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TMI Blog2021 (7) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the course of search operations, documents relating to the assessee were also found and seized. Accordingly, proceedings u/s 158BD were initiated on 4th September, 1997. In response to the said notice, the assessee filed return for the block period declaring nil undisclosed income. 4. During the course of assessment proceedings, the AO noted that various documents relating to the assessee were found and seized during the search operation at the business/residential premises of M/s Manufinlease Ltd. and its directors. The AO, during the course of assessment proceedings, confronted the above seized documents and asked the assessee to explain the various transactions contained therein. In absence of any satisfactory explanation given by the assessee, the AO made various additions and determined the total income of the assessee at Rs. 39,62,616/-. 5. Aggrieved with such order of the AO, the assessee is in appeal before the Tribunal by raising the following grounds:- "1. That having regard to the facts and circumstances of the case, ld. Assessing Officer has erred in law & on facts in assuming jurisdiction over the case of the appellant u/s.158 BD of the Act and that too without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing an addition of Rs. 363330/- as undisclosed income on account of alleged unexplained investment in housing society appearing in document no 2. 11. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in making an addition of Rs. 545500/- as undisclosed income on account of alleged unexplained investment in purchase of property at New Friends Colony, New Delhi on the basis of alleged D.no.2. 12. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in making an addition of Rs. 1300000/-, on account of alleged unexplained investment in Office a/c as undisclosed income on the basis of alleged D.no.2. 13. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in not giving the credit of an amount of Rs. 23,38,771 appearing in name of assessee in document no 35/11 seized from Manu Finlease Ltd. 14. That having regard to the facts & circumstances of the case Ld. ACIT has erred in law and on facts in making an addition on account of document 2 seized from residence of Sh. Anil Jindal. 15. That having regard to the facts & circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rched person which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to the ACIT viz. AO of this assessee. PB 327-328-332 - Letter from AO of searched person dated 01.09.1998 supplying to ACIT, Inv Circle, Fbd the seized material which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to the ACIT viz. AO of this assessee. PB 333 - Letter from AO to ACIT, Inv Circle, Fbd dated 01.09.1998 acknowledging the receipt of seized material from AO of the searched person which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to the ACIT viz. AO of this assessee. PB 335 - Letter dated 18.09.1998 from ACIT, Inv Circle, Fbd asking ADIT to give him the seized material which shows that on 4.9.1997 when jurisdiction u/s 158 BD was assumed, books etc. of this assessee were not handed over to the ACIT viz. AO of this assessee. PB 5-6 - Assessee's letter raising the issue of jurisdiction being bad in law. PB 1-3 - ITAT in first round order says that all issues including legal are open. PB 91 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that notice u/s 143(2) was not issued in this case after filing of return of income on 14.9.1998. The notice u/s 143(2) was issued on 13.2.1998 and, thus, jurisdiction assumed by the AO to pass assessment order u/s 143(3) read with section 158BD/158BC could not be validly assumed. Referring to page 262 and 263 of the paper book, the ld. Counsel submitted that the original assessment order dated 29.09.1998 passed in the first round says that return of income was filed on 14.09.1998 and notice 143(2) was issued on 13.09.1998. Referring to the following decisions, he submitted that since notice issued u/s 143(2) was barred by limitation, therefore, the entire assessment proceedings has become null and void:- i) ACIT vs. Hotel Blue Moon, (2010) 321 ITR 0362 (SC); ii) Jyoti Pat Ram vs. ITO, (2005) 96 TTJ 0947 (Lkw); iii)DIT vs. Society for Worldwide, (2010) 323 ITR 0249 (Del); iv) Pr. CIT vs. Jai Shiv Shankar Traders, (2016) 383 ITR 0448 (Del); v) Sapthagiri Finance & Investments vs. ITO, (2013) 90 DTR 0289 (Mad); & vi) Tika Ram vs. ITO, ITA No. 5961/2012, dated 08.06.2017 (Del). 11. The ld. Counsel for the assessee, in his next plank of arguments, submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on properly and the jurisdiction was with the officer having jurisdiction over the assessee. Therefore, the assessee cannot challenge the jurisdictional issue now. He, however, conceded that the seized materials, etc., were handed over to the AO after assuming jurisdiction u/s 158BD. So far as the merit of the case is concerned, the ld. DR submitted that the AO has given valid reasons while making the addition. Therefore, the addition made by the AO should be upheld. 15. The ld. Counsel, in his rejoinder, submitted that the assessee has raised the validity of jurisdiction before the Tribunal and the Tribunal, while restoring the issue to the file of the AO, has held that 'the assessee would be entitled to raise all the issues including the issue of jurisdictional limitation, etc., open to him in law.' Therefore, the ld. CIT, DR is not correct in saying that the assessee has not raised the jurisdictional issue before the AO. The AO should have decided the issue of jurisdiction in the second round of litigation before him in the light of the direction of the Tribunal. 16. We have considered the rival arguments made by both the sides and perused the record. We find, during the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158BC against such other person and the provisions of this Chapter shall apply accordingly." 17. We find, the Hon'ble Supreme Court in the case of Manish Maheshwari vs. ACIT & Anr. Reported in 289 ITR 341 has observed that before the provisions of section 158BD of the IT Act, 1961 are invoked against a person other than the person whose premises have been searched u/s 132 or documents and other assets have been requisitioned u/s 132A, the conditions precedent have to be satisfied. One of the conditions is that the books of account or other documents or assets 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, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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