Appeal allowed due to missing satisfaction note; Revenue faces adverse inference. Block assessment order quashed.

The Tribunal allowed the appeal of the assessee in a block assessment case due to the absence of a recorded satisfaction note by the Assessing Officer. Adverse inference was invoked against the Revenue for failing to produce required records. The block assessment order was quashed following a Supreme Court judgment emphasizing the necessity of recorded satisfaction for determining undisclosed income.

---

---

Issues involved: Appeal against CIT(Appeals) order, Block assessment u/s 132, Undisclosed income determination, Jurisdiction of Assessing Officer, Notice u/s 158BD, Satisfaction note recording, Adverse inference, Quashing of block assessment order.

Block Assessment u/s 132:
The appeal was filed by the Revenue against the CIT(Appeals) order related to a block assessment u/s 132 carried out in the case of Nandoliya group of cases. Documents seized during the search revealed discrepancies in the profits declared by the company compared to the profits received by individuals associated with the company. The Assessing Officer concluded that the company had undisclosed income based on the seized documents. The first appellate authority upheld the Assessing Officer's decision.

Jurisdiction and Notice u/s 158BD:
The appellant contended that the Assessing Officer did not have jurisdiction over the case as the company was regularly assessed by a different assessing officer. Additionally, it was argued that no satisfaction was recorded by the Assessing Officer regarding undisclosed income belonging to the assessee, making the notice u/s 158BD invalid. The appellant also challenged the determination of undisclosed income by the CIT(A).

Adverse Inference and Quashing of Block Assessment Order:
After multiple directions to produce assessment records, the Revenue failed to provide the satisfaction note recorded by the Assessing Officer. The appellant requested adverse inference to be taken due to the delay in producing records. The Tribunal agreed that no useful purpose would be served by further adjournments and decided in favor of the appellant. Citing a Supreme Court judgment, the Tribunal quashed the block assessment order due to the lack of recorded satisfaction by the Assessing Officer regarding undisclosed income.

In conclusion, the Tribunal allowed the appeal of the assessee based on the absence of a recorded satisfaction note by the Assessing Officer in the block assessment case. The Tribunal invoked adverse inference due to the Revenue's failure to produce the required records despite repeated directions. The block assessment order was quashed in line with the judgment of the Hon'ble Supreme Court, emphasizing the necessity of recorded satisfaction for undisclosed income determination.

---