Sh. Anupam Naglia, Gurgaon V. DCIT, New Delhi

CO 380/DEL/2010

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9708 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-05-2014
• Assessment Year: misc
• Appeal Filed On: 29-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A MISHRA
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Document seized; Principle of natural justice; Period of limitation; Deemed to accrue or arise in india; Block assessment; Right to appeal; Time period of passing order; Reason to believe; Documents seized
• Section: 69C; 68; 148; 132; 28; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S.KAPOOR, ACCOUNTANT MEMBER I.T.(SS) NO. -36/DEL/2010 (ASSESSMENT YEAR- 01.04.1997 TO 08.05.2003) DCIT, CIRCLE-20(1), ROOM NO-333, E-2, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI. (APPELLANT) VS ANUPAM NAGALIA, EG-3/18, GARDEN ESTATE, GURGAON (RESPONDENT) C.O.-380/DEL/2010 (IN I.T.(SS) NO.-36/DEL/2010) (ASSESSMENT YEAR- 01.04.1997 TO 08.05.2003) ANUPAM NAGALIA, EG-3/18, GARDEN ESTATE, GURGAON (APPELLANT) VS DCIT, CIRCLE-20(1), ROOM NO-333, E-2, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI. (RESPONDENT) APPELLANT BY SH. SALIL AGARWAL, ADV. & SH. SHAILESH GUPTA, CA RESPONDENT BY SH. A.MISHRA, CIT DR ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 14.06.2010 OF CIT (APPEALS)-I, NEW DELHI FOR THE B LOCK PERIOD 01.04.1997 TO 08.05.2003 ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LD. CIT(APPEALS) IS NOT CORRECT I N LAW AND FACTS; 2 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN QUASHING THE BLOCK ASSESSMENT COMPLETED UNDER SECTION 158BC READ WITH SECTION 158BD OF INCOME TAX, 1961 WHEREAS NEITHER OBJECTION WAS RAISED AGAINST LEGAL VALIDITY OF PROCEEDINGS BEFORE THE AO NOR ANY REMEDY WAS SOUGHT AT ANY, OTHER LEVEL; 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING O F THE APPEAL. 2. THE FACTS AVAILABLE ON RECORD AS PER THE ASSESSM ENT ORDER SHOW THAT SEARCH & SEIZURE OPERATION WAS CONDUCTED ON THE RESIDENCE OF THE ASSESSEE ON 08.05.2003 IN CONNECTION WITH THE SEARCH IN VATIKA GROUP OF COMPA NIES. FOR READY-REFERENCE WE EXTRACT THE OPENING PARA OF THE ASSESSMENT ORDER HE REUNDER:- SEARCH & SEIZURE OPERATIONS WERE CONDUCTED AT THE RESIDENCE OF THE ASSESSEE ON 8/5/2003 IN CONNECTION WITH THE SEARCH IN VATIKA GROUP OF COMPANIES. A SATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE VATIKA GROUP OF CASES. ACCORDINGLY A NOTICE U/S 158BD WAS ISSUED ON 31/05/2005 AND THE ASSESSEE FILED ITS RETURN OF INCOME U/S 158BD ON 20/10/2005 DECLARING NIL UNDISC LOSED INCOME. NOTICE U/S 143(2) WAS ISSUED AND THE ASSESSEE REQUE STED FOR THE REASONS FOR THE ISSUANCE OF NOTICE U/S 158BD. A CO PY OF SATISFACTION NOTE WAS DULY PROVIDED TO THE ASSESSEE AND THE ASSESSEE FILE D ITS LETTER DATED 10/5/2006 (EMPHASIS PROVIDED) 3. THE AO CONSIDERING THE REPLY OF THE ASSESSEE THA T THE DOCUMENTS WERE MERE PROPOSALS AND WERE NEVER ACTED UPON AS THEY WERE CL AIMED TO BE ROUGH CALCULATIONS ETC. APART FROM VARIOUS OTHER EXPLANATIONS OFFERED CAME TO THE CONCLUSION THAT RELIANCE PLACED UPON THE ORDER DATED 23.09.2005 IN THE CASE OF S.M.AGARWAL REPORTED IN ITA NO-116/DEL/2001 WAS MISPLACED AND P ROCEEDED TO MAKE VARIOUS ADDITIONS RESULTING IN THE ADDITION OF RS.1,89,53,9 00/-. THIS ACTION WAS CHALLENGED BY THE ASSESSEE IN APPEAL BEFORE THE CIT(A) BEFORE WHOM 25 GROUNDS WERE RAISED. CHALLENGE WAS POSED TO THE ACTION OF THE AO ON LEGA L GROUNDS AS WELL AS ON MERITS. A PERUSAL OF THE GROUNDS RAISED SHOWS THAT VIDE GRO UND NO-1 TO 9 ASSUMPTION OF 3 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 JURISDICTION BY THE AO U/S 158BD WAS ASSAILED. THE SPECIFIC GROUNDS RAISED BEFORE THE CIT(A) READ AS UNDER :- 1. THE ASSESSEE HAS PREFERRED THIS APPEAL AGAINST ORD ER OF ASSESSMENT MADE U/S 158BD OF THE INCOME TAX ACT,1961 ON 21.05.2007 ASSE SSING UNDISCLOSED INCOME AT RS. 1,89,53,900/- AGAINST NIL UNDISCLOSED INCOME DECLARED BY THE ASSESSEE. IN RESPONSE TO NOTICES ISSUED IN THE APP ELLATE PROCEEDINGS, SH. D.B. JAIN, C.A. APPEARED FROM TIME TO TIME WITH WHOM THE APPEAL WAS DISCUSSED. 2. AGAINST THE ORDER OF ASSESSMENT U/S 158BD THE ASSES SEE HAS FILED THIS APPEAL AND RAISED 25 GROUNDS, WHICH ARE REPRODUCED HEREUND ER: 1) THAT THE LD. DCIT, CENTRAL CIRCLE-20 HAS ERRED BOTH ON LAW AND ON FACTS IN INITIATING THE PROCEEDINGS AND FRAMING AN ORDER OF ASSESSMENT DATED 21.05.2007 UNDER CHAPTER XIVB OF THE INCOME T AX ACT, 1961 AND DETERMINING THE UNDISCLOSED INCOME OF THE ASSES SEE AT RS. 1,89,53,900/-. 2) THAT THE INSTANT ASSESSMENT MADE, IS BARRED BY LIMI TATION AND THE PROVISIONS OF SECTION 158BD OF THE ACT HAS BEEN INV OKED ONLY FOR COLLATERAL PURPOSES, DESPITE THE FACT, THAT ALL THE DOCUMENT HAD BEEN SEIZED FROM THE ASSESSEE ON A SEARCH CONDUCTED AT T HE RESIDENCE OF THE ASSESSEE OR 08.05.2003. 3) THAT THE LD. DEPUTY COMMISSIONER OF INCOME TAX HAS FAILED TO COMPREHEND THAT THE WARRANT OF SEARCH WAS ADMITTEDL Y ISSUED IN THE NAME OF VATIKA GROUP OF COMPANIES AND ASSESSEE BEIN G THE DIRECTOR WAS SEARCHED AT HIS RESIDENCE. IT COULD THUS NOT B E DENIED THAT ASSESSEE WAS A PERSON WHO HAD BEEN SEARCHED ON 08.0 5.2003. 4) THAT IN DOING SO HE HAS FAILED TO APPRECIATE THE AS SESSMENT HAS BEEN FRAMED BY HIM BY INVOKING THE PROVISIONS OF SEC. 15 8BD OF THE I.T. ACT, 1961 AND NOT THAT THE PROCEEDINGS HAVE BEEN IN ITIATED AGAINST THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 158B C OF THE INCOME TAX ACT, 1961. 5) THAT THE LD. DCIT HAS FURTHER ERRED IN FAILING TO A PPRECIATE THAT UNDER THE PROVISIONS OF SECTION 158BD OF THE INCOME TAX A CT, 1961 A NOTE OF SATISFACTION WAS REQUIRED TO BE RECORDED IN THE CAS E OF THE PERSON WHO HAD BEEN SEARCHED ON THE BASIS OF WHICH THE AO HAVI NG JURISDICTION OVER THE ASSESSEE WAS REQUIRED TO BE SATISFIED THAT BOOKS OF ACCOUNTS, OTHER DOCUMENTS OR ASSETS SEIZED REPRESENTED UNDISC LOSED INCOME OF THEN PERSON AGAINST WHOM THE PROCEEDINGS HAVE BEEN INITIATED BY HIM. IN THE ABSENCE OF ANY SUCH SATISFACTION HAVING BEEN RECORDED IN THE CASE OF PERSON SEARCHED NO VALID PROCEEDINGS COULD HAVE BEEN INITIATED AGAINST THE ASSESSEE. 6) THAT THE LD. DEPUTY COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT NO SUCH DOCUMENTS OR EVIDENCE WERE EITHER FOUND OR SEIZED FROM THE PERSON SEARCHED AND AS SUCH NO ASSE SSMENT COULD BE MADE BY INVOKING THE PROVISIONS OF SECTION 158BD OF THE INCOME TAX ACT, 1961. 4 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 7) THAT THE LD. DCIT HAS FAILED TO COMPREHEND THAT THE PROVISIONS OF SECTION 158BC AND 158BD OF THE ACT OPERATE IN DIFFE RENT FIELDS AND IT DEPENDS UPON THE SATISFACTION OF THE AO HAVING JURI SDICTION IN THE CASE OF PERSON SEARCHED TO INITIATE OR NOT TO INITIATE P ROCEEDINGS AGAINST THE ASSESSEE AND AS SUCH HE WAS OBLIGED IN LAW TO RECOR D A NOTE OF SATISFACTION IN THE COURSE OF SUCH A PERSON WHO HAS BEEN SEARCHED BEFORE INITIATING THE PROCEEDINGS AGAINST THE ASSES SEE. 8) THAT IN THE INSTANT CASE, IT IS AN ADMITTED FACT TH E PURPORTED ALLEGED DOCUMENTS, ON THE BASIS OF WHICH ASSESSMENT HAS BEE N MADE, WERE SEIZED FROM THE ASSESSEE DURING THE COURSE OF SEARC H STATED TO HAVE BEEN CONDUCTED ON HIM ON 08.05.2003 WHEREAS IT IS U NDISPUTED FACT THAT NO SUCH DOCUMENTS WERE FOUND OR SEIZED AS A RE SULT OF SEARCH CONDUCTED ON SUCH OTHER PERSON, WHICH SEARCH HAS BE EN CONDUCTED ON 08.05.2003. 