Assessing Officer's Jurisdiction in Income-tax Act Upheld

The High Court held that the Assessing Officer had jurisdiction to make an assessment under sections 158BC and 158BD of the Income-tax Act based on materials found in a search at another's premises, even without a search at the assessee's premises. The court emphasized that the Assessing Officer only needed to establish undisclosed income belonging to a person other than the one searched. The Tribunal's decision was overturned, affirming the Assessing Officer's jurisdiction. The court instructed the order's communication to the Income-tax Tribunal, Cochin Bench for implementation.

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Issues:
1. Jurisdiction of Assessing Officer to make assessment under section 158BC read with section 158BD in absence of search under section 132 of the Income-tax Act.

Analysis:
The case involved the question of whether the Assessing Officer had the jurisdiction to make an assessment under section 158BC read with section 158BD of the Income-tax Act without a search conducted under section 132 at the premises of the assessee. The Tribunal initially held that since no search was conducted at the assessee's premises, it would be illegal for the Assessing Officer to make such an assessment. The firm in question was engaged in the business of manufacturing and selling various products and had been assessed to tax from the year 1986-87 onwards. The search was conducted at the premises of a sister concern, and certain books of account and documents related to the assessee were seized, indicating possible understatement of sales.

The assessee argued that the seized accounts from the sister concern could not be a valid basis for the assessment under section 158BC read with section 158BD. They also contended that the Assessing Officer lacked jurisdiction due to the absence of a search under section 132. However, the High Court pointed out the provisions of sections 158BC and 158BD, emphasizing that the Assessing Officer only needed to be satisfied that undisclosed income belonged to a person other than the one searched under section 132. The court referenced a similar case from the Gujarat High Court to support its interpretation.

The High Court concluded that the Assessing Officer indeed had the jurisdiction to make the assessment based on materials unearthed in a search conducted at another's premises, even if no search was carried out at the assessee's premises. Therefore, the Tribunal's decision was set aside, and the Assessing Officer's jurisdiction was upheld. The court directed the communication of the order to the Income-tax Tribunal, Cochin Bench for further action.

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