TMI Blog2014 (9) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... orded, but the satisfaction note need not be recorded before the block assessment order was passed in the case of the person searched - There was nothing in the language of the provisions, which suggested that the satisfaction note cannot be recorded upon completion of the proceedings u/s 158BC of the Act against the “searched person” - Tribunal was not correct in holding that the block assessment proceedings were barred and invalid because the satisfaction note was not recorded by the AO before he had passed the block assessment order u/s 158BC in the case of the person searched – Decided in favour of revenue. - Income Tax Appeal No. 1420/2010 - - - Dated:- 27-8-2014 - Sanjiv Khanna And V. Kameswar Rao,JJ. For the Appellant : Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessee Shri Raghubir Singh Garg, Room No. 6, 1st Floor, 2897, Kishan Mkt., Hauz Quazi, Delhi-6 has received a total amount of ₹ 21,17,191/- (cheques Nos.) (1) ₹ 4,00,000/- vide cheques No. 958609, (2) ₹ 3,00,000/- vide cheques No. 940946, (3) ₹ 2,56,922/- vide cheques No.945544, (4) ₹ 3,80,000/- vide cheques No. 964193, (5) ₹ 5,00,000/- vide cheque No. 940657 (6) ₹ 2,80,268/- vide cheque No.965567 drawn on a/c No. 1224, Vijaya Bank, Vigyan Vihar, New Delhi from M/s Friends Portfolio Pvt. Ltd. This amount is a cheque received in lieu of unaccounted money paid. This is the prima-facie transaction of accommodation entry as evident from the seized material and inquiries done from the bank accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eputy Commissioner of Income Tax, Central Circle-3, New Delhi on 16 th January, 2003, which is after the passing of the block assessment order under Section 158BC in the case of searched person , i.e. M/s Friends Portfolio Private Limited, on 29th August, 2002. The Deputy Commissioner of Income Tax, Central Circle-3, New Delhi had thus become functus officio and could not have recorded the satisfaction note once he had passed the block assessment order in the case of M/s Friends Portfolio Private Limited on 29th August, 2002. 7. The aforesaid reasoning and ratio of the tribunal is contrary to the law subsequently expounded by the Supreme Court in Commissioner of Income Tax-III versus Calcutta Knitwears, Ludhiana (2014) 6 SCC 444 wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officers satisfaction in concluding that the seized documents belong to a person other than the searched person is necessary for initiation of action under Section 158BD. The bare reading of the provision indicates that the satisfaction note could be prepared by the assessing officer either at the time of initiating proceedings for completion of assessment of a searched person under Section 158BC of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely after the assessment proceedings are completed under Section 158BC of the Act of the searched person. 8. In light of the aforesaid ratio decidendi, the question of law has to be answered in favour of the appellant-Revenue and against the respondent-assessee. The Tribunal was not correct in holding that the block assessment proceedings were barred and invalid because the satisfaction note was not recorded by the Assessing Officer before he had passed the block assessment order under Section 158BC in the case of the person searched. 9. Learned counsel for the respondent-assessee states that the matter may be remanded for examination of the addition on merits. We accept the said prayer as the Tribunal has not decided the appeal, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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