Section 131(1A)

Section 131(1A) — the law in short

What the courts have decided on section 131(1A), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Raj Kumar Kedia v Income Tax Office High CourtHelps departmentNo later treatment found
  My prosecution sanction under s.279(1) was signed by the Principal Director of Income Tax (Investigation), not the Principal Commissioner. Is the sanction bad, and can I say the complaint is premature because no assessment has been made?
  Neither point succeeded. 'Commissioner' in s.279 is read with the definition in s.2(16) and the hierarchy in s.116, so it means and includes the Director and the Principal Director of Income Tax; a sanction by the Principal Director (Investigation) is by a competent authority under a different nomenclature. The complaint is not premature merely because assessment proceedings had not been completed, P. Jayappan being applied.
• Pramod Swarup Agarwal v PDIT (Inv) High CourtHelps taxpayerUnder appeal
  The authorised officer who searched us has now summoned us under s.131(1A). Can he?
  No, not after the search is over. The officer who issued the notice was the authorised officer for the s.132 search, and s.131(1A) lets the authorised officer use that power only before he takes action under clauses (i) to (v) of s.132(1). The action having already been taken, the notice was quashed; and the department could not save it by pointing to the same person's substantive designation as Deputy Director.
• Pawan Kumar Goel v Union of India High CourtHelps taxpayer
  The officers came in on a survey, I cooperated and showed them everything, and then they turned it into a search and took away the cash. Can they do that?
  No, not on this record. The Punjab and Haryana High Court quashed the action. Section 133A(4) forbids an income-tax authority acting under that section from removing any cash, stock or valuable article from the premises, and it is only where the person refuses or evades cooperation that section 133A(6) lets the authority fall back on the powers in section 131(1). Here the assessee had voluntarily disclosed and handed over Rs 2,09,89,090, the department produced no material to show non-cooperation, and no satisfaction was ever recorded for converting the survey into a search. The summons under section 131 was also vague, specifying nothing that was required of him. The action was quashed with consequential benefits.
• Dipen Laljibhai Mandalia v DGIT High CourtHelps taxpayer
  The department is justifying my search warrant with discrepancies it discovered after the satisfaction note was recorded. Can material found later prop up the authorisation?
  No. The Gujarat High Court held that material collected after the satisfaction note is recorded and the search authorisation issued cannot be pressed into service to support that authorisation. The Court read the satisfaction note itself, found that the department already knew of the gold, had the lease documents and the assessee's books before it, and that the explanation offered was corroborated by the goldsmiths' statements. There was therefore no material on which a reasonable belief under section 132(1)(c) could be formed. The petitions were allowed and the search and seizure operations were quashed.
• ACIT v Md. Illyas Hussain — the section reads "issue", not "serve": the Revenue's side of the section 143(2) point in a block assessment ITATHelps departmentNo later treatment found
  The Commissioner (Appeals) annulled the block assessment because no section 143(2) notice was served. Can the department save it by showing the notice was issued?
  The Patna Tribunal held that it could. It read section 158BC as requiring only the ISSUE of a notice under section 143(2) and not its service, found on the record that a notice had been issued on 20 August 1999 and received at the assessee's address, and added that in any event the assessee's block return, filed after the time allowed, was an invalid return so that no section 143(2) notice was required at all. It set aside the annulment and restored the appeal to the Commissioner (Appeals) to be decided on the merits.
• Timothy John Brinkman v DDIT (Inv.) ITATHelps taxpayerNo later treatment found
  I am a foreign national who became resident in India and missed Schedule FA in my first return, but I put it right in a revised return. Is the Rs 10 lakh penalty still due?
  Not on these facts. The Mumbai Bench deleted a penalty under s.43 where a British citizen, resident in India for a fixed five-year assignment, omitted his United Kingdom assets from Schedule FA in the original return and disclosed them in a revised return filed within the time allowed by s.139(5). The Tribunal held that the Revenue had not established that he had ever been an Indian citizen or that the foreign investments came out of undisclosed Indian income, and that the Act is aimed at undisclosed foreign income and assets, not at a bona fide omission.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.