TaxTMI 
TaxTMI 
2004 (10) TMI 27
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed out in respect of M/s. Bharat Lottery Agency and its proprietor, Shri Praveen Kumar Jolly, on June 23, 1999. It is also indicated in the petition that the residential premises of the said Shri Praveen Kumar Jolly was searched. It is in view of this search and seizure of the books of account, that a report was submitted by the raiding party. It transpires that on the basis of this appreciation report, action has been initiated against all these petitioners. Section 158BD being relevant is quoted hereunder: "158BD. Undisclosed income of any other person.-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 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... furnish within such time not being less than fifteen days ; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1977, serve a notice to such person requiring him to furnish within such time not being 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 ..." Reading the aforesaid provision, it is clear that in view of section 132, a search must have been carried out or books of account or other documen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....action. In our view, it is not necessary for the Assessing Officer to record his satisfaction with regard to the person against whom the action has been initiated under section 132 or section 132A of the Act, but it is required only if action is taken against any other person other than the one covered by section 132 or 132A of the Act. It was submitted before us that, as stated in the affidavit in reply, the material was considered for initiating action. The relevant portion reads as under: "The assessee has acquired the following properties: 1/4th share in property located at 5/11, WEA Karol Bagh, for a sum of Rs. 1,89,000. 1/10th share in property located at 9-B, Rajindra Park for a sum of Rs. 9,45,000. The following issues with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lment. (iv) The issues discussed above need to be scrutinized more so in the light of the fact that the case of the assessee-company has not been scrutinized in the last five years. Keeping in view the above observations and preliminary examination of the seized record, proceedings under section 158BD of the Income-tax Act are hereby initiated against the assessee company, to carry out detailed investigation." Before us, the appreciation report prepared by the search party under section 132 of the Act was also produced with various annexures for perusal. It is in view of this report, it appears that the Assessing Officer initiated proceedings under section 158BD of the Act. From the record, it appears from the appreciation report t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....named persons it cannot be said that no action for alleged undisclosed income was called for against the petitioner under section 158BD." Thus, it is very clear that satisfaction is required and it cannot be said that proceedings can be initiated without such satisfaction. Although, this satisfaction may be on the basis of the material which is seized not from the noticee, but from the other assessee and against a person in respect of whom action was taken under section 132 or 132A of the Act. The court further pointed out as under: "... This disclosure in the search operations against the two abovenamed persons was a relevant material for forming of an opinion and satisfaction that the petitioner has not truly disclosed his income an....