TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 1203
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....cts available on record as per the assessment order show that search & seizure operation was conducted on the residence of the assessee on 08.05.2003 in connection with the search in Vatika Group of companies. For ready-reference we extract the opening para of the assessment order hereunder:- "Search & Seizure operations were conducted at the residence of the assessee on 8/5/2003 in connection with the search in Vatika Group of Companies. A satisfaction note was recorded by the Assessing Officer having jurisdiction over the Vatika Group of Cases. Accordingly a notice u/s 158BD was issued on 31/05/2005 and the assessee filed its return of income u/s 158BD on 20/10/2005 declaring NIL undisclosed income. Notice u/s 143(2) was issued and the assessee requested for the reasons for the issuance of notice u/s 158BD. A copy of satisfaction note was duly provided to the assessee and the assessee filed its letter dated 10/5/2006" (Emphasis provided) The AO considering the reply of the assessee that the documents were mere proposals and were never acted upon as they were claimed to be rough calculations etc. apart from various other explanations offered came to the conclusion that relianc....
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.... 1961 a note of satisfaction was required to be recorded in the case of the person who had been searched on the basis of which the AO having jurisdiction over the assessee was required to be satisfied that books of accounts, other documents or assets seized represented undisclosed income of then person against whom the proceedings have been initiated by him. In the absence of any such satisfaction having been recorded in the case of person searched no valid proceedings could have been initiated against the assessee. That the ld. Deputy Commissioner of Income Tax has failed to appreciate that no such documents or evidence were either found or seized from the person searched and as such no assessment could be made by invoking the provisions of Section 158BD of the Income Tax Act, 1961. That the ld. DCIT has failed to comprehend that the provisions of section 158BC and 158BD of the Act operate in different fields and it depends upon the satisfaction of the AO having jurisdiction in the case of person searched to initiate or not to initiate proceedings against the assessee and as such he was obliged in law to record a note of satisfaction in the course of such a person who ha....
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....of assessment framed u/s 158BD has noted that, "a satisfaction note was recorded by the AO having jurisdiction over the Vatika Group of Cases". Again in second para of the order, it is stated that a copy of satisfaction note was duly provided to the assessee and the assessee filed its letter dated 10.05.2006. The appellant has disputed the observation made by the AO in the first para of the order of assessment that a satisfaction note was recorded by the AO having jurisdiction over the Vatika Group of cases. It is contended that during the course of hearing, the assessee filed a reply dated 14th May, 2007 wherein assessee specifically raised this issue before the completion of assessment proceedings. The AO however, did not deal the aforesaid objections of the assessee. Further, it was submitted that, copy of the said satisfaction note had been served upon the assessee on 27.01.2006 when the satisfaction note was recorded on 31.05.2005 and, no reason for delay of over 7 months has been given. It was further submitted as under: "A perusal of the satisfaction note served on the assessee shows that the heading of the so recorded reasons reads as under: Reasons u/s 158BC read with 15....
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....assessee, the AO has no jurisdiction for assessment u/s 158BD which jurisdiction was wrongly assumed by the AO instead of application of provisions of section 158BC in order to circumvent non issue of notice u/s 158BC. In this connection without prejudice and in the alternative the assessee submitted that the assessment has been framed u/s 158BD whereas it should have been completed under the provisions of section 158BC and thus, the assessment made is barred by limitation and the provisions of section 158BD are not attracted in the case of the assessee. The appellant has submitted as under: "The facts in this connection are that: Assessee is an Individual. He is a director in some of the Vatika Group of Companies. There was search proceeding u/s 132 of the I.T. Act, 1961 on 08.05.2003. The assessee being the director was searched at his residence. On the aforesaid facts and circumstances it could not be denied that assessee was a person who had been searched on 08.05.2003. As such assessment on assessee should have been made under the provisions of section 158BC and the assessment proceedings should have been concluded by 31st May, 2005. However, in the present case a note o....
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.... of two years to an AO to complete assessment u/s 158BC where search has taken place. It is however, submitted that when an action is taken, then it should not be because of any remissness on the part of the AO to initiate the proceedings. In the instant case, the ld. AO on the same facts had taken up the proceedings in the case of the assessee and, had completed the same after period of 2 years as prescribed and, as such, if, he did not choose to initiate proceedings under the correct provisions of the Act where he was within his jurisdiction, it is clear case of remissness on the part of the AO. It cannot be validly said that the ld. AO on the same facts takes up the assessment of all assesses where search was taken up issue a notice u/s 158BC of the Act on the assessee, there is no remissness on his part. It is submitted that, a person cannot be allowed to take advantage of his own lapse or remissness. The short submission of the assessee is that having searched the premises of the assessee, the AO cannot make the same a basis to initiate proceedings u/s 158BD of the Act. It is a case of an inaction on the part of the AO and, any inaction on then part of the AO has always to be ....
