1. Under section 255(3) of the Income-tax Act, 1961 (the Act), the Hon’ble President of Income Tax Appellate Tribunal has constituted this Special Bench consisting of five Members to consider the following question:—

"Whether the Income Tax Appellate Tribunal has powers to adjudicate upon the issue relating to the validity of the search conducted under section 132 while disposing the appeal against block assessment."

2. Since the above question referred to this bench for consideration and decision is purely a question of law which can be decided independent of facts of any particular case, we do not deem it necessary to advert to the facts of the case before us at this stage. However, the background in which this Special Bench has come to be constituted can be outlined here. This case was initially fixed for hearing before a Division Bench of the Tribunal i.e. ‘D’ Bench, New Delhi. During the course of hearing, it was noticed by the Members constituting the Division Bench that the assessee-company has challenged, inter alia, the validity of search conducted under section 132 in its appeal and the question involved for consideration was whether the Income Tax Appellate Tribunal has powers to adjudicate upon the issue relating to the validity of search conducted under section 132 while disposing of the appeal against the block assessment. It was also noticed by the Division Bench that in a Third Member decision in the case of Dr. A.K. Bansal v. Asstt. CIT [2000] 73 ITD 49, the Allahabad Bench of ITAT has held that in the event of assessee challenging the validity of search under section 132 on the ground of non-existence of any circumstances/ conditions enumerated in clause (a), (b) or (c) of sub-section (1) of section 132 or challenging the very factum of search on the ground that there was no search warrant in his case, the Assessing Officer as well as Tribunal not only have the powers but are duty bound in exercise of their quasi-judicial powers to adjudicate upon the matter and consequently, call for the records of concerned authorities leading to the issue of authorization of search and can satisfy itself with regard to authorization having been issued in accordance with law. It was also given to understand to the Members of the Division Bench that the operation of the said order of the Allahabad Bench has been stayed by the Hon’ble Allahabad High Court. It was also noticed by the Division Bench that Ahmedabad Bench of the Tribunal in the case of Smt. Mumtazbano M. Rafiqbhai v. Asstt. CIT [2000] 67 TTJ (Ahd.) 202 has taken a view that the Tribunal is competent to decide as to whether the conditions precedent for invoking the powers given to the learned CIT under section 132 are exercised in accordance with the provisions of section 132. It was further noticed that a contrary view, however, has been taken by the Delhi Bench of ITAT in the case of Virinder Bhatia v. Dy. CIT [2001] 79 ITD 340 wherein it was held that the powers of the Assessing Officer and the Tribunal while disposing of the block assessment appeal are limited and they have no power to go into the validity of search. It was also held by Delhi Bench that the question of validity of search is beyond the pale of the power of the Assessing Officer and that of the Tribunal so far as adjudication of appeal against the block assessment framed by the Assessing Officer is concerned. It was further held by Delhi Bench of ITAT that there is no appeal provided against the exercise of power under section 132 and if at all the validity of search has to be challenged, it can be done by filing a writ petition before the High Court. Keeping in view these divergent opinions on the question of law involved in the present case before it and considering that similar issue is being raised every often before different Benches of ITAT, a reference was made by the Members of the Division Bench to the Hon’ble President for constitution of a Special Bench. Accordingly, a Special Be