The ACIT, Circle-3,, Surat v. Vimal Vadilal Shah, Surat

ITSSA 10/AHD/2008 | misc
Pronouncement Date: 21-05-2010 | Result: Dismissed

Appeal Details

RSA Number 1020516 RSA 2008
Assessee PAN AFAPS0298F
Bench Ahmedabad
Appeal Number ITSSA 10/AHD/2008
Duration Of Justice 2 year(s) 4 month(s) 3 day(s)
Appellant The ACIT, Circle-3,, Surat
Respondent Vimal Vadilal Shah, Surat
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 21-05-2010
Date Of Final Hearing 17-05-2010
Next Hearing Date 17-05-2010
Assessment Year misc
Appeal Filed On 18-01-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AT SURAT CAMP AHMEDABAD BEFORE SHRI T.K. SHARMA JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER IT(SS)A NO.10 & 28/AHD/2008 BLOCK PERIOD: 1990-91 TO 1999-00 DATE OF HEARING:17.5.10 DRAFTED:18.5.10 ACIT CIRCLE-3 SURAT VIMAL VADILAL SHAH B- 704 YOGI COMPLEX NEW RANDER ROAD SURAT V/S . V/S . VIMAL VADILAL SHAH B- 704 YOGI COMPLEX NEW RANDER ROAD SURAT PAN NO.AFAPS0298F DY. COM. OF INCOME- TAX CIRCLE-3 ROOM NO.112 1 ST FLOOR AYAKA BHAAN MAJAURA GATE SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI NIMISH VAYAVALA REVENUE BY:- SHRI SANJEEV KASHYAP SR-DR IT(SS)A NO.12/AHD/2008 & C.O.NO.91/AHD/2009 (ARISING OUT IT(SS)A NO.12/AHD/2008 BLOCK PERIOD: 1990-91 TO 1999-00 ACIT CIRCLE-3 ROOM NO.213 2 ND FLOOR AAYKAR BHAVA MAJURA GATE SURAT INDUBEN B KAYASTH B- 101 YOGI COMPLEX V/S . V/S . INDUBEN B KAYASTHA B-101 VGI COMPLEX NEW RANDER ROAD SURAT PAN NO.PCPK4962N ASSTT. COMMISSIONER OF IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 2 NEW RANDER ROAD SURAT INCOME TAX CIRCLE-3 SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI RASESH SHAH AR REVENUE BY:- SHRI SANJEEV KASHYAP SR-DR IT(SS)A NO.14 & 27/AHD/2008 BLOCK PERIOD:1990-91 TO 2000-01 SHRI MANOJ HIRALAL ADHIKARI B-901 YOGI COMPLEX NEW RANDER ROAD SURAT PAN NO.ABEPA6650R ACIT CIRCLE-3 ROOM NO.213 2 ND FLOOR AAYKAR BHAVAN MAJURAA GATE SURAT V/S . V/S . THE DY. COMMISSIONER F INCOME TAX CIRCLE-3 SURAT MANOJ HIRLAL ADHIKARI B-10 YOGI COMPLEX NEW RANDER ROAD SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI K.K. SHAH AR REVENUE BY:- SHRI SANJEEV KASHYAP SR-DR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER:- IN ALL THESE APPEALS SIMILAR ISSUE IS INVOLVED. H ENCE THEY ARE TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE. THE ISSUE I NVOLVED IS THAT SATISFACTION U/S.158BD HAS NOT BEEN RECORDED BY THE ASSESSING OF FICER OF THE PERSON SEARCHED AND NOTICES U/S.158BD HAS BEEN ISSUED MUCH AFTER THE CLOSER OF BLOCK ASSESSMENT PROCEEDINGS U/S.158BC OF THE PERSON SEAR CHED. THEREFORE BLOCK IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 3 ASSESSMENT U/S.158BD MADE IN ALL THESE CASES ARE BA D IN LAW AND THEREFORE ARE REQUIRED TO BE QUASHED. 