be irrespective of whether the service provider has business connection in India, or residence or place of business. The Government wanted to make it clear that it would levy tax on the payment to a non-resident, if the service is utilised in India, irrespective of whether the service is rendered in India or not.

According to people familiar with legal developments, if a non-resident architect is paid for consultation on a building situated in India, it means that his services have been utilised in India. Prior to the amendment, the architect's consultation fees would have been taxed had he been based in India. The Government will now tax the non-resident architect, even if he does not come to India and renders the service from outside India.

A chartered accountant firm, said: "The amendment has serious implications. It will certainly lead to litigations. Moreover, the amendment is not clear as regards its applicability on income by way of interest and royalty earned by a non-resident outside India." [Source : www.economictimes.com dated March 3, 2010]

>> Direct Tax Code Bill to be presented as monsoon bonanza

Government will introduce the bill for a Direct Taxes Code in the monsoon session of Parliament, the Revenue Secretary said. Having altered the income-tax slabs in the Budget, the Finance Ministry said the next round of widening of the tax slabs is possible when the direct taxes code comes into effect, likely from 2011-12.

The Finance Ministry has already come out with the Draft Direct Taxes Code, but since there are a number of grievances on it, it will come out with a revised draft in the first quarter of next fiscal so that a bill to this effect can be tabled in the Monsoon session of Parliament.

"The period is going to be between April and June. That is when we have time for this process, if we were to get the legislative process commencing from around July during the Monsoon session," the Revenue Secretary said.

In a Rs. 21,000-crore bonanza, the Budget has widened the income-tax slabs for all. While there would be no tax for income up to Rs. 1.6 lakh, a tax of 10 per cent. would be levied for income up to Rs. 5 lakh, 20 per cent. for up to Rs. 8 lakh and 30 per cent. beyond that level. [Source : www.economictimes.com dated March 5, 2010]

Roll-over charges for foreign currency contracts have to be capitalized u/s 43A

Roll-over charges for foreign currency contracts have to be capitalized u/s 43A

The assessee procured a foreign currency loan for expansion of its existing business. To ensure availability of foreign currency, the assessee booked forward contracts with a bank. The contract was for the entire amount and delivery of foreign currency was obtained from the bank for the installment due from time to time. The balance value of the contract was rolled over for a further period up to the date of the next installment. The assessee paid “roll over premium charges” for the same. The AO disallowed the said charges on the ground that as it were incurred for purchase of plant & machinery, it was capital expenditure. The CIT (A) reversed the AO on the ground that the charges were expenditure for raising a loan and was consequently revenue in nature. The Tribunal reversed the CIT (A) on the ground that u/s 43A the expenditure had to be capitalized. The High Court reversed the Tribunal on the ground that the charges were in the nature of interest or commitment charges and allowable u/s 36(1) (iii). On appeal

(a) Exchange differences are required to be capitalized if the liabilities are incurred for acquiring fixed assets like plant and machinery. It is the purpose for which the loan is raised that is of prime significance. Whether the purpose of the loan is to finance the fixed asset or working capital is the question which one needs to answer;

(b) The cost for carrying forward the contracted foreign currency not immediately required for repayment is called the roll over charge(s). The argument that s. 43A applies only to cases where there is a fluctuation in the rate of exchange and that since roll over charges are paid to avoid increase or reduction in liability on account of such fluctuation, s. 43A does not apply has no merit because s. 43A applies to the entire liability remaining outstanding at the year end and is not restricted merely to the installments actually paid during the year. Therefore the year-end liability of the assessee has to be looked into. Further, it cannot be said that roll over charge has nothing to do with the fluctuation in the rate of exchange. Roll over charges represent the difference arising on account of change in foreign exchange rates. Roll over charges paid/ received in respect of liabilities relating to the acquisition of fixed assets should be debited/ credited to the asset in respect of which liability was incurred. However, roll over charges not relating to fixed assets should be charged to the Profit & Loss Account.

Note: This matter best exemplifies the uncertainties of litigation. The AO was reversed by the CIT (A). The CIT (A) was reversed by the ITAT. The ITAT was reversed by the High Court and finally the High Court was reversed by the Supreme Court. As a great jurist lamented “Those who enter this labyrinth find exit by different paths“.

Budget plugs tax loophole

Mechanism for non-resident service providers made stricter.

Budget 2010 has shut the window for non-resident service providers like technical or financial consultants, or certain other foreign service providers, to save taxes for rendering services to Indian businesses.

