- (1.) WE have heard learned counsel for parties and considered the arguments as well as pleadings.
(2.) ON 28 -5 -1995, Railway Police recovered an amount of Rs. 4,04,500 from the possession of assessee while he was travelling in a train. That information was passed on to the IT Department on 28 -6 -1995 itself. Next day on 29 -6 -1995, the Railway Police sent another intimation to the IT Department along with a copy of FIR and statement of Shri P.N. Sanyal. In the statement, the assessee had submitted that he was acting as a commission agent and the recovered money in his possession was out of that income. Moreover, his statement recorded by the Railway Police contradicted another statement that he had taken money from his friends about whom he had given only a part information. However, he also told that he had not paid any income -tax in the year 1994 -95. Thus, the Railway Police was not satisfied with the explanation given by the assessee regarding cash amount recovered from his possession.
(3.) IN this view of the matter, the Director Inspection (Inv.) IT, Kanpur, on 3 -7 -1995 issued warrant of authorization under section 132A of the Income Tax Act for requisition of books of account etc. by way of production/search and seizure. The warrant was executed on 23 -8 -1995 when the amount under assessment was seized by the Department. Resultantly, the proceedings under section 158BC were initiated on 11 -9 -1995 which finally culminated in block assessment for the period 1 -4 -1995 to 23 -8 -1995 at a total income of Rs. 29,02,711. Being aggrieved by the block assessment, the assessee filed an appeal before the Tribunal. By the impugned order dt. 23 -12 -2003, the block assessment was quashed by the Tribunal with the observation that the Department will be at liberty to take appropriate proceedings to bring to tax any income in respect of any of the assessment years covered by the block assessment order as per provisions of the law. Against the said order dt. 23 -12 -2003 passed in ITA No. 1701/All/1996 (P.N. Sanyal v. Asstt. CIT), the Department has filed this appeal through Asstt. CIT with following questions of law: "(a) Whether under the facts and in the circumstances of the case, the Tribunal was justified in law in substituting its belief in place of belief formed by the Director of IT (Inv.) for the purpose of search warrant under section 132A and thereby holding the search invalid and quashing the assessment order ? (b) Whether seizure of cash by the railway police after the respondent failed to furnish any satisfactory reply leading to form opinion that the seized money was unaccounted was not direct and relevant material before Director Investigation to form a reasonable belief for the purpose of section 132A of Income Tax Act and Tribunal could not have gone into adequacy of these reasons ? (c) Whether under the facts and in the circumstances of the case, the learned Tribunal was justified in law equating the facts of the instant case with that of the Apex Courts judgment in case of Union of India v. Ajit Jain and Anr. : (2003) 260 ITR 80 (SC) - However, upon hearing learned counsel for parties, vide order dt. 1 -10 -2010, a Co -ordinate Division Bench of this Court of which one of us (Hon'ble Ritu Raj Awasthi, J.) was a Member, formulated only one substantial question of law. The said order containing substantial question of law reads as: "After hearing the counsel for the parties, the following substantial question of law is framed: WHETHER in an appeal preferred against the block assessment made in pursuance of the search conducted by the IT Department, the validity of the search can be gone into by the Tribunal ? The learned counsel for the appellant has also relied upon a judgment in the case of M.B. Lal v. CIT : (2005) 279 ITR 298 (Del), wherein similar controversy has been decided. Mr. Jaspreet Singh, appearing for the respondent prays for and is allowed two weeks time to answer the aforesaid plea. List this matter after two weeks for further hearing." ;