Point of Law: Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the assessment year in which the search takes place.

JUDGMENT :

Dr. S. Muralidhar, J.

1. These writ petitions arise from a common set of facts involving same questions of law and are accordingly being disposed of by this common judgment. For the sake of convenience the Court is taking up for discussion the facts of the lead case i.e. W.P.(C) No. 10587 of 2009.

2. The background facts of the case are that the Petitioner is a Director of a Private Limited Company in the name and style of Sambit Resorts Pvt. Ltd. On 15th November, 2007 search was conducted by the Income Tax Department at the Petitioner’s residence in Bhubaneswar and a Panchnama was drawn up on that date. Subsequently another search warrant was issued under Section 132 (1) of the Income Tax Act, 1861 (‘the Act’) on 6th December, 2007 by one Sri V. Ananda Rajan, Additional Director of Income Tax (Investigation) (‘ADIT’) authorizing himself and Sri M.L Sardar, Additional Director of Income Tax (Investigation) to conduct search and seizure operation of the locker standing jointly in the name of the Petitioner and her husband at Andhra Bank, Ashok Nagar Branch, Bhubaneswar. Though the said search took place, nothing was found in the locker. The said search was not followed up immediately by a notice under Section 153A of the Act initiating search assessment proceedings.

3. More than 18 months later, the Assessing Officer, i.e., the Assistant Commissioner of Income Tax, Circle-I (2), Bhubaneswar issued a notice on 14th July, 2009 commencing assessment proceedings under Section 153A/ 143(3) of the Act for the Assessment Year (AY) 2002-2003. Identical notices were issued for each of the AYs of 2008-2009. The Petitioner filed her returns for the said AYs. Thereafter the present writ petitions were filed in this Court challenging the initiation of the assessment proceedings under Section 153A of the Act. On 11th September, 2009 this Court directed that the assessment proceedings may continue but no final order shall be passed.

4. During the pendency of the writ petition, Section 132(1) of the Act was amended by Finance (No.2) Act, 2009 authorizing the Additional Director or the Additional Commissioner or the Joint Director or the Joint Commissioner to issue a search warrant. This provision was given retrospective effect from 1st June, 1994. At the same time, a proviso was inserted in Section 132(1) wherein it is stated that in case of a search warrant issued by the Additional Director or the Additional Commissioner or Joint Director after 1st October, 2009, he has to take the approval of the Central Board of Direct Taxes (CBDT). Section 132(1) of the Act as amended reads as under:

“132. (1) Where the (Director General or Director) or the (Chief Commissioner or Commissioner) (or Additional Director or Additional Commissioner) (or Joint director of Joint Commissioner) in consequence of information in his possession, has reason to believe that—

(a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act 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, or

(b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or

(c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, dis