This relates to the amendment of the source rule in Section 9 (clause v, vi, vii) of the Income Tax Act on the income from interest, royalty and fees for technical services rendered by non-resident service providers, in India or abroad, for Indian businesses.

The finance bill has clarified such services rendered by a non-resident will attract the withholding tax of 10.56 per cent, irrespective of whether the services were rendered in India or abroad, if it was paid by or availed for a business in India.

The amendment comes into effect retrospectively, from June 1, 1976, and overrules a Supreme Court judgment in 2007, which said non-residents have to pay a tax only if they physically rendered the service in India, and not otherwise.

What the new rule says is that irrespective of where the service was rendered, the service provider will be liable to pay tax in India if its services were paid or availed by an Indian entity or were used to carry out business in India or earning an income in India.

In 1976, the government had mandated that all such income for services rendered by non-residents will be liable to be taxed in India, irrespective of whether these services were rendered in India or abroad, if the services were paid or availed by an Indian firm.

However, the Supreme Court, in a case of Ishikawajima-Harima Heavy Industries Vs Directorate of International Tax, held that for such services to be taxed, it must be rendered in India, as well as utilised in India. What it meant was that if the service was being rendered out of say, New York, it couldn't be taxed in India.

"People were trying to use the window (created by the apex court judgment) to avoid the tax. The clarification effectively closes this window," said Anurag Jain, partner (direct tax), BMR Advisors. A non-resident using the services of a non-resident will have to deduct a tax, if the same is paid for by a business in India, or is meant for earning income here.

"The problem with amendments like this is that many of these are with retrospective effect and overrule court rulings. The taxpayers become liable to pay tax with retrospective effect, which creates uncertainty (in business circles)," said Sunil Badala, partner, B S R & Co.

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Search ,seizure and block assessment.

HISTORY AND INTRODUCTION

"Search and Seizure", the origin of these provisions will in a few years celebrate its golden jubilee. It was since 1956 that the provisions of search and seizure made its first entry into the Income Tax Act. Section 132 was totally substituted by the Finance Act, 1964. After section 132 underwent a through overhaul in the year 1976, to committees had made certain recommendations on search and seizure provisions (i) The Raja Chellaiah Committee and, (ii) The Kelkar Committee. It is seen that the recommendations affecting the substantive law have been given effect to in respect of majority of such recommendations; the assessee friendly measures recommended by these committees have not been given any serious considerations.

Who is the authorized officer to issue order for search and seizure?

a)   the Director General of Income Tax, or

b)   the Director of Income Tax, or

c)   the Chief Commissioner of Income Tax, or

d)   the Commissioner of Income Tax, or

e) any such Joint Director or Joint Commissioner of Income Tax as may be empowered by the Board.

The Director General or Director or the Chief Commissioner or Commissioner or Joint Commissioner or Joint Director who have been empowered by the Board can authorize anyofficer subordinate to him not below the rank of Income Tax Officer to conduct search. The officer so authorized is referred as Authorized officer and the authorization is done by issuing a search warrant in Form 45.

What are the circumstances in which search and seizure can be conducted?

132(1)

The authorized officer who is duly empowered by the Board has in his possession any information through which he has reason to believe that –

132(1 )(a)

A person to whom a summon u/s 131(1) or a notice u/s 142(1) has been served to produce books of accounts or other documents has failed or omitted to produce or cause to be produced the said books of accounts or other documents, or,

132(1 )(b)

A person to whom a summon u/s 131(1) or a notice u/s 142(1) has been or might be issued is not likely to produce or caused to be produced anybooks of account or other document which will be useful for or relevant to any proceedings under the Act; or

132(1) (c)

A person is in possession of money, bullion, jewellery or other valuable article or thing and such property represents wholly or partly income or property which has not been disclosed or would not be disclosed.

Who are the Persons to be searched: From the above it is clear that the persons to be searched are persons:

(a)   who have books of account or documents which have not been produced or are not likely to be produced in response to notices or / summons, or

(b) persons who are likely to be in possession of undisclosed income or property. What are the basis for search and seizure?

The assessing officer must have a reason to believe that the person, whether or not a notice has been served on him, is not likely to produce his books, etc. in such a case, the basic is that the person will suppressbooks of account and other documents which may be useful and relevant to an income tax proceedings. Here the authorizing authority, if challenged, has to prove the basis of belief.