2. FOR THE SAKE OF CLARITY WE PROVIDE THE DETAILS I N INDIVIDUAL CASES AND TAKE UP THE LEGAL DISCUSSION THERE AFTER. I. IT(SS)A NO.27/AHD/2008 (ASSESSEE MANOJ HIRALAL ADHIKARI) :- IN THIS CASE ASSESSEE HAS RAISED FOLLOWING GROUND: - 01. ON THE FACTS AND CIRCUMSTANCES OF THE CASE. TH E LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE ADDITION MADE B Y THE LEARNED ASSESSING OFFICER ON ACCOUNT OF ON MONEY OF RS.2 14 000-AND ANOTHER SUM OF RS.20 776/- BEING UNDISCLOSED INCOME-TAX OF APPELLANT AND CONSIDERING SAME AS UNEXPLAINED INVESTMENT IN THE H ANDS OF APPELLANT. 02. THE LEARNED CIT(APPEALS) ERRED IN UPHOLDING THE CLAIM OF THE APPELLANT THAT HE HAS NOT PAID ON MONEY FOR PURCHAS E OF FLAT. 03. THE APPELLANT PRAYS TO RESERVE THAT RIGHT TO AD D ALTER AMEND O WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL. IN ADDITION TO THIS ASSESSEE HAS RAISED FOLLOWING A DDITIONAL GROUND:- 01. THE LEARNED CIT(APPEALS) GROSSLY ERRED IN QUAS HING THE BLOCK ASSESSMENT PROCEEDINGS U/S. 158BD OF THE ACT AS THE RE NO SATISFACTION WAS RECORDED PRIOR TO ISSUE OF NOTICE BY THE ASSESS ING OFFICER WHO COMPLETED THE 158BC PROCEEDINGS IN THE CASE OF SEA RCHED PARTY I.E. M/S. OHM ORGANIZERS AND OHM DEVELOPERS. 02. THE LEARNED CIT(APPEALS) GROSSLY ERRED IN QUASH ING THE BLOCK ASSESSMENT PROCEEDINGS U/S. 158BD AT THE WHOLE ORDE R IS TIME BARRED AS PER THE PROVISIONS OF SEC. 158BE OF THE ACT. II. IT(SS)A NO.14/AHD/2008 (APPEAL BY REVENUE) ASSESSEE: MANOJ HIRALAL ADHIKARI:- 3. THE REVENUE HAS RAISED FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.6 26 250/- OUT OF TH E TOTAL ADDITION OF RS.9 125 000/- MADE ON ACCOUNT OF UNEXPLAINED INVES TMENT IN THE FLAT. IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 4 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE C IT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 4. AFTER DISCUSSING THE ISSUE WITH LD. SR-DR AND AR WE ADMIT ADDITIONAL GROUND FOR ADJUDICATION IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD. V. CIT (1998) 229 ITR 383 (SC). IN THIS CASE SEARCH U/S.132 OF THE ACT WA S CARRIED OUT IN THE BUSINESS PREMISES OF M/S. OHM ORGANIZERS SURAT ON 29-10-1999 . CERTAIN BOOKS OF ACCOUNTS AND DOCUMENTS RELATING TO THE ASSESSEE WER E ALSO SEIZED. THE ASSESSING OFFICER HAVING JURISDICTION OVER THE CASE OF M/S.OHM ORGANIZERS SURAT FOUND THAT CERTAIN INVESTMENT IN PURCHASE OF FLATS/SHOPS WERE MADE BY THE ASSESSEE AND PAYMENT OF ON-MONEY WAS MADE BY HIM TO THE BUILDER. THEREAFTER CERTAIN INQUIRIES WERE CARRIED OUT FROM THE ASSESSE E U/S.133(6) OF THE ACT BY WAY OF NOTICE ISSUED ON U/S.133(6). FURTHER LETTERS WER E ALSO ISSUED. HOWEVER NOTICE U/S.158BD WAS ISSUED TO THE ASSESSEE ON 04-02-2005. THE ISSUE WAS CHALLENGED BEFORE LD. CIT(APPEALS) ABOUT THE LEGALITY OF ACTIO N U/S.158BD OF THE ACT LD. CIT(APPEALS) REJECTED THIS ISSUE BY OBSERVING AS UN DER:- 6. FROM THE FACTS OF THE CASE AS HAS BEEN DETAILED IN THE PRECEDING PARAGRAPHS SIT IS CLEARLY SEEN THAT THE AO HAVING JURISDICTION OVER THE PERSONS SEARCHED HAD MADE THE REQUISITE INQUIRIES WITH THE ASSESSEE AND HAD RECORDED HIS SATISFACTION THAT THE ASSESSEE HAD INDEED PAID ON MONEY TOWARDS THE PURCHASE OF THE FLAT AT YOGI COMPLEX. H E HAD THEREFORE JUSTIFIABLY CONVEYED HIS SATISFACTION UNDER THE PRO VISIONS OF SEC. 158BD OF THE IT ACT TO