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....nt was going to be barred by limitation as had stated when according to assessee it had already become barred by limitation by long lapse of time, which according to assessee should have been completed on 31.05.2005 as there was a seizure made form the assessee on 08.05.2003. It is contended by the assessee that the entire purpose for making the assessment is to burden the assessee, with the tax liability and without affording to the assessee a fair and proper opportunity, when assessment had already become barred by limitation. The assessee is unable to comprehend any reason as to why proceedings which had been initiated on 31st May, 2005 and in respect of which the assessee had filed his reply on 10.05.2006 were not completed, when the assessee had already filed his reply as early as on 10.05.2006. It is thus contended that the AO was sitting with predetermined mind to frame the assessment arbitrarily". It is seen that the assessee's objections were confronted by the CIT(A) to the AO and Remand Report was sought from him. The relevant extract from the impugned order is reproduced hereunder:- "In response to the submissions made by the assessee, a remand report was sought from t....
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....tted as under: "It is submitted that the assessment as had been framed on 21.05.2007 is barred by limitation, whereas it had to be framed by 31.05.2005, since the search u/s 132(1) of the Income Tax Act, 1961 had been completed on 08.05.2003, when the documents on the basis of which an undisclosed income has been computed were found and seized from the residential premises of the assessee. It is an admitted fact that, the search had been conducted on the assessee u/s 132(1) of the Income Tax Act, 1961 on 08.05.2003, and as such as is provided u/s 158BE of the Income Tax Act, 1961 the assessment had to be framed within the period of two years from the end of the month, in which the last of the warrant of authorization was finally executed. In the instant case, it is also an undisputed fact that, the search had finally been concluded on 08.05.2003 and as such it is emphasized here that, no assessment in law could be made by the ld. AO. It is further submitted that, there is no further search conducted on the assessee or even on M/s Vatika Landbase Pvt. Ltd. of which the assessee was the director. In such a situation, on a receipt of the notice u/s 158BD of the Act, 1961 dated 31.0....
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.... In such circumstances it is submitted the objection raised by the ld. AO by his letter dated 26.08.2009 is misdirected, misconceived and thus, deserves to be rejected as is entirely untenable. It is thus prayed that, it be held that an assessment made is barred by limitation. In respect of the other issues and grounds of appeal detailed submissions have already been made and in respect of which there have been no counter submissions made by the ld. AO". Considering the same the CIT(A) allowed the appeal of the assessee holding that the proceedings initiated u/s 158BD were not legal. He further went on to examine and hold that the same were time barred u/s 158BC. These detailed findings are found discussed in para 4 to para 4.9 at pages 14-21 of the impugned order. Aggrieved by this the Revenue is in appeal before the Tribunal. The hearing in the present proceedings took place on two separate and distinct dates as after hearing both the sides, it was considered appropriate for the sake of completeness to direct the parties to place on record the written submissions addressing their respective stand and that too after mutually exchanging the same amongst themselves first. 4.1. ....
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....ched person. Applying these to the facts of the instant case it should be seen that basis adopted for initiation of proceeding u/s 158BD of the Act in the case of appellant is that there has been a search conducted on the premises of Vatika Group of Companies and as a result of the material found during the search satisfaction was recorded by the AO having jurisdiction over the Vatika Group of Companies. iii. ..... It is admitted that each of the aforesaid papers have been found as a result of search on the appellant and not from the premises of Vatika Group of Companies i.e. searched person. This observation made by the CIT(A) is factually incorrect because the seized papers relied upon the AO for initiating proceedings u/s 158BD of the Act have been found from the premises of the Vatika Group of Company. No search was conducted on the appellant. iv) The CIT(A) has also given an observation that undisputedly search has been conducted on the premises on 8.5.2003 (on the appellant Sh. Anupam Naglia), However, it is apparent that no action was taken on the basis of said search as no notice u/s 158BC of the Income-tax Act was issued to the appellant. In fact even the instant proce....
