9911796707
TMI Blog2014 (3) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... .1991 to 03.08.2000. The only question of law which arises for our consideration in this appeal is as under:- "Whether the assessing officer is bound to record satisfaction within the meaning of section 158BD of the Income-tax Act, 1961 during the process of assessment of the person searched under section 158BC of the said Act?" 2. With the consent of the parties the above question of law is taken up for hearing straightway. 3. There was a search conducted in respect of one Mr Manoj Aggarwal on 03.08.2000. The block assessment pursuant to the said search was concluded in respect of the searched person (Mr Manoj Aggarwal) under section 158BC on 29.08.2002. It would be relevant to point out at this juncture itself that the terminal date fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd party to a search, was necessarily to be initiated during the course of the block assessment proceedings under section 158BC of the searched person. If the ratio of that decision were to be applied to the facts of the present case, the initiation of action under section 158BC insofar as the present appeal is concerned ought to have been done latest by 29.08.2002 the date on which the block assessment in respect of the searched person was concluded under section 158BC. 6. The relevant observations of the Punjab & Haryana High Court in this regard are set out in paragraph 7 of the decision which reads as under:- "7. Section 158BE of the Act prescribes the time limit for framing of assessments under sections 158BC and 158BD of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o anomaly and would be arbitrary and unreasonable. It could not be read in the provision that where block assessment under 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." 7. A similar issue came up for consideration before a Division Bench of this court in the case of CIT v. UmeshChandra Gupta: ITA 2055/2010 which was decided on 06.02.2014. Paragraphs 4,5,6 and 7 of the said decision are relevant and they are as under:- "4. It is urged on behalf of the revenue that the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m he has jurisdiction, such satisfaction is to be recorded during the course of assessment proceedings of the person searched. In other words, the jurisdiction to issue notice itself under Section 158BD and the consequent time period prescribed under Section 158BE in respect of third parties would get defined within the two year time period given to the AO under Section 158BE(1). 7. This Court finds that such reasoning is sound for the simple reason that if the disjoined interpretation of Section 158BE suggested by the revenue were to be adopted, startling and perhaps unintended consequences would ensue. The period of limitation in respect of the primary individual, i.e. the searched person is controlled by Section 158BE(1) which is subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y states that the satisfaction is to be recorded by the AO with respect to the need to issue notice to the third party before he hands-over possession of books and assets seized or requisitioned, to the AO of such third party. This too clearly has a reference to the primary jurisdiction of the AO of the searched person and the consequential limitation placed upon him to complete assessment within the period of two years spelt-out under section 158BE." 8. The sum and substance of the decision of the Division Bench of this court in Umesh Chandra Gupta (supra) is that the jurisdiction to issue the notice under section 158BD and the consequent time period prescribed under section 158BE in respect of third parties gets defined within the two ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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