MAMCHAND AND CO v CIT (1970) 76 ITR 217 (CAL)

KUSUM LATAv CIT (1989) 180 ITR365 (RAJ)

There must be information with the authorizing authority relating to two matters. One, the person should be in possession of money and secondly such money represents either wholly or partly income or property which has not been disclosed.

CIT v RAMESH CHANDER (1974) 93 ITR 450 (PUN)

Is the assessee entitled to a copy of reasons recorded for issuing a search warrant?

Disclosure of the material or the information to the person against whom the action is taken u/s 132(1) is not mandatory, because such disclosure might affect or hamper the investigation (SOUTHERN HERBALS LTD v DIT (INVESTIGATIONS) (1994) 207 ITR 55 (KAR). Only the High Courts and the Supreme Court have the jurisdiction to call for and look into the reasons recorded to decide whether the issue of thesearch warrant was called for. (Dr. PRATAP SINGH v DIRECTOR OF ENFORCEMENT (1985) 155 ITR 166 (SC)

Can material obtained during illegal search be utilized for the purpose of an ordinary assessment?

The materials obtained during a search or seizure illegally or irregularly conducted can nevertheless be utilized for the purpose of an ordinary assessment.(POORANMAL v DIRECTOR OF INSPECTION (INVESTIGATION),INCOME TAX (1974) 97 ITR 505 (SC)

Can search be authorized by an authorized by an authority other than jurisdictional authority?

The Chief Commissioner/Commissioner of Income Tax has the power to authorize a search of any building, place, vessel, vehicle or aircraft of a person which is under his jurisdiction and also in cases where such building, place, vessel, vehicle or aircraft is in his area of jurisdiction but he has no jurisdiction over the persons concerned, if he has reason to believe that any delay in obtaining authorization from the Commissioner having jurisdiction over the person would be prejudicial to the interests of revenue. Such authorization shall be given in Form 45A.

Where a search for any books of account or other documents or assets has been authorized by any authority who is competent to do so, and some other Chief Commissioner/Commissioner in consequence of information in his possession has reason to suspect that suchbooks of account or other documents and assets etc, of the assessee are kept in any building, place, vessel or aircraft not specified in the search warrant issued by such authority, he may authorize the Authorised Officer to search such other building, place, vessel, vehicle or aircraft. Such authorization shall be given in Form 45B.

What are the powers of the officer to whom authority is given for search and seizure?

a)      enter and search any building, place, vessel, vehicle or aircraft where he has reason t0o suspect that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing are kept.

b)      Break open the lock of any door,box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) above where the keys thereof are not available.

c)   Search any person who (a) has got out of, or (b) is about to get into, or (c) is in the building, place, vessel, vehicle oraircraft, if the authorized officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing.

d)      Require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic records, to afford the necessary facility to the authorized officer to inspect all such books of account or other documents.

e)   Seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search. However, w.e.f. 1-6-2003, theauthorized officer shall have no powers to seize any bullion, jewellery or other valuable article or thing being stock-in-trade of the business found as a result of search. He shall make a note or inventory of such stock-in- trade of business.

f)        Place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom.

g) Make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing.

What are the additional powers of the authorized officer?

a) Deemed Seizure 132(1) : Where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to it being of a dangerous nature, theauthorized officer may serve an order on the owner or the person who is in immediate possession thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of suchauthorized officer and such action of the authorized officer shall be deemed to be seizure of such valuable article or thing.

b) Restraint Order 132(3) with explanation and section 132(8A) : where it is not possible or practicable to seize any (a) books of accounts, or other documents, or (b) money, bullion jewellery or other valuable articles or things for reasons other than those mentioned , the authorized officer may serve an order on the owner or a person who is in immediate possession or control thereof that he shall not part with or otherwise deal with it except with the previous permission of such officer and such officer may take steps as may be necessary for compliance.

c) Power to requisition service of a police officer or officer of the Central Government sec 132(2): The authorized officer may requisition the services of any police officer or any of the officer of the Central Government or of both to assist him for all or any of the purposes specified above and it will be duty of every such officer to comply with such requirements.

d) Examination of any person on oath sec 132(4) with explanation: the authorized officer may, during the course of search or seizure, examine on oath any person who is found to be in possession or control of any books of accounts, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the I.T.Act,1 961. The statement can be recorded during the course of search and seizure or when it is over. Further, an explanation has been added to provide that the examination of any person may be not merely be in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceedings under the Income Tax Act,1 961.

e) Presumption of ownership of books of accounts and assets and its truthfulness sec 132 (4A): it may be presumed a)the books of account or other documents and assets found in possession of any person in the course of a search belong to such person, b) the contents of such books of accounts and other documents are true, c) the signature and every other part of such books of account and other documents which purports to be in the handwriting of any particular person are in handwriting of that person or which may reasonably be assumed to have signed or written the books of accounts or other documents are in that person's handwriting. In case of documents stamped, executed or attested that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.

