TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 607
X X X X Extracts X X X X
X X X X Extracts X X X X
....ashing the revision order passed under Section 263 of the Act, when the assessee has not produced any evidence for claiming 50% of commission receipt as expenditure to earn such commission income? T.C.(A) No.248 of 2014: (i)Whether, on the facts and circumstances of the case, the Tribunal was right in quashing the block assessment as time barred, when there is no time limit prescribed in the Income Tax Act either for recording of satisfaction note or issuing notice under Section 158BD of the Act? (ii)Whether, on the facts and circumstances of the case, the Tribunal was right in following Special Bench judgment in the case of Manoj Aggarwal v. DCIT, 113 ITR 377, which is not applicable to the facts of the present case and clearly distinguishable? (iii)Whether, on the facts and circumstances of the case, the Tribunal was right in cancelling the block assessment without adjudicating the grounds of appeal raised before it which is contrary to the ratio of the judgment of the Madras High Court in the case of South India Surgical Cotton Ltd, 263 ITR 5? 2. T.C.(A) No.502 of 2014 is filed by the Revenue challenging the order of the Income Tax Appellate Tribunal 'A' Bench, Chen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd to be earning commission income from Sree Gokulam Chits and Finance Company Limited and hence, notices under Section 158BD of the Act were issued to the respondents on various dates. The respondents in T.C.(A) Nos. 247, 248, 651 and 652 of 2014 did not file return of income. The respondent in T.C.(A) No.502 of 2014 filed return of income on 4.7.2007 admitting undisclosed income at Rs. 2,07,385/-. 4.3. Pursuant to the same, the Assessing Officer proceeded to complete the block assessment under Section 144 read with Section 158BD of the Act. The Assessing Officer treated the actual commission received by the respondents as undisclosed income and deducted 50% of it towards incidental expenditure incurred by them. Thus, the Assessing Officer determined the undisclosed income as under: T.C.(A) No. Undisclosed Income 247 and 248 of 2014 Rs.5,13,880/- 502 of 2014 Rs.2,07,390/- 651 and 652 of 2014 Rs.6,38,779/- 4.4. Even though the proceedings till this stage dealt with similar facts and circumstances, the manner in which cases proceeded further varies and, therefore, they are set out separately for better understanding. In T.C.(A) Nos.247 and 248 of 2014: 4.5.1. The a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g Officer to redo the assessment after affording an opportunity to the assessee. Aggrieved by the order dated 30.3.2012 passed under Section 263 of the Act, the assessee filed an appeal before the Tribunal in I.T.(SS) A.No.16/Mds/2012. 4.6.2. The Tribunal set aside the revision order passed by the Commissioner of Income Tax, Centra-I, Chennai under Section 263 of the Act and allowed the appeal filed by the assessee. 4.6.3. Aggrieved by the said order, the assessee filed T.C.(A) No.502 of 2014 raising the question of law, referred supra. In T.C.(A) Nos.651 and 652 of 2014: 4.7.1. The assessee in these appeals challenged the block assessment order dated 29.5.2009 before the Commissioner of Income Tax (Appeals), who, by order dated 9.3.2012, set aside the block assessment order and held that since the notice under Section 158BD of the Act was served beyond the time limit specified under Section 158BE of the Act, the block assessment order is ab initio void. 4.7.2. However, by order dated 30.3.2012, the appellant (Commissioner of Income Tax, Central-I, Chennai) reviewed the assessment order dated 29.5.2009 on the ground that deducting 50% of commission receipts as incidental expen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable period, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assesee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice of demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case. (emphasis supplied) 9. In the case on hand, block assessment in respect of the Sree Gokulam Chits and Finance Company Limited was proceeded under Section 158BC of the Act. It is only on the basis of the block assessment of the person with respect to whom search was made under Section 132 of the Act, proceedings under Section 158BD of the Act in respect of any other person can be initiated. Therefore, the provisions of Sections 158BD and 158BC are intertwined. In other words, the jurisdiction to issue notice under Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer who might otherwise be left with uncontrolled discretion in such matters. Fourthly, section 158BE expressly states that the satisfaction is to be recorded by the Assessing Officer with respect to the need to issue notice to the third party before he hands over possession of books and assets seized or requisitioned, to the Assessing Officer of such third party. This too clearly has a reference to the primary jurisdiction of the Assessing Officer of the searched person and the consequential limitation placed upon him to complete assessment within the period of two years spelt out under section 158BE. (emphasis supplied) 11. The reliance placed on a decision of the Kerala High Court in Commissioner of Income Tax, Cochin v. Bimbis Creams and Bakes, [2012] 24 Taxmann.com 143 (Ker.) by the learned Standing Counsel for the Revenue is not applicable to the facts of the present case, as in the said decision assessment under Section 158BD of the Act was well within the statutory period. The relevant portion of the said decision reads as under: "Relying on the decision in CIT v. PANCHAJANYAM MANAGEMENT AGENCIES, (2011) 333 ITR 281, Senior counsel for the respondent-assessee submitt....