THE AO HAVING JURISDICTION OVER THE A SSESSEE AND HAD ALSO HANDED OVER THE RELEVANT SEIZED MATERIALS CONTAININ G DETAILS OF THE PAYMENTS MADE BY THE ASSESSEE TO THE PERSON SEARCHE D. ON THE BASIS OF SUCH INFORMATION THE ACIT CIR.3 WHO HELD JURISDICT ION OVER THE ASSESSEE JUSTIFIABLY RECORDED HIS REASONS AND SATISFACTION A ND INITIATED PROCEEDINGS U/S.158BD R.W.S. 158BC OF THE IT ACT. T HEREFORE IT COULD NOT BE SAID THAT SUCH PROCEEDINGS WAS EITHER UNAUTHORIZ ED OR WAS WITHOUT ANY JURISDICTION. CONSEQUENTLY IT WAS ABSOLUTELY C LEAR FORM THE FACTS OF IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 5 THE CASE THAT THE ORDER PASSED U/S.158BD R.W.S. 158 BC WHICH IS THE SUBJECT MATTER OF THIS APPEAL WAS PERFECTLY VALID IN LAW . THE ASSESSEES APPEAL ON THIS GROUND IS THEREFORE REJECTED. 5. NOW WE CONSIDER GROUNDS THE ACTION TAKEN BY TH E ASSESSING OFFICER AND DECISION BY LD. CIT(APPEALS) IN ANOTHER CASE AS UND ER:- III. IT(SS)A NO.28/AHD/2008 ( ASSESSEE: VIMAL VADILAL SHAH) :- 6. IN THIS CASE ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS:- 1. THE LEARNED C.I.T.(A) HAS ERRED IN POINTS OF LA W AND/OR FACTS IN SUSTAINING ADDITION OF RS.2 81 600 OUT OF TOTAL ADD ITION OF RS.8 15 000 MADE IN THE BLOCK ASSESSMENT. IN THE ABSENCE OF REC ORDING OF NECESSARY SATISFACTION BEFORE COMPLETION OF THE ASSESSMENT IN THE CASE OF RAIDEE THE ENTIRE BLOCK ASSESSMENT U/S.158BD IN THE CASE OF A PPELLANT OUGHT TO HAVE BEEN CANCELLED. 2. THE LEARNED C.I.T.(A) OUGHT TO HAVE HELD THAT TH ERE WAS NO MATERIAL TO HOLD RS.2 81 600 AS UNDISCLOSED INCOME-TAX LIABLE T O TAX AND OUGHT NOT TO HAVE CONFIRMED THE ADDITION OF RS.2 81 600/-. 3. THE C.I.T.(A) OUGHT TO HAVE CANCELLED THE ASSESS MENT AS THE PROCEEDINGS U/S.158BD WERE INITIATED AFTER INORDINA TE DELAY I.E. AFTER MORE THAN 3 YEARS OF COMPLETION OF THE ASSESSMENT U /S.158BC IN THE CASE OF PERSON RAIDED. 4. THE BLOCK ASSESSMENT MADE U/S. 158BD READ WITH S ECTION 158BC BE CANCELLED. THE ADDITION OF RS.2.81 600 AS CONFIRMED BY C.I.T.(A) BE DELETED. SEARCH ACTION AGAINST M/S.OHM ORGANIZERS AND OHM DE VELOPERS WERE CARRIED OUT ON 29-10-1999 WHEREAS NOTICES U/S.158BD OF THE ACT WAS ISSUED AGAINST THE ASSESSEE ON 04-02-2005 THE ASSESSEE CHALLENGED THE ACTION U/S.158BD OF THE ACT. BUT LD. CIT(APPEALS) REJECTED THE ARGUMENTS AN D GROUND BY ALMOST FOLLOWING THE SAME REASONING AS GIVEN IN THE CASE O F SHRI MANOJ HIRALAL ADHIKARI. IV. IT(SS)A NO.10/AHD/2008 BY THE REVENUE : (ASSESSEE : VIMAL VADILAL SHAH :- IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 6 7. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.5 33 400/- OUT OF TH E TOTAL ADDITION OF RS.8 15 000/- MADE ON ACCOUNT OF UNEXPLAINED INVEST MENT IN THE FLAT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. V. IT(SS)A. NO.12/AHD/2008 BY REVENUE: (ASSESSEE : INDUBEN B KAYASTHA) AND CO NO.91/AHD/2009 (BY ASSESSEE):- 8. IN THIS CASE REVENUE HAS RAISED THE FOLLOWING GR OUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.8 35 000/- MADE ON A CCOUNT OF UNEXPLAINED INVESTMENT IN