9) THAT THE PRESENT ASSESSMENT HAS BEEN FRAMED BY INVO KING THE PROVISIONS OF SECTION 158BD OF THE INCOME TAX ACT, 1961 ONLY TO CIRCUMVENT THE TIME PROVIDED TO COMPLETE ASSESSMENT U/S 158BE OF THE ACT, WHICH HAD EXPIRED. THE ASSESSMENT MADE IS BAR RED BY LIMITATION. 3.1. THE FACTS WERE MARSHALLED BY THE CIT(A) IN PAR A 3 OF HIS ORDER AS UNDER:- 3. GROUND NO. 1 TO 9 OF THE GROUNDS ARE REGARDING ASSUMPTION OF JURISDICTION U/S 158BD OF THE ACT. THE RELEVANT FA CTS ARE, SEARCH AND SEIZURE OPERATIONS U/S 132(1) OF THE ACT WAS CONDUCTED AT T HE RESIDENCE OF THE ASSESSEE ON 8.5.2003 AS WELL AS VATIKA GROUP OF COM PANIES. THEREAFTER, NOTICE U/S 158BD OF THE ACT WAS ISSUED ON 31.5.2005 TO THE APPELLANT AND ASSESSEE IN RESPONSE THERETO, FILED HIS RETURN OF U NDISCLOSED INCOME ON 20.10.2005 DECLARING NIL UNDISCLOSED INCOME. HOWEV ER, AN ASSESSMENT WAS MADE U/S 158BD/158BC/143(3) OF THE ACT DATED 21.05. 2007 DETERMINING THE UNDISCLOSED INCOME OF THE APPELLANT AT RS. 1,68,53, 900/-. THE APPELLANT HAS DISPUTED THE INITIATION OF PROCEEDINGS UNDER SECTIO N 158BD OF THE ACT AND FILED DETAILED WRITTEN SUBMISSION IN RESPECT OF THE ABOVE CONTENTION. (EMPHASIS PROVIDED) 3.2. IN SUPPORT OF THE GROUNDS RAISED THE DETAILED SUBMISSIONS ADVANCED ON BEHALF OF THE ASSESSEE ARE FOUND REPRODUCED IN THE IMPUGNE D ORDER. THE SAME ARE EXTRACTED HEREUNDER:- 3.1.1 IN THE WRITTEN SUBMISSIONS, IT HAS BEEN CONTENDED THAT, SATISFACTION NOTE WAS RECORDED IN THE CASE OF ASSESSEE AND, NO S ATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFFICER IN THE CASE OF VA TIKA GROUP OF COMPANIES. THEREFORE, ACCORDING TO THE ASSESSEE, NO NOTE OF SA TISFACTION WAS RECORDED BY THE AO HAVING JURISDICTION OVER THE ASSESSEE WHO HA S BEEN SEARCHED ALTHOUGH 5 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 IN THE ASSESSMENT ORDER IT IS STATED THAT, A SATISF ACTION NOTE WAS RECORDED BY THE AO HAVING JURISDICTION OVER THE VATIKA GROUP OF COM PANIES. THE ASSESSEE HAS STATED THAT, THE AO HAS IN THE FIRST PARA OF THE OR DER OF ASSESSMENT FRAMED U/S 158BD HAS NOTED THAT, A SATISFACTION NOTE WAS RECO RDED BY THE AO HAVING JURISDICTION OVER THE VATIKA GROUP OF CASES. AGAI N IN SECOND PARA OF THE ORDER, IT IS STATED THAT A COPY OF SATISFACTION NOT E WAS DULY PROVIDED TO THE ASSESSEE AND THE ASSESSEE FILED ITS LETTER DATED 10 .05.2006. THE APPELLANT HAS DISPUTED THE OBSERVATION MADE BY THE AO IN THE FIRS T PARA OF THE ORDER OF ASSESSMENT THAT A SATISFACTION NOTE WAS RECORDED BY THE AO HAVING JURISDICTION OVER THE VATIKA GROUP OF CASES. IT IS CONTENDED TH AT DURING THE COURSE OF HEARING, THE ASSESSEE FILED A REPLY DATED 14 TH MAY, 2007 WHEREIN ASSESSEE SPECIFICALLY RAISED THIS ISSUE BEFORE THE COMPLETIO N OF ASSESSMENT PROCEEDINGS. THE AO HOWEVER, DID NOT DEAL THE AFORESAID OBJECTIO NS OF THE ASSESSEE. FURTHER, IT WAS SUBMITTED THAT, COPY OF THE SAID SA TISFACTION NOTE HAD BEEN SERVED UPON THE ASSESSEE ON 27.01.2006 WHEN THE SAT ISFACTION NOTE WAS RECORDED ON 31.05.2005 AND, NO REASON FOR DELAY OF OVER 7 MONTHS HAS BEEN GIVEN. IT WAS FURTHER SUBMITTED AS UNDER: A PERUSAL OF THE SATISFACTION NOTE SERVED ON THE A SSESSEE SHOWS THAT THE HEADING OF THE SO RECORDED REASONS READS AS UNDER: REASONS U/S 158BC READ WITH 158BD IN THE CASE OF SH RI ANUPAM NAGALIA. AGAIN THE OPENING PARAGRAPH READS AS UNDER: WARRANT WAS ISSUED IN THE NAME OF VATIKA GROUP OF COMPANIES TO SEARCH RESIDENCE OF SH. ANUPAM NAGALIA. ON 08.05.2 003, WHO WAS DIRECTOR OF SOME OF THE COMPANIES AND ALSO A CHARTE RED ACCOUNTANT. SCRUTINY OF SEIZED DOCUMENTS REVEALS THAT ASSESSEE HAD UNACCOUNTED INCOME UNDER THE FOLLOWING HEADS. FURTHER IN THE END THE NOTE READS AS UNDER: IN VIEW OF THE FACTS STATED ABOVE AND MATERIAL AVA ILABLE IN THE FORM OF SEIZED DOCUMENTS, I AM SATISFIED THAT SH. ANUPAM NA GALIA HAD UNDISCLOSED INCOME FOR THE BLOCK PERIOD 01.04.1997 TO 08.05.2003 WHICH WAS NOT DISCLOSED IN THE REGULAR RETURN OF INCOME. THEREFORE, NOTICE U/S 158BC READ WITH SECTION 158BD IS ISSUED. THE AFORESAID INSTANCES CLEARLY INDICATE THAT THE A FORESAID NOTE OF SATISFACTION WAS RECORDED BY THE OFFICER HAVING JUR ISDICTION OVER THE ASSESSEE AND WAS NOT RECORDED BY THE AO HAVING JURI SDICTION OVER THE PERSON SEARCHED. IN SUPPORT OF ABOVE CONTENTION ABOUT THE SATISFACTI ON NOTE, THE ASSESSEE HAS RELIED UPON THE DECISIONS BY THE APEX COURT IN THE CASES OF (1) MANISH MAHESHWARI VS. ACIT VS. KISHORI LAL BALWANT RAJ REP ORTED AS 17 SOT 308 (CHANDIGARH) ITAT AND ACIT VS. R.P. SINGH REPORTED AS 165 TAXMAN 147 (MAG. DELHI ITAT). ON THE BASIS OF AFORESAID DECISIONS, THE ASSESSEE HAS OBJECTED TO THE INITIATION OF PROCEEDINGS SINCE ACCORDING TO HIM NO SATISFACTION NOTE WHATSOEVER WAS RECORDED BY THE AO HAVING JURISDICTION OVER THE PERSON SEARCHED. 6 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 THE ASSESSEE HAS ALSO CONTENDED THAT, THE ADDITIONS MADE IN THE HANDS OF THE ASSESSEE HAVE BEEN MADE ON THE BASIS OF DOCUMENTS S EIZED FROM ASSESSEES PREMISES ALLEGEDLY PERTAINING TO THE ASSESSEE AND N OT ON THE BASIS OF EVEN A SINGLE PAPER SEIZED FROM THE PREMISES OF VATIKA GROUP OF C OMPANIES. EVEN IN THE NOTE OF SATISFACTION THERE IS NO MENTION OF ANY INCRIMIN ATING DOCUMENT SEIZED FROM THE RESIDENTIAL PREMISES OF SH. ANUPAM NAGALIA. THE AS SESSEE HAS THEREFORE, OBJECTED TO THE OBSERVATIONS OF THE AO THAT A NOTE OF SATISF ACTION WAS RECORDED IN THE CASE OF VATIKA GROUP OF COMPANIES. IN FACT, THERE CANNO T BE ANY OCCASION TO RECORD ANY NOTE OF SATISFACTION FOR THE PAPERS SEIZED DURI NG SEARCH ON THE ASSESSEE NOT PERTAINING TO VATIKA GROUP OF COMPANIES. SECONDLY, THE ASSESSEE IS AGGRIEVED ON THE ASSESSMENT MADE BY THE AO UNDER THE PROVISIONS OF SECTION 158BD SINCE ACCORDING TO THE ASSESSEE, THE AO HAS NO JURISDICTI ON FOR ASSESSMENT U/S 158BD WHICH JURISDICTION WAS WRONGLY ASSUMED BY THE AO IN STEAD OF APPLICATION OF PROVISIONS OF SECTION 158BC IN ORDER TO CIRCUMVENT NON ISSUE OF NOTICE U/S 158BC. IN THIS CONNECTION WITHOUT PREJUDICE AND IN THE ALT ERNATIVE THE ASSESSEE SUBMITTED THAT THE ASSESSMENT HAS BEEN FRAMED U/S 158BD WHERE AS IT SHOULD HAVE BEEN COMPLETED UNDER THE PROVISIONS OF SECTION 158BC AND THUS, THE ASSESSMENT MADE IS BARRED BY LIMITATION AND THE PROVISIONS OF SECTI ON 158BD ARE NOT ATTRACTED IN THE CASE OF THE ASSESSEE. THE APPELLANT HAS SUBMIT TED AS UNDER: THE FACTS IN THIS CONNECTION ARE THAT: A) ASSESSEE IS AN INDIVIDUAL. B) HE IS A DIRECTOR IN SOME OF THE VATIKA GROUP OF COM PANIES. C) THERE WAS SEARCH PROCEEDING U/S 132 OF THE I.T. ACT , 1961 ON 08.05.2003. D) THE ASSESSEE BEING THE DIRECTOR WAS SEARCHED AT HIS RESIDENCE. ON THE AFORESAID FACTS AND CIRCUMSTANCES IT COULD N OT BE DENIED THAT ASSESSEE WAS A PERSON WHO HAD BEEN SEARCHED ON 08.0 5.2003. AS SUCH ASSESSMENT ON ASSESSEE SHOULD HAVE BEEN MADE UNDER THE PROVISIONS OF SECTION 158BC AND THE ASSESSMENT PROCEEDINGS SHOULD HAVE BEEN CONCLUDED BY 31 ST MAY, 2005. HOWEVER, IN THE PRESENT CASE A NOTE OF SATISFACTION WAS PREPARED ONLY ON 31.05.2005 AND ASSESSMENT WAS COMPLETED U/S 158B D ON 21.05.2007 BY WRONGLY ASSUMING JURISDICTION TO ASSESS THE ASSE SSEE