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..../s Vatika Land Base Pvt. Ltd., Anil Bhalla, Gaurav Bhalla and Gautam Bhalla. AO has having jurisdiction with Vatika group of companies recorded satisfaction as required u/s 158BD of the Act and on the basis of this satisfaction, notice was issued u/s 158BD to the appellant. Reliance is placed on the following case: Vinod Goel (Page 30) 107 TTJ 1853. Sanjay Kumar Modi (Page 3) 150 Taxman 175 Ved PRakash, Sanjay Kumar 76 LTD 107 (Page 28(2) ACIT vs 17 SOT 380 (12) Jaxan Bai 94 Taxman 24 (page 28) In view of the fact of the case and the legal position, it is clear that the CIT(A)'s order is based on incorrect facts and it should therefore be set aside." On behalf of the assessee in support of the impugned order attention was invited to the specific ground raised by the Revenue. Carrying us through the sole issue agitated by the Revenue it was his submission that the Revenue is only aggrieved as per the ground raised that the assessee has not raised any objection against the validity of initiation of proceedings before the AO and also by the fact that the assessee has also not sought any remedy at any other level. It was argued that no challenge is posed by the Revenue to the f....
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....r, the purported satisfaction note was provided to the after a delay of almost seven months on 27.01.2006 (kindly see page 38 of the paper book). 21.05.2007: The AO framed an assessment at an undisclosed income of Rs. 1,89,53,900/-. The assessee-respondent being aggrieved against the aforesaid order of assessment; preferred an appeal before ld. CIT(A) on various grounds including (kindly see pages 306 to 318 of the paper book). Alleged satisfaction note so recorded is not by the AO of the searched person; hence assessment framed is illegal and void-ab-initio. Satisfaction note was not recorded prior to the culmination of proceedings in the case of searched person. The assessment has been framed u/s 158BD of the Act, whereas, it should have been completed under the provisions of section 158BC of the Act and, thus, the assessment made is barred by limitation and provisions of Section 158BD of the Act are not attracted in the case of the assessee. On this ground alone, the assessment deserves to be cancelled. 14.06.2010: That ld. CIT(A) after calling for the remand report quashed the assessment so made by AO u/s 158BD of the Act (kindly see pages 18 to 21, para's 4.7 to 4.9 of C....
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....y incorrect and contrary to material available on record. It was contended that where admittedly the only grievance posed by the Revenue is that no such ground was raised before the AO which factually is incorrect on facts then accordingly on the basis of this finding itself the sole ground raised by the Revenue deserves to be dismissed and the departmental appeal be accordingly dismissed. Since arguments de hors the grounds were advanced it was contended by the Ld. AR that he would also address the issues raised in the arguments advanced by the Ld. CIT DR. It was contended that according to the Ld. DR no search was conducted on the assessee and proceedings were validly initiated u/s 158BD it was again reiterated that this grievance is not arising out of the ground raised. It was again requested that the argument de hors the ground need not to be adjudicated upon as the department is traveling beyond the ground raised and in support for the said prayer, reliance was placed upon the following decisions:- CIT vs Sahara India Corporation Ltd.-296 ITR 285 (Delhi HC) CIT vs Samir Diamonds Exports Ltd. 245 ITR 548 (Bombay HC). Contending that de-hors the ground the CIT DR had advance....
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..... It would be appropriate to extract from the submissions dated 15.05.2014 filed so as to emphasize in assessee's own words the arguments advanced addressing the "mistake" of the AO:- "6.3.3.................................................................... The short-submission here of the assessee-respondent is that having searched the premises of the assessee, the AO could not take recourse to the provisions of section 158BD of the Act. It is a case of an inaction on the part of AO to have not adhered to statutory provisions as envisaged u/s 158BC of the Act and, any inaction on the part of the AO has to be at the cost of national exchequer and for this proposition reliance is placed on the judgment of Hon'ble Supreme Court in the case of Parshuram Pottery Works Ltd. vs. ITO reported in 106 ITR 1 at page 10, wherein the lordships have held as under: "It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only ....
