TaxTMI 
TaxTMI 
2015 (4) TMI 1106
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....tice is without jurisdiction and the said assessment is liable to be quashed ? 3. Whether on the facts and in the circumstances of the case the Tribunal is right in law in not quashing the assessment on the ground that it is not based on materials seized or found at the time of the search ? 4. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in not deleting the income relating to the year 1995-96 from the block assessment on the ground that the due date for filing the return had not expired before the date of search and also on the ground that such income is duly disclosed before the search ?" 2. The facts, in a nutshell, are as hereunder : It appears that the Income-tax Department conducted a search invoking the provisions of section 132 of the Income-tax Act (for short "Act") on various premises of different textile dealers in Godown Street on August 31, 1995 and on other dates. In the course of the said search operation, books of account and documents were seized from various dealers. It is also the case of the Department, which is not denied by the appellant herein, that a search was conducted in so far as the....
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....t orders of all the appellants were set aside and the appeals were allowed. The relevant portion of the order of the Tribunal is extracted hereinbelow for better clarity : "2. We have heard both sides and perused the records. In these appeals, the block assessments were completed under section 158BC of the Income-tax Act. The assessee has challenged that the Assessing Officer has no jurisdiction to issue notice under section 158BC as there was no search or requisition made by the Revenue. The asses sees filed affidavits duly sworn by them to this effect. Under similar circumstances in the connected matters this Tribunal cancelled the assessment. The relevant order of this Tribunal in the connected matters dated October 8, 1997 in I. T. A. Nos. 1925, 1926 . . ./Mds/96 in the case of Urmila Chandak was produced. A copy of that order is placed on record. Besides that the learned counsel for the assessees also produced a copy of the order of this Tribunal dated July 2, 1998 in R. A. Nos. 804 to 835/Mds/97 arising out of the order of this Tribunal dated October 8, 1997 in the aforesaid cases. The facts show that there was no search or requisition issued in the case of these ass....
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....s. The specific case of the Department in the earlier round of litigation before this court was that in the case of one assessee, there was, in fact, search of the premises of the assessee and the block assessment was made in the case of the other assessee invoking the provisions of section 158BD, which is on the basis of the materials gathered at the time of the search. However, this court was of the view that the Tribunal did not apply its mind to the facts of the case and that the facts necessary in respect of the two assessees were not examined and, therefore, this court held that it was not appropriate to decide the issue one way or the other. The order of this court, for better clarity, is extracted hereinbelow : "2. The order on which the Tribunal placed reliance contains a specific finding that there was no search in the premises of those asses sees. The submission made before us by the learned counsel for the Revenue is that in the case of one of these assessees there was in fact search in the premises of the assessee and that the block assessment made in the case of other assessees also does not require or warrant any interference as these assessments had been ma....
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....ed. The very object of section 158BD is to give jurisdiction to the Assessing Officer to proceed against any person (assessee) other than the person against whom a search warrant is issued under section 132 or section 132A provided any undisclosed income belonging to such person is recovered in the search operation." 7. The Tribunal, thereafter, went on to decide the issue and dismissed the appeal on jurisdiction and remanded the matter to the Assessing Officer for the purpose of redetermining the assessment, against which the present appeal has been filed by the assessee, primarily on the questions of law, which have been extracted supra. 8. However, learned counsel appearing on either side conceded that the core issue, that arises for consideration in this appeal is the second substantial question of law and if the same is answered, the other questions of law become academic. Accordingly, this court proposes to deal with the second substantial question of law. 9. The contention of Dr. Anitha Sumanth, learned counsel appearing for the appellant is that the jurisdictional issue, as relied on by the Tribunal, based on the decision of the Madhya Pradesh High Court, has been ....
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....n the case of any person in respect of whom search has been carried out under section 132A or documents or assets have been requisitioned under section 132A. Section 158BD, however, provides for taking recourse to a block assessment in terms of section 158BC in respect of any other person, the conditions precedent wherefore are : (i) satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act ; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person ; and (iii) the Assessing Officer has proceeded under section 158BC against such other person. The conditions precedent for invoking the provisions of section 158BD, thus, are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the per son whose premises had been searched or whose documents and other assets had been requisitioned under section 132A of the Act." 14. Heard the learned counsel appearing for the appellant an....