U/S 158BD WHERE ASSESSMENT IN ASSESSEES CASE IN RESPECT OF U NDISCLOSED INCOME IF ANY SHOULD HAVE BEEN COMPLETED U/S 158BC. IT WAS FURTHER SUBMITTED BY THE ASSESSEE, IT IS SO SINCE A SEARCH ON ASSESSEES PREMISES WAS CARRIED OUT ON 08.05.2003 W HEN A NUMBER OF DOCUMENTS ETC., WERE SEIZED. EVEN A LOCKER IN THE NAME OF ASSESSEES WIFE WAS ALSO SEARCHED ALTHOUGH NO ADDITION ON THE BASIS OF CONTENTS IN THE SAID LOCKER HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSEE AGAIN CONTENDED THAT IN THE INSTANT CA SE IT IS AN ADMITTED FACT THAT THE PURPORTED ALLEGED DOCUMENTS, ON THE B ASIS OF WHICH ASSESSMENT HAS BEEN MADE, WERE SEIZED FROM THE ASSE SSEE FROM HIS RESIDENCE DURING THE COURSE OF SEARCH STATED TO HAV E BEEN CONDUCTED ON HIM ON 08.05.2003 WHEREAS IT IS UNDISPUTED FACT THA T NO SUCH DOCUMENTS 7 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 WERE FOUND OR SEIZED AS A RESULT OF SEARCH CONDUCTE D ON SUCH OTHER PERSON WHICH SEARCH HAS BEEN CONDUCTED ON 08.05.200 3. THE ASSESSEE AGAIN CONTENDED THAT IF THE AO FOUND T HAT AS A RESULT OF PAPERS SEIZED BY THE DEPARTMENT FROM ASSESSEES RES IDENCE ON SEARCH ON 08.05.2003, HE COULD HAVE ISSUED A NOTICE U/S 15 8BC, WITHIN THE TIME PRESCRIBED UNDER THE ACT AND OUGHT TO HAVE COM PLETED THE ASSESSMENT LATEST BY 31 ST MAY, 2005 AS PROVIDED U/S 158BE OF THE ACT. HOWEVER, IN THE INSTANT CASE, NO SUCH NOTICE WAS IS SUED BY HIM AND, HE HAS CHOSEN TO INITIATE PROCEEDING U/S 158BD OF THE ACT BY RECORDING SATISFACTION IN ASSESSEES HANDS. FROM THE AFORESAID, ASSESSEE SUBMITS THAT IT IS EVI DENT THAT, INSTEAD OF INITIATING PROCEEDING BY ISSUE OF NOTICES U/S 158BC OF THE ACT AND, SERVING THE SAME WITHIN A PERIOD PERMISSIBLE UNDER THE ACT, THE LD. AO ISSUED NOTICE U/S 158BD OF THE ACT. IN FACT IT MAY BE STATED THAT, RECOURSE TO THE PROVISIONS OF SECTION 158BD OF THE ACT CAN BE SAID TO HAVE BEEN TAKEN FOR COLLATERAL PURPOSE I.E., TO CIR CUMVENT THE NON-ISSUE OF NOTICE U/S 158BC OF THE ACT. IT IS SUBMITTED THAT, THE ASSUMPTION OF JURISDICTIO N BY INVOKING THE PROVISIONS OF SECTION 158BD OF THE ACT, IS WITHOUT JURISDICTION, AS NO VALID NOTICE COULD HAVE BEEN ISSUED BEYOND A PERIOD OF TWO YEARS FROM THE END OF THE MONTH IN WHICH SEARCH TOOK PLACE AT ASSESSEES PREMISES. IT IS FURTHER SUBMITTED THAT THE LEGISLATURE HAS PR OVIDED A PERIOD OF TWO YEARS TO AN AO TO COMPLETE ASSESSMENT U/S 158BC WHE RE SEARCH HAS TAKEN PLACE. IT IS HOWEVER, SUBMITTED THAT WHEN AN ACTION IS TAKEN, THEN IT SHOULD NOT BE BECAUSE OF ANY REMISSNESS ON THE P ART OF THE AO TO INITIATE THE PROCEEDINGS. IN THE INSTANT CASE, THE LD. AO ON THE SAME FACTS HAD TAKEN UP THE PROCEEDINGS IN THE CASE OF T HE ASSESSEE AND, HAD COMPLETED THE SAME AFTER PERIOD OF 2 YEARS AS PRESC RIBED AND, AS SUCH, IF, HE DID NOT CHOOSE TO INITIATE PROCEEDINGS UNDER THE CORRECT PROVISIONS OF THE ACT WHERE HE WAS WITHIN HIS JURIS DICTION, IT IS CLEAR CASE OF REMISSNESS ON THE PART OF THE AO. IT CANNO T BE VALIDLY SAID THAT THE LD. AO ON THE SAME FACTS TAKES UP THE ASSESSMEN T OF ALL ASSESSES WHERE SEARCH WAS TAKEN UP ISSUE A NOTICE U/S 158BC OF THE ACT ON THE ASSESSEE, THERE IS NO REMISSNESS ON HIS PART. IT I S SUBMITTED THAT, A PERSON CANNOT BE ALLOWED TO TAKE ADVANTAGE OF HIS O WN LAPSE OR REMISSNESS. THE SHORT SUBMISSION OF THE ASSESSEE I S THAT HAVING SEARCHED THE PREMISES OF THE ASSESSEE, THE AO CANNO T MAKE THE SAME A BASIS TO INITIATE PROCEEDINGS U/S 158BD OF THE ACT. IT IS A CASE OF AN INACTION ON THE PART OF THE AO AND, ANY INACTION ON THEN PART OF THE AO HAS ALWAYS TO BE AT THE CORE OF NATIONAL EXCHEQUER RELIANCE IS PLACED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CAS E OF PARSHURAM POTTERY WORKS LTD. VS. ITO REPORTED IN 106 ITR 1 AT PAGE 10 WHERE IT HAS BEEN OBSERVED AS UNDER: IT HAS BEEN SAID THAT THE TAXES ARE THE PRICE THAT WE PAY FOR CIVILIZATION. IF SO, IT IS ESSENTIAL THAT THOSE WH O ARE ENTRUSTED WITH THE 8 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 TASK OF CALCULATING AND REALIZING THAT PRICE SHOULD FAMILIARIZE THEMSELVES WITH THE RELEVANT PROVISIONS AND BECOME WELL-VERSED WITH THE LAW ON THE SUBJECT. ANY NATIONAL EXCHEQUER AND MUST NECESSARILY RESULT IN LOSS OF REVENUE. AT THE SAME TIME, WE HA VE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POIN T OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTI VATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME INDUCE REPO SE IN AND SET AT REST JUDICIAL AND QUASI-JUDICIAL CONTROVERSIES AS IT MUS T IN OTHER SPHERES OF HUMAN ACTIVITY. SO FAR AS THE INCOME TAX ASSESSMEN T ORDER ARE CONCERNED, THEY CANNOT BE REOPENED ON THE SCORE OF INCOME ESCAPING ASSESSMENT U/S 147 OF THE ACT OF 1961 AFTER THE EXP IRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR UNLESS THERE BE OMIS SION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. AS ALREADY MENTIONED , THIS CANNOT BE SAID IN THE PRESENT CASE. IT IS SUBMITTED THAT, IT IS ALSO WELL SETTLED LAW T HAT, ASSESSEE IS NOT UNDER OBLIGATION TO ASK THE AO TO ASSESS HIM U/S 158BC FO R THE PAPERS SEIZED FROM HIM. THERE CAN BE NO OCCASION TO DISCLOSE WHA T AO ALREADY KNOWS. IT IS FOR THE AO TO RAISE SUCH INFERENCES A ND, DRAW HIS OWN CONCLUSION. IT IS SUBMITTED THAT THE PRESENT ASSESSMENT HAS BEE N FRAMED BY INVOKING THE PROVISIONS OF SECTION 158BD OF THE INCOME TAX A CT, 1961 ONLY TO CIRCUMVENT THE TIME PROVIDED TO COMPLETE ASSESSMENT U/S 158BE OF THE ACT, WHICH HAD EXPIRED AS SUCH ASSESSEE CONTENDS TH AT THE ASSESSMENT MADE IS BARRED BY LIMITATION. WITHOUT PREJUDICE, THE ASSESSEE, FURTHER SUBMITS TH AT IN THEN INSTANT CASE SEARCH WAS CONDUCTED ON VATIKA GROUP OF COMPAN IES ON 08.05.2003 AND IN THE CASES OF VATIKA GROUP ASSESSM ENTS WERE MADE BY 31.05.2005, WHEREAS IN ASSESSEES CASE PROCEEDINGS WERE INITIATED BY THE AO ON 31.05.2005, THOUGH WITHOUT JURISDICTION A ND IMPROPERLY, YET INSPITE OF, THE ASSESSEE HAD FURNISHED HIS REPLY ON 10.05.2006. HOWEVER, THE AO AGAIN PROCEEDED WHEN ASSESSMENT WAS GOING TO BE BARRED BY LIMITATION AS HAD STATED WHEN ACCORDING T O ASSESSEE IT HAD ALREADY BECOME BARRED BY LIMITATION BY LONG LAPSE O F TIME, WHICH ACCORDING TO ASSESSEE SHOULD HAVE BEEN COMPLETED ON 31.05.2005 AS THERE WAS A SEIZURE MADE FORM THE ASSESSEE ON 08.05 .2003. IT IS CONTENDED BY THE ASSESSEE THAT THE ENTIRE PURPOSE F OR MAKING THE ASSESSMENT IS TO BURDEN THE ASSESSEE, WITH THE TAX LIABILITY AND WITHOUT AFFORDING TO THE ASSESSEE A FAIR AND PROPER OPPORTU NITY, WHEN ASSESSMENT HAD ALREADY BECOME BARRED BY LIMITATION. THE ASSESSEE IS UNABLE TO COMPREHEND ANY REASON AS TO WHY PROCEEDIN GS WHICH HAD BEEN INITIATED ON 31 ST MAY, 2005 AND IN RESPECT OF WHICH THE ASSESSEE HAD FILED HIS REPLY ON 10.05.2006 WERE NOT COMPLETE D, WHEN THE ASSESSEE HAD ALREADY FILED HIS REPLY AS EARLY AS ON 10.05.2006. IT IS 9 C.O.- 380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 THUS CONTENDED THAT THE AO WAS SITTING WITH PREDETE RMINED MIND TO FRAME THE ASSESSMENT ARBITRARILY. 3.3. IT IS SEEN THAT THE ASSESSEES OBJECTIONS WER E CONFRONTED BY THE CIT(A) TO THE AO AND REMAND REPORT WAS SOUGHT FROM HIM. THE RELEVANT EXTRACT FROM THE IMPUGNED ORDER IS REPRODUCED HEREUNDER:- 3.4 IN RESPONSE TO THE SUBMISSIONS MADE BY THE ASS ESSEE, A REMAND REPORT WAS SOUGHT FROM THE AO VIDE OFFICE LETTER NO.F.NO.C IT(A)-1/2008-09/135 DATED 17.09.2008. THE AO SENT HIS REPORT ON 26.08. 