TMI Blog2012 (6) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... llant. Pawan Ved for the Respondent. ORDER D.K. Agarwal, Judicial Member This appeal preferred by the assessee is directed against the order dated 17.1.2011 passed by the ld. CIT(A) for the Block period 1.4.1996 to 31.12.2002. 2. Briefly stated facts of the case are that the assessee is a Member of the Legislative Council of Maharashtra State. A search action u/s 132 of the Income Tax Act 1961 (the Act) was carried out in the group cases of M/s N.A. Fabrics Pvt. Ltd., (2) M/s MKT Sales, (3) Shri Nirmal A Banwani and (4) late Shri Pravin M. Shah on 30.12.2002 and on subsequent dates. During the course of search, various documents/loose papers were found and seized from the premises of this group. In the light of these seized material/documents and statements recorded of Shri Nirmal A. Banwani and late Shri P.M. Shah Block Assessment orders u/s 158BC of the Act were passed in these cases on 6.7.2007. In the course of assessment proceedings of aforementioned assessees it was found that documents/loose papers seized during the search also reveal that Shri Gopal Agrawal, an M.L.A. of Maharashtra Legislative Assembly received commission to the tune of Rs. 2.75 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the block assessment order u/s.158BD passed on 29.9.2009 was time barred and hence bad in law. 3. Without prejudice to the above and even on merits, the ld. Assessing Officer erred in making the addition of Rs. 2,78,40,000/- on mere suspicion and without any proof on hand. 4. That ld A.O. erred in passing the order u/s.158BD without granting the Appellant an adequate opportunity of being heard. The order passed by him is in contravention of principles of natural justice and hence bad in law." 4. The ld. CIT(A) after considering the assessee's submissions observed and held that " ..the letter written on dt. 13.7.2007 after concluding the assessment u/s 158BC in the case of Shri Nirmal A. Banwani clarify all the facts of the case. All these facts are clear and requirements of law, in my opinion, was complied before completion of assessment, therefore, the AO has properly assumed the jurisdiction to issue a valid notice u/s 158BD as per the Income Tax Act". On merits, the ld. CIT(A) while observing that the Assessing Officer after taking into consideration various documents has properly made the addition, upheld the addition of Rs. 2,78,40,000/-made by the AO. 5. Bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ula, Prop. Dhruv Fabrics [2011] 335 ITR 266 (Punj. Har.), (d) CIT v. Ramesh Kumar, Proprietor [2011] 14 taxmann.com 163/[2012] 204 Taxman 121 (Mag.) (Punj. Har.) and (e) the decision of the Tribunal in Dy. CIT v. Arihant Impex IT(SS)A No. 63/Mum/2007 and IT(SS)A No. 52/Mum/2007 (block period 1.4.1995 to 10.5.2007) dated 4.2.2009. He, therefore, submits that since no satisfaction has been recorded, the block assessment order passed u/s.158BD of the Act be quashed. 8. On the querry raised by the bench as to whether any such satisfaction was recorded in the group cases of M/s. N.A. Fabrics Pvt. Ltd.; (2) M/s. M K T Sales, (3) Shri. Nirmal A. Banwani and (4) Late Shri Pravin M. Shah, the ld. counsel for the assessee, on the next date of hearing, placed on record the copy of ITAT order in the cases of Pravin M. Shah v. Dy. CIT and Nirmal A. Banwani v. DCIT vice-versa in IT(SS) No. 31/Mum/2008, IT(SSA) No. 32/Mum/2008, IT(SS)A No. 52/Mum/2008 and IT(SS)A No. 53/Mum/2008 (block period 1.4.1996 to 31.12.2002) dated 31.3.2011, to show that in the case of Pravin M. Shah ( supra ), the Tribunal has held that the assessment order passed in this case is beyond the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 3.9.2007 in the assessee's case appearing at page 29 of the assessee's paper book as 13.8.2007). The letter dated 13.7.2007 is reproduced as under : "NO. DCIT/CC-47/NAF Group/2007-08 Office of the Dy. Commissioner of Income-tax, Central Circle-47, R. No. 658, Aayakar Bhavan, M.K. Road, Mumbai-400 020. Date: 13.07.2007. The Income-tax Officer, Gondiya Ward, Fulchur Road, Gondiya-441601. Sub: Intimation of cash transactions with M/s. N.A. Fabrics group cases by Shri Gopal Agrawal, MLC/MLA, Gondiya For A.Y.20O2-03/2OO3-O4 -- reg. A search action u/s 132 was carried out in the group cases