TMI Blog2021 (7) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... s seized or requisitioned have to be handed over to the AO having jurisdiction on such other person and, thereafter only the AO has to proceed u/s 158BD against such person. Similar view has been taken in various other decisions relied on by the ld. Counsel. Since the AO in the instant case has taken recourse to section 158BD before receipt of the seized material, therefore, the 158BD jurisdictional conditions cannot be said to have been met. Therefore, the entire proceedings u/s 158BD/143(3) are vitiated and, therefore, such 158BD proceedings which are not in accordance with the law are quashed. - Appeal filed by the assessee is allowed. - IT (SS) A No. 145/Del/2007 - - - Dated:- 8-7-2021 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER Assessee by : Shri Rakesh Gupta, Advocate Revenue by : Shri H.K. Choudhary, CIT, DR ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 25th June, 2007 passed u/s 158BD/143(3)/254 of the IT Act, 1961 for the block assessment period 01.041986 to 14.08.1996. 2. This is the second round of litigation before the Tribunal. Vide IT(SS)A No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income and therefore the block assessment framed is illegal and void abinitio. 4. That having regard to the facts and circumstances of the case and without prejudice to any other ground, notice U/S.158BD could not have been issued to the appellant company and that too after august 1997. 5. That having regard to the facts and circumstances of the case, Ld. ACIT has erred in law and on facts in framing assessment without issuing mandatory notice under section 143 (2) in accordance with the law. 6. That having regard to the facts circumstances of the case Ld. ACIT has erred in law and on facts in treating ₹ 84584 (₹ 9320, ₹ 10000, ₹ 15264, ₹ 50000) under the heads income tax expenses, FDR Kanta Devi, Capital a/c RRA and cash received from Rajkumar Ji in document no 2 as undisclosed income of the assessee. 7. That having regard to the facts circumstances of the case Ld. ACIT has erred in law and on facts in treating ₹ 3,50,060 under the head entry income in document no 2. 8. That having regard to the facts circumstances of the case Ld. ACIT has erred in law and on facts in treating ₹ 6,00,000 under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of ₹ 812950/-, on account of alleged transactions as per page 2 of document no 1A, seized from Sh Raj Kumar Agarwal. 18. That the appellant craves the leave to add, amend, modify, delete any of the ground(s) of appeal before or at the time of hearing and all grounds are independent and without prejudice to each other. 6. The ld. Counsel for the assessee strongly challenged the order of the AO on jurisdiction issue. He submitted that the jurisdiction u/s 158BD and the jurisdictional conditions were not fulfilled. The ld. Counsel, at the outset, drew the attention of the Bench to the following pages of the paper book which are as under:- PB 4 - Notice u/s 158BD dated 04.09.1997 by ACIT COY. Circle 3(9) Delhi. PB 319-320 - Letter from AO of searched person to AO of assessee dated 26.08.1997 ACIT, Coy. Circle 3(9) Delhi asking ACIT to take over the books of accounts for the purpose of section 158BD. PB 321 - Letter from AO of searched person dated 26.02.1998 to show books were not handed over till then to ACIT, Inv Circle, Fbd. What to say prior to 4.9.1997 i.e. the date on which jurisdiction u/s 158BD was assumed. PB 322 - Letter from ACIT Circle- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eline Hotel (P) Ltd. vs. DCIT, (2008) 116 TTJ 0536 (Mum) 297 ITR 0155; v) Lunawat Jayant Maniklal vs. DCIT, (2008) 112 ITD 0268 (Pune); vi) Nitin P. Shah Alias Modi vs. DCIT, (2005) 276 ITR 0411 (Guj) 8. The ld. Counsel for the assessee, in his second plank of argument submitted that satisfaction must be recorded by the officer issuing notice u/s 158BD and not by any other officer. Referring to the notice issued u/s 158BD dated 4th September, 1997 issued by the ACIT, Company Circle 3(9), copy of which is placed at page 4 of the paper book, he submitted that the satisfaction in the instant case u/s 158BD has not been recorded by the AO of the assessee. Therefore, the proceedings are null and void. For the above proposition, the ld. Counsel referred to the decision of the Hon ble Calcutta High Court in the case of Subhash Chandra Bhaniramka vs. ACIT, (2010) 320 ITR 0349 (Cal). 9. The ld. Counsel submitted that the notice issued u/s 158BD dated 4.9.1997 neither indicated any material or basis on which it was issued, nor indicated the person in whose case search was conducted and material found relating to assessee, nor indicated any satisfaction of AO as required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of which is placed at pages 10-12 of the paper book; and (c) Referring to page 92 of the paper book, he submitted that jurisdiction was transferred from ITO, Ward 1, Faridabad to ACIT Inv. Circle, Faridabad by CIT, Rohtak which also shows that ACIT, Delhi was not having jurisdiction. 12. In his last plank of argument, the ld. Counsel submitted that if it is taken that notice u/s 158BD was served on 03.09.1998, then notice u/s 158BD and assessment is bad in law in view of series of decisions which say that notice u/s 158BD can be issued within 6-8 months from the conclusion of assessment order of the searched person. He submitted that in the instant case, the assessment of Manu Finlease Ltd. was passed in August 1997 whereas the notice u/s 158BD if issued on 03.09.1998 i.e. after more than one year period then such notice is barred by limitation. For the above proposition, he relied on the following decisions:- i) CIT vs. Bharat Bhushan Jain, (2015) 370 ITR 0695 (Del); and ii) CIT vs. Calcutta Knitwears, (2014) 362 ITR 0673 (SC) 13. He accordingly submitted that the assessment proceedings u/s 158BD are not valid. 13.1 So far as the merit of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of which is placed at page 4 of the paper book. We find from the letter from the AO of the searched person to AO of the assessee dated 26th August, 1997, it was requested to take over the books of account for the purpose of section 158BD, copy of which is placed at pages 319-320 of the paper book. We find, the AO of the searched person, vide letter dated 26th February, 1998 to the ACIT, Inv. Wing, Faridabad, had handed over the books of accounts pertaining to the assessee which otherwise shows that prior to 04.09.1997, i.e., the date on which jurisdiction u/s 158BD was assumed, the books of account were not handed over to the assessee. The copy of the above is placed at page 321 of the paper book. Similarly, a perusal of page 322 of the paper book shows that vide letter dated 24th August, 1998, the ACIT, Circle- 1 has handed over the books to ACIT, Inv. Circle, which shows that on 4th September, 1997 when the jurisdiction u/s 158BD was assumed, the books, etc., of the assessee were not handed over to the ACIT, i.e., AO of the assessee. Further, a perusal of page 323 of the paper book shows that the ACIT, Inv. Circle, Faridabad, has acknowledged the receipt of the seized materi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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