TMI Blog2004 (10) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... en disclosed in the return of income - this court is of the opinion that the proceedings are not in accordance with law and, therefore, are required to be quashed. However, it goes without saying that if there is any material, the Department can take action in accordance with law - - - - - Dated:- 5-10-2004 - Judge(s) : B. C. PATEL., BADAR DURREZ AHMED. JUDGMENT The judgment of the court was delivered by B.C. Patel C. J. - These petitions are preferred by different assessees questioning the issuance of notices by the Assessing Officer under section 158BD of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). It transpires that in accordance with the provisions contained in the Act, namely, under section 131, search an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng proceedings under section 158BC of the Act. In the instant case, it is submitted that it was the same Assessing Officer who assessed all the petitioners. So far as the procedure for block assessment is concerned, one will have to refer to section 158BC of the Act. The relevant portion of section 158BC is reproduced hereunder: "158BC. Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then,- (a) the Assessing Officer shall- (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1977, serve a notice to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted or failed to produce or cause to be produced such books of account, etc. Just as in the case of section 132, we are not discussing the entire section in detail, but we note that what is required is that there must be "reason to believe" for initiating action. After initiating action in consonance with section 132 or 132A of the Act, the Assessing Officer can follow the procedure laid down in section 158BC of the Act for block assessment. In the instant case, there was no question of there being any "reason to believe" that the present petitioners have warranted the officers to initiate action either under section 132 or 132A of the Act. It is in view of this that section 158BD calls upon the Assessing Officer to be satisfied himsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, all of them are claiming separate office and administrative expenses. The authenticity of such expenses needs to be verified and whether any duplicity, with regard to claim of such expenses, by each of such companies has to be looked into as in the past such cases were assessed by different Assessing Officers. (iii) A plethora of other information is also available from the seized record by way of papers filed with ROC, property tax papers, details about expenses incurred on construction-renovation, etc., which require to be collated and compared with information available in the returns filed by the assessee in the past. Some of it is verifiable from the record of the Department but for the rest, an indepth scrutiny is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Rushil Industries Ltd. v. Harsh Prakash [2001] 251 ITR 608, wherein it is pointed out that satisfaction is not required to be recorded. However, it is in a different context and the court has clearly indicated so. The Division Bench of the High Court has pointed out as under: "... A bare reading of the provisions of section 158BD (quoted above) would show that for taking action under the said section, the Assessing Officer is merely required to be satisfied that the books of account or other documents or assets found in the search show undisclosed income of a person other than one against whom the search was conducted. Merely because no books of account or other documents or assets were found in the search against the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is nothing to indicate, he has recorded in writing that he was satisfied about the action required to be initiated. The Assessing Officer has come out with the version in para. 4 of the affidavit in reply that "there is no requirement under the provisions of section 158BD for recording 'reasons to believe' before issuing notice under the said section." Thus, it is very clear that there was no satisfaction. Even it is not stated in the affidavit in reply that the Assessing Officer was satisfied and hence issued notice. On the contrary, it reveals that to arrive at a satisfaction, notice was issued and that is clear from the affidavit of the Assessing Officer. It may be noted that the property which is referred to for initiating proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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