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....ght and that too by predating a satisfaction note recorded by dating the same as 31.05.2005. Thus, the proceedings so initiated u/s 158BD of the Act (without recording of proper satisfaction note) is without satisfying the statutory preconditions as envisaged under the Act and had been rightly quashed by ld. CIT(A) and in support of the aforesaid submission, the assessee-respondent would seek to place its reliance on the judgment of Hon'ble Supreme Court in the case of Manish Maheshwari vs. ACIT reported in 289 ITR 341. In fact, the burden is very heavy on the revenue to establish that, such a note of satisfaction was recorded by showing independent evidence that a satisfaction note was recorded by the AO having jurisdiction over the person searched and that too prior to culmination of assessment made on M/s Vatika Ltd. on whose case an assessment was made which has not been done by the Revenue and as such, the assessment needs to be quashed on this ground alone. Further, the assessee-respondent would seek to place its reliance on the findings as recorded by ld. CIT(A) in para 4.8 and 4.9 at pages 20 to 21 of the impugned order, which have not been rebutted by ld. CIT DR ....
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.... of which proceedings u/s 158BD of the Act had been initiated were also seized from the said premises of assessee. Thus, the submission of the assessee-respondent is that once the search party entered the premises of the assessee and seized documents therefrom, than proceedings should have been initiated u/s 158BC of the Act on the assessee-respondent instead of section 158BD of the Act. That in order to support the above said submission the assessee-respondent seeks to place its reliance on the order of Hon'ble ITAT Mumbai in the case of J.M. Trading Corporation vs. ACIT reported in 20 SOT 489 which is duly approved by Hon'ble Bombay High Court. (Copy enclosed as Annexure "A" and "B"). That, without prejudice to the above, it is submitted that in order to invoke the provisions of section 158BD of the Act, the basic premise/foundation is that the seized/incriminating material found as a result of search should depict undisclosed income and it is only then that a proper satisfaction could have been recorded by the officer of the searched person while handing over the documents to the officer of other person to make assessment. Whereas, in the instant case the purported satisfaction....
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..../13 7,28,375/- 10 Pg 339 to 344 of the paper book 10 A-2 8/17 5,15,000/- 11 Pg 339 to 344 of the paper book 11 A-2 10/25 21,44,657/ - 11 Pg 339 to 344 of the paper book 12 A-2 11/27 1,16,000/- 11-12 Pg 339 to 344 of the paper book 13 A-2 30/33 4,34,350/- 12 Pg 339 to 344 of the paper book 14 A-2 21/93 63,60,000/ 12 Pg 339 to 344 of the paper book That on appraisal of the aforesaid submissions, it would become clear that the documents seized does not depict undisclosed income of the assessee and thus, the satisfaction so recorded is merely a purported and subjective satisfaction. It is also important to note that mere seizure of document (as is in the instant case), would not entail powers to the assessing officer to initiate proceedings under section 158BD of the Act, as the provisions of section 158BD are is sharp contrast with the newly inserted provisions of section 153C of the Act, wherein only seizure of document belonging to "other person" from the premises of the searched person is enough to initiate proceedings under section 153C of the Act, whereas, situation is entirely different under the provisions of section 158BD of the Act as has be....
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....t whom the proceedings are being initiated u/s 158BD of the Act). It is submitted that in the latter class of cases, provisions of section 158BD of the Act are inapplicable. Thus, all what the assessee has submitted is that, even assuming there was no search on the assessee then too, since the documents have been seized from the assessee-respondent and not from the person who had been searched, action u/s 158BD of the Act was wrongly initiated and hence the assessment made is without jurisdiction and has rightly been quashed by ld. CIT(A)." We have heard the rival submissions and perused the material available on record alongwith written submissions filed on behalf of the parties before the Bench. On a careful consideration of the peculiar facts and circumstances of the case wherein the Revenue has deemed it appropriate to assail the impugned order effectively only on the grounds that :- a) the CIT(A) has erred in quashing the proceedings when the validity of the proceedings were not challenged before the AO; and b) no remedy was sought by the assessee at any other level we on consideration of the factual and legal aspects thereon primarily do not find any merit in the department....
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....hich is a letter dated 11.06.2005 addressed by the assessee to the ACIT, Circle-20 (received as per the stamp of the said office on 13.06.2005) shows that the assessee let alone during the assessment proceedings even at the notice stage has not kept the department in dark about its intentions, grievance and awareness of the legal position. A perusal of the said letter shows that the assessee specifically requests the said authority for the documents taken into consideration for the issuance of notice and the "satisfaction note" required as per law to have been recorded by the AO of the searched person. For ready-reference, we reproduce the relevant extract from the letter dated 11.06.2005:- "A notice dated 31.5.2005 has been served on me on 1.6.2005 purported to be a notice u/s 158BD of the Income Tax Act, 1961. It has been stated that whereas a search & seizure operation was conducted on Vatika Group of Companies on 8.5.2003 and on the basis of papers/documents found and seized in pursuance of the provisions of section 158BD, I am required to prepare a true and correct return of my undisclosed income. It is submitted that I do not have any undisclosed income. However, before I fi....