THE FLAT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 9. ASSESSEE IN CO HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER TAKING ACTION U/S.158BD OF THE AC T WITHOUT RECORDING REQUISITE SATISFACTION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT THE LEARNED CIT(A) HAS ERRED DIN CONFIRMIN G THE ACTION OF ASSESSING OFFICER TAKING ACTION U/S.158BD OF THE AC T AFTER COMPLETION OF ASSESSMENT IN THE CASE OF M/S. OHM ORGANIZERS THAT TOO AFTER 6 YEARS FROM SEARCH ACTION IN THE CASE OF SAID FIRM. 3. IT IS THEREFORE PRAYED THAT THE ACTION U/S.158B D OF THE ACT SHOULD BE TREATED AS INVALID BEING WRONGLY TAKEN AND BEING TA KEN NOT WITHIN REASONABLE TIME. 9. THUS IN ALL THE ABOVE CASES SEARCH AT THE PREM ISES OF OHM DEVELOPERS WAS CARRIED OUT ON 29-10-1999 AND IN THE SEARCH CER TAIN DOCUMENTS WERE FOUND SHOWING THAT ABOVE ASSESSEES HAVE PURCHASED FLATS/S HOPS FROM OHM DEVELOPERS IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 7 AND HAVE PAID ON-MONEY. TO TAX ON-MONEY ASSESSING O FFICER FIRST CARRIED OUT SOME PRELIMINARY ENQUIRIES AND THEN FINALLY ISSUED NOTICE U/S.158BD OF THE ACT ON 04-02-2005. LD. CIT(APPEALS) HAVE REJECTED THE G ROUND TAKEN BY THE ASSESSEE ON LEGALITY OF ACTION U/S.158BD OF THE ACT . 10. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEES TOOK THE COMMON ARGUMENTS THAT NOTICE U/S.158BD OF THE ACT CANNOT B E ISSUED AFTER CLOSER OF THE BLOCK ASSESSMENT PROCEEDINGS U/S.158BC OF THE ACT I N THE CASE OF PERSON SEARCHED FROM WHICH CASE THE PROCEEDINGS U/S.158BD OF THE ACT AGAINST THIS ASSESSEE ARE INITIATED. THEY RELIED ON SEVERAL JUDG MENTS WHICH ARE DISCUSSED HEREINBELOW:- (I) ITAT CHANDIGARH BENCH IN THE CASE OF ACIT V. K ISORILAL BALBANT RAI (2007) 17 SOT 380 (CHANDIGARH) HELD AS UNDER:- THE NATURE OF THE PROVISIONS OF SECTION 158BD HAS B EEN CONSIDERED BY THE APEX COURT IN THE CASE OF MANISH MAHESHWARI V. ASSTT. CIT [2007] 289 ITR 341/159 TAXMAN 258 (SC). THE APEX COURT HELD THAT BEFORE CHAPTER XIV-B COULD BE INVOKED AGAINST A PERSON OTHER THAN A PERSON WHO IS PUT TO SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A THE CONDITIONS PRESCRIBED UNDER SECTION 158BD ARE REQUI RED TO BE STRICTLY COMPLIED WITH. THE SUPREME COURT HAS HELD THAT COND ITIONS PRECEDENT IN SUCH CASES FOR TAKING RECOURSE OF BLOCK ASSESSMENT IN TERMS OF SECTION 158BD REQUIRE THE ASSESSING OFFICER TO RECORD A SA TISFACTION THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH IS MADE UNDER SECTION 132 OR A REQUISITION IS PUT UNDER SECTION 132A. SECONDLY THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED ARE REQUIRED TO B E HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OT HER PERSON. THE SUPREME COURT HAS FURTHER HELD THAT ONLY UPON THE H APPENING OF THE AFORESAID THAT THE ASSESSING OFFICER HAVING JURISDI CTION OF THE OTHER PERSON SHALL PROCEED UNDER SECTION 158BC AGAINST S UCH OTHER PERSON. WITH THE ABOVE DISCUSSION A PREMISE WHICH CAN BE SAFELY DEDUCED IS THAT THE SATISFACTION AS CONTEMPLATED UNDER SECTION 158BD IS TO BE OF THE ASSESSING