2009 WHICH IS BEING EXTRACTED HEREUNDER: KINDLY REFER TO YOUR OFFICE LETTER F.NO.CIT(A)-1/2 008-09/135 DATED 17.09.2008 ON THE ABOVE REFERRED SUBJECT. 2. THIS OFFICE HAS BEEN REQUIRED TO SUBMIT REMAND REPORT ON THE SPECIFIC ISSUE THAT BLOCK ASSESSMENT SHOULD HAVE BE EN COMPLETED U/S 158BC OF THE I.T. ACT, 1961 ON 31.05.2009 IN PURSUA NCE OF SEARCH HAVING BEEN CONDUCTED ON THE RESIDENCE OF THE ASSES SEE AND ON THE COMPANY M/S VATIKA LANDBASE P. LTD. IN WHICH HE WAS DIRECTOR ON 08.05.2003. 3. IN THIS CONNECTION, FOLLOWING SUBMISSIONS MAY K INDLY BE CONSIDERED IN APPELLATE PROCEEDINGS: A) IT IS UNDISPUTED FACT THAT SEARCH WAS CONDUCTED U/S 132 OF I.T. ACT, 1961 IN THE CASE OF SH. ANUPAM NAGALIA AND ON THE COMPANY M/S VATIKA LANDBASE P. LTD. IN WHICH HE WAS DIRECTOR ON 08.05.2003. B) NOTICE U/S 158 BD OF THE INCOME TAX ACT, 1961 WAS I SSUED ON 31.05.2005 AFTER RECORDING SATISFACTION NOTE. THUS , THE NOTICE WAS ISSUED WITHIN THE LIMITATION PERIOD. C) BLOCK ASSESSMENT WAS COMPLETED U/S 158BD OF I.T. AC T, 1961 ON 21.05.2007 ON UNDISCLOSED INCOME OF RS. 1,89,53,900 /- AGAINST UNDISCLOSED INCOME SHOWN AT NIL IN RETURN OF UNDISC LOSED INCOME. D) THE ASSESSEE COMPLIED WITH THE NOTICES AND FILED WR ITTEN SUBMISSIONS THOUGH RAISED OBJECTIONS RELATING TO ME RITS OF THE SATISFACTION NOTE AS NOT COMMENSURATE WITH THE LEGA L REQUIREMENTS OF SECTION 158BD OF THE INCOME TAX ACT , 1961. E) DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT RAISE THE ISSUE OF BLOCK ASSESSMEN T U/S 158BC BUT OBJECTED TO THE INITIATION OF PROCEEDINGS U/S 1 58BD ON MERITS OF SATISFACTION NOTE. F) THEREFORE, IN VIEW OF PROVISIONS OF SECTION 292BB O F INCOME TAX ACT, 1961, THE ASSESSEE IS PRECLUDED FROM TAKING AN Y OBJECTION IN THE BLOCK ASSESSMENT PROCEEDINGS. 10 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 ACCORDINGLY, THE OBJECTIONS OF THE ASSESSEE AGAINST THE BLOCK ASSESSMENT ARE LIABLE TO BE REJECTED. (EMPHASIS PROVIDED IN THE PRESENT PROCEEDINGS) 3.4. THE RECORD FURTHER SHOWS THAT THE REMAND REPOR T FORWARDED BY THE AO WAS CONFRONTED TO THE ASSESSEE BY THE CIT(A) AND COMMEN TS OF THE ASSESSEE WERE INVITED THEREON. IT IS FURTHER SEEN THAT THE ASSESS EE VIDE LETTER DATED 23.03.2009 FORWARDED THE FOLLOWING SUBMISSIONS (THESE ARE EXTR ACTED FROM PAGES 12 & 13 OF THE IMPUGNED ORDER):- 3.5 THE ASSESSEE IN COMMENTS ON THE REMAND REPORT ON 23.12.2009 SUBMITTED AS UNDER: IT IS SUBMITTED THAT THE ASSESSMENT AS HAD BEEN FR AMED ON 21.05.2007 IS BARRED BY LIMITATION, WHEREAS IT HAD TO BE FRAMED BY 31.05 .2005, SINCE THE SEARCH U/S 132(1) OF THE INCOME TAX ACT, 1961 HAD BEEN COMPLET ED ON 08.05.2003, WHEN THE DOCUMENTS ON THE BASIS OF WHICH AN UNDISCLOSED INCO ME HAS BEEN COMPUTED WERE FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES OF T HE ASSESSEE. IT IS AN ADMITTED FACT THAT, THE SEARCH HAD BEEN CONDUCTED ON THE ASS ESSEE U/S 132(1) OF THE INCOME TAX ACT, 1961 ON 08.05.2003, AND AS SUCH AS IS PROVIDED U/S 158BE OF THE INCOME TAX ACT, 1961 THE ASSESSMENT HAD TO BE F RAMED WITHIN THE PERIOD OF TWO YEARS FROM THE END OF THE MONTH, IN WHICH THE L AST OF THE WARRANT OF AUTHORIZATION WAS FINALLY EXECUTED. IN THE INSTANT CASE, IT IS ALSO AN UNDISPUTED FACT THAT, THE SEARCH HAD FINALLY BEEN CONCLUDED ON 08.05.2003 AND AS SUCH IT IS EMPHASIZED HERE THAT, NO ASSESSMENT IN LAW COULD BE MADE BY THE LD. AO. IT IS FURTHER SUBMITTED THAT, THERE IS NO FURTHER S EARCH CONDUCTED ON THE ASSESSEE OR EVEN ON M/S VATIKA LANDBASE PVT. LTD. OF WHICH T HE ASSESSEE WAS THE DIRECTOR. IN SUCH A SITUATION, ON A RECEIPT OF THE NOTICE U/S 158BD OF THE ACT, 1961 DATED 31.05.2005 FROM THE LD. AO, THE ASSESSEE HAS RAISED BY WAY OF AN ALTERNATIVE ARGUMENT IN REPLY OF SUCH A NOTICE AND THERE IS NO NOTE OF SATISFACTION RECORDED FOR INITIATING THE PROCEEDINGS. HOWEVER, THE FACT OF THE MATTER REMAINS IS THAT, THE ASSESSMENT FRAMED BY THE LD. AO IS EVIDENTLY BA RRED BY LIMITATION, AS THE ASSESSMENT HAD TO BE FRAMED, ON THE BASIS OF SEARCH CONDUCTED ON THE ASSESSEE ON 8.5.2003 AND THERE WAS ABSOLUTELY NO VALID JUSTI FICATION NOT TO HAVE COMPLETED THE ASSESSMENT BY 31.5.2005 AND AS SUCH I T WAS SUBMITTED THE NOTICE ISSUED U/S 158BD WAS AN ATTEMPT TO WRIGGLE OUT OF A N AWKWARD SITUATION FOR HAVING NOT COMPLETED THE ASSESSMENT WITHIN THE TIME PROVIDED IN LAW AND WAS TO CIRCUMVENT THE PROVISION OF SECTION 158BD OF THE IN COME TAX ACT. IT IS THUS MANIFESTLY CLEAR THAT THE ASSESSMENT FRAMED IS BARR ED BY LIMITATION AND IS WHOLLY UNTENABLE IN LAW. 11 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 IN THE COMMENTS OF THE LD. AO, DATED 26.08.2009 IT HAS BEEN STATED BY HIM THAT, THE ASSESSEE HAD NOT RAISED ANY SUCH OBJECTION IN T HE COURSE OF PROCEEDINGS BEFORE HIM. IN SO FAR AS THE FACTS OF THE INSTANT CASE ARE CONCERNED, IT IS SUBMITTED THAT SUCH A SUBMISSION IS NOT A CORRECT S TATEMENT MADE BY AO AND IN FACT SUCH AN OBJECTION WAS RAISED BY THE ASSESSEE, IN ITS WRITTEN SUBMISSION DATED 14.05.2007, A COPY OF WHICH APPEARS AT PAGE 7 2 OF THE PAPER BOOK. BE THAT AS IT MAY, EVEN OTHERWISE THE PROVISIONS OF SEC. 292BB OF THE ACT, HAS NO APPLICATION. IT IS FURTHER SUBMITTED THAT IN SO FAR AS THE VALID ITY OF PERIOD OF LIMITATION IS CONCERNED, IN ANY CASE AND WITHOUT PREJUDICE THE SA ID PROVISION OF SEC. 292BB OF THE ACT OTHERWISE TOO, HAVE NO APPLICATION AND FURT HER THE AFORESAID PROVISIONS, HAD BEEN INSERTED BY THE FINANCE ACT, 2008 W.E.F. 0 1.04.2008 WHEREAS THE ASSESSMENT HAD BEEN COMPLETED ON 21.05.2007 AND AS SUCH A PROVISION OTHERWISE TOO HAS NO APPLICATION. IT IS RESPECTFULLY SUBMITT ED THAT, THE ASSESSEE COULD NOT HAVE DECIDED FOR HIMSELF NOT TO PARTICIPATE IN THE PROCEEDINGS DESPITE THE FACT THAT, (THE SAME HAS BECAME BARRED BY LIMITATION) SINCE TH E ASSESSEE HAD TO COMPLY WITH THE NOTICE ISSUED AND HAD NOT OPTION NOT TO DO SO, IT AND AS SUCH IT COULD NOT BE STATED THAT MERELY BECAUSE ASSESSEE HAD PARTICIPATE D IN THE ASSESSMENT PROCEEDINGS HE IS NOT ENTITLED TO CONTEND THAT ASSE SSMENT MADE WAS BARRED BY LIMITATION AND THE PURPORTED NOTICE U/S 158BD OF TH E ACT WAS NO NOTICE IN THE EYES OF LAW. IN SUCH CIRCUMSTANCES IT IS SUBMITTED THE OBJECTION RAISED BY THE LD. AO BY HIS LETTER DATED 26.08.2009 IS MISDIRECTED, MISCONCEIVE D AND THUS, DESERVES TO BE REJECTED AS IS ENTIRELY UNTENABLE. IT IS THUS PRAYED THAT, IT BE HELD THAT AN ASSESSME NT MADE IS BARRED BY LIMITATION. IN RESPECT OF THE OTHER ISSUES AND GROUNDS OF APPEA L DETAILED SUBMISSIONS HAVE ALREADY BEEN MADE AND IN RESPECT OF WHICH THERE HAV E BEEN NO COUNTER SUBMISSIONS MADE BY THE LD. AO. 3.5. CONSIDERING THE SAME THE CIT(A) ALLOWED THE AP PEAL OF THE ASSESSEE HOLDING THAT THE PROCEEDINGS INITIATED U/S 158BD WERE NOT L EGAL. HE FURTHER WENT ON TO EXAMINE AND HOLD THAT THE SAME WERE TIME BARRED U/S 158BC. THESE DETAILED FINDINGS ARE FOUND DISCUSSED IN PARA 4 TO PARA 4.9 AT PAGES 14-21 OF THE IMPUGNED ORDER. