TMI Blog2007 (9) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... assed in the instant cases without making compliance of the pre-requisite condition i. e., recording of satisfaction, cannot be legally justified. Hence on this basis itself the assessment is liable to be quashed. We, accordingly, quash the assessment order. Time limitation for issuance of Notice u/s 143(2) - In view of the authority, the Tribunal Delhi Bench in the case of Smt. Tulika Mishra (to which both of us were parties)[ 2007 (3) TMI 747 - ITAT DELHI] , has quashed the assessment order on the ground that the notice u/s 143(2) was not served upon the assessee within the prescribed period. On this ground we have held the assessment order to be null and void in that case. Hence following the same decision, we declare the assessment order as null and void in this case also because notice u/s 143(2) was not served upon the assessee within the prescribed period. Hence on this ground also the assessment order is liable to be quashed. The same is accordingly quashed. Thus, the legal grounds taken in the cross-objection stand allowed - Since we have quashed the assessment order by allowing legal grounds raised by the assessee, we are not required to consider other grounds rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st plea is concerned, the learned counsel pointed out that from the observations made by the learned CIT(A) in para 3.2.2 it is obvious that reasons recorded by the AO of Bagaria group of cases in which group search took place and assessment was finalized under s. 158BC, were not available. According to the learned counsel. the learned CIT(A) has also mentioned that the fact regarding disclosing the income of the assessee was intimated to the AO of the present assessee, namely, Dy. CIT, Circle, Saharanpur, U.P. by Dy. CIT Circle-14(1), New Delhi, vide letter dt.11th Dec., 2001 whereas notice under s. 158BD was issued on9th April, 2001. Thus, the reasons have been recorded after the issuance of notice. 6. According to the learned counsel, the satisfaction should be recorded by the AO of the person searched before passing assessment under s. 158BC. In support of this argument, the learned counsel placed reliance on the ratio of decisions in the case of Manish Maheshwari vs. Asstt. CIT (2007) 208 CTR (SC) 97 : (2007) 289 ITR 341 (SC) and also on the ratio of decisions in the cases of Amity Hotels (P) Ltd. vs. CIT Ors. (2004) 192 CTR (Del) 607 : (2005) 272 ITR 75 (Del); Nitin P. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncontroverted. 10. So far as the legal position is concerned, in the case of Manish Maheshwari, the Hon'ble Supreme Court has held that satisfaction is a pre-requisite condition for completing the assessment under s. 158BD. 11. The Hon'ble Delhi High Court in the case of Amity Hotels (P) Ltd. vs. CIT Ors., after examining the provisions contained under ss. 158BD and 158BC, has observed as under: The satisfaction is required to be preceded by the investigation and not that the investigation is required to be preceded by the satisfaction. On behalf of the Revenue, our attention was drawn to a decision of the Division Bench of the Gujarat High Court in the case of Rushil Industries Ltd. vs. Harsh Prakash (2001) 166 CTR (Guj) 300 : (2001) 251 ITR 608 (Guj), wherein it is pointed out that satisfaction is not required to be recorded. However, it is in a different context and the Court has clearly indicated so.............Thus, it is very clear that satisfaction is required and it cannot be said that proceedings can be initiated without such satisfaction. Although, this satisfaction may be on the basis of the material which is seized not from the notice, but from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recording of satisfaction, cannot be legally justified. Hence on this basis itself the assessment is liable to be quashed. We, accordingly, quash the assessment order. 15. The second plea taken by the learned counsel for the assessee is that in the instant case the return was filed by the assessee on 14th May, 2001 and a notice under s. 143(2) was issued on1st April, 2003. He culled out these facts from the assessment order itself. The learned Departmental Representative could not dispute these facts. According to learned counsel, the notice under s. 143(2) should have been issued within one year from the end of the month in which the return was filed. In support of this argument, the learned counsel has placed reliance on the decision of Delhi Bench of the Tribunal dt.21st March, 2007 in the case of Smt. Tulika Mishra vs. Jt. CIT and vice versa rendered in IT(SS)A No. 81/Del/2003 another reported in 2007-TIOL-253-ITAT-Del. The learned counsel also placed reliance on the ratio of decision of Hon'ble Gauhati High Court in the case of Smt. Bandana Gogoi vs. CIT Anr. (2007) 209 CTR (Gau) 31 : (2007) 289 ITR 28 (Gau). 16. The learned Departmental Representative has only p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Bandana Gogoi, the Hon'ble Gauhati High Court has observed as under: Clause (b) of s. 158BC of the IT Act, 1961, provides that the provisions of s. 142 as well as sub-ss. (2) and (3) of s. 143 shall apply even in the case of a block assessment so far as may be. There is no dispute that in the case of assessment under Chapter XIV, a notice under s. 143(2) is mandatory where the AO proceeds to make an inquiry as provided in s. 142. Similarly, the provision of s. 143(2) will be mandatorily applicable in the case of block assessment also where the AO in repudiation of the return filed under s. 158BC(a) proceeds to make an inquiry in the proceedings under Chapter XIV-B. Once the power of inquiry under s. 142 is invoked, AO has no option but to follow the provisions of s. 143(2). The words 'so far as may be', will thus become mandatory where the AO proceeds to make an inquiry in repudiation of the return filed in response to a notice issued under s. 158BC. The circular issued by the CBDT provides that a notice under sub-s. (2) of sub-s. 143 can be served on the assessee during the financial year in which the return is furnished or within six months from the end of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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