TaxTMI 
TaxTMI 
2010 (5) TMI 889
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....ee has raised following ground:- "01. On the facts and circumstances of the case. The learned CIT(Appeals) erred in upholding the addition made by the learned Assessing Officer on account of on money of Rs. 2,14,000-and another sum of Rs. 20,776/- being undisclosed Income-tax of appellant and considering same as unexplained investment in the hands of appellant. 02. The learned CIT(Appeals) erred in upholding the claim of the appellant that he has not paid on money for purchase of flat. 03. The Appellant prays to reserve that right to add, alter, amend o withdraw any of the above grounds of appeal. In addition to this assessee has raised following additional ground:- "01. The learned CIT(Appeals) grossly erred in quashing the block assessment proceedings U/s. 158BD of the Act as there no satisfaction was recorded prior to issue of notice by the assessing officer who completed the 158BC proceedings in the case of searched party i.e. M/s. Ohm Organizers and Ohm Developers. 02. The learned CIT(Appeals) grossly erred in quashing the block assessment proceedings U/s. 158BD at the whole order is time barred as per the provisions of Sec. 158BE of the ....
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....justifiably recorded his reasons and satisfaction and initiated proceedings u/s.158BD r.w.s. 158BC of the IT Act. Therefore, it could not be said that such proceedings was either unauthorized or was without any jurisdiction. Consequently, it was absolutely clear form the facts of the case that the order passed u/s.158BD r.w.s. 158BC which is the subject matter of this appeal, was perfectly valid in law,. The Assessee's appeal on this ground is therefore, rejected." 5. Now, we consider grounds, the action taken by the Assessing Officer and decision by Ld. CIT(Appeals) in another case as under:- III. IT(SS)A No.28/Ahd/2008 (assessee: Vimal Vadilal Shah):- 6. In this case assessee has raised the following grounds:- "1. The learned C.I.T.(A) has erred in points of law and/or facts in sustaining addition of Rs. 2,81,600 out of total addition of Rs. 8,15,000 made in the block assessment. In the absence of recording of necessary satisfaction before completion of the assessment in the case of raidee, the entire block assessment u/s.158BD in the case of appellant ought to have been cancelled. 2. The learned C.I.T.(A) ought to have held that there was no material t....
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....case of M/s. Ohm Organizers that too after 6 years from search action in the case of said firm. 3. It is therefore, prayed that the action u/s.158BD of the act should be treated as invalid being wrongly taken and being taken not within reasonable time." 9. Thus, in all the above cases, search at the premises of Ohm Developers was carried out on 29-10-1999 and in the search certain documents were found showing that above assessees have purchased flats/shops from Ohm Developers and have paid on-money. To tax on-money Assessing Officer first carried out some preliminary enquiries and then finally issued notice u/s.158BD of the Act on 04-02-2005. Ld. CIT(Appeals) have rejected the ground taken by the assessee on legality of action u/s.158BD of the Act. 10. The Authorized Representative of the assessees took the common arguments that notice u/s.158BD of the Act cannot be issued after closer of the block assessment proceedings u/s.158BC of the Act in the case of person searched from which case the proceedings u/s.158BD of the Act against this assessee are initiated. They relied on several judgments which are discussed hereinbelow:- (i) ITAT Chandigarh Bench in the....
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....e. [Para 23] Further, the satisfaction contemplated under section 158BD, is required to be recorded by the Assessing Officer of the person searched at any time but not later than the finalization of assessment of undisclosed income for the block period under Chapter XIV-B in the case of the person put to search or requisition, as the case may be. Secondly, insofar as the issuance of notice under section 158BD is concerned, the same is to be issued by the Assessing Officer of the person other than the person put to search under section 132 or requisition under section 132A. That too, after transmission of the relevant material from the first mentioned Assessing Officer, i.e., the Assessing Officer of the person put to search under section 132 or requisition under section 132A. Therefore, a reasonable time lag between the date of recording of satisfaction and issuance of notice under section 158BD is envisaged in the Act itself. [Para 27] Similar view was taken by ITAT Delhi Bench in the case of Manoj Agarwal v. DCIT (2008) 113 ITD 377 (Del) (SB), it was held as under:- Section 158BD, read with sections 158BC and 147, of the Income-tax Act, 1961 - Block assessmen....