2014 (9) TMI 134

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....der Section 158BC, by the Assessing Officer of the "person searched" 2. Block assessment order for the period 1st April, 1990 to 20th August, 2000 was passed on 30th August, 2005. Income Tax Appellate Tribunal (Tribunal, for short) has held that the block assessment order is invalid and void. 3. One Mr. Manoj Aggarwal and a company M/s Friends Portfolio Private Limited were subjected to search and seizure operation under Section 132 of the Income Tax Act, 1961(Act, for short) on 3rd August, 2000. Subsequently, block assessment under Section 158BC of the Act was completed in the case of M/s Friends Portfolio Private Limited on 29th August, 2002. Similarly, block assessment proceedings were completed in the case of Manoj Aggarwal vide o....

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....during the course of search and inquires conducted during assessment proceedings thus clearly establish that undisclosed income belonging to Shri Raghubir Singh Garg has been found during the course of search of Sh. Manoj Aggarwal. This information is beiong(sic) passed on to you for initiating proceedings u/s 158BC read with Section 158BD since the jurisdiction over Raghubir Singh Garg is with you. This amount has been added in the case of M/s Friends Portfolio Pvt. Ltd. on protective basis. The outcome of the investigation may be intimated to the undersigned for taking necessary action in the case of M/s Friends Portfolio Pvt. Ltd." 5. Thereafter, block assessment proceedings under Section 158BD read with Section 158BC were initiated a....

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....e was nothing in the language of the provisions, which suggested that the satisfaction note cannot be recorded upon completion of the proceedings under Section 158BC of the Act against the "searched person". Section 158BE(2)(b) only prescribed limitation period for completion of proceedings initiated under Section 158BD. The exact observations of the Supreme Court in this regard read as under:- "38. We would certainly say that before initiating proceedings under Section 158BD of the Act, assessing officer who has initiated proceedings for completion of the assessments under Section 158BC of the Act should be satisfied that there is an undisclosed income which has been traced out when a person was searched under Section 132 or the books o....

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.... 158BD in case of the person other than the searched person as two years from the end of the month in which the notice under this Chapter was served on such other person in respect of search carried on after 01.01.1997. The said section does neither provides for nor imposes any restrictions or conditions on the period of limitation for preparation the satisfaction note under Section 158BD and consequent issuance of notice to the other person. 40. XXXXX 41. In the result, we hold that for the purpose of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person. The satisfaction note....