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE HEARING IN THE PRESENT PROCEEDINGS TOOK PLAC E ON TWO SEPARATE AND DISTINCT DATES AS AFTER HEARING BOTH THE SIDES, IT WAS CONSIDERED APPROPRIATE FOR THE SAKE OF COMPLETENESS TO DIRECT THE PARTIES TO PLACE ON RECORD THE WRITTEN 12 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 SUBMISSIONS ADDRESSING THEIR RESPECTIVE STAND AND T HAT TOO AFTER MUTUALLY EXCHANGING THE SAME AMONGST THEMSELVES FIRST. 4.1. IN COMPLIANCE WITH THE DIRECTIONS THE LD. CIT DR, MS. ANURADHA MISHRA PLACED WRITTEN SUBMISSIONS DATED NIL CONSISTING OF FOUR UN-NUMBERED PAGES ALONGWITH ANNEXURES. THE LD. AR HAS ALSO PLACED WR ITTEN SUBMISSIONS DATED 15.05.2014 AS A REBUTTAL TO THE DEPARTMENTS CONTEN TIONS AND ALSO A SUPPLEMENTARY REBUTTAL TO THE ARGUMENTS OF THE LD. CIT DR DATED 2 1.05.2014 NUMBERING 10 PAGES AND 8 PAGES RESPECTIVELY ACCOMPANIED WITH ANNEXURES . ACCORDINGLY WHILE REFERRING TO THE RESPECTIVE ARGUMENTS OF THE PARTIE S BEFORE THE BENCH APART FROM MAKING REFERENCE TO THE ORAL ARGUMENTS ADVANCED THE WRITTEN SUBMISSIONS AVAILABLE ON RECORD WOULD ALSO BE REFEREED TO. 5. SINCE THE LD. CIT DR HAS MORE OR LESS COMPLETELY ENCOMPASSED THE ARGUMENTS ADVANCED ORALLY ON THE DATE OF HEARING IT IS APPROPRIATE TO REPRODUCE THE DEPARTMENTAL STAND IN THE WORDS OF THE LD. CIT DR H ERSELF:- FACTS OF THE CASE:- THE SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN V ATIKA GROUP OF CASES ON 8.5.2003. ON THE BASIS OF PAPERS/DOCUMENT S FOUND/SEIZED FROM THE PREMISES OF M/S VATIKA LAND BASE PVT. LTD. NOTICE U/S 158 BD OF THE INCOME- TAX ACT, 1961 WAS ISSUED IN THE CASE OF SH. ANUPAM NAGLIA. ASSESSMENT U/S 158 BC READ WITH SECTION 158 BD OF THE INCOME-TAX ACT W AS FRAMED IN THE CASE OF SH. ANUPAM NAGLIA ON 21.5.2007 AT TOTAL INCOME OF RS. 1,89,53,900/- AS AGAINST THE RETURNED INCOME AT NIL. THE ABOVE ORDER WAS CHALLEN GED BY THE ASSESSEE BEFORE THE CIT(A) AND THE CIT(A) IN HIS ORDER DT. 14.6.201 0 HAS QUASHED THE ORDER ON THE GROUND THAT THE PROCEEDINGS INITIATED U/S 158BD OF THE INCOME-TAX ACT WERE NOT LEGAL AND VALID. 2. THE DECISION OF THE CIT(A) CAN BE SUMMARIZED AS FOL LOWS: I. THAT THE SEARCH AND SEIZURE OPERATION U/S 132( 1) O F THE ACT WAS CONDUCTED ON 8.5.2003 AT THE RESIDENCE OF THE ASSESSEE AS WEL L VATIKA GROUP OF COMPANIES. THIS OBSERVATION OF THE CIT(A) IS FACTUALLY INCORRE CT BECAUSE THE SEARCH WARRANT WAS ISSUED IN THE NAME OF M/S VATIKA LAND B ASE PVT. LTD., ANIL 13 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 BHALLA, GAURAV BHALLA.GAUTAM BHALLA. NO SEARCH WARR ANT WAS ISSUED IN THE NAME OF SHRI ANUPAM NAGLIA (COPY OF SEARCH WARR ANT & PANCHNAMA IS ENCLOSED FOR READY REFERENCE). II. THE BASIC STATUTORY PRECONDITION FOR INVOKING P ROVISION CONTAINED IN SECTION 158BD OF THE ACT IS THE SATISFACTION RECORD ED BY THE AO OF THE SEARCHED PERSON AND THAT SUCH SATISFACTION SHOULD B E RECORDED IN WRITING ON THE BASIS OF MATERIAL FOUND AS A RESULT OF SEARC H ON THE SEARCHED PERSON. APPLYING THESE TO THE FACTS OF THE INSTANT CASE IT SHOULD BE SEEN THAT BASIS ADOPTED FOR INITIATION OF PROCEEDING U/S 158BD OF T HE ACT IN THE CASE OF APPELLANT IS THAT THERE HAS BEEN A SEARCH CONDUCTED ON THE PREMISES OF VATIKA GROUP OF COMPANIES AND AS A RESULT OF THE MA TERIAL FOUND DURING THE SEARCH SATISFACTION WAS RECORDED BY THE AO HAVI NG JURISDICTION OVER THE VATIKA GROUP OF COMPANIES. III. ..... IT IS ADMITTED THAT EACH OF THE AFORESAID PAPERS HA VE BEEN FOUND AS A RESULT OF SEARCH ON THE APPELLANT AND NOT FROM THE PREMISES OF VATIKA GROUP OF COMPANIES I.E. SEARCHED PERSON. THIS OBSERVATION MADE BY THE CIT(A) IS FACTUALLY IN CORRECT BECAUSE THE SEIZED PAPERS RELIED UPON THE AO FOR INITIATING PRO CEEDINGS U/S 158BD OF THE ACT HAVE BEEN FOUND FROM THE PREMISES OF THE VA TIKA GROUP OF COMPANY. NO SEARCH WAS CONDUCTED ON THE APPELLANT. IV) THE CIT(A) HAS ALSO GIVEN AN OBSERVATION THAT UNDISPUTEDLY SEARCH HAS BEEN CONDUCTED ON THE PREMISES ON 8.5.2003 (ON THE APPELLANT SH. ANUPAM NAGLIA), HOWEVER, IT IS APPARENT THAT NO ACTION WAS TAKEN ON THE BASIS OF SAID SEARCH AS NO NOTICE U/S 158BC OF THE INCOME-TA X ACT WAS ISSUED TO THE APPELLANT. IN FACT EVEN THE INSTANT PROCEEDINGS CAN NOT BE TAKEN AS PROCEEDINGS U/S 158BC OF THE ACT SINCE, FIRSTLY INITIATION OF THE PROCEEDINGS UNDOUB TEDLY U/S 158BD OF THE ACT AND MOREOVER, LIMITATION FOR FRAMING ASSESSMENT U/S 158BC OF THE INCOME-TAX ACT EXPIRED ON 31.5.2005 WHICH IS THE DA TE ON WHICH NOTICE U/S 158BD WAS ISSUED TO THE APPELLANT. THE ABOVE OBSERVATION OF THE CIT(A) ARE BASED ON IN CORRECT FACTS, SINCE NO SEARCH WAS CONDUCTED ON ANUPAM NAGLIA, THE APPELLANT AND THEREFORE, THERE WAS NO REQUIREMENT OF ISSUING NOTI CE U/S 158BC OF THE INCOME-TAX ACT IN THE CASE OF SH ANUPAM NAGLIA. CER TAIN DOCUMENTS SEIZED FROM THE PREMISES COVERED IN THE SEARCH ON M/S VATIKA GROUP OF CASES REVEALED THAT THE ASSESSEE SH ANUPAM NAGLIA H AD UNACCOUNTED INCOME THEREFORE, BEING SATISFIED THAT SH ANUPAM NA GLIA HAD UNDISCLOSED INCOME FOR THE BLOCK PERIOD 01.04.1997 TO 08.05.2003 WHICH WAS NOT DISCLOSED IN THE REGULA R RETURN OF INCOME, A NOTICE U/S 158BC READ WITH SECTION 158BD OF THE IT ACT WAS ISS UED BY THE ACIT, CENTRAL CIRCLE - 20, NEW DELHI. 14 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 3. TO SUM UP, THE CIT(A) IS OF THE VIEW THAT, (A) A SEARCH WAS CONDUCTED IN THE CASE OF APPELL ANT, SH. ANUPAM NAGLIA, THEREFORE, NOTICE SHOULD HAVE BEEN ISSUED I N THIS CASE U/S 158BC OF THE ACT. HOWEVER, SINCE NO NOTICE U/S 158BC WAS ISS UED UP TO 31.5.2005 THE LIMITATION FOR ISSUE OF NOTICE HAD CLEARLY EXPI RED AND ANY ASSESSMENT U/S 158BC OF THE ACT HAD BECOME TIME BARRED. (B) THE NOTICE ISSUED U/S 158BD OF INCOME-TAX AC T WAS ILLEGAL AND INVALID BECAUSE THE SATISFACTION RECORDED BY THE AO WAS BASED ON THE SEIZED MATERIAL FOUND FROM THE PREMISES OF APPELLAN T HIMSELF AND NOT FROM ANY OTHER PERSON (M/S VATIKA LAND BASE PVT. LTD.) 4. THE ABOVE VIEW TAKEN BY THE CIT(A) IS FACTUALLY INCORRECT IN VIEW OF THE FOLLOWING FACTS: A) SEARCH WAS CARRIED OUT IN THE CASE OF VATIKA GROUP OF CASES SPECIFICALLY M/S VATIKA LAND BASE PVT. LTD., ANIL BHALLA, GAURAV BHA LLA, GAUTAM BHALLA AS IS EVIDENT FROM THE SEARCH WARRANT AS WEL L AS PANCHNAMA. B) SEARCH WARRANT WAS ISSUED IN THE NAME OF VATIKA LAN D BASE PVT. LTD. AT THE RESIDENCE OF ANUPAM NAGLIA I.E. EG-3118,GARDEN ESTATE, GURGAON. C) NO SEARCH WARRANT WAS ISSUED IN THE NAME OF APPELLA NT SH. ANUPAM NAGLIA. D) IT IS SETTLED LAW THAT SECTION U/S 132(1) IS PERSON SPECIFIC AND NOT PREMISES SPECIFIC.{SMT. NASREEN YUSUF DHANANI VS ACIT-(2009) 118 ITD 133(MUM)} E) THE BOOKS OF ACCOUNTS/DOCUMENTS WERE SEIZED FROM TH E SEARCHED PERSONS. M/S VATIKA LAND BASE PVT. LTD., ANIL BHALLA, GAURAV BHALLA AND GAUTAM BHALLA. F) AO HAS HAVING JURISDICTION WITH VATIKA GROUP OF COM PANIES RECORDED SATISFACTION AS REQUIRED U/S 158BD OF THE ACT AND O N THE BASIS OF THIS SATISFACTION, NOTICE WAS ISSUED U/S 158BD TO THE AP PELLANT. RELIANCE IS PLACED ON THE FOLLOWING CASE: (A) VINOD GOEL (PAGE 30) 107TTJ 1853. (B) SANJAY KUMAR MODI (PAGE 3) 150 TAXMAN 175 (C) VED PRAKASH, SANJAY KUMAR 76 LTD 107 (PAGE 28(2) (D) ACIT VS 17 SOT 380 (12) (E) JAXAN BAI 94 TAXMAN 24 (PAGE 28) 5. IN VIEW OF THE FACT OF THE CASE AND THE LEGAL POSIT ION, IT IS CLEAR THAT THE CIT(A)S ORDER IS BASED ON INCORRECT FACTS AND IT S HOULD THEREFORE BE SET ASIDE. 