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....ies of such documents as I wish out of the seized records (Emphasis Supplied). With great respect, it is most respectfully submitted that the proceedings have been initiated on the basis of satisfaction of the assessing officer having jurisdiction over the person who has been searched. Further, such satisfaction has been reached on the basis of evidence found as a result of seized evidence on such third person. It is thus evident that I have to examine such evidence and prepare my reply accordingly. It is thus respectfully submitted that in the instant case, provisions of section 158BD have been invoked. You will very kindly furnish me such evidence which satisfied the assessing officer to assume that an undisclosed income had been earned and that it belonged to me. I thus request you to please furnish such evidence or pass such order on this application as you consider appropriate according to law. It is thus submitted that unless the department furnishes such documents and provides copies thereof to me, it would be contrary to the principles of natural justice & fair play to expect the assessee to file a return of an alleged undisclosed income, (and that too considering the same....
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....tion note and hence the Writ Petition was dismissed as withdrawn. Sir, it is because of non furnishing of evidence assessee is not able to furnish the return and as such delay in filing the return is not attributable to assessee. It is submitted that in case you propose to pass an adverse order, no interest be charged on such undisclosed income assessed." (Emphasis provided by the Bench) The above read alongwith letter dated 14.05.2007 taken into consideration by the CIT(A) and confronted to the AO shows that not only before the filing of the return but even after filing the return the assessee has been objecting to the validity of the proceedings as per record. It is further seen that vide letter dated 14.05.2007 the assessee again in writing objects to the proceedings u/s 158BD (copy placed at pages 60-72) not only vide para 16 thereof as taken note of in the impugned order but also vide specific paras 1 to 4. In paras 5 to 15 the documents on the basis of which satisfaction purportedly has been recorded on consideration to form the view that they pertained to unaccounted money was assailed in detail. A perusal of the same would show that objection to the validity of the proce....
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....al of the "reasons" which have been furnished by you, it is apparent that such a note of reasons as has been recorded by the ACIT, Central Circle- 20, New Delhi, is in my case and as such it is submitted that there has been no valid assumption of jurisdiction at the time of initiation of proceedings by you as there has been no note of satisfaction recorded by the assessing officer as is contemplated in law. Copy of reasons which has been supplied to me reads as under:- Reasons u/s 158 BC read with section 158 BD in the case of Shri Anupam Nagalia "Warrant was issued in the name of Vatika Group of Companies to search residence of Sh. Anupam Nagalia on 8.5.2003, who was Director of some of the companies of Vatika Group and also a Chartered Accountant. Scrutiny of seized documents reveals that assessee had unaccounted income under the following heads:- Remuneration- Annexure A-11, page 33,34,37 and 38 reveals receipt of unaccounted remuneration by Sh. Anupam Nagalia. Profit in Danisco Deal - Annexure A-1 reveals receipt of unaccounted profit from business deal with M/s Danisco Ingredients (India) Pvt. Ltd. Investment in assets - Annexure A-1, page 65 reveals unaccounted investme....
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....idity of the proceedings and cannot be aggrieved by an assessee who on facts has availed of the Statutory right of appeal vested in him by the Statute, namely the Income Tax Act, 1961. Further the AO is no one to suggest that the assessee ought to have invoked the extra ordinary Writ jurisdiction. Infact it would not be out of place to point out that there are umpteen instances to show that the Hon'ble High Court may refuse to entertain the Writ Petition and consequently refuse to exercise the extra-ordinary jurisdiction vested in the Court and instead direct the petitioner to first petition the concerned authority and/or avail of the remedy of the statutory remedy of appeal available under the statute. We may refer here to the judgement of the Jurisdictional High Court in the case of Adobe Systems Software Ireland Ltd. vs Assistant Director of Income Tax (2014) 363 ITR 174(Del) wherein their Lordships held that existence of Jurisdictional fact cannot be examined in Writ proceedings and assessee was directed to resolve disputed questions of fact in alternative remedies available under law. Infact to approach the Court without filing the return was considered to have led the Hon'ble....
