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2023 (11) TMI 807 - DELHI HIGH COURTValidity of block assessment - whether or not a satisfaction note had been generated by AO of the searched person before issuing notice u/s 158BD r.w.s. 158BC - HELD THAT:- Concededly, despite the order dated 02.08.2016 passed by the coordinate bench nearly seven (07) years ago, the revenue has not been able to produce the original files, which could have disclosed as to whether or not a satisfaction note was generated by the AO of the searched person. This being the position, we can only draw an adverse inference qua the revenue that no satisfaction note was generated by the AO of the searched person. During the course of arguments, counsel for the revenue sought to highlight the fact that the issue concerning the purported failure of the AO to generate a satisfaction note was not raised before the Tribunal. Our perusal of the record shows that this submission is incorrect. But even if we were to assume that this aspect was not pressed before the Tribunal, since it, otherwise, has a bearing on the jurisdiction of the AO of the assessee to deal with the matter, it can be raised, in our opinion, before the High Court for the first time. We have no reason to conclude that ground with regard to the AO wrongly assuming jurisdiction was not raised before the Tribunal. This being the factual situation, the issue is no longer res integra and stands concluded by the judgments rendered by the Supreme Court in the cases referred to hereafter. See cases Manish Maheswari vs. ACIT [2007 (2) TMI 148 - SUPREME COURT], Tapan Kumar Dutta [2018 (4) TMI 1375 - SUPREME COURT] as held very object of the section 158BD is to give jurisdiction to the Assessing Officer to proceed against any person other than the person against whom a search warrant is issued. Although section 158BD does not speak of “recording to [of] reasons” as postulated in section 148, but since proceedings under section 158BD may have monetary implications, such satisfaction must reveal mental and dispassionate though process of the Assessing Officer in arriving at a conclusion and must contain reasons which should be the basis of initiating the proceedings under section 158BD - Decided in favour of assessee.
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