TMI Blog2012 (9) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... the third para of the assessment order i.e. "considering the nature of seized diaries, therefore, a notice u/s 158BC r.w.s. 158BD was issued to the assessee" indicate that reasons were recorded, was not very convincing because it was not clear as to what nature of the seized diaries were examined by the AO and how he satisfied himself that these diaries belong to the appellant firm. As in the absence of satisfaction recorded by the AO, he did not have jurisdiction to proceed against the assessee under Section 158BC read with Section 158BD additions made on protective basis need to deleted - in favour of assessee. - INCOME TAX APPEAL No. - 721 of 2012 - - - Dated:- 4-9-2012 - Sunil Ambwani, Aditya Nath Mittal, JJ. Petitioner Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58BD read with section 143 (3) before the ld. CIT (A) and it was submitted that the AO has not recorded any satisfaction required u/s 158BD of the Act before initiating the proceedings. Therefore, the impugned order is wholly without jurisdiction. Several decisions were relied upon in support of the contention including decision of Hon'ble Supreme Court in the case of Manish Maheshwari vs. ACIT, 289 ITR 341. The ld. CIT (A) called for the remand report from the AO and the AO in the remand report submitted that he has examined the records of all the persons searched but no reasons were traceable. The AO, however, referred to para 3 of the block assessment order to show that AO was satisfied for issuing notice u/s 158BD after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs to any person, other than the person with respect to whom search was made under Section 132 of the Act (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the AO having jurisdiction over such other person, and (iii) the AO has proceeded under Section 158BC against such other person. The conditions precedent for invoking the provisions of Section 158BD, thus, are required to be satisfied before the provisions of the said chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under Section 132A of the Act. 5. In Vishwanath Prasad v. ACIT 86 ITD 516 this Court held as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l on following substantial questions of law:- (1) Whether the ITAT had sufficient material to come to a conclusion that this was a case of no recording of satisfaction by the AO even when the record suggests that the reasons were recorded, but not traceable at present due to transfer of record? (II) Whether the ITAT was justified in law as well as in the facts and circumstances of the case has not appreciated that as per provisions of Section 292B of the Act, if any notice or assessment is in substance and effect in conformity with or according to intent and purpose of the Act, the same cannot be invalidated merely by reason of any mistake, omission or defects in such notice or return? (III) Whether the ITAT was justified in law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 158BD, he was required to record a satisfaction note to be served along with the notice to the assessee. He did not agree with the AO that the reasons were duly recorded but the same was not readily traceable due to transfer of records. The CIT (A) also considered the explanation of the AO, that the sentence written in the third para of the assessment order i.e. considering the nature of seized diaries, therefore, a notice u/s 158BC read with section 158BD of the I.T. Act was issued to the assessee indicate that reasons were recorded, was not very convincing because it was not clear as to what nature of the seized diaries were examined by the AO and how he satisfied himself that these diaries belong to the appellant firm. 9. We do no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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