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TMI Blog2023 (11) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... could have been assumed by the AO of the assessee only after a satisfaction note had been prepared by the AO of the searched person. For convenience, the order dated 02.08.2016 passed by the coordinate bench is set forth below: "1. These four appeals are directed against the common order dated 24 June, 2003 passed by the Income Tax Appellate Tribunal (TTAT') in I.T. (SS) Appeal No. 96(Del) of 1998 for the Assessment Year ('AY') 1987-88 to 1997-98. Two of the appeals, ITA Nos. 344/2004 and 345/2004, are by the Revenue. The other two appeals i.e. ITA Nos. 577/2008 and 1291/2008, are by the Assessees, Amarjit Singh Bakshi (Individual) and Amarjit Singh Bakshi HUF respectively. 2. It may be mentioned at the outset that although ITA No. 577/2008 is not included in the cause list for today, with the consent of the counsel for the parties, it has also been taken up since it arises out of the same common order of the ITAT. 3. The appeals by the Assessees i.e. ITA Nos. 577/2008 and 1291/2008 are accompanied by applications for condonation of delay in filing of the appeals. In ITA No. 577/2008 there is a delay of 1492 days, while in ITA No. 1291/2008, the delay involved i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded: "The question of admission of this appeal as well as the condonation of delay would be considered at the time of hearing of the connected appeals, being ITA Nos. 344 & 345 of 2004....". When ITA 1291 of 2008 the case was taken up on 21st November 2008 it was tagged with the other appeals of the Revenue. 8. One of the questions that requires to be considered at the outset is the condonation of delay in the Assessee's appeals. As already noted, the Assessee's appeals raise only one question which concerns the recording of the satisfaction note by the AO of the searched person before invocation of Section 158BD of the Act. The question whether there does exist such a satisfaction note is a pure question of fact. The Court notes that in the appeal before the ITAT a generally worded ground was raised by the assessee on the legality of the action of the Revenue in initiating proceedings against the Assessees under Section 158BD of the Act without fulfilling the statutory requirements of that provision. 9. In the considered view of the Court even for considering whether the extraordinary delay in the Assessee's filing their appeals should be condoned, it is necessary in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verse inference qua the revenue that no satisfaction note was generated by the AO of the searched person. 11. During the course of arguments, counsel for the revenue sought to highlight the fact that the issue concerning the purported failure of the AO to generate a satisfaction note was not raised before the Tribunal. 12. Our perusal of the record shows that this submission is incorrect. But even if we were to assume that this aspect was not pressed before the Tribunal, since it, otherwise, has a bearing on the jurisdiction of the AO of the assessee to deal with the matter, it can be raised, in our opinion, before the High Court for the first time. 13. However, we need not go that far in this case, as our perusal of the record shows that this aspect was, indeed, pressed before the Tribunal. For easy reference, we may refer to, firstly, the following observations made in paragraph 23 of the order dated 31.08.2001 by the Accountant Member of the Tribunal: "23. I have not discussed and given finding on the ground in which the assessee has challenged the proceeding initiated under section 158BD in this case because the Ld. JM has not given finding on the same in the proposed orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid approval could be compared with the approval provided u/s 148 of the Income Tax Act wherein before initiating valid proceedings u/s 148 of the Income Tax Act, the authority has to obtain the due approval in the instant case, since no such approval as required in law has been obtained, the order of assessment is a nullity in the eye of law which required to be annulled as such. 5. That even otherwise, the assessment under Chapter XIV B of the Income Tax Act could not have been made as there was no material for issuing warrant of authorization u/s 132(1) of the Income Tax Act on the assessee. The pre-requisite for issuing the notice under Section 132(1) of the Income Tax Act were since absent in the instant case, the proceedings u/s 132(1) of the Income Tax Act are bad in law and hence, the assessment made is also void and ab-initio bad in law, being without jurisdiction. 6. That the learned ACIT has erred both on facts and in law, in making an order u/s 158 BD of the Income Tax Act for the Block Period ending 6.11.1996 without appreciating that there was no material for assuming that there was any undisclosed income, which can be assessed under the provision of Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swari vs. ACIT [2007] 289 ITR 341 (SC): "11. The condition precedent for invoking a block assessment is that a search has been conducted under Section 132, or documents or assets have been requisitioned under Section 132A. The said provision would apply in the case of any person in respect of whom search has been carried out under Section 132A or documents or assets have been requisitioned under Section 132A. Section 158BD, however, provides for taking recourse to a block assessment in terms of Section 158BC in respect of any other person, the conditions precedents wherefor are : (i) Satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 of the Act; (ii) The books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person; and (iii) The Assessing Officer has proceeded under Section 158BC against such other person. 12. The conditions precedent for invoking the provisions of Section 158BD, thus, are required to be satisfied before the provisions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompletion of the assessments under Section 158BD of the Act, the other provisions of XIV-B shall apply." (iii) Tapan Kumar Dutta vs. Commissioner of Income Tax [2018] 404 ITR 28 (SC): "11. A perusal of section 158BD of the Income-tax Act makes it clear that the Assessing Officer needs to satisfy himself that the undisclosed income belongs to any person other than the person with respect to whom the search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A. The very object of the section 158BD is to give jurisdiction to the Assessing Officer to proceed against any person other than the person against whom a search warrant is issued. Although section 158BD does not speak of "recording to [of] reasons" as postulated in section 148, but since proceedings under section 158BD may have monetary implications, such satisfaction must reveal mental and dispassionate though process of the Assessing Officer in arriving at a conclusion and must contain reasons which should be the basis of initiating the proceedings under section 158BD." [Emphasis is ours.] 17. In view of the aforesaid factual and legal position, acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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