TaxTMI 
TaxTMI 
2015 (4) TMI 632
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.... satisfaction under section 158BD by the Assessing Officer of the person searched and consequent issuance of notice under section 158BD on02.09.2005 was belated and beyond the period prescribed by law when the section 158BD read with section 158BE does not specify that satisfaction has to be recorded by the Assessing Officer before completion of assessment under section 158BC of the Income Tax Act, 1961." 3. The appeal is against the order of the Income Tax Appellate Tribunal upholding the order of the C.I.T. (Appeals) pertaining to the block period 01.04.1998 to 05.02.2003. The challenge is to the decision of the CIT (Appeals) in deleting an addition of Rs. 91,96,083/- made by the Assessing Officer on account of certain transactions between the respondent and a group referred to as the Bhatia Group. These transactions were noticed during a search and seizure operation under section 132(1) of the Income Tax Act, 1961 (for short 'the Act'), conducted on the Bhatia Group. 4. The respondent carries on business as a manufacturer of hosiery goods in the firm name & style of M/s Dhruv Fabrics and as the sole proprietor thereof. The search operation was conducted under section 132(1) on....
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....eing less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of Section 142, setting forth his total income including the undisclosed income for the block period: xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx Undisclosed income of any other person. 158-BD. -Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 or whose books of account or other documents or any assets were requisitioned under Section 132-A, 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 2[under Section 158-BC] against such other person and the provisions of this Chapter shall apply accordingly. Time limit for completion of block assessment.- 158-BE. [(1) The order under Section 158-BC shall be passed- (a) xx xx xx (b) xx xx xx (2) The period of limitation for completion of block assessment i....
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....C of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisition of books of accounts was made under Section 132-A of the Act. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. 42. Further, Section 158-BE(2)(b) only provides for the period of limitation for completion of block assessment under Section 158-BD 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 1-1-1997. The said section thus, neither provides for nor imposes any restrictions or conditions on the period of limitation for preparation of the satisfaction note under S....
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....nder Section 158-BC of the Act of the searched person. They, however, contended that the satisfaction must be recorded not at any time after the assessment proceedings are completed under section 158-BC of the Act of the searched person but immediately thereafter. 11. The question that falls for our consideration, therefore, is the meaning of the words "immediately after" in the judgment. The Supreme Court did not specify any outer limit. In our view, the words indicate that the satisfaction note must be prepared as soon as practicably possible and without undue delay after the assessment proceedings are completed under section 158-BC of the Act of the searched person. This must necessarily depend upon the facts of each case. We do not read the words "immediately after" to mean something as drastic or rigid as the very next moment or even the very next day or even week after the completion of the assessment proceedings under section 158 BC of the searched person. The error in the respondent's submission is in reading the words "immediately after" so rigidly arisen on account of considering them in isolation instead of reading the judgment as a whole. For instance, in paragraph 43,....