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2010 (7) TMI 728 - AT - Income TaxBlock assessment- validity of initiation of proceedings under section 158BD- Held that:-The satisfaction contemplated under section 158BD to the effect that any undisclosed income belongs to any person other than the person with respect to whom search was conducted under section 132 or requisition made under section 132A, is to be recorded in writing by the AO of the person with respect to whom search under section 132 or a requisition under section 132A is made. Further, the satisfaction contemplated under section 158BD is required to be recorded by the AO of the person searched at any time but not later than the finalization of assessment of undisclosed income for the block period under Chapter XIV-B in the case of the person put to search or requisition, as the case may be. Secondly, insofar as the issuance of notice under section 158BD is concerned, the same is to be issued by the AO of the person, other than the person put to search under section 132 or requisition under section 132A. That too, after transmission of the relevant material from the first-mentioned AO, i.e., the AO of the person put to search under section 132 or requisition under section 132A .Therefore, the proceeding initiated by issuing the notice under section 158BD in the case of the assessee was not valid proceeding. As such the block assessment framed in the hands of the assessee was bad in law. See Manish Maheshwari v. Asstt. CIT (2007 - TMI - 40384 - Supreme Court). Decided in favor of the assessee.
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