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.... "4.8. The Assessing Officer in the remand report, has contended that since this objection was not raised in the course of assessment proceedings, therefore, this objections may not be entertained in view of section 292BB of the Act. Firstly, the contention is factually incorrect as the contention regarding validity of proceedings was raised by the appellant in the course of assessment proceedings vide his reply dated 14.5.2007 and moreover, section 292BB of the Act has no application to the facts of the case. Section 292BB of the Act provides that where an assessee has appeared in any proceedings or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceedings or inquiry under this Act that the notice was not served upon him or notice was not served upon him in time or served upon him in an improper manner. It will be seen that the contention of the appellant is neither that notice was served or notice w....
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.... under section 132 of the Act, 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, thereafter the Assessing Officer of such other person shall proceed against such other person. The, Apex Court in the case of Manish Maheshwari 289 ITR 341 has held that, unless there is a valid satisfaction note recorded by the Assessing Officer of the searched person, after going through the seized documents to the effect that initiation of proceedings u/s 158BD is called for, there is no justification, to initiate proceedings u/s 158BD of the I. T. Act. It concluded therein as under :- "The condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. The said provision would apply in 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, ....
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....h cases the Assessing Officer who has jurisdiction will proceed against such other person by issuing the requisite notice contemplated by section 158BC of the Act." Also, Hon'ble Delhi High Court in the case of Janki Exports International v UOI reported in 278 ITR 296 has further held as under :- "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 required to forward the relevant documents, papers, etc., to the Assessing Officer who is required to assess the person in respect of whom the undisclosed income has been discovered. Once this is done, we feel that the person who is to be proceeded against under section 158BD and then section 158BC, must be informed about the satisfaction of the Assessing Officer which has been recorded and he must be given a reasonable opp....
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....ial and hence the satisfaction contemplated in section 158BD is totally different than contemplated in section 147. It is fundamental that the Assessing Officer finds out whether there is undisclosed income. If he finds that there exists undisclosed income, then he has to give a finding as to whom the said income belongs. In the absence of such a finding, it is not possible to conclude a block assessment under section 158BC. Only thereupon the section 158BD proceedings in respect of the other person for making a similar block assessment of such undisclosed income would commence. Hence, in our considered view, the note of satisfaction must contain a positive finding by the Assessing Officer making the assessment under section 158BD indicating therein the undisclosed income found as a result of his examination of the seized material, the person to whom such income belongs and proceed accordingly as provided for in the said section. The circumstances envisaged and the context in sections 147 and 158BD are entirely different decision in the case cited (supra) into the section 158BD proceeding for the reasons detailed herein." In other words, the basic statutory pre-condition for invok....
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....the learned Assistant Commissioner of Income Tax, Central Circle-20, New Delhi has referred to the following material for concluding that there is undisclosed income of the appellant:- Pages 33, 34, 37 and 38 of Annexure A-11 Annexure A-11 Page 65 of Annexure A-1 (d) Pages 1, 2, 3, 5, 6, 8, 10, 13, 15 and 21 of Annexure A-2. It is admitted position that, each of the aforesaid papers have been found as a result of search on the appellant and, not from the premises of M/s Vatika Group of Companies, i.e., searched person considered by the Assessing Officer for assuming jurisdiction u/s 158BD of the Act. Thus, since satisfaction note is not based on any seized material found from the searched person i.e. Vatika Group of cases, the basic statutory precondition for invoking provisions contained in section 158BD of the Act is lacking in the instant case. The burden was on the Assessing Officer to establish that, a valid satisfaction note had been recorded on the basis of material found as a result of the searched person. In the instant case, the perusal of satisfaction note would clearly show that, since there is no material found as a result of the search on the searched person, no ....
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....refore, the order passed on the basis of this notice is invalid in the eye of law. "4.8. The Assessing Officer in the remand report, has contended that since this objection was not raised in the course of assessment proceedings, therefore, this objections may not be entertained in view of section 292BB of the Act. Firstly, the contention is factually incorrect as the contention regarding validity of proceedings was raised by the appellant in the course of assessment proceedings vide his reply dated 14.5.2007 and moreover, section 292BB of the Act has no application to the facts of the case. Section 292BB of the Act provides that where an assessee has appeared in any proceedings or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceedings or inquiry under this Act that the notice was not served upon him or notice was not served upon him in time or served upon him in an improper manner. It will be seen ....
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....on. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. So far as the income-tax assessment orders are concerned, they cannot be reopened on the score of income escaping assessment u/s 147 of the Act of 1961 after the expiry of four years from the end of the assessment year unless there be omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. As already mentioned, this cannot be said in the present case. The appeal is consequently allowed, the judgment of the High Court is set as....