2007 (9) TMI 296

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rounds taken by the assessee in the cross-objection. These grounds are as under: "1. That the CIT(A) erred on facts and in law in not holding that the order passed by the AO under s. 158BD/143(3) of the IT Act, 1961 ('the Act') was without jurisdiction, bad in law and void ab initio. 1.1. That the CIT(A) erred on facts and in law in holding that the AO assumed valid jurisdiction under s. 158BD of the Act. 1.2. That the CIT(A) erred on facts and in law in not appreciating that since the AO completed the block assessment without serving upon the appellant a proper, legal and valid notice under s. 143(2) of the Act the impugned order was illegal and bad in law." 4. At the time of hearing, the learned counsel for the assessee raised following two pleas in support of the grounds referred to above: "(1) That no satisfaction was recorded by the AO who completed the assessment under s. 158BC prior to transmitting the record of the assessee to the AO concerned and that the satisfaction, if any, was recorded after the issuance of notice under s. 158BD to the assessee. (2) That notice under s. 143(2) was not issued and served upon the assessee within the prescribed period."....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..../17, A-2/47, A-2/48 indicated prima facie concealment of income of Sh. R.P. Singh. When considered with the statement given by Sh. R.P. Singh under s. 133A the seized material in the case of Bagaria Group leads to reason to believe that Sh. R.P. Singh gave bogus, accommodating entries to the various concerns of Bagaria Group. The reasons recorded by the AO of Bagaria Group of cases who finalized the assessment under s. 158BC in this case are not available on record. However, a copy of letter written by the Dy. CIT, Circle-14(1),New Delhi, No. Dy. CIT/Circle-14(1)/01-02/Misc/278 dt.11th Dec., 2001is available on record in which the Dy. CIT has intimated Dy. CIT, Circle-2, Saharanpur (UP) regarding the assessee's undisclosed income.". 9. From the above portion of the order of learned first appellate authority it is clear that even before him the Department could not produce the satisfaction recorded by the AO in the case of person searched. From the said order it is also clear that intimation regarding undisclosed income of the assessee was given to the AO of the present assessee after the issuance of notice. Thus, on facts the argument of the learned counsel for the assessee ha....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....led. Thus, the provisions of s. 158BD were not applicable in this case." 13. The Chandigarh Bench of the Tribunal has considered this issue in para 26 of its order in the case of Kishore Lal Balwant Rai. The concluding part of this para is as under: "Therefore, logically speaking, the point of time whereby the AO, after having examined the entire material and evidence for the purpose of making an assessment in the case of person searched, shall be in a position to satisfy himself as to whether any undisclosed income belongs to a person other than the person being assessed. Thus the date of finalization of assessment under s. 158BC of the person put to search is a relevant point of time to deduce the period of limitation available with the AO to arrive at the satisfaction contemplated under s. 158BD." 14. The learned Departmental Representative has not been able to cite any authority, contrary to the decisions referred to above. Hence, following the ratio of the decisions in the above-referred cases and on the facts and circumstances of this case we hold that the assessment order passed in the instant cases without making compliance of the pre-requisite condition i. e., recordin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... independent block assessment provisions shall be defeated. Hon'ble Special Bench of the Delhi (sic-Lucknow) Tribunal in the case of Nawal Kishore & Sons Jewellers vs. Dy. CIT (2003) 81 TTJ (Lucknow)(SB) 362 : (2003) 87 ITD 407 (Lucknow)(SB) has held that the time limit for issuance of notice under s. 143(2) is not applicable in the case of block assessment made pursuant to search operation. The decisions relied upon by the appellant does not pertain to block period (search and seizure assessment), hence the same are distinguishable and not relevant to the case of the appellant. In view of the jurisdictional Tribunal's decision the arguments of the appellant are without any merit and the same are dismissed." 18. It may be pointed out that the learned Departmental Representative has not cited any authority of any High Court for controverting the argument of the learned counsel for the assessee. Thus, before us the only authority directly on the point is that of Hon'ble Gauhati High Court in the case of Smt. Bandana Gogoi vs. CIT & Anr., which has been followed by the Delhi Bench of the Tribunal in the case of Smt. Tulika Mishra. 19. In the case of Smt. Bandana Gogoi, t....