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2010 (10) TMI 1119 - ITAT AHMEDABADBlock assessment proceedings u/s 158BD after lapse of about 5 years - long gap of completion of the assessment in the case of persons searched - search action u/s 132 was carried out at the premises and after making preliminary enquiries, the proceedings u/s 158BD r.w.s. 158BC were initiated against the assessee - AO, after considering the material on record, computed the undisclosed income on which part relief is allowed by the ld.CIT(A) - HELD THAT:- We are of the view that the issue is squarely covered in favour of the assessee by the order of ITAT, in the case of Vimal Vadilal Shah & Ors [2010 (5) TMI 889 - ITAT AHMEDABAD] following the decision of Special Bench in the case of Manoj Agarwal [2008 (7) TMI 446 - ITAT DELHI-A] held that without there being satisfaction recorded prior to completion of assessment of the person searched proceedings so initiated u/s 158BD will not be valid. we hold that the block assessment framed in case assessee are not legally valid and therefore are quashed for the reason that notices u/s 158BD were issued in these cases long after completion of assessment in the case of person searched i.e. Ohm Developers. An identical matter was considered by this Court, CIT v. Mridula, Prop. M/s Dhruv Fabrics [2010 (7) TMI 664 - PUNJAB AND HARYANA HIGH COURT] as observed If any other time limit is read in the provisions / statute, it shall lead to anomaly and would be arbitrary and unreasonable. It could not be read in the provision that where block assessment u/s 158BC in the case of an assessee against whom action u/s 132 or 132A had been carried out is finalized, Revenue can take action at any time in the absence of any specific limitation prescribed in the statute. A construction which leads to such an anomaly should be avoided. No justification for initiation of block assessment proceedings u/s 158BD against the assessee after long gap of completion of the assessment in the case of persons searched, viz. M/s Ohm Developers.Appeal of the assessee are allowed.
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