Amendment made in the budget:

-It is proposed to amend section 292C of the I.T.Act, so as to extend this presumption also to books of account, other documents, money, bullion, jewellery or other valuable article or thing found in the possession or control of any person in the course of a search u/s 132.

-Further, it is proposed to amend the said section so as to extend this presumption also to books of account, other documents etc, found in the possession or control of any person in the course of a survey operation. This amendment will take effect retrospectively from ₁st June'2002.

- It is also proposed to amend section 42D of the Wealth Tax Act to extend this presumption to books of account, other documents or assets which have been delivered to the requisitioning officer in accordance with the provisions of section 37B of the Wealth Tax Act. This amendment will take effect retrospectively from 1^st October,1975.

f) Retention of books of account and other documents 132(8): the books of account or other documents seized shall not be retained by the authorized officer (if he is himself an assessing officer) for a period exceeding 30 days from the date of the order of assessment u/s 153A or 158BC unless the reasons for retaining the same are recorded by him in writing and the approval of the Chief Commissioner, Commissioner, Director General or Director for such retention is obtained. The following conditions must be fulfilled before the retention of books for the extended period: a) the authorized officer or the concerned assessing officer seeking the commissioner's approval should record the reasons for retaining the books in writing. b) He should obtain the approval of CIT for the extended period.

g) Copies of extract of books of account and documents sec 132(9): the person from whose custody any books of accounts or documents are seized may make copies or take extracts therefrom in the presence of authorized officer or any person empowered by him in his behalf, at such place an time as the authorized officer may appoint in this behalf.

h) Handling over of seized books and assets to assessing officer sec 132(9A): such handling over is done within the period of 60 days from the date on which the last of the authorization for search was executed.

Seizure of jewellery:

a)        In the case of wealth tax assessee, gold, jewellery and ornaments found in excess of gross weight disclosed in the wealth disclosed in the wealth tax return only need to be seized.

b)        in case of person not assessee to wealth tax, gold jewellery and ornaments to the extent of 500gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family, need not be seized. The same is treated as explained and no addition can be made under sec 69. the said guidelines would apply to block assessment.

Explain the powers, procedures followed by the authorized officer with regards to requisition of books of accounts ?(sec 132)

a) Requisition of books of account, etc taken into custody under any other law:

Section 132A provides that in case where any books of account or other documents and assets have been taken into custody by the Officer or authority under any law e.g by the Collector of Customs, the Sales Tax Commissioner, etc, the Director General or Director or the Chief Commissioner or Commissioner of Income Tax may, in such circumstances as are covered by section 132 for search and seizure, authorize in Form No 45C and Deputy Director, Assistant Commissioner, Assistant Director or the Assessing Officer (Requisitioning Officer) to require such officer or authority to deliver to him such books of account or other documents and assets. This section however does not empower to take under requisition assets and documents which are in the custody of court.

b) When such power be invoked (Rule 112D)

When the Director General or Chief Commissioner or Commissioner has reason to believe that

i)        any person to whom summons u/s 131(1) or a notice u/s 142(1) was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents, as required by such summons or notice and the said books of accounts or other documents have been taken into custody by any officer or authority under any other law for the time being in force, or

ii)     any books of account or other documents will be useful for, or relevant to, any proceedings under the Act and any person to whom summons or notices as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents on the return of such books of accounts or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force, or

iii) any assets represent either wholly or partly income or property which has not been, or would not have been disclosed for the purposes of the Act, by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force.

c) Application of seized or requisitioned assets (Sec 132B)

-) the assets seized shall be dealt with in the following manner

i) Seized assets may be applied towards existing and future liability (sec 132B(1)(i)

ii) Release of seized asset after meeting existing liabilities in certain cases 132B(1)(ii)

iii) Money seized may be applied for discharging the liabilities (sec 132B(1)(ii)

iv) Assets other than money may also be applied to discharge liabilities (sec 132B (1)(iii) -) return of excess assets seized (section 132B(3)

-) interest to be paid at the rate of 1/2% p.m. or part of the month non seized money (section 132B(4) on the aggregate sum of a) the money seized u/s 132 or requisition u/s 132A as reduced by the amount of money if any released , and, b) the proceeds of assets sold towards the discharge of existing liability in sec 132B(1)(i).

the interest shall be payable from the expiry of the period of 120 days from the execution of the last of the authorizations for search till the date of completion of assessment under section 153A or block assessment.

