TMI Blog2007 (9) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions applicable for the searches carried out prior to 1-1-1997. Tribunal cancelled the assessment on the ground that no search has taken place against the assessee. The search was taken place against Dr. D.C. Srivastava and Dr. Saroj Srivastava. No warrant under section 132(1) was issued against this assessee. Thereafter, the Assessing Officer being DCIT, Range-I, Lucknow recorded a satisfaction note under section 158BD on 30-3-2005 and forwarded the same to the Assessing Officer having jurisdiction over the assessee. Accordingly, a notice under section 158BC was issued to the assessee on 30-3-2005 itself. In response thereto proceedings were initiated and finally an assessment order under section 158BC read with section 158BD of Income-tax Act was passed on 28-3-2006 on a total income of Rs. 52,39,720. 3. Assessee now challenged this before us mainly on the legal ground that Assessing Officer could not have recorded satisfaction and initiated block assessment proceedings after lapse of more than 8 years. The preliminary grounds raised by the assessee are as under:- (1) Because the notice captioned as "under section 158BD read with section 158BC of the Income-tax-Act, 1961" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 158BD should have been issued within reasonable time of completion of block assessment proceedings in the case of the persons searched. The persons searched were Dr. D.C. Srivastava and Dr. Saroj Srivastava. The present assessee was not subjected to search. In fact, according to learned Authorised Representative no assessment under section 158BC has been made in the case of Dr. D.C. Srivastava and Dr. Saroj Srivastava which means that the Assessing Officer of those two assessees, who were subjected to search, was satisfied that undisclosed as a result of search belong to the present assessee. As a consequence thereof, the proceeding under section 158BD should have been initiated just thereafter. In the present case proceeding under section 158BD have been initiated after a lapse of more than 8 years from the date of search. Therefore, due to latches, assessment should be cancelled. He relied on the decision of ITAT, "C" Bench, Delhi in the case of B.L. Leather (P.) Ltd. v. Dy. CIT in IT(SS) A. No. 13/Delhi/1999, dated 28-12-2004 for the proposition that proceeding under section 158BD should have been initiated within a reasonable time by the Assessing Officer and for this purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonable basis. He then referred to the decision of Hon'ble Delhi High Court in the case of Janki Exports International v. Union of India [2005] 278 ITR 296 for the proposition that proceeding under section 158BD are similar to the proceeding under section 147. He then relied on the decision of Hon'ble Allahabad High Court in the case of Sukhlal Ice Cold Storage Co. v. ITO [1993] 199 ITR 129 for the proposition that second proceedings can be initiated if first proceedings are found invalid. He then referred to the decision of Allahabad High Court in the case of Dharam Pal Singh Rao v. ITO [2004] 271 ITR 223 for the proposition that if the Assessing Officer issues subsequent notice after properly obtaining sanction of the ACIT as required under the law then such notice will not be invalid if it is within the period of limitation. Thereafter ld. Departmental Representative referred to the decision of Hon'ble Supreme Court in the case of Shri Vallabh Glass Works Lid. v. Union of India [1985] 155 ITR 560 for the proposition that the Courts have discretion to condone the delay. In brief, the ld. Departmental Representative summarized the argument submitting that the doctrine of latches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer can always be changed through transfer by the competent authority and the jurisdiction can also be changed. It is also possible that satisfaction as required under section 158BD is recorded after some gap of time because of some administrative problem or otherwise or because of the injunction of the Court. During the meantime, the officer may be changed by way of transfer. Therefore, to infer that it should be the same person to record satisfaction for enabling other officer having jurisdiction over the person in whose case the undisclosed income is to be assessed and who is not subjected to search is a very narrow view of the provision and is not acceptable. It is also legally not tenable as the provision dose not indicate that the satisfaction should be of the same person occupying the office and who has initiated proceedings under section 158BC against the person searched. Therefore, in our view it has to be the Assessing Officer having jurisdiction over the person searched who has to record the satisfaction that undisclosed income pertained to a third person who is not subjected to search and the books of account and other documents have to be handed over to the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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