TMI Blog2007 (8) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to consider that on the date of search, Mr. L.T. Punjabi was not alive and legal heirs were not aware and responsible for any undisclosed income of deceased. 3. (a) The learned CIT(A) erred in not producing before the appellant the satisfaction note. if any, recorded by the AO to make an assessment under s. 158BD. (b) The learned CIT(A) erred in holding that satisfaction is not necessary to be recorded in writing. (c) Without prejudice to the above, the learned CIT(A) erred in not considering that satisfaction note, if any, pertained only of an amount of Rs. 25,00,000 and not the entire amount which has been assessed and confirmed by the CIT(A). (d) The learned CIT(A) erred in holding that the provisions of s. 158BD and s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /w s. 158BD of the IT Act at the threshold, for the reasons the provisions of s. 158BD were not invoked in accordance with law. Before invoking the provisions of s. 158BD, no satisfaction was recorded by the AO of the assessee upon whom the search was conducted. The learned counsel for the assessee empathetically argued that satisfaction should have been recorded by the AO before handing over the material to the AO having jurisdiction of the assessee. He has also invited our attention to the various letters written by the assessee in this regard. During the course of assessment proceedings a specific request to furnish the copy of satisfaction if recorded by the AO of Mrs. Shobha Ahuja before invoking the provisions of s. 158BD was made but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfaction of the AO, having jurisdiction over the assessee, upon whom search was conducted. is required on the basis of seized materials that it pertains to some other person. In that eventuality after recording a satisfaction, the AO shall forward the seized material to the AO of that assessee to whom the seized material relates. But in the instant case, AO has initially assessed the income on the basis of seized material in the hands of Mrs. Shobha Ahuja upon whom the search was conducted and later on when the addition on the seized material was deleted in her hands and CIT(A) made certain observations, the AO of Mrs. Shobha Ahuja has referred the matter to the AO of the assessee. This action of the AO is not in accordance with law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mrs. Shobha Ahuja has written various letters in this regard, it amounts to proper satisfaction before invoking the provisions of s. 158BD of the Act. 7. We have heard the rival submissions and carefully perused the orders of the lower authorities and the documents placed before us. 8. Undisputedly, the search was conducted upon Mrs. Shobha Ahuja and some seized materials were found. The AO of Mrs. Shobha Ahuja framed the block assessment under s. 158BC of the IT Act and made certain additions on the basis of the seized materials. At the time of framing of the block assessment under s. 158BC, the AO was satisfied with the seized materials that it related to Mrs. Shobha Ahuja and made addition in her hands but when the matter travelled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O shall proceed (under s. 158BC) against such other person and the provisions of this chapter shall apply accordingly." 10. From the plain reading of this section only one inference is drawn that it can only be invoked, when AO of the such searched persons is satisfied that any undisclosed income belongs to any person other than the person with respect to whom search was made under s. 132 or whose books of accounts or the documents or any assets were requisitioned under s. 132A, then the books of accounts, other documents or any assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person as per the provisions of this Chapter XIV-B. Meaning thereby before handing over the seized material or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India, their Lordships of Delhi High Court have held that under s. 158BD, the AO has to be satisfied that there is undisclosed income. Upon such satisfaction, the AO is required to forward the relevant documents, papers, etc. to the other AO who has jurisdiction over the assessee. Once this is done, the assessee who is to be proceeded with under s. 158BD and then s. 158BC must be informed about the satisfaction of the AO which has been recorded and must be given a reasonable opportunity to object to the same. Satisfaction can be arrived at on some material. That material would provide a reasonable satisfaction. 11. From the careful perusal of the various judgments referred to by the assessee, we are of the view that before handin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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