of M/s N.A. Fabrics Pvt. Ltd., viz (1) M/s N.A. Fabrics Pvt. Ltd. (2) M/s MKT Sales, (3) Shri Nirmal A Banwani and (4) Late Shri Pravin M. Shah on 30.12.2002 and on subsequent dates. During the course of search, various documents /loose papers and computerized data were found and seized from the premises of this group, which pertain to unaccounted transactions of the businesses of these assessee, viz. supply of various items to the different Govt./semi Govt. organizations, which were not disclosed to the Income-tax Department at all. 2. Considering these seized material/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments or further details are needed, please intimate us immediately so that I can be supplied well in time. Sd/- (V.V. Shastri) Dy. Commissioner of Income Tax, Central Circle -47, Mumbai. Encl: 1. Page No.110 to 113 of Annexure A/33 2. Page No. 39 of Annexure A/37 3. Asstt. Order u/s 158BC in the case of Shri Nirmal A Banwani Copy submitted for information to - 1. The Commissioner of Income Tax-IV, Nagpur. 2. The Addl. Commissioner of Income -Tax, Range-7, Nagpur. 3. The Addl.Commissioner of Income Tax, C.R.- Mumbai. Sd/- D.C.I.T., C.C.-47, Mumbai." 11. We further find that the block assessments in the case of Pravin M. Shah ( supra ) and Shri Nirmal A Banwani were completed on 6.7.2007 i.e. prior to the above letter dated 13.7.2007. We further find that the said assessments were quashed by the, Tribunal vide order dated 31.3.2011 ( supra ). We further find that the Hon'ble Jurisdictional High Court in the case of Late Pravin M. Shah has also upheld the view of the Tribunal in holding that the block assessment order passed by the AO was time barred. 12. In Manoj Aggarwal ( supra ) the Special Bench of the Tribunal as held vide para 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 158BC of the Act in the case of an assessee against whom action under section 132 or 132A of the Act had been carried out is finalized, the Revenue can take action at any time in the absence of any specific limitation prescribed in the statute. A construction which leads to such an anomaly should be avoided." 14. The Tribunal, in the case of Arihant Impex and vice-versa ( supra ) vide paragraphs 4 of its order has held as under : "4. We have heard the rival submissions and perused the relevant material on record. There is no dispute about the fact that the search action was taken u/s 132(1) on Shri Ashok P. Shah, Shri Niranjan P. Shah and Shri Chirag A Shah on 10.5.2001. The block assessments in their cases have been framed u/s 158BC vide orders of the Assessing Officer on 14.5.2003, copies of which orders have been placed in the paper book. Admittedly the satisfaction in the case of the present assessee, which is a pre-condition for initiating proceedings u/s 158BD was recorded on 22.3.2004. The Special Bench of the Tribunal in the case of Manoj Aggarwal has held that section 158BE provides the time limit for completion of block assessment which implies that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed income of the assessee for the block period was finalized at Rs. 8,81,830 u/s.158BC r.w.s. 158BD of the Act, on December 18, 2007. The Commissioner (Appeals) held that assumption of jurisdiction by the Assessing Officer u/s. 158BD of the Act and the proceedings initiated pursuant thereto were invalid and void as the block assessment orders in the case of B were passed on March 30, 2005, whereas the satisfaction note in the case of the assessee was recorded on July 15, 2005. The Tribunal upheld the order passed by the Commissioner (Appeals). On further appeal: Held, dismissing the appeal, that the action contemplated u/s.158BD of the Act against a third person was necessarily to be during the course of block assessment proceedings u/s.158BC of the person searched. It could not be after the conclusion of the block assessment as there was no occasion for an Assessing Officer to examine the seized material or documents of the person searched when the block assessment proceedings had concluded and no other proceedings were pending before him." 16. In CIT v. Calcutta Knitwears [2011] 338 ITR 239 (Punj. Har.) it has been held (head note): "Held, dismissing the appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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