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2013 (7) TMI 419 - MADRAS HIGH COURTBlock assessment - Notice u/s 158BD not issued - Undisclosed income - Tribunal made addition on account of undisclosed income - Held that:- Two search warrants have been issued - First warrant was issued in the name of a company and the second one was issued without any name - Consequently, no search warrant was issued in the name of the Assessee - It is not as if the authorities have obtained search warrant in the name of the appellant or its Proprietary concern and on search they found the receipts in the name of the assessee. When the search of the business place of the appellant is a consequential one, i.e. after the first search of, Section 158BC would not be applicable since the appellant, at best, can be called only as 'other person' - During the first search the authorities have found and seized 18 blank agreements along with four receipts signed by the assessee in his letter-head. After seizure of such receipts, the authorities proceeded to the business place of the appellant without search warrant and 'found' some undisclosed income of the assessee - Tribunal also accepted that no warrant was issued in the individual name of the appellant - appellant being a 'person other than the person with respect to whom the search was conducted', if at all, only the provisions under Section 158BD would apply and the provisions of Section 158 BC have no application - Decided in favour of Assessee. Rectification of irregularity - whether the assessment order passed by the Assessing Officer invoking Section 158BC suffers from any procedural irregularities as contemplated under Section 292B so as to make such assessment order valid - Held that:- Section 292B itself is having its own limitations of applications with three exceptions - passing an order of assessment under Section 158BC instead of Section 158BD would not amount to a mistake, a defect or an omission, much less a curable one - When different contingencies are dealt with under different Sections of the Act, allowing an illegality to be perpetrated and then taking a plea by the Revenue that such an action adopted on their part would not nullify the proceedings, cannot be appreciated since by virtue of such actions, the Revenue has attempted to nullify the scheme of things of limitations legally propounded - Following decision of Monga Metals (P) Ltd. vs. Asst. Commissioner of Income Tax [1999 (6) TMI 47 - ALLAHABAD HIGH COURT] - Decided in favour of Assessee. Limitation period - Whether assessment is barred by limitation as per Section 158BE(1)(a) or saved by limitation as per Section 158BE(2)(a) - Held that:- When the provisions of Section 158BC alone have been invoked, then automatically the period of limitation contemplated under Section 158BE(1)(a) alone are applicable and not the period of limitation provided under Section 158BE(2)(a) since the said period of limitation is applicable to the 'other person' referred to in Section 158BD - One cannot be allowed to follow a particular procedure contemplated in one Section and borrow the limitation contemplated in the other Section - The assessment order passed in this case, under Section 158BC, is invalid as it has not been passed within the prescribed period of limitation - Decided in favour of assessee. Violation of principle of natural justice - Held that:- Tribunal directed to afford an opportunity to the appellant to cross-examine was not at all complied with by the Assessing Officer - But Tribunal simply thrown liability on assessee that it was utilized by the assessee - Therefore, order passed by the authorities as well as the Tribunal is against the principles of natural justice and liable to be set aside - Decided in favour of assessee. Benami Transaction - Application of Section 68 - Held that:- Assessing Officer, in spite of clear explanations and production of voluminous documents by the appellant, has held that the assessee has not explained the cash credits - Tribunal has confirmed the order of addition on account of benami transaction made by the AO, on the ground that it is the primary onus of the assessee to make out a prima facie case that he did not receive the sums from genuine sources - Therefore, Tribunal has, unjustifiably and illegally, fixed onus on the assessee to establish such credits - Following decision of CIT vs. Orissa Corporation [1986 (3) TMI 3 - SUPREME Court] and CIT vs. Mohim Udma [1999 (10) TMI 45 - KERALA High Court] - Decided in favour of Assessee.
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