OFFICER OF THE PERSON WHO HAS BEEN PUT TO SEARCH OR REQUISITION UNDER SECTION 132 OR 132A RESPECTIVELY. ANOTHER PRE MISE WHICH CAN BE SAFELY DEDUCED FROM THE DECISION OF THE SUPREME COU RT IS THAT THE REQUIREMENT OF RECORDING OF SUCH SATISFACTION IS A MANDATORY CONDITION. IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 8 THEREFORE THE PLEA ADVANCED ON BEHALF OF THE REVEN UE THAT THE SATISFACTION IN SUCH CASES COULD ONLY BE DISCERNIBL E ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND SUCH SATISFACTION NEED NOT BE SPECIFICALLY RECORDED COULD NOT BE ACCEPTED. IN TH IS VIEW OF THE MATTER IT COULD BE SAID THAT THE SATISFACTION CONTEMPLATED UN DER SECTION 158BD TO THE EFFECT THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UN DER SECTION 132 OR REQUISITION MADE UNDER SECTION 132A IS TO BE RECOR DED IN WRITING BY THE ASSESSING OFFICER OF THE PERSON WITH RESPECT TO WHO M SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A IS MADE. [PARA 23] FURTHER THE SATISFACTION CONTEMPLATED UNDER SECTIO N 158BD IS REQUIRED TO BE RECORDED BY THE ASSESSING OFFICER OF THE PERS ON SEARCHED AT ANY TIME BUT NOT LATER THAN THE FINALIZATION OF ASSESSM ENT OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD UNDER CHAPTER XIV-B IN THE CASE OF THE PERSON PUT TO SEARCH OR REQUISITION AS THE CASE MA Y BE. SECONDLY INSOFAR AS THE ISSUANCE OF NOTICE UNDER SECTION 158BD IS CO NCERNED THE SAME IS TO BE ISSUED BY THE ASSESSING OFFICER OF THE PERSON OTHER THAN THE PERSON PUT TO SEARCH UNDER SECTION 132 OR REQUISITION UNDE R SECTION 132A. THAT TOO AFTER TRANSMISSION OF THE RELEVANT MATERIAL FR OM THE FIRST MENTIONED ASSESSING OFFICER I.E. THE ASSESSING OFFICER OF THE PERSON PUT TO SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A . THEREFORE A REASONABLE TIME LAG BETWEEN THE DATE OF RECORDING O F SATISFACTION AND ISSUANCE OF NOTICE UNDER SECTION 158BD IS ENVISAGED IN THE ACT ITSELF. [PARA 27] SIMILAR VIEW WAS TAKEN BY ITAT DELHI BENCH IN THE C ASE OF MANOJ AGARWAL V. DCIT (2008) 113 ITD 377 (DEL) (SB) IT WAS HELD AS UNDE R:- SECTION 158BD READ WITH SECTIONS 158BC AND 147 OF THE INCOME-TAX ACT 1961 - BLOCK ASSESSMENT IN SEARCH CASES - UNDISCLOS ED INCOME OF ANY OTHER PERSON - BLOCK PERIOD 1-4-1990 TO 20-8-2000 - WHETHER FOR INITIATING ACTION UNDER SECTION 158BD FIRST AND FO REMOST REQUIREMENT IS THAT ASSESSING OFFICER MAKING BLOCK ASSESSMENT IN C ASE OF PERSON SEARCHED HAS TO BE SATISFIED THAT UNDISCLOSED INCO ME DETECTED BELONGS TO SOME PERSON OTHER THAN PERSON SEARCHED AND THUS S ECTION ITSELF CONTEMPLATES SATISFACTION ON PART OF ASSESSING OFFI CER MAKING ASSESSMENT IN CASE OF PERSON SEARCHED; RECORDING OF SATISFACTI ON IS MANDATORY AND IMPERATIVE BEFORE ASSUMPTION OF JURISDICTION UNDER SECTION 158BD - HELD YES WHETHER NOTE OF SATISFACTION MUST CONTAIN A P OSITIVE FINDING BY ASSESSING OFFICER MAKING ASSESSMENT UNDER SECTION 1 58BC INDICATING THEREIN UNDISCLOSED INCOME FOUND AS A RESULT OF HI S EXAMINATION OF SEIZED MATERIAL AND PERSON TO WHOM SUCH INCOME BELONGS - H ELD YES IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 9 IN THE CASE OF BHARAT BHUSHAN JAINS V. ACIT (2009) 17 DTR 498 (DEL) TRIBUNAL HELD THAT PROCEEDINGS U/S.158BD INITIATED AFTER 19 MONTHS OF COMPLETION OF PROCEEDINGS U/S.158BC CANNOT BE SUSTAINED. IT WAS H ELD IN THE CASE OF SAROJ NURSING HOME V. ACIT (2009) 116 ITD 311 (LUCKNOW) THAT PROCEEDINGS U/S.158BD CAN BE INITIATED ON THE SATISFACTION OF T HE ASSESSING OFFICER HAVING JURISDICTION OVER PERSON SEARCHED TO TAX UNDISCLOSE D INCOME-TAX PERTAINING TO THIRD PERSON WHO IS NOT SUBJECTED TO SEARCH AND BOO KS OF ACCOUNTS AND IN OTHER DOCUMENTS WERE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH THIRD PERSON BUT PROCEEDINGS INITIATED U/S.158 BD OF THE ACT AFTER A PERIOD OF SIX YEARS CANNOT BE REGARDED AS VALID. 11. IN E.J. ULAHANNA V. ACIT IN ITA NO.19/AHD/2007 PRONOUNCED ON 18-03- 2009 FOLLOWING THE DECISION OF SPECIAL BENCH IN TH E CASE OF MANOJ AGARWAL (SUPRA) HELD THAT WITHOUT THERE BEING SATISFACTION RECORDED PRIOR TO COMPLETION OF ASSESSMENT OF THE PERSON SEARCHED PROCEEDINGS SO IN ITIATED U/S.158BD OF THE ACT WILL NOT BE VALID. IN THAT CASE NOTICE U/S.158BD OF THE ACT WAS ISSUED ON 10-06- 2004. BUT SEARCHED AGAINST OHM DEVELOPERS WAS CARRI ED OUT ON 29-10-1999 THEREFORE ASSESSMENT U/S. 158BD THEREOF COMPLETED A FTER 31-10-2001 COULD NOT BE HELD VALID. IN THE CASE OF SHRI VISHNUBHAI R BAROT V. ACIT IN IT(SS)A NO.104/AHD/2009 ITAT AHMEDABAD D BENCH PRONOUNCED ON 18-12-2009 IT WAS HELD FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI V. ACIT (2007) 289 ITR 341 (SC) AND MANOJ AGARWAL (SUPRA) THAT IF THE ASSESSMENT U/S.158BC OF THE ACT IN THE CASE OF PERSON SEARCHED (OHM DEVELOPERS) WAS COMPLETED ON 30-11-20 01 THEN ISSUING NOTICE U/S.158BD OF THE ACT ON 29-03-2006 AGAINST ASSESSEE IS BARRED BY LIMITATION. SIMILAR VIEW WAS TAKEN BY THE ITAT AHMEDABAD BENCH IN IT(SS)A NO.25/AHD/2007 IN THE CASE OF ADIL PARVEZ RANDERIA V. ACIT CC-3 (1) SURAT PRONOUNCED ON 01-09-2008. FOLLOWING THESE DECISION S WE HOLD THAT THE BLOCK IT(SS)A NO.14 27/AHD/2008 10 & 28/AHD/2008 & 12/AHD/08 & CO 91/AHD/09 BLOCK PERIOD 1990-91 TO 2000-01 PAGE 10 ASSESSMENT FAMED IN CASE OF ALL THE ABOVE ASSESSEE ARE NOT LEGALLY VALID AND THEREFORE ARE QUASHED FOR THE REASON THAT NOTICES U /S.158BD OF THE ACT WERE ISSUED IN THESE CASES LONG AFTER COMPLETION OF ASSE SSMENT IN THE CASE OF PERSON SEARCHED I.E. OHM DEVELOPERS . 12. AS A RESULT WE DISPOSE OF ABOVE FOLLOWING AS UNDER :- IT(SS)A NO.14/AHD/2008 APPEAL OF REVENUE IS DISMISSED. IT(SS)A NO.10/AHD/2008 APPEAL OF REVENUE IS DISMISSED. IT(SS)A NO.28/AHD/2008 APPEAL OF ASSESSEE IS ALLOWED. IT(SS)A NO.27/AHD/2008 APPEAL OF ASSESSEE IS ALLOWED. IT(SS)A NO.12/AHD/2008 APPEAL OF REVENUE IS DISMISSED AND CO NO.91/AHD/2009 OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 21/05/2010 SD/- SD/- (T.K.SHARMA) (D.C.AGRAWAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD DATED : 21/05/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-II SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD