TaxTMI 
TaxTMI 
2021 (7) TMI 372
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....iate company of M/s Manufinlease Ltd. During the course of search operations, documents relating to the assessee were also found and seized. Accordingly, proceedings u/s 158BD were initiated on 4th September, 1997. In response to the said notice, the assessee filed return for the block period declaring nil undisclosed income. 4. During the course of assessment proceedings, the AO noted that various documents relating to the assessee were found and seized during the search operation at the business/residential premises of M/s Manufinlease Ltd. and its directors. The AO, during the course of assessment proceedings, confronted the above seized documents and asked the assessee to explain the various transactions contained therein. In absence of any satisfactory explanation given by the assessee, the AO made various additions and determined the total income of the assessee at Rs. 39,62,616/-. 5. Aggrieved with such order of the AO, the assessee is in appeal before the Tribunal by raising the following grounds:- "1. That having regard to the facts and circumstances of the case, ld. Assessing Officer has erred in law & on facts in assuming jurisdiction over the case of the ....
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..... That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in making an addition of Rs. 363330/- as undisclosed income on account of alleged unexplained investment in housing society appearing in document no 2. 11. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in making an addition of Rs. 545500/- as undisclosed income on account of alleged unexplained investment in purchase of property at New Friends Colony, New Delhi on the basis of alleged D.no.2. 12. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in making an addition of Rs. 1300000/-, on account of alleged unexplained investment in Office a/c as undisclosed income on the basis of alleged D.no.2. 13. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in not giving the credit of an amount of Rs. 23,38,771 appearing in name of assessee in document no 35/11 seized from Manu Finlease Ltd. 14. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in making an ad....
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.... PB 262-284 - Assessment order dated 29.09.1998 by ACIT, Inv Circle Fbd. PB 326 - Letter from ACIT, Inv Circle, Fbd dated 31.08.1998 asking for more seized records from AO of the searched person which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to the ACIT viz. AO of this assessee. PB 327-328-332 - Letter from AO of searched person dated 01.09.1998 supplying to ACIT, Inv Circle, Fbd the seized material which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to the ACIT viz. AO of this assessee. PB 333 - Letter from AO to ACIT, Inv Circle, Fbd dated 01.09.1998 acknowledging the receipt of seized material from AO of the searched person which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to the ACIT viz. AO of this assessee. PB 335 - Letter dated 18.09.1998 from ACIT, Inv Circle, Fbd asking ADIT to give him the seized material which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to t....
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....ied on the decision of the Delhi Bench of the Tribunal in the case of DCIT vs. NITS Software Ltd., (2008) 8 DTR 0269 (Del) and the decision of the Hon'ble Delhi High Court reported in 299 ITR 83 (Del). 10. The ld. Counsel for the assessee in his next plank of argument submitted that notice u/s 143(2) was not issued in this case after filing of return of income on 14.9.1998. The notice u/s 143(2) was issued on 13.2.1998 and, thus, jurisdiction assumed by the AO to pass assessment order u/s 143(3) read with section 158BD/158BC could not be validly assumed. Referring to page 262 and 263 of the paper book, the ld. Counsel submitted that the original assessment order dated 29.09.1998 passed in the first round says that return of income was filed on 14.09.1998 and notice 143(2) was issued on 13.09.1998. Referring to the following decisions, he submitted that since notice issued u/s 143(2) was barred by limitation, therefore, the entire assessment proceedings has become null and void:- i) ACIT vs. Hotel Blue Moon, (2010) 321 ITR 0362 (SC); ii) Jyoti Pat Ram vs. ITO, (2005) 96 TTJ 0947 (Lkw); iii)DIT vs. Society for Worldwide, (2010) 323 ITR 0249 (Del); ....
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....ly, the assessment order is bad in law and factually the addition deserves to be deleted. 14. The ld. DR, on the other hand, heavily supported the order of the CIT(A). He submitted that in the second round of litigation before the AO, the assessee has not raised the jurisdictional issue. The AO, in the instant case, has recorded the satisfaction properly and the jurisdiction was with the officer having jurisdiction over the assessee. Therefore, the assessee cannot challenge the jurisdictional issue now. He, however, conceded that the seized materials, etc., were handed over to the AO after assuming jurisdiction u/s 158BD. So far as the merit of the case is concerned, the ld. DR submitted that the AO has given valid reasons while making the addition. Therefore, the addition made by the AO should be upheld. 15. The ld. Counsel, in his rejoinder, submitted that the assessee has raised the validity of jurisdiction before the Tribunal and the Tribunal, while restoring the issue to the file of the AO, has held that 'the assessee would be entitled to raise all the issues including the issue of jurisdictional limitation, etc., open to him in law.' Therefore, the ld. CIT, DR is not co....