TMI Blog2010 (5) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held, following the decision of Hon ble Supreme Court in the case of Manish Maheshwari v [ 2007 (2) TMI 148 - SUPREME COURT] and Manoj Agarwal. [ 2008 (7) TMI 446 - ITAT DELHI-A] held that without there being satisfaction recorded prior to completion of assessment of the person searched proceedings so initiated u/s.158BD will not be valid. In that case notice u/s.158BD was issued on 10-06-2004. But searched against Ohm Developers was carried out on 29-10-1999, therefore assessment u/s. 158BD thereof completed after 31-10-2001 could not be held valid. Following these decisions, we hold that the block assessment famed in case of assessee are not legally valid and therefore are quashed for the reason that notices u/s.158BD were issued in these cases long after completion of assessment in the case of person searched i.e. Ohm Developers. - Shri T.K. Sharma, Judicial Member, And Shri D. C. Agrawal, Accountant Member. Assessee by :- Shri Nimish Vayavala Revenue by:- Shri Sanjeev Kashyap, SR-DR ORDER PER D.C. Agrawal, Accountant Member:- In all these appeals similar issue is involved. Hence, they are taken up together for the sake of convenience. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussing the issue with Ld. SR-DR and AR we admit additional ground for adjudication, in view of the decision of Hon ble Supreme Court in the case of National Thermal Power Corporation Ltd. V. CIT (1998) 229 ITR 383 (SC). In this case search u/s.132 of the Act was carried out in the business premises of M/s. Ohm Organizers Surat on 29-10-1999. Certain books of accounts and documents relating to the assessee were also seized. The Assessing Officer having jurisdiction over the case of M/s.Ohm Organizers, Surat found that certain investment in purchase of flats/shops were made by the assessee and payment of on-money was made by him to the Builder. Thereafter certain inquiries were carried out from the assessee u/s.133(6) of the Act by way of notice issued on u/s.133(6). Further letters were also issued. However, notice u/s.158BD was issued to the assessee on 04-02-2005. The issue was challenged before Ld. CIT(Appeals) about the legality of action u/s.158BD of the Act, Ld. CIT(Appeals) rejected this issue by observing as under:- 6. From the facts of the case as has been detailed in the preceding paragraphs sit is clearly seen that the AO, having jurisdiction over the persons se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.158BD of the Act was issued against the assessee on 04-02-2005 the assessee challenged the action u/s.158BD of the Act. But Ld. CIT(Appeals) rejected the arguments and ground by almost following the same reasoning as given in the case of Shri Manoj Hiralal Adhikari. IV. IT(SS)A No.10/Ahd/2008 by the Revenue: (Assessee : Vimal Vadilal Shah:- 7. The Revenue has raised the following grounds:- 1. On the facts and circumstances of the case, the learned CIT(A) erred in deleting the addition of ₹ 5,33,400/- out of the total addition of ₹ 8,15,000/- made on account of unexplained investment in the flat. 2. In the facts and circumstances of the case, the learned CIT(A) ought to have upheld the order of the assessing officer. V. IT(SS)A. No.12/Ahd/2008 by Revenue:(Assessee : Induben B Kayastha) and CO No.91/Ahd/2009 (by assessee):- 8. In this case Revenue has raised the following grounds:- 1. On the facts and circumstances of the case, the learned CIT(A) erred in deleting the addition of ₹ 8,35,000/- made on account of unexplained investment in the flat. 2. In the facts and circumstances of the case, the learned CIT(A) ought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in terms of section 158BD, require the Assessing Officer to record a satisfaction that any undisclosed income belongs to any person other than the person with respect to whom search is made under section 132 or a requisition is put under section 132A. Secondly, the books of account or other documents or assets seized or requisitioned are required to be handed over to the Assessing Officer having jurisdiction over such other person . The Supreme Court has further held that only upon the happening of the aforesaid that the Assessing Officer having jurisdiction of the other person shall proceed under section 158BC against such other person. With the above discussion, a premise, which can be safely deduced, is that the satisfaction as contemplated under section 158BD is to be of the Assessing Officer of the person who has been put to search or requisition under section 132 or 132A respectively. Another premise which can be safely deduced from the decision of the Supreme Court is that the requirement of recording of such satisfaction is a mandatory condition. Therefore, the plea advanced on behalf of the revenue that the satisfaction in such cases could only be discernible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contain a positive finding by Assessing Officer making assessment under section 158BC indicating therein undisclosed income found as a result of his examination of seized material and person to whom such income belongs - Held, yes In the case of Bharat Bhushan Jains v. ACIT (2009) 17 DTR 498 (Del) Tribunal held that proceedings u/s.158BD initiated after 19 months of completion of proceedings u/s.158BC cannot be sustained. It was held in the case of Saroj Nursing Home v. ACIT (2009) 116 ITD 311 (Lucknow) that proceedings u/s.158BD can be initiated on the satisfaction of the Assessing Officer having jurisdiction over person searched to tax undisclosed Income-tax pertaining to third person who is not subjected to search and books of accounts and in other documents were handed over to the Assessing Officer having jurisdiction over such third person but proceedings initiated u/s.158BD of the Act after a period of six years cannot be regarded as valid. 11. In E.J. Ulahanna v. ACIT in ITA No.19/Ahd/2007 pronounced on 18-03- 2009, following the decision of Special Bench in the case of Manoj Agarwal (supra) held that without there being satisfaction recorded prior to completion of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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