6. ON BEHALF OF THE ASSESSEE IN SUPPORT OF THE IMPU GNED ORDER ATTENTION WAS INVITED TO THE SPECIFIC GROUND RAISED BY THE REVENU E. CARRYING US THROUGH THE SOLE 15 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 ISSUE AGITATED BY THE REVENUE IT WAS HIS SUBMISSION THAT THE REVENUE IS ONLY AGGRIEVED AS PER THE GROUND RAISED THAT THE ASSESSE E HAS NOT RAISED ANY OBJECTION AGAINST THE VALIDITY OF INITIATION OF PROCEEDINGS B EFORE THE AO AND ALSO BY THE FACT THAT THE ASSESSEE HAS ALSO NOT SOUGHT ANY REMEDY A T ANY OTHER LEVEL. IT WAS ARGUED THAT NO CHALLENGE IS POSED BY THE REVENUE TO THE FI NDING RECORDED IN THE IMPUGNED ORDER BY WAY OF A SPECIFIC GROUND AND NOR HAS THE R EVENUE RAISED ANY SPECIFIC GROUND CHALLENGING THE FINDING THAT THE PROCEEDINGS INITIATED U/S 158BD WERE NOT VALIDLY INITIATED, ACCORDINGLY IT WAS SUBMITTED THA T ON THIS PRELIMINARY ISSUE ITSELF THE DEPARTMENTS APPEAL SHOULD BE DISMISSED. FOR R EADY-REFERENCE WE EXTRACT FROM THE SUBMISSIONS DATED 15.05.2014:- 1.1 AT THE OUTSET, IT IS SUBMITTED THAT IN THE AF ORESAID GROUND OF APPEAL, THE ONLY GRIEVANCE OF THE REVENUE IS THAT, AS THE ASSESSEE H AS NOT RAISED ANY OBJECTION AGAINST THE VALIDITY OF INITIATION OF PROCEEDINGS B EFORE THE LD. AO NOR HAD SOUGHT ANY OTHER REMEDY AT ANY OTHER LEVEL AGAINST THE VAL IDITY OF INITIATION OF PROCEEDINGS, THE LD. CIT(A) HAD THUS ERRED IN QUASH ING THE ORDER OF ASSESSMENT PASSED U/S 158BD OF THE ACT. HOWEVER, REVENUE HAS NOT DISPUTED NOR ANY GROUND OF APPEAL HAS BEEN RAISED CHALLENGING THE FINDING O F LD. CIT(A) THAT THE PROCEEDINGS INITIATED U/S 158BD OF THE ACT WERE NOT VALIDLY INITIATED. 6.1. HAVING ADVANCED THE PRELIMINARY OBJECTION TO T HE MAINTAINABILITY OF THE DEPARTMENTAL APPEAL THE LD. AR ADDRESSING THE FACTU AL MATRIX WHILE REFERRING TO THE IMPUGNED ORDER AND THAT OF THE ASSESSING OFFICER EM PHASIZED THE FOLLOWING DATES SO AS TO SUPPORT THE IMPUGNED ORDER. THESE ARE EXTRAC TED FROM THE WRITTEN SUBMISSIONS DATED 15.05.2014 HEREUNDER:- 3.1 08.05.2003: A SEARCH AND SEIZURE OPERATION W AS CONDUCTED ON M/S VATIKA LANDBASE (P) LTD., SH. ANIL BHALLA, SH. GAURAV BHAL LA AND SH. GAUTAM BHALLA AS ALSO AT THE RESIDENCE OF THE ASSESSEE-RESPONDENT SH . ANUPAM NAGALIA (DIRECTOR IN VARIOUS COMPANIES OF VATIKA GROUP) (KINDLY SEE COPY OF WARRANT OF AUTHORIZATION ANNEXED AS ANNEXURE A AND COPY OF PANCHNAMA ENCLO SED AT PG NO. 1 OF PAPER BOOK). 3.2 23.07.2004: NOTICE U/S 158BC OF THE ACT WAS IS SUED TO M/S VATIKA LANDBASE PRIVATE LIMITED. 16 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 3.3 31.05.2005: ASSESSMENT WAS FRAMED ON M/S VATIK A LANDBASE PRIVATE LIMITED U/S 158BC OF THE ACT AT AN UNDISCLOSED INCO ME OF RS. 45,89,68,830/-. 3.4 NO NOTICE U/S 158BC OF THE ACT WAS HOWEVER ISSU ED IN THE NAME OF THE ASSESSEE-RESPONDENT . 3.5 31.05.2005: THAT A NOTICE U/S 158BD OF THE ACT WAS HOWEVER ISSUED TO THE ASSESSEE-RESPONDENT AND THEREAFTER, THE ASSESSEE SO UGHT FOR THE COPY OF SATISFACTION NOTE AND COPY OF SEIZED DOCUMENTS VIDE REPLIES DATED 13.06.2005 AND 29.06.2005 (KINDLY SEE PAGES 15 AND 16 TO 18 OF THE PAPER BOOK). THEREAFTER, THE PURPORTED SATISFACTION NOTE WAS PROVIDED TO THE AFT ER A DELAY OF ALMOST SEVEN MONTHS ON 27.01.2006 (KINDLY SEE PAGE 38 OF THE PAP ER BOOK). 3.6 21.05.2007: THE AO FRAMED AN ASSESSMENT AT AN UNDISCLOSED INCOME OF RS. 1,89,53,900/-. 3.7 THE ASSESSEE-RESPONDENT BEING AGGRIEVED AGAINST THE AFORESAID ORDER OF ASSESSMENT; PREFERRED AN APPEAL BEFORE LD. CIT(A) O N VARIOUS GROUNDS INCLUDING (KINDLY SEE PAGES 306 TO 318 OF THE PAPER BOOK). I.ALLEGED SATISFACTION NOTE SO RECORDED IS NOT BY T HE AO OF THE SEARCHED PERSON; HENCE ASSESSMENT FRAMED IS ILLEGAL AND VOID-AB-INIT IO. II.SATISFACTION NOTE WAS NOT RECORDED PRIOR TO THE CULMINATION OF PROCEEDINGS IN THE CASE OF SEARCHED PERSON. III.THE ASSESSMENT HAS BEEN FRAMED U/S 158BD OF THE ACT, WHEREAS, IT SHOULD HAVE BEEN COMPLETED UNDER THE PROVISIONS OF SECTION 158B C OF THE ACT AND, THUS, THE ASSESSMENT MADE IS BARRED BY LIMITATION AND PROVISI ONS OF SECTION 158BD OF THE ACT ARE NOT ATTRACTED IN THE CASE OF THE ASSESSEE. ON THIS GROUND ALONE, THE ASSESSMENT DESERVES TO BE CANCELLED. 3.8 14.06.2010: THAT LD. CIT(A) AFTER CALLING FOR THE REMAND REPORT QUASHED THE ASSESSMENT SO MADE BY AO U/S 158BD OF THE ACT ( KINDLY SEE PAGES 18 TO 21, PARAS 4.7 TO 4.9 OF CIT(A)S ORDER). 6.2. REFERRING TO THE ARGUMENTS OF THE REVENUE ADV ANCED ON THE DATE OF HEARING I.E 12.05.2014 IT WAS HIS SUBMISSION THAT ONLY THE FOLLOWING GRIEVANCE WAS POSED BY THE LD. CIT DR, THE SAME AGAIN IS REPRODUCED IN ASSESSEES OWN WORDS FROM THE WRITTEN SUBMISSIONS PLACED ON RECORD:- 5. CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE: IT IS SUBMITTED THAT, THE LD. CIT DR DURING THE COU RSE OF HEARING ON 12.05.2014 HAS MADE FOLLOWING SUBMISSION S: I. THAT THE PANCHNAMA PLACED AT PAGE NO. 1 OF THE PAPE R BOOK AND ALSO THE WARRANT OF AUTHORIZATION (ANNEXED AT ANNEXURE A) AS FURNIS HED BY THE REVENUE MAKES IT CLEAR THAT THE SEARCH WAS CONDUCTED ON M/S VATIKA L ANDBASE (P) LTD., SH. ANIL BHALLA, SH. GAURAV BHALLA, SH. GAUTAM BHALLA AND NO SEARCH WHATSOEVER WAS CONDUCTED IN THE NAME OF SH. ANUPAM NAGALIA. II. THAT EVEN THOUGH NO SEARCH TOOK PLACE ON SH. ANUPAM NAGALIA, HOWEVER, SEARCH PARTY ENTERED THE RESIDENCE OF SH. ANUPAM NAGALIA A S COULD BE SEEN FROM THE 17 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 WARRANT OF AUTHORIZATION SO FURNISHED BY THE REVENU E AND VARIOUS DOCUMENTS WERE SEIZED FROM THE RESIDENTIAL PREMISES OF SH. AN UPAM NAGALIA AND THEREAFTER, PROCEEDINGS WERE VALIDLY INITIATED UNDER SECTION 15 8BD OF THE ACT ON SH. ANUPAM NAGALIA. III. THAT FURTHER, THE LD. CIT DR RELIED ON FOLLOWING DE CISIONS OF HONBLE ITAT TO SUPPORT ITS ARGUMENTS, NAMELY: A) ACIT VS. VINOD GOEL (ITAT AMRITSAR) REPORTED IN 111 ITD 70; B) SMT. NASREEN YUSUF DHANANI VS. ACIT (ITAT MUMBAI) R EPORTED IN 118 ITD 133. 6.3. IN REBUTTAL THEREOF IT WAS AGAIN RE-ITERATED T HAT THE REVENUE IS ONLY AGGRIEVED BY THE QUASHING OF THE PROCEEDINGS ON THE GROUND TH AT VALIDITY OF THE PROCEEDINGS WERE NOT CHALLENGED BEFORE THE AO. IT WAS CONTENDE D THAT NOT ONLY THIS GRIEVANCE IS NOT RELEVANT EVEN OTHERWISE IT IS DE HORS THE FACTS AS IT HAS BEEN IGNORED BY THE LD. CIT. DR THAT THE CIT (A) HAS CATEGORICALLY RE CORDED A FINDING AT PAGE 20 PARA 4.8 OF HIS ORDER THAT THE OBJECTION IN REGARD TO TH E INITIATION OF PROCEEDINGS WAS INFACT RAISED BEFORE THE AO BY THE ASSESSEE VIDE LETTER DATED 14.05.2007. IN SUPPORT OF THE SAME, OUR ATTENTION WAS INVITED TO P AGE 60 TO 72 OF THE PAPER BOOK FILED (SPECIFIC PARA 16 AT PAGE 72). IN THIS BACKG ROUND IT WAS HIS SUBMISSION THAT THE CONTENTION OF THE AO IN HIS REMAND REPORT DATED 20.08.2009 COPY OF WHICH IS PLACED AT PAGES 348-349 OF THE PAPER BOOK REGARDING APPLICABILITY OF PROVISIONS OF SECTION 292BB OF THE ACT IS FACTUALLY INCORRECT AND CONTRARY TO MATERIAL AVAILABLE ON RECORD. IT WAS CONTENDED THAT WHERE ADMITTEDLY THE ONLY GRIEVANCE POSED BY THE REVENUE IS THAT NO SUCH GROUND WAS RAISED BEFOR E THE AO WHICH FACTUALLY IS INCORRECT ON FACTS THEN ACCORDINGLY ON THE BASIS OF THIS FINDING ITSELF THE SOLE GROUND RAISED BY THE REVENUE DESERVES TO BE DISMISS ED AND THE DEPARTMENTAL APPEAL BE ACCORDINGLY DISMISSED. 6.4. SINCE ARGUMENTS DE HORS THE GROUNDS WERE ADVANCED IT WAS CONTENDED BY THE LD. AR THAT HE WOULD ALSO ADDRESS THE ISSUES RAISED IN THE ARGUMENTS ADVANCED BY THE LD. CIT DR. IT WAS CONTENDED THAT ACCORDING TO THE LD. DR NO SEARCH WAS 18 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 CONDUCTED ON THE ASSESSEE AND PROCEEDINGS WERE VALI DLY INITIATED U/S 158BD IT WAS AGAIN REITERATED THAT THIS GRIEVANCE IS NOT ARISING OUT OF THE GROUND RAISED. IT WAS AGAIN REQUESTED THAT THE ARGUMENT DE HORS THE GROUN D NEED NOT TO BE ADJUDICATED UPON AS THE DEPARTMENT IS TRAVELING BEYOND THE GROU ND RAISED AND IN SUPPORT FOR THE SAID PRAYER, RELIANCE WAS PLACED UPON THE FOLLO WING DECISIONS:- (A) CIT VS SAHARA INDIA CORPORATION LTD.-296 ITR 285 (D ELHI HC) (B) CIT VS SAMIR DIAMONDS EXPORTS LTD. 245 ITR 548 (BOM BAY HC). 6.5. CONTENDING THAT DE-HORS THE GROUND THE CIT DR HAD ADVANCED HER ARGUMENTS IT WAS EMPHASIZED THAT EVEN IF HER ARGUMENTS ARE CO NSIDERED FOR A MOMENT, THEN IT NEEDS TO BE CONSIDERED THAT THE LD.CIT DR HAS NOT D ISPUTED THE FACT THAT THE PREMISES WHICH WERE SEARCHED UPON WAS THE RESIDENTI AL PREMISES OF THE ASSESSEE RESPONDENT AND THE DOCUMENTS HAD ALSO BEEN SEIZED F ROM THE SAID PREMISES IN SUCH A BACKGROUND IT WAS ARGUED SECTION 158BD HAS WRONG LY BEEN INVOKED WHICH AGAIN SUPPORTS THE IMPUGNED ORDER. THE RELEVANT EXTRACT FROM PARA 6.2 OF THE WRITTEN SUBMISSIONS DATED 15.05.2014 ARE REPRODUCED HEREUND ER:- 6.2 .. THUS, THE SUBMISSION OF THE ASSESSEE IS THAT, IN O RDER TO INVOKE THE PROVISIONS OF SECTION 158BD OF THE ACT, THE BASIC PREMISE/FOUNDAT ION IS THAT THE SEIZED/INCRIMINATING MATERIAL DEPICTING UNDISCLOSED INCOME SHOULD HAVE BEEN FOUND FROM THE PREMISES OF THE SEARCHED PERSON AND ONCE, THE SAID MATERIAL IS SEIZED THE SAME HAS TO BE HANDED OVER BY THE AO OF THE SEARCHED PERSON TO THE AO OF THE OTHER PERSON TO FRAME ASSESSMENT IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 158BD OF THE ACT. IN THE INSTANT CASE, ADM ITTEDLY THE MATERIAL SEIZED HAD BEEN FOUND FROM THE PREMISES OF THE APPELLANT ITSEL F (WHOSE PREMISES HAS BEEN SEARCHED) AS IS ALSO NOTED IN THE WARRANT OF AUTHOR IZATION AND PANCHNAMA AND AS SUCH, ASSESSMENT IF AT ALL TO BE FRAMED HAD TO BE M ADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 158BC OF THE ACT. 6.6. EVEN OTHERWISE IT WAS CONTENDED THAT THE ASSES SEE RESPONDENT BEING A DIRECTOR IN VARIOUS COMPANIES OF M/S VATIKA GROUP W AS SEARCHED ON 08.05.2003 AS SUCH THE ASSESSMENT ON THE ASSESSEE COULD HAVE BEEN MADE ONLY UNDER THE 19 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 PROVISIONS OF SECTION 158BC AND THE ASSESSMENT PROC EEDINGS SHOULD HAVE BEEN CONCLUDED BY 31.05.2005 AS PROVIDED U/S 158BE OF TH E ACT. HOWEVER IN THE FACTS OF THE PRESENT CASE NOTICE U/S 158BD WAS ISSUED ON 31.05.2005 AND IN PURSUANCE TO THE SAID NOTICE ASSESSMENT WAS COMPLETED U/S 158BD OF THE ACT ON 21.05.2007. IN THE FACTS OF THE PRESENT CASE IT WAS HIS SUBMISSION THAT IN RESPECT OF UNDISCLOSED INCOME IF ANY THE ASSESSMENT SHOULD HAVE BEEN COMP LETED U/S 158BC TILL 31.05.2005 AS PER THE PROVISION OF SECTION 158BE(1) (B) OF THE ACT AND ACCORDINGLY SINCE NOTICE U/S 158BC HAD NOT BEEN ISSUED RECOURS E TO THE PROVISIONS OF SECTION 158BD WAS TAKEN FOR THE COLLATERAL PURPOSES I.E. TO CIRCUMVENT THE NON-ISSUANCE OF NOTICE U/S 158BC. IT WOULD BE APPROPRIATE TO EXTRA CT FROM THE SUBMISSIONS DATED 15.05.2014 FILED SO AS TO EMPHASIZE IN ASSESSEES O WN WORDS THE ARGUMENTS ADVANCED ADDRESSING THE MISTAKE OF THE AO:- 6.3.3.. THE SHORT-SUBMISSION HERE OF THE ASSESSEE-RESPONDEN T IS THAT HAVING SEARCHED THE PREMISES OF THE ASSESSEE, THE AO COULD NOT TAKE RECOURSE TO THE PROVISIONS OF SECTION 158BD OF THE ACT. IT IS A CASE OF AN IN ACTION ON THE PART OF AO TO HAVE NOT ADHERED TO STATUTORY PROVISIONS AS ENVISAG ED U/S 158BC OF THE ACT AND, ANY INACTION ON THE PART OF THE AO HAS TO BE A T THE COST OF NATIONAL EXCHEQUER AND FOR THIS PROPOSITION RELIANCE IS PLAC ED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF PARSHURAM POTT ERY WORKS LTD. VS. ITO REPORTED IN 106 ITR 1 AT PAGE 10, WHEREIN THE L ORDSHIPS HAVE HELD AS UNDER: IT HAS BEEN SAID THAT THE TAXES ARE THE PRICE THAT WE PAY FOR CIVILIZATION. IF SO, IT IS ESSENTIAL THAT THOSE WH O ARE ENTRUSTED WITH THE TASK OF CALCULATING AND REALIZING THAT PRI CE SHOULD FAMILIARIZE THEMSELVES WITH THE RELEVANT PROVISIONS AND BECOME WELL-VERSED WITH THE LAW ON THE SUBJECT. ANY REMIS SNESS ON THEIR PART CAN ONLY BE AT THE COST OF THE NATIONAL EXCHEQ UER AND MUST NECESSARILY RESULT IN LOSS OF REVENUE. AT THE SAME TIME, WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THER E MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT ST ALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND TH AT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI- JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. SO FAR AS THE INCOME-TAX ASSESSMENT ORDE RS ARE CONCERNED, THEY CANNOT BE REOPENED ON THE SCORE OF INCOME 20 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 ESCAPING ASSESSMENT U/S 147 OF THE ACT OF 1961 AFTE R THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR U NLESS THERE BE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH E ASSESSMENT. AS ALREADY MENTIONED, THIS CANNOT BE SAID IN THE PR ESENT CASE. THE APPEAL IS CONSEQUENTLY ALLOWED, THE JUDGMENT OF THE HIGH COURT IS SET ASIDE AND THE IMPUGNED NOTICES ARE QUA SHED. THE PARTIES IN THE CIRCUMSTANCES SHALL BEAR THEIR OWN C OSTS THROUGHOUT. 6.7. IT WAS ALSO HIS CONTENTION THAT IN THE FACTS O F THE PRESENT CASE THE PROCEEDINGS INITIATED AGAINST THE ASSESSEE BY NOTICE U/S 158BD WAS NOT ACCOMPANIED BY ANY SATISFACTION NOTE. IT WAS CONTENDED THAT THOUGH NO SPECIFIC GROUND HAS BEEN RAISED BY THE REVENUE HOWEVER FOR THE SAKE OF COMPLETENESS THOUGH HE WOULD BE RELYING ON THE IMPUGNED ORDER SINCE ARGUMENTS HAVE BEEN ADV ANCED BY THE REVENUE HE WOULD FURTHER LIKE TO REFER TO CERTAIN OTHER FACTS IN THIS CONTEXT. THESE ARE EXTRACTED FROM THE SUBMISSIONS DATED 15.05.2014 HER EUNDER:- 6.4.1 THAT ON 13.06.2005 AND 29.06.2005,THE ASSESSEE-RES PONDENT SOUGHT FROM THE AO A COPY OF NOTE OF SATISFACTION, IF RECO RDED FOR INITIATING PROCEEDINGS U/S 158BD OF THE ACT (SEE PAGES 15 AND 16 TO 18 OF THE PAPER BOOK). THE LD. AO NEVER ACCEDED TO THE REQUEST OF THE ASSESSEE TILL 27.01.2006 (SEE PAGE 38 OF THE PAPER BOOK), WHEN THE PURPORTED /ALLEGED NOTE OF SATISFACTION WAS PROVIDED TO THE APPELLANT. 6.4.2 THUS, IT IS EVIDENT THAT A NOTE OF SATISFACTION WAS PROVIDED TO THE ASSESSEE-RESPONDENT ON 27.01.2006 I.E. NEARLY AFTER 7 MONTHS OF THE REQUEST MADE BY THE ASSESSEE AND THUS, IT IS SUBMITTED THAT NO VALID PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE AND SINCE, THERE HAD BEEN A FAILURE ON THE PART OF AO TO FRAME ASSESSMENT U/S 158BC OF THE ACT, A NOTI CE U/S 158BD OF THE ACT WAS ISSUED AS AN AFTERTHOUGHT AND THAT TOO BY PREDA TING A SATISFACTION NOTE RECORDED BY DATING THE SAME AS 31.05.2005. THUS, T HE PROCEEDINGS SO INITIATED U/S 158BD OF THE ACT (WITHOUT RECORDING O F PROPER SATISFACTION NOTE) IS WITHOUT SATISFYING THE STATUTORY PRECONDITIONS A S ENVISAGED UNDER THE ACT AND HAD BEEN RIGHTLY QUASHED BY LD. CIT(A) AND IN S UPPORT OF THE AFORESAID SUBMISSION, THE ASSESSEE-RESPONDENT WOULD SEEK TO P LACE ITS RELIANCE ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF MA NISH MAHESHWARI VS. ACIT REPORTED IN 289 ITR 341. 