TMI Blog2015 (4) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... f the satisfaction having been prepared thereafter. In these circumstances, the appellant having taken three and a half months to record his satisfaction cannot be held to be unreasonable. The appellant contended that the satisfaction was recorded on 15.07.2005. If that is established, as held earlier, it is sufficient compliance with the provisions of Section 158-BD of the Act. The respondents, however, contended that there was never any satisfaction recorded at all. The orders of the Assessment Officer and of C.I.T. (Appeals) refer to the satisfaction note of 15.07.2005. The issue as to whether the same is genuine as contended by the appellant or fabricated and false as contended by the respondents may be considered by the Tribunal. All the appeals are accordingly allowed. The question of law is answered in favour of the appellant. The appeals are restored to the file of the ITAT and shall be decided on-merits by the Tribunal. - Decided in favour of revenue - ITA No. 591 of 2009 (O&M), ITA No. 154 of 2010 (O&M), ITA No. 317 of 2010 (O&M), ITA No. 318 of 2010 (O&M) & Cross objections No.23-CII of 2015 - - - Dated:- 10-4-2015 - S. J. Vazifdar, Acting CJ And Hon'ble Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to in the documents which were seized had not been recorded by the assessee in its books of account. He, therefore, brought the undisclosed income on account of the investment and profit elements in respect thereof to tax. 5. The C.I.T. (Appeals) upheld the respondent s contention that during the survey carried out under section 133-A at her premises on 19.02.2003, she had surrendered ₹ 2.75 crores and that the unaccounted transaction in question was covered by the same. The C.I.T. (Appeals) accordingly deleted the addition. 6. It was contended on behalf of the respondent before the Tribunal that the Assessing Officer lacked jurisdiction to make the impugned assessment as the department had not complied with the requirement of Section 158-BD of the Act. It was contended that before initiating proceedings under section 158-BD it was mandatory for the Assessing Officer making the block assessment in case of the person searched (i.e. S.K.Bhatia) to record the satisfaction that the undisclosed income detected belonged to the person other than the person searched i.e. the respondent in this case, before or at the time of making the assessment in respect of the person sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whom the search was made under section 132 i.e. Bhatia Group was made on 30.03.2005. The Assessing Officer recorded his satisfaction that the undisclosed income belonged to the respondent i.e. the person other than the person with respect to whom the search was made under section 132 only thereafter on 15.07.2005. 9. The question before us is answered in favour of the appellant by an order and judgment of the Supreme Court dated 12.03.2014 in Commissioner of Income Tax v. M/s Calcutta Knitwears, Ludhiana, 2014(6) SCC 444 and several other appeals. The respondent s appeal was also a part of the proceedings before the Supreme Court. The issue that fell for consideration before the Supreme Court was: at what stage of the proceedings under Chapter XIV-B does the Assessing Authority require to record his satisfaction for issuing a notice under Section 158BD of the Income Tax Act, 1961 . The Supreme Court held as under:- 41. We would certainly say that before initiating proceedings under Section 158-BD of the Act, the assessing officer who has initiated proceedings for completion of the assessments under Section 158-BC of the Act should be satisfied that there is an undisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings were completed by the assessing officer under Section 158- BC of the Act which is contrary to the provisions of Section 158-BD read with Section 158-BE(2)(b) and therefore, have dismissed the case of the Revenue. In our considered opinion, the reasoning of the learned Judges of the High Court is contrary to the plain and simple language employed by the legislature under Section 158-BD of the Act which clearly provides adequate flexibility to the assessing officer for recording the satisfaction note after the completion of proceedings in respect of the searched person under Section 158-BC. Further, the interpretation placed by the courts below by reading into the plain language of Section 158-BE(2)(b) such as to extend the period of limitation to recording of satisfaction note would run counter to the avowed object of introduction of the Chapter to provide for cost-effective, efficient and expeditious completion of search assessments and avoiding or reducing long-drawn proceedings. 44. In the result, we hold that for the purpose of Section 158- BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where after the assessment proceedings are completed under section 158-BC of the Act of the searched person, the Assessing Officer is indisposed for some reason such as on the ground of health. It would not be unreasonable if the satisfaction is recorded soon after he recovers. The Assessing Officer may have enormous burden of work upon completing the assessment proceedings under Section 158-BC of the Act. It would be permissible if he took some time after completing such pending work to prepare the satisfaction note. Each case must be judged upon its own facts. 13. Our view is supported by the judgment of a Division Bench of this Court dated 14.02.2011 in Income Tax Appeal No. 147 of 2010 Commissioner of Income Tax, Faridabad v. M/s Om Parkash and sons. The Division Bench held as under::- 17. .As regards delay in issuing notice to the assessee, we find merit in the contention that it was a case which involved a huge fraud of tax evasion where business of searched person was to give accommodation entries resulting in tax evasion to the extent of ₹ 132 Crores in total, spread over the cases of various assesses in all over India. The coordination by the assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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