- (1.) AGGRIEVED by the order dt. 17th Sept., 2002, passed by Tribunal, Jodhpur Bench, Jodhpur, in IT(SS)A No. 7/Jp/1997, [reported as Chitra Devi v. Asstt. CIT(2002) 77 TTJ(Jd) 640 -Ed.], Revenue has preferred this appeal.
(2.) WHILE the defects were overruled by this Court on 6th Aug., 2003, and admitting the appeal, following substantial questions of law were framed: 1. Whether for having recourse to assessment for block period under Chapter XIV -B, a valid search under Section 132 is a condition precedent and mere fact of search is not enough to give jurisdiction to the AO to have recourse to provision under Chapter XIV -B? 2. If so, whether in the facts and circumstances of the present case, the Tribunal was right to hold that the search conducted in the present case was invalid? The facts giving rise to the present appeal are, that assessee, Chitra Devi, filed appeal before the Tribunal, challenging the validity of the assessment order, being violative of principle of natural justice. The assessee contended that the assessment order is bad in law for the reason that the same was passed on belief of the assessing authority, without disclosing any material as is required under Section 132 of the IT Act. According to assessee, there was no material with the Director, to form the belief as is required under the provisions of Section 132, and in absence of any material to this effect, the assessment order passed is not maintainable, and therefore, the assessment order deserves to be set aside.
(3.) THE Tribunal in appeal decided the said issue, after referring various judgments on the issue, as to whether Tribunal is having jurisdiction to examine the validity of the authorisation, based on reasons duly recorded in writing for search, when the same is challenged before the Court/Tribunal. According to the Tribunal, Revenue was given various opportunities to produce the material, to show that authorisation was based on existence of reasons, about there being one or more of the circumstances enumerated in Section 132(1)(a) to (c), as is required under Section 132 of the IT Act. It was stated that on 12th Oct., 2001, appeal was adjourned to 21st Dec, 2001 for the purpose of production of record showing authorisation being based on existence of reasons about there being one or more of the circumstances enumerated in Section 132(1)(a) to (c). Then the matter was further adjourned to 12th Feb., 2002, however when the material was not produced, the matter was further adjourned to 19th March, 2002, and finally when Revenue could not produce the record, showing authorisation being based on existence of reasons, about there being one or more of the circumstances enumerated in Section 132(l)(a) to (c), the arguments were heard on 19th March, 2002 and 27th March, 2002. Even during the course of arguments also, record containing existence of material, which may have given reasons to believe the competent authority, about existence of any one or more of the circumstances postulated under Section 132(1)(a), (b) and (c) could not be produced, rather representative appearing for the Revenue showed his helplessness to produce the record before the Tribunal. Thus, the Tribunal after granting ample opportunity to the Revenue for production of the record, decided the issue, holding, that in absence of authorisation being based on reasons, required under Section 132 of the IT Act, search was not valid, which otherwise was taken as a basis, for the purpose of passing the order by assessing authority. Even factum of authorisation based on reasons, has not come on record. In those circumstances, Tribunal passed the order to the effect that search was not valid in absence of authorisation based on reasons, as required by Section 132(1), and consequentially, block assessment was held to be illegal.;