21 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 6.4.3 IN FACT, THE BURDEN IS VERY HEAVY ON THE REVENUE TO ESTABLISH THAT, SUCH A NOTE OF SATISFACTION WAS RECORDED BY SHOWING INDE PENDENT EVIDENCE THAT A SATISFACTION NOTE WAS RECORDED BY THE AO HAVING JUR ISDICTION OVER THE PERSON SEARCHED AND THAT TOO PRIOR TO CULMINATION OF ASSES SMENT MADE ON M/S VATIKA LTD. ON WHOSE CASE AN ASSESSMENT WAS MADE WHICH HAS NOT BEEN DONE BY THE REVENUE AND AS SUCH, THE ASSESSMENT NEEDS TO BE QUA SHED ON THIS GROUND ALONE. 6.4.4 FURTHER, THE ASSESSEE-RESPONDENT WOULD SEEK TO PLAC E ITS RELIANCE ON THE FINDINGS AS RECORDED BY LD. CIT(A) IN PARA 4.8 AND 4.9 AT PAGES 20 TO 21 OF THE IMPUGNED ORDER, WHICH HAVE NOT BEEN REBUTTED BY LD. CIT DR DURING THE COURSE OF HEARING BEFORE HONBLE BENCH NOR ANY MATERIAL HAS BEEN PRODUCED BEFORE THE HONBLE BENCH TO CONTROVERT THE SAME. (EMPHASIS PROVIDED) 6.8. IT WAS ALSO CONTENDED THAT THE CASE LAW RELIED UPON BY THE LD. CIT DR IS DISTINGUISHABLE. REFERRING TO THE ORDER IN THE CAS E OF ACIT VS VINOD GOYAL 111 ITD 70 (ASR.), IT WAS HIS SUBMISSION THAT THE DOCUM ENTS THEREIN WERE ADMITTEDLY SEIZED FROM THE PREMISES OF THE SEARCHED PERSON AND THE PROCEEDINGS WERE INITIATED U/S 158BD OF THE ACT ON THE OTHER PERSON TO WHOM T HE MATERIAL BELONGED. IN THE FACTS OF THE PRESENT CASE IT WAS CONTENDED THAT THE DOCUMENTS WERE FOUND AND SEIZED FROM THE PREMISES OF THE ASSESSEE ITSELF AS SUCH THE PROVISIONS OF SECTION 158BD AS HELD BY THE CIT(A) HAVE BEEN WRONGLY INVOK ED ON FACTS. 6.8.1. ADDRESSING THE DECISION IN THE CASE OF SMT. NASREEN YUSUF DHANANI VS ACIT 118 ITD 133 (MUM.) IT WAS CONTENDED THAT IT IS ALSO DISTINGUISHABLE ON THE SAME REASONING AS HEREIN ALSO THE DOCUMENTS WERE ADMITTE DLY SEIZED FROM THE PREMISES OF THE SEARCHED PERSON WHO WAS THE ASSESSEES HUSB AND THE PROCEEDINGS INITIATED U/S 158BC WERE HELD TO BE WRONGLY INVOKED. 7. ON THE NEXT DATE OF HEARING BOTH THE LD. AR & LD . CIT DR INVITING ATTENTION TO THEIR SUBMISSIONS AVAILABLE ON RECORD CONTENDED THAT THE WRITTEN SUBMISSIONS HAVE BEEN MUTUALLY EXCHANGED AND THEY C ONTAIN MORE OR LESS THE ARGUMENTS ADVANCED ON THE DATE OF HEARING. LD. AR FURTHER BROUGHT TO THE NOTICE OF THE BENCH THAT OVER AND ABOVE THE WRITTEN SUBMIS SIONS DATED 15.05.2014 THE 22 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 ASSESSEE HAS ALSO PLACED ON RECORD SUPPLEMENTARY RE BUTTAL TO THE WRITTEN SUBMISSIONS OF THE CIT DR, THESE ARE DATED 21.05.20 14 AND HAS BEEN MADE AVAILABLE TO THE DEPARTMENT. THE LD. CIT DR ACCEPT ED THE FACT THAT IT HAS BEEN MADE AVAILABLE TO HER HOWEVER IT WAS HER STAND THAT HER STAND IS FULLY ADDRESSED BY THE SUBMISSIONS ALREADY ON RECORD. 7.1. LD. AR BRIEFLY SUMMARIZING THE 8 PAGED SUBMISS IONS INVITED SPECIFIC ATTENTION TO PARA 3.1 TO 3.2.3 AS UNDER:- 3.1 THE ARGUMENT OF LD. CIT DR THAT NO SEARCH WAS CONDUCTED ON ASSESSEE- RESPONDENT, AS NO SEARCH WARRANT WAS PREPARED IN TH E NAME OF ASSESSEE IS FALLACIOUS AND CONTRARY TO MATERIAL AVAILABLE ON RE CORD, AS IT IS AN ADMITTED FACT THAT THE SEARCH PARTY, SEARCHED AND ENTERED THE RES IDENCE OF ASSESSEE-RESPONDENT AS THE ASSESSEE WAS A DIRECTOR IN M/S VATIKA LANDBA SE P. LTD. AND IT IS ALSO AN ADMITTED FACT THAT DOCUMENTS ON THE BASIS OF WHICH PROCEEDINGS U/S 158BD OF THE ACT HAD BEEN INITIATED WERE ALSO SEIZED FROM THE SA ID PREMISES OF ASSESSEE. THUS, THE SUBMISSION OF THE ASSESSEE-RESPONDENT IS THAT O NCE THE SEARCH PARTY ENTERED THE PREMISES OF THE ASSESSEE AND SEIZED DOCUMENTS T HEREFROM, THAN PROCEEDINGS SHOULD HAVE BEEN INITIATED U/S 158BC OF THE ACT ON THE ASSESSEE-RESPONDENT INSTEAD OF SECTION 158BD OF THE ACT. THAT IN ORDER TO SUPPORT THE ABOVE SAID SUBMISSION THE ASSESSEE-RESPONDENT SEEKS TO PLACE I TS RELIANCE ON THE ORDER OF HONBLE ITAT MUMBAI IN THE CASE OF J.M. TRADING COR PORATION VS. ACIT REPORTED IN 20 SOT 489 WHICH IS DULY APPROVED BY HONBLE BOM BAY HIGH COURT. (COPY ENCLOSED AS ANNEXURE A AND B). 3.2 THAT, WITHOUT PREJUDICE TO THE ABOVE, IT IS SUB MITTED THAT IN ORDER TO INVOKE THE PROVISIONS OF SECTION 158BD OF THE ACT, THE BAS IC PREMISE/FOUNDATION IS THAT THE SEIZED/INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH SHOULD DEPICT UNDISCLOSED INCOME AND IT IS ONLY THEN THAT A PROPE R SATISFACTION COULD HAVE BEEN RECORDED BY THE OFFICER OF THE SEARCHED PERSON WHIL E HANDING OVER THE DOCUMENTS TO THE OFFICER OF OTHER PERSON TO MAKE ASSESSMENT. WHEREAS, IN THE INSTANT CASE THE PURPORTED SATISFACTION NOTE SO PROVIDED TO THE ASSESSEE-RESPONDENT FAILS THIS BASIC TEST OF DEPICTION OF UNDISCLOSED INCOME FROM SEIZED DOCUMENTS . 3.2.1 THAT ON BARE PERUSAL OF THE PURPORTED SATISFA CTION NOTE PLACED AT PAGE 38 OF THE PAPER BOOK, WOULD MAKE IT EVIDENTLY CLEAR THAT THE SATISFACTIO N SO RECORDED IN THE INSTANT CASE IS A MERE SUBJECTIVE SATISFACTI ON, AS NO INVESTIGATION OR ANALYSIS OF DOCUMENTS WERE DONE BEFORE RECORDING OF THE PURP ORTED SATISFACTION. THAT IT IS FURTHER, SUBMITTED THAT THE SATISFACTION SO CONTEMP LATED UNDER SECTION 158BD IS OF A LEVEL MUCH HIGHER THAN WHAT AN ASSESSING OFFICER ACQUIRES IN ORDER TO INVOKE PROVISIONS OF SECTION 147/148 OF THE ACT, AS MERE P RIMA FACIE REASON TO BELIEVE IS NOT SUFFICIENT FOR INITIATION OF PROCEEDINGS U/S 15 8BD OF THE ACT, RATHER THERE 23 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 SHOULD BE A CONCRETE EVIDENCE ESTABLISHING THE FACT THAT THE DOCUMENT OR BOOKS OF ACCOUNTS SEIZED DEPICTS UNDISCLOSED INCOME OF THE A SSESSEE. THAT IN ORDER TO SUPPORT THE AFORESAID PROPOSITION, THE ASSESSEE-RES PONDENT WOULD SEEK TO PLACE ITS RELIANCE ON THE ORDER OF HONBLE ITAT CHANDIGARH IN THE CASE OF ACIT VS. KISHORI LAL BALWANT RAJ REPORTED IN 17 SOT 308. 3.2.2 THAT IT IS FURTHER SUBMITTED THAT NONE OF THE DOCUMENTS SEIZED ENCLOSED AT PAGES 235 TO 255 OF THE PAPER BOOK , SHOW THAT THERE IS EITHER ANY DEEMED INCOME WHICH CAN BE HELD TO BE TAXABLE UNDER SECTION 69, 6 9A, 69B OR 69C OF THE ACT. IT MAY ALSO BE ADDED HERE THAT THE PROVISIONS OF SECTI ON 68 ALSO COULD NOT BE INVOKED AS THERE ARE NO CREDITS IN THE BOOKS OF ACC OUNTS. THAT THE ASSESSEE- RESPONDENT HAD EXPLAINED BEFORE BOTH THE LOWER AUTH ORITIES THAT THE SAID DOCUMENTS ON WHICH PURPORTED SATISFACTION NOTE WAS RECORDED DO NOT DEPICT THE UNDISCLOSED INCOME OF THE ASSESSEE AND THE SAME IS SUMMARIZED BELOW: S.NO. ANNEXURE PAGES AMOUNT (IN RS.) PAGE OF FINDINGS OF THE AO EXPLANATION/SUBMISSION OF ASSESSEE-RESPONDENT 1 A-11 33 18,23,628/ - 4 PG 329 TO 334 OF THE PAPER BOOK. 2 A-11 38 13,84,400/ - 4 PG 334 TO 335 OF THE PAPER BOOK. 3 A-11 34 2,15,000/- 5 PG 335 TO 337 OF THE PAPER BOOK. 4 A-1 17 2,25,000/- 6 PG 337 TO 339 OF THE PAPER BOOK 5 A-2 1 1,05,000/- 8 PG 339 TO 334 OF THE PAPER BOOK 6 A-2 2/5 (UPPER PORTION) 6,91,150/- 9 PG 339 TO 344 OF THE PAPER BOOK 7 A-2 3/7 20,57,000/ - 9 PG 339 TO 344 OF THE PAPER BOOK 8 A-2 5/11 21,55,342/ - 9 PG 339 TO 344 OF THE PAPER BOOK 9 A-2 6/13 7,28,375/- 10 PG 339 TO 344 OF THE PAPER BOOK 10 A-2 8/17 5,15,000/- 11 PG 339 TO 344 OF THE PAPER BOOK 11 A-2 10/25 21,44,657/ - 11 PG 339 TO 344 OF THE PAPER BOOK 12 A-2 11/27 1,16,000/- 11-12 PG 339 TO 344 OF THE