CURRENT POSITION:

The Finance Act, 2003 has changed the method of assessment of income in respect of search & requisition cases, & the new method of assessment is made applicable to searches initiated, or requisitions made after 31/5/03. The new procedure for assessment is laid down in the three sections, viz. Sections 153A, 153B, and 153C, inserted by the Finance Act, 2003 with effect from 1.6.03.

The Amended provisions in details of the newly inserted sections are as follows:

Sections 153A, 153B and 153C deal with search and seizure they can be explained as under:

"SECTION: 153 A"

The Assessing Officer under section 153A (a) would issue a notice to furnish returns of income for each of immediately six proceeding years within specified time limit. Therefore, if the search is initiated on 1/12/2007, the assessee can be called upto to file returns for the A. Y 2002-03 to 2007-2008. (i.e. previous years 1/4/2001 to 31/3/2007). Thereby the assessee will have to file separate returns for each of the years in the prescribed form within the time limit specified in the notice. Further there is no provision for giving any maximum time limit for filing the returns.

The notice issued under provision 153A can be issued even if the conditions laid down in sections 147 to 149,151 and 153 are not satisfied. We can interpret then ,that even if 4 years from the end of the assessment year, for which sections 143(3) has been made, had expired and the assessee had disclosed all material facts at the original assessment for the year, notice u/s 153A can be issued for that year. In normal circumstances such notice for reassessment cannot be issued u/s 148 in view of the provision to section 147.

With regards to the year(s) in respect of which the assessment or re-assessment is pending, as per the second proviso to section 153A (b), the same shall abate. In other words, the assessment or re-assessment shall not be made by regular assessment under section 143(3) or re-assessment under section 143, but it shall be under section 153A(b). If the returns are filled, the Assessing Officer shall re-assess the income under section 153A

(b) in respect of the year(s) in respect of which the assessment is complete. Thus, the assessee will have to include the income already assessee earlier or income declared in the returns for which assessments are pending in the respective years while filing returns for the above 6 years for which notice u/s 153A is issued. If no returns are filed, the Assessing Officer shall proceed to make assessment under section 144.

Amendments:

i)      If any proceeding initiated u/s 153A or any order of assessment or reassessment made under subsection (1) of this section has been annulled in any appeal or other legal proceeding, the abated assessment or reassessment relating to any assessment year shall stand revived and if such order of annulment is set aside, such revival shall cease to have effect.

ii)    that time limit for completion of such assessment or assessment shall be one year from the end of the month in which the abated assessment revives or within the period already specified in section 153 or in sub section (1) of section 153B, whichever is later.

iii) the period commencing from the date of annulment of a proceedings or order of assessment or reassessment referred to in sub section (2) of section 153A till the date of the receipt of the order setting aside the order of such annulments by the Commissioner, shall be excluded in computing the period of limitation for the purposes of this section.

Assessment in case of search or requisition [(section 1 53A(b)]

Notice for filing return [(section 1 53A(a)]

Separate assessment of six assessment year [proviso 1 to section 1 53A]

"SECTION: 153 B"

Under section 153B the assessment proceeding shall be completed within a period of two years from end of the financial year in which last of the authorization of the search was executed. Provisions have been made for extending this time limit where special tax audit u/s 142(2A) has been ordered or where stay order by court has been issued or in similar circumstances.

Time limit of completion of assessment of 6 assessment year [section 153B (1)(a)]

Time limit of completion of assessment year relevant to the previous year in which search is conducted , or requisition is made [sec 153B (1)(b)]

Time limit for completion of assessment of other person referred to in section 153C [proviso to section 153B(1)]

"SECTION: 153 C"

Sections 153C states that, if during the course of the search it is noticed that any books of accounts, documents, assets etc: are found or seized belonging to any other person, the Assessing Officer shall transfer the same to the officer who has jurisdiction over that other person and then officer shall proceed against that other person as provided in section 153A and 153B.

