TaxTMI 
TaxTMI 
2025 (8) TMI 1526
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessment order and deleting the addition of Rs. 12,34,46,051/- disregarding the Department's finding and evidence on record produced before the Tribunal as well as before the lower authorities making the said order perverse in nature" 3. By order dated 16th June, 2016 the Hon'ble Division Bench granted leave to the respondent/assessee to file cross-objection which has been filed and taken on record as OCOT/6/2016. In the said cross-objection the following grounds have been raised by the assessee : "(A) For that the Tribunal was not justified in holding that the notice dated November 28, 2003 issued under section 158BD of the Income Tax Act,1961 (hereinafter referred to as "the Act") was not invalid or barred by limitation or that satisfaction within the meaning of section 158BD of the Assessing Officer of the searched person was arrived at in the course of the assessment proceedings in the case of the searched person. (B) For that the Tribunal should have held that the notice dated November 28, 2003 under section 158BD and the proceedings initiated thereunder were wholly without jurisdiction and/or barred by limitation. (C) For that the Tribunal fail....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed by the assessee in the cross-objection, the assessee questions the notice dated 28.11.2003 issued by their Assessing Officer at Kolkata under Section 158BD of the Act as being wholly without jurisdiction and/or barred by limitation. 7. The assessee places reliance on the decision of the Delhi Bench of the Tribunal in the case of SMC Share Brokers Ltd. Vs. Deputy Commissioner of Income-tax, (2007) 109 TTJ 700 (Delhi). Though the learned Tribunal in the impugned order has taken note of the decision, it has not touched upon the issue regarding limitation, more particularly, the correctness of the stand taken by the revenue that there is an Office note generated at the instance of the Assessing Officer of the searched person at Delhi dated 29.8.2002. It is not in dispute that the said Office note was produced for the first time before the learned Tribunal, which had weighed in the mind of the Tribunal to decide against the assessee. The Delhi Bench of the Tribunal in SMC Share Brokers Ltd. considered the Office note dated 29.8.2002 and its effect and efficacy qua the stand taken by the assessee that the Office note was ante-dated. The learned Tribunal has elaborately considered ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Assessing Officer of the third person. Mere use or mention of the word "satisfaction" in the order/note will not meet the requirement of the concept of satisfaction as used in section 158BD. The satisfaction has to be in writing and can be gathered from the assessment order, if it is so mentioned/recorded, or from any other order, note or record maintained by the Assessing Officer of the person searched. The word "satisfaction" refers to the state of mind of the Assessing Officer of the person searched, which gets reflected in a tangible shape/form when it is reduced into writing. It is the conclusion drawn or the finding recorded on the foundation of the material available. The Assessing Officer is satisfied when he makes up his mind or reaches a clear conclusion when he takes a prima facie view that the material available establishes "undisclosed income" of a third party. The Assessing Officer must reach a clear conclusion that good grounds exist for the Assessing Officer of the third person to initiate proceedings as material before him shows or would establish undisclosed income of a third person. At this stage, as the proceedings are at the very initial stage, the satisfaction....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Hon'ble Division Bench took note of the decision of Supreme Court in the case of Commissioner of Income-Tax vs. Calcutta Knitwears, (2014) 362 ITR 673 (SC) and held that the revenue has to be vigilant in issuing notice to third party under Section 158BD, immediately after completion of assessment of the searched person and the delay ranging between ten months of one and half years cannot be considered contemporaneous to assessment proceedings and therefore held the notices impugned therein are not in conformity with the requirements of Section 158BD as they were unduly delayed. 15. In Calcutta Knitwears (supra), the Hon'ble Supreme Court held that for the purpose of Section 158BD of the Act, a satisfaction notice is a sine qua non and must be prepared by the Assessing Officer before he transmits records to the other Assessing Officer who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages :- a) At the time of or along with initiation of proceedings against the searched person under Section 158BC of the Act ; b) Along with the assessment proceedings under Section 158BC of the Act; and c....