TaxTMI 
TaxTMI 
2017 (2) TMI 743
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.... a case where survey under Section 133A was converted into search. During the course of search various papers/ documents/ accounts etc. were found and seized and on examination of the same, certain undisclosed income belonging to the assessee was required to be taxed and, therefore, action under section 158BD of the Income Tax Act was taken. 3. Counsel for the appellants has contended that though the society has challenged the order by way of Tax Appeal No.51/2005 wherein a Division Bench of this Court (comprising of Hon'ble Mr. Justice R.M. Lodha and Hon'ble Mr. Justice R.S. Chauhan) by dated 15.02.2007 passed the following order: "Upon perusal of the Tribunal's Order, we find that in paragraph 34, the Tribunal has deleted the total income assessed in the hands of the appellant society in the block return as well as regular return. In the backdrop of this finding, the assessee cannot be said to be aggrieved by the order of Income Tax Appellate Tribunal. This appeal, therefore, does not deserve to be entertained and it is disposed of accordingly." 3.1 On the same day i.e. 15.02.2007, the same Bench has passed the following order in the case of the assess....
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....ectness of the finding recorded by C.I.T. (A) that initiation of proceedings under Section 158 BD was without jurisdiction when the said finding was not challenged by the revenue in the appeal? iii) Whether in view of the subsequent assessment order dated 26th November, 2005 and the appeal order dated 29th January, 2007, the correctness of the order passed by the Income Tax Appellate Tribunal on 21st October, 2004 should not be examined in the appeal?" 5. Counsel for the appellants Mr. Ranka, senior counsel, has take us to the order or CIT (Appeals) wherein in para 5 and 6 it has been held as under: 5. I have carefully considered rival submissions. I find that the only income assessed in the hands of the appellant is 50% income computed by him in the case of M/s Paharganj Grih Nirman Sahakari Samiti Ltd. The proceeding against the appellant has been made u/s 158BD of the Act. The provisions of sec. 158BD required to be analysed for which these provisions are reproduced as under :- "158BD. 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 1....
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....ime where the Courts are to be very cautious, careful and considered that its valuable and precious time is not wasted or consumed in deciding the matters of academic nature. The decision given on these two questions either way will not have any bearing or effects on the ultimate result to which the Court subordinate or the Tribunal reached, meaning thereby even if the case of the Revenue is accepted, still it will not result in grant of relief in its favour. Even if these two questions of law are answered in favour of the Revenue we are satisfied that it will not result in revival of the order of the AO which has been confirmed by the CIT(A) i.e., the penalty of Rs. 1,68,000 and the consequential liability of payment thereof upon the assessee. 16. Their Lordships of the Hon'ble Supreme Court in the case of CIT v. Smt Anusuya Devi [1968]68ITR750(SC) observed that the High Court may only answer a question referred to it by the Tribunal. It is however not bound to answer a question merely because it is raised and referred. The High Court may decline to answer a question of fact or a question of law which is purely an academic or has no bearing on the dispute between the ....
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....ding income substantively. Notice under section 158BD was issued to the appellants on 16.01.2001. The appellants found the same to be lacking jurisdiction. No return was filed. On the basis of the society, addition was made protectively at the hands of the appellants at 50% on 30.01.2003. It is contended that the only material produced before the Assessing Officer was copy of partnership deed of B.R. Properties dated 07.05.1993 and another deed dated 03.02.1990. No activities, transactions, income, bank account, books of accounts or proof of existence of the firm were produced before the assessing officer. The assessing Officer itself gave up the sharing ratio in the deed and assessed equally. In case of income of a firm which is treated to be a person under section 2(31) of the Income Tax Act, notice under Section 158BD should have been addressed to the firm and served on the firm. No action was taken against the firm, therefore, notice to the appellants is illegal and bad. In support of his submissions, he has relied upon the decision of the Bombay High Court in the case of CIT Vs. Tirupati Oil Corporation- (2001)248 ITR 194 wherein it has been observed as under: "The Tr....
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....n other than a searched person, is mandatory before proceedings under Section 158BD can be initiated against such other person. In this case, after going through the records the Tribunal came to the conclusion that the letter dated 14th August, 2002 predicated on which the proceedings under Section 158BD of the said Act had been initiated by the Assessing Officer of the assessee did not show that he was satisfied that the investment had been made by the assessee. The Tribunal further went on to note that as a matter of fact the Assessing Officer of the said M/s Chintpurni Constructions Pvt. Ltd. had vide the assessment completed by him on the 28th September, 2001, already added on substantive basis the sum of Rs. 11.53 lakh to the assessment of the said M/s Chintpurni Constructions Pvt. Ltd., and from that action of the Assessing Officer it could be clearly inferred that the said Assessing Officer was satisfied that the investment did not belong to some other person. Therefore, the Tribunal came to the conclusion that the satisfaction, as mandated under Section 158BD of the said Act, was not recorded. Therefore, the proceedings under Section 158BD/158BC, insofar as the respondent a....
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....isdiction under the Act to assessee the appellant, Chhotalal. As ex parte order was passed against the appellant for the assessment year 1952-53, on March 30, 1957, by the Seventh Income-tax Officer, Ward G, Bombay, on the finding that the remittances in question constituted the income of the appellant from undisclosed business and other source during the assessment year. This ex parte order was challenged by the appellant by preferring an appeal before the Appellate Assistant Commissioner. The appellate authority allowed the appellant's appeal and set aside the ex parte order on the ground that there was no service of notice on the appellant as required by law. The matter was accordingly remitted to the Income-tax Officer for a fresh assessment. Thereupon the impugned notice was served on the appellant under section 34 of the Act on February 25, 1959. 9. The main argument which is urged by Mr. Nambiar in support of this appeal is that respondent No. 1, the Income-tax Officer, who has issued the impugned notice, has no jurisdiction to assess the appellant for the income in question, because he contends that even according to respondent No. 1 the said proposed assessmen....
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....the initial state it would be open to the income-tax authorities to determine by proper proceedings who is in fact responsible for the payment of tax, and that is all that is being done at the present stage. In cases where it appears to the income-tax authorities that certain income has been received during the relevant assessment year but it is not clear who has received that income and prima facie it appears that the income may have been received either by A or B or by both together, it would be open to the relevant income-tax authorities to determine the said question by taking appropriate proceedings both against A and B. That being so, we do not think that Mr. Nambiar would be justified in resisting the enquiry which is proposed to be held by respondent No. 1 in pursuance of the impugned notice issued by him against the appellant. Under these circumstances we do not propose to deal with the point of law sought to be raised by Mr. Nambiar. " 11. We have heard learned counsel for both the parties. 12. We will first consider question no.2 whether the Income Tax Appellate Tribunal was right in law in going into the correctness of the finding recorded by C.I.T. (A) that initi....