2012 (6) TMI 233

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....emises of another assessee, the Officer transferring the file should record his satisfaction about the undisclosed income to be assessed at the hands of other assessee under Section 158BD of the Income Tax Act, 1961 (hereinafter referred to as the Act for short). 2. We have heard learned Senior Standing Counsel Shri.P.K.R.Menon appearing for the Revenue and Shri.Arun Raj, learned counsel appearing for the respondent assessee.   3. Facts leading to the controversy are the following:- The assessee and his wife are running a clinic at Adimali. In the course of search conducted in the premises of a Company by name M/s.Eastern Retreads (P) Ltd., in which the assessee's son was a Director, the Department found evidence of undisclosed incom....

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....ect to whom search was made under Section 132 or whose books of account or other documents or any assets were requisitioned under Section 132A, 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."   5. Chapter XIVB provides for special procedure for assessment of search cases. The provision provides for assessment for block period pursuant to search made under Section 132 or based on requisition of accounts or documents under Section 132A of the Act. The provisions for assess....

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.... The case of the assessee is that in the absence of satisfaction recorded under Section 158BD by the Assessing Officer transferring the file to the other Assessing Officer, the assessment is invalid.   6. The Revenue has brought to our notice the decision of this Court in Commissioner of Income Tax v. Panchajanyam Management Agencies & Services, reported in 239 CTR (Ker) 424, wherein the Division Bench of this Court of which one of us (CNR(J)) is a member, has taken the view that the satisfaction under Section 158BD is only about evidence of undisclosed income of a person other than the assessee searched and there is no requirement to record the same; and such satisfaction being only for transferring the file from one Officer to anoth....

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....see revealed undisclosed income of another assessee, who is not searched, the material or evidence so received can be the basis for making assessment under Section 158BC of the assessee who is not searched. The satisfaction required under Section 158BD for the Officer to transfer the material and evidence gathered during search or after requisition of accounts is only to justify transfer of the file to the Assessing Officer, who has jurisdiction to assess the assessee who is not searched but in respect of whose undisclosed income evidence is gathered. In fact, it is absolutely left to the Officer to whom the file is transferred under Section 158BD to consider the transferred evidence and materials and to decide whether to proceed with asses....