2008 (3) TMI 394 - AT - Income Tax

Summary

Issues:
Validity of the order passed by the Assessing Officer under section 158BD of the Act.

Analysis:
The appeal involved a challenge against the order dated 25-3-2004 of the Assessing Officer under section 158BC read with section 158BD of the Act for the block period 1-4-1986 to 16-7-1996. The key grounds of appeal were regarding the validity of the order passed by the Assessing Officer under section 158BD. The facts revolved around a robbery incident where cash was looted from the assessee and another individual. Subsequently, the recovered cash was handed over to the IT Department, leading to assessment proceedings. The Assessing Officer brought a sum of Rs. 73,00,000 to tax under section 69A of the Act, which was challenged by the assessee in an appeal before the Tribunal. The Tribunal had earlier deleted the entire addition made by the Assessing Officer.

The Assessing Officer invoked section 158BD for assessment beyond the block period, leading to objections from the assessee. The crux of the issue was whether the provisions of section 158BD could be applied in this case. The Tribunal analyzed the legal provisions of section 158BD, which require that there should not have been a search on a person under section 132 of the Act for invoking section 158BD. In this case, a search had been conducted on the assessee under section 132, which did not satisfy the conditions for invoking section 158BD.

The Tribunal further examined the requisition under section 132A, which was made in the name of the assessee, not someone else. It was emphasized that the proceedings under section 158BD were initiated to tax the same sum previously found not chargeable to tax by the Tribunal under section 158BC. The Tribunal concluded that initiating two different proceedings against the same assessee for the same cause of action was impermissible. The Revenue's failure to tax any sum under section 158BC could not justify assessment under section 158BD. Therefore, the Tribunal held that the proceedings under section 158BD were legally flawed and annulled the order of assessment under section 158BD.

In light of the above analysis, the Tribunal allowed the appeal of the assessee on the preliminary issue of the validity of the order passed under section 158BD. Other grounds of appeal were not considered as the primary issue was resolved in favor of the assessee.