2011 (8) TMI 848

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....questions of law:- "1.  Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in law in confirming the order of the CIT(A) who deleted all the additions in holding the assessment void ab initio.  2.  Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal has erred in law in holding that the recording of satisfaction is prerequisite for initiating proceedings U/s 158 DB.  (i)  As per provisions of section 158BD, if the A.O. satisfied that any undisclosed income belongs to any person other than the person with respect to whom search was made u/s 132 then the books of account, other documents or assets seized shall be hand....

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....ch, certain incriminating documents, books were found. Accordingly, a notice u/s 158 BD was issued to the assessee on 24.5.2004. The assessee filed its return showing undisclosed income at 'NIL' on 10.9.2001. However, on 31.5.2006 the assessment under section 158BD /144 of the Income Tax Act was framed by the Assessing Officer. Being aggrieved with the assessment order, the assessee filed an appeal before the first appellate authority who observed that no valid satisfaction, as required, had been recorded by the Assessing Officer prior to initiating proceedings under section 158BD of the Income Tax Act, 1961. The first Appellate Authority i.e the CIT(A) has relied on the ratio of law laid down in the case of Manish Maheshwari v. Asstt. CIT ....

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....Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section132 or whose books of account or other documents or any assets were requisitioned under section 132 a, then the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158BC against such other person and the provisions of this Chapter shall apply accordingly. 8. While interpreting Section 158BD, the Hon'ble Supreme Court in the case of Manish Maheshwari (supra) observed that before the provision of section 158BD of the Act ....