2014 (5) TMI 158 - ALLAHABAD HIGH COURT

Block Assessment - Requirement to record the satisfaction – Proceeding u/s 153A & 153C versus 158BC, 158BD - Notice to be issued u/s 158BD of the Act - Notice for undisclosed income of any other person - At what stage of the proceedings under Chapter XIV-B does the assessing authority require to record his satisfaction for issuing a notice u/s 158BD of the Act – Held that:- Following Commissioner of Income Tax-III Vs. M/s Calcutta Knitwears, Ludhiana [2014 (4) TMI 33 - SUPREME COURT] - For the purpose of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person - the assessing officer had not recorded the satisfaction note as required u/s 158BD of the Act - The provisions of Section 158BD are pari materia with the provisions of Section 153C.

Bothe the CIT(A) and the ITAT rightly noted that there is no material showing the recording of satisfaction by the AO of the 'searched person' prior to issuance of notice u/s 153C to the assessee, i.e. 'the other person' - though the AO (of the other person) in the assessment order had stated that satisfaction for issuing notice u/s 153C was recorded on examination, it was seen that recording of satisfaction alleged to be recorded by the AO was not available thus, there was no substantial question of law arises in the appeal for interference with the judgment u/s 260-A of the Act – Decided against Revenue.