"SECTION : 234 A AND 234 B"

The provisions of section 234A and 234B for levy of interest on the demand raised under the above proceedings will apply. Therefore, the assessee who is subjected to assessment or reassessment u/s 153A, 153B and 153C will have to pay interest for the delay in filing the return of income and short fall in payment of advance tax at the applicable rates for each of the above six years.

"SECTION : 271″

With regards to the provisions of section 271 for the levy of penalty for concealment of income will also apply and penalty will range between 100% to 300% of tax which can also be levied.

SECTION 271AAA

Where search has been initiated u/s 132 on or after the 1^st day of June, 2007, the assessee shall pay by way of penalty, in addition to tax, if any payable by him, a sum computed at the rate of 10% of the undisclosed income of the specified previous year.

Penalty u/s 271AAA shall not be levied in the following case (section 271AAA(2))

Where the assessed,

i)    In the course of the search, I n a statement u/s 132(4), admits the undisclosed income and specifies the manner in which such income has been derived.

ii) substantiates the manner in which the undisclosed income was derived, and iii) pays the tax, together with interest, if any, in respect of the undisclosed incomes. "SECTION : 276 CC"

It should be noted here that the provisions for prosecution u/s 276CC will be applicable when the assessments are made u/s 153A, 153B and 153C.

"SECTION : 246A"

The Finance Act, 2003 has amended section 246A so that the assessee can file an appeal to the C1T (A) against the order of assessment or re-assessment under the above section. Further an appeal to the ITA Tribunal can also be filed against the order of CIT (A). Also appeals to High Court on substantial question of law can also be filed.

"POINTS TO REMEMBER"

The assessment officer is bound to issue notice for all the assessment years including the assessment years for which nothing is found and nothing is likely to be assessee as additional income over and above the income already disclosed by the assessee. Thus, in this case, even though there cannot be any assessment, the Assessing officer is bound to pass an order of assessment or reassessment as the case may be.

The assessing officer would be in a position to make a fresh assessment even though an assessment or reassessment has been made and which is not likely to be disturbed on account of the search.

Section 132 has been amended with effect from 1/6/03 to provide that any bullion, jewellery, or other valuable article or thing being stock in trade shall not be seized or put under prohibitory orders in search proceedings.

The assessing officer would be in a position to make an assessment even in respect of time-barred assessment. In other words, he would get fresh limitation period in respect of those assessment years.

It is to be noted that any income of any assessment year can be assessee only once. This principle being accepted and disputed has to be kept in mind for common assessment years. For Instance a search is carried on March 15, 2007 and concluded, lets assume on July 10, 2007. In that case, the specified period would be assessment years 2002-03 to 2007-08 and 1-4-2007 to 8-7-2007. Thus, the common assessment years are 2002-03 to 2005-06.

JUDICIAL POSITION IN OUR COURTS"

Search does not get invalidated on allegation of bribery as affirmed in Kamal Khosla v Director of Income Tax (Investigation) 258 ITR 43

>                    In case where the search officers dump documents and articles in particular place and seal it, so that they could examine whether they could seize it or not at their leisure, they may not be within their rights as held in Dr. C. Balakrishnan Nair v CIT 237 ITR 70

>                    Where the CIT had authorised a search merely on an intimation from CBI without any effort to ascertain the correctness of the allegation of money or other assets or primary verification the court held the search was invalid,

Ajit Jain Vs Union of India 242 ITR 302

>                    In Ram Kumar Dhanuka v Union of India 252 ITR 205, the court has held that non­residents are not immune from the reach of powers of search and seizure.

>                    Constitutional      validity      affirmed     in     Pooran     Mal     v.     Director of          Inspection
93 ITR 505, C. Venkata Reddy VITO 66 ITR 212

>                    Power       to       arrest       denied        in     L.R.Gupta       v      Union        of       India        194 ITR 32

>                    Interpretative clause cannot be invoked for the purposes of authorization of search held in Dr. Nalini Mahajan v Director of Income Tax 2571TR 123

> Just because cash was initially seized by the police, there could not be action under section 482 of the Criminal Procedure Code, 1973, when the cash seized had meanwhile become the subject matter of an other search. Kushi Ram v Hashim, AIR 1959 SC 542.

> It would not be correct for the search officers to seize assets not belonging to the assessee where there was explanation as to the ownership of such assessee as held in Alleppey Financial Services V ADIT 236 ITR 562.

> Immovable property cannot be seized held in Bapurao v ADI 247 ITR 98, followed Sardar Parduman Singh v Union of India 166 ITR 115.

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