The court held that a petitioner searched under Section 132 of the Income Tax Act cannot be treated as a non-searched person for proceedings under Section 153C, and thus impugned notices issued against them were illegal.

ORDER :

S.R.KRISHNA KUMAR, J.

In this petition, petitioner seeks quashing of the impugned Notices issued by the 1^st respondent to the petitioner for the assessment years 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 under Section 153C of the Income Act, 1961 (for short ‘the I.T.Act’) and for other reliefs.

2. Heard learned Senior counsel for the petitioner and learned counsel for the respondents – Revenue and perused the material on record.

3. A perusal of the material on record will indicate that on12.09.2017, the respondents obtained a warrant of authorization under Section 132 of the I.T.Act and Rule 112 of the I.T.Rules in relation to one K.Narayana Raju and in respect of residential premises of the petitioner at No.24, Lakshmi Nivas, 4^th cross Road, K.R.Layout, J.P.Nagar, 6^th phase, Bangalore. In pursuance of the same, the respondents conducted a search in the aforesaid premises of the petitioner during the period from 14.09.2017 to 16.09.2017 and recorded the statement of the petitioner, pursuant to which, the respondents prepared a satisfaction note recording reasons for initiating action against the petitioner under Section 153C of the I.T.Act, in pursuance of which, the 1^st respondent issued the impugned notices under Section 153C of the I.T.Act to the petitioner which were followed by subsequent notices under Sections 142(1) and 143(2) of the I.T.Act to the petitioner, who is before this Court by way of the present petition.

4. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioner submits that Section 153C of the I.T.Act would not be applicable to the petitioner, inasmuch as the respondents conducted a search of the petitioner at his residential premises in his presence and had recorded his statement, thereby indicating that the petitioner was a “searched person” and not “such other person / non-searched person” within the meaning or scope and ambit of Section 153C of the I.T.Act. It was therefore submitted that the impugned notices issued by the respondents to the petitioner under Section 153C of the I.T.Act are illegal, arbitrary and without jurisdiction or authority of law and contrary to the said provisions and as such, the impugned notices and all further proceedings pursuant thereto, deserve to be quashed. In support of his submissions, learned Senior counsel for the petitioner placed reliance upon the following judgments:-

(i) Deputy Commissioner of Income Tax vs. Sunil Kumar Sharma ; (2024) 168 taxmann.com 77 (SC)

(ii) Deputy Commissioner of Income Tax vs. Sunil Kumar Sharma ; (2024); 159 taxmann.com 179 (Kar.)

(iii) Sunil Kumar Sharma vs. Deputy Commissioner of Income Tax; (2022) 448 ITR 485 (Kar.)

(iv) Commissioner of Income Tax vs. St. Ann’s Education Society in ITA No. 1254/2006 dated 28.09.2011

(v) Commissioner of Income Tax vs. St. Ann’s Education Society in ITA No. 1253/2006 dated 28.09.2011

(vi) St. Ann’s Education Society vs. Deputy Commissioner of Income Tax (Exemptions) in ITA No. 165/Bang/2002 dated 04.04.2006

(vii) C. Ramaiah Reddy vs. Assistant Commissioner of Income Tax; (2011) 339 ITR 210 (Kar.)

(viii) Commissioner of Income Tax vs. IBC Knowledge Park (P.) Ltd.; (2016) 385 ITR 346 (Kar.)

(ix) Commissioner of Income Tax vs. Calcutta Knitwears; (2014) 362 ITR 673 (SC)

(x) Vinit Kumar vs. Central Bureau of Investigation and Ors.; 2019 Scc OnLine Bom 3155

(xi) Manish Maheshwari vs. Assistant Commissioner of Income Tax; [2007] 159 taxmann 258 (SC)

5. Per contra, learned counsel for the respondents – revenue would reiterate the various contentions urged in the