TMI Blog2001 (1) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... f the impugned order that the notice dt. 23rd Dec., 1996 (referred to above), was a notice under s. 158BD and therefore, the time-limit to pass an order thereunder, was available till 31st Dec., 1997, under s. 158BE(2) of the IT Act, 1961. 4. Because the nature and scope of proceedings under s. 158BC and under s. 158BD were entirely different from each other and the notice dt. 23rd Dec., 1996, factually issued under s. 158BC could not be equated with or treated to have been issued under s. 158BD, by applying the provisions of s. 292B. 2. We have heard the counsel for the assessee as well as the learned Departmental Representative and before referring to their respective arguments and consideration of the same we are of the opinion that it is necessary to consider the facts, as have been revealed from the records/documents placed before us and admitted by both the parties and therefore, extract the same as under: 2.1. A partnership firm styled as M/s Eastern Molasses Company having its head office at 106A, Shyam Bazar St, Calcutta, was having branches at Deoria in U.P., Indore in MP was being assessed at Calcutta. The present appellant—HUF was partner of this firm and Sh. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO, therefore, completed the block assessment on 23rd Dec., 1997, terming the same as under s. 158BD r/w s. 158BC by considering the notice (captioned as mentioned in the earlier part of this order and dt. 23rd Dec., 1996) as a notice under s. 158BD of the Act. 3. In the light of aforesaid admitted facts the counsel for the assessee first of all submitted that the notice captioned as "Notice under s. 158BC of IT Act, 1961" dt. 23rd Dec., 1996", which was only the notice issued and served upon the appellant could not be considered as a notice under s. 158BD of IT Act by stretch of any imagination because, under the provisions of s. 158BD of the Act it is the AO having jurisdiction over the case of a person in whose case action under s. 132(1) has been taken, who will, first of all, record his satisfaction that the seized books of accounts/documents/valuables/money/jewellery/bullion, etc. disclose the undisclosed income of some third person and then will transfer that material to the AO having jurisdiction over the case of such third person. According to the counsel it is thereafter that the AO having jurisdiction over the case of such third person will, after receipt of relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed to admit that there was no search warrant in the name of appellant-HUF and the search had been carried on only in the case of M/s Eastern Molasses Company and that no communication or any document or material was received by the AO Gorakhpur from AO, Calcutta, yet the notice issued under s. 158BC on 23rd Dec., 1996, in appellant's case was a valid notice under s. 158BC r/w s. 158BD of the Act because: (i) There is no provision for issuing a notice under s. 158BD of the Act either to the person, who has been searched or the person whose undisclosed income has been found recorded in the books of accounts/documents/assets found and seized during the search. According to him in both the cases the notice has to be issued under s. 158BC of the Act. (ii) The notice dt. 23rd Dec., 1996, having been issued on the basis of appraisal report received from ADI was a valid notice under s. 158BC of the Act because, the report of the ADI is deemed to be compliance to the requirements of s. 158BD of the Act. He therefore, strongly supported the order of the AO. Referring to the observations of the AO, in the block assessment order that a notice under s. 158BD of the Act was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, had no jurisdiction to issue notice under s. 158BC of the Act in case of the assessee and that being the case the notice in question is rendered bad in law which in turn renders all subsequent proceedings including the block assessment order as bad in law and void ab initio. We hold so. 8.2. Secondly, even if the notice in question is considered to be a valid notice then also the block assessment order, dt. 23rd Dec., 1997, is bad in law and void ab initio being barred by time because, according to the provisions of s. 158BE the assessment could be framed by the end of February, 1997. In other words the action under s. 132(1) having been taken on 28th Feb., 1996, the block assessment could be completed by 28th Feb., 1997, and therefore, the block assessment completed on 23rd Dec., 1997, is barred by time. 8.3. Thirdly, so far as, dispute regarding the compliance to the requirement of the provisions of s. 158BD is concerned since, the Revenue has not been able to produce any material, which may establish that the AO Gorakhpur, had received any communication or satisfaction note or any document/material from AO Calcutta, having jurisdiction over firm's case by 23rd Dec., 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation date i.e. 31st Dec., 1997. 4. Relevant portion of appraisal report in case of D.K. Kedia and some seized material in this case is also with me which is under close scrutiny for framing block assessments in case of S. Nos. 2 3 of Para 1. 5. As regards cases mentioned at S. No. (d) to (g) of para 2 and cases at S. No. 2 4 of para 1, no seized material, papers and documents or any adverse material other than appraisal report are with me because the entire seized materials were handed over to you as the jurisdiction over the main firm M/s Eastern Molasses Co. lay with you and you had already completed the block assessment of the said firm on 28th Feb., 1997, after through examination scrutiny of the same. 6. I have not received any intimation from you whether any seized papers and documents or any adverse material or entries representing undisclosed income in the cases specifically mentioned in para 5 r/w para 1 S. No. 2 and para 2 Sl. Nos. (d) to (g) are in your custody or not. It is, therefore, requested that all the entries representing undisclosed income or expenditure relating to the said persons other than firm may kindly be communicated to us in order to e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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