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TMI Blog2016 (4) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... that consequent to the search operation under Section 132 of the Income-tax Act, 1961 (in short 'the Act') in the business and residential premises of one Shri Mukundan, one of the partners of the assessee-firm, on 09.03.1999, a notice was issued to the assessee under Section 158BD of the Act calling the assessee to file the return of income. The assessee had declared 'NIL' income. However, the Assessing Officer computed the undisclosed income for the block period to Rs. 66,40,000/-. On appeal by the assessee, the CIT(Appeals) confirmed the addition to the extent of Rs. 23,45,873/- for the block period. This Tribunal has also confirmed the order of the CIT(Appeals). The Assessing Officer levied penalty under Section 158BFA(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not called for. 4. The Ld. representative further submitted that the Revenue authorities could not find any cash, bullion or asset during the course of search operation and no independent enquiry or verification was made with regard to so-called summary statement seized during the course of search operation. The aggregate sales as per the so-called Daily Summary Transaction Report was less than the gross sales as per the return, therefore, there is no suppression of sales at all. Hence, according to the Ld. representative, it is not a fit case for levy of penalty under Section 158BFA(2) of the Act. 5. On the contrary, Shri R. Mohan, the Ld. Departmental Representative, submitted that during the course of search operation, sales bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, according to the Ld. D.R., the CIT(Appeals) has rightly confirmed the levy of penalty under Section 158BFA(2) of the Act. 6. We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the block assessment was made under Section 158BD of the Act since the assessee was the person other than the searched person. For framing assessment under Section 158BD of the Act, the Assessing Officer is expected to record a satisfaction that the seized material found during the course of search operation relates to assessee. 7. We have carefully gone through the judgment of Apex Court in Manish Maheshwari v. ACIT (2007) 289 ITR 341. In the case before the Apex Court, there was search i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m are two different and independent assessable units. Therefore, in a proceeding under the Income-tax Act, the partner and partnershipfirm are treated as two different, independent assessable units. Therefore, even though there was a search in the premises of the partner Shri M. Mukundan, recording of satisfaction as instructed by the CBDT is mandatory, when the case was initiated under Section 158BD of the Act against the partnership firm. In the case before us, such a satisfaction was not recorded. 8. This Tribunal is of the considered opinion that penalty proceeding is different than the assessment proceeding. The authorities under Income-tax Act are expected to re-appreciate the material available on record and find out whether penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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