TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 44
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....I, Pune dated 22.07.2013 which, in turn, has arisen from order dated 27.02.2008 passed by the Assessing Officer u/s 158BD r.w.s. 158BC of the Act. 3. In this appeal, the primary dispute relates to an addition of Rs. 32,00,000/- made u/s 68 of the Act on account of unexplained loan and a sum of Rs. 7,55,062/-on account of unexplained expenditure u/s 69C of the Act relating to the interest on aforesaid unexplained loan. Apart from challenging the merits of the addition sustained by the CIT(A), assessee has raised an Additional Ground of Appeal which goes to the root of the matter as it is claimed that the principles of natural justice have been contravened in this case while completing the block assessment. The said Additional Ground of Appeal raised before us, which was not raised hitherto before the lower authorities, reads as under :- "(1) On the facts and circumstances of the case and in law the perusal of the order of the Ld. CIT(A) it reveals that in this Block assessment completed 3 under S. 158BD r.w.s. 158BC of the Act the satisfaction note as prepared by the A.O. of the searched party was not provided to the assessee which amounts to the denial of the reasonable opportuni....
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.... the rival submissions and also the precedent relied upon by the assessee, we find that the aforesaid Additional Ground of Appeal deserves to be admitted for adjudication. The Ground of Appeal raised involves a point of law which relates to a jurisdictional aspect and quite clearly the facts available on records justify its admission, as our subsequent discussion would show. At the time of hearing, it was put across to the parties that the aforesaid Ground deserves to be admitted and in that light the rival counsels have advanced their arguments on merits of the said Additional Ground of Appeal. 7. On merits of the Additional Ground of Appeal, it was a common point between the parties that identical controversy has been dealt with by the Pune Bench of the Tribunal in the case of M/s Bhagyashree Steel Center (supra) wherein the relevant discussion is as under :- "6. On merits, the Ld. Representative for the assessee relied upon the judgement of the Hon'ble Delhi High Court in the case of Janki Exports International vs. Union of India, 278 ITR 296 (Del) to submit that any person who is to be proceeded with u/s 158BD of the Act must be informed about the satisfaction of the Assessin....
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....g Officer of the searched person is duly recorded, prior to initiation of action u/s 158BD r.w.s. Sec. 158BC." 7. The aforesaid discussion reveals that after examining the record the CIT(A) has come to a conclusion that though satisfaction note was recorded by the Assessing Officer yet a copy of the same has not been provided to the assessee. The Hon'ble Delhi High Court in the case of Janki Exports International (supra) was considering the plea of the assessee regarding issuance of notice u/s 158BD of the Act. Though the challenge to the notice issued u/s 158BD of the Act before the Hon'ble High Court was by way of a Writ Petition but the following discussion in the order of the Hon'ble High Court is relevant :- "6. We find that section 158BD is somewhat analogous to section 147 in so far as the procedure that is required to be followed. Section 147 contemplates that, if the Assessing Officer has reasons to believe that there is escapement of income, then notice can be issued under section 148 of the Act. So far as section 158BD of the Act is concerned, the Assessing Officer has to be satisfied that there is undisclosed income. Upon such satisfaction, the Assessing Officer is re....
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....ble opportunity to object to the same. In this background, the Hon'ble High Court directed the Assessing Officer to supply the reasons recorded for arriving at the satisfaction contemplated u/s 158BD of the Act and only after disposing of the objections taken by the petitioner, the assessment was to be completed thereafter. 9. In the present case, it is clear that the satisfaction Note has not been supplied to the assessee, as deduced by the CIT(A). Therefore, following the parity of reasoning laid down by the Hon'ble Delhi High Court in the case of Janki Exports International (supra), we set-aside the impugned orders of the lower authorities and restore the matter back to the file of the Assessing Officer who shall supply the reasons recorded for arriving at the satisfaction for invoking section 158D of the Act to the assessee. On receipt of such reasons, assessee shall be entitled to file objections which shall be disposedoff by the Assessing Officer by way of a speaking order and only thereafter he shall proceed to pass a fresh assessment in accordance with law. 10. The Ld. Departmental Representative raised a plea that the CIT(A) has already examined the record and is satisfi....
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....ree Enterprises is found to be clearly recorded that the undisclosed income found in the books belongs to the appellant. The extract of the books of accounts including the loan amounts and interest thereon have been duly reproduced in the satisfaction note and therefore, the requirement of sec. 158BD that the books of accounts, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person, is seen to have been met. Therefore, although the appellant has not been provided a copy of satisfaction note, a perusal of the same shows that it contains the detailed working of the loan entries and the interest thereon as found in the books of Maheshwari Financiers and therefore, this ground that no documents, papers or other evidence have been actually handed over to his Assessing Officer by the Assessing Officer of the searched person is considered to be a frivolous ground." [underlined for emphasis by us] 9. The aforesaid discussion in the order of the CIT(A) is reveals that after examining the record, CIT(A) came to conclude that though the satisfaction note was recorded by the Assessing Officer yet a cop....