2014 (12) TMI 188

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....986 to 29.08.1996. 2. By order dated 01.02.2005, the following substantial question of law was framed: "Whether in the facts and circumstances of the case, non-issuance of notice under Section 158BD of the Income Tax Act, 1961 would vitiate the proceedings initiated under Section 158BC of the Act?" 3. The respondent assessee is a firm originally constituted on 01.03.1990 and had been filing their returns of income from the address X-49, Loha Mandi, Naraina Phase-2, New Delhi. On 29.08.1996 search and seizure operations under Section 132(1) of the Act were conducted at E-49, Naraina Vihar, New Delhi at the residence of Nem Chand Gupta, an individual. During the course of search, books of accounts namely a journal, a cash book and a ....

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....see. Therefore, no proceedings can be taken against the assessee u/s 158BC. The search was conducted on one Shri Nem Chand Gupta on 29.8.1996 and proceedings u/s 158BC were taken against that assessee. Some papers related to the assessee were found during the course of search made on Shri Nem Chand Gupta. Those books of accounts had papers were seized and notice u/s 158BC was issued to the assessee and the assessee was asked to file the return for the block period. The notices u/s 143(2) and 142(2) along with questionair were issued to the assessee. A specific query was raised during the course of hearing by the Bench to the learned DR that whether any notice u/s 158BD was issued or not, it was fairly admitted that no notice u/s 158BD was i....

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.... were found in the search. Thus reference was to Section 158BD of the Act. However, the respondent assessee is entitled to succeed in view of the specific finding given by the Tribunal in the aforesaid paragraph that no material was brought on record whether any intimation or information was received by the Assessing Officer of the respondent assessee from the Assessing Officer of Nem Chand Gupta i.e. the person on whom search was conducted. Accordingly, the finding of the Tribunal was that the Assessing Officer of Nem Chand Gupta had not given any intimation or information to the Assessing Officer of the respondent assessee. On the said aspect, Section 158BD of the Act is clear and stipulates as a pre-condition that the Assessing Officer o....

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....e Act are that the assessing officer must be satisfied that "undisclosed income" belongs to any other person other than the person with respect to whom a search was made under Section 132 of the Act or a requisition of books were made under Section 132A of the Act and thereafter, transmit the records for assessment of such other person. Therefore, the short question that falls for our consideration and decision is at what stage of the proceedings should the satisfaction note be prepared by the assessing officer: whether at the time of initiating proceedings under Section 158BC for the completion of the assessments of the searched person under Section 132 and 132A of the Act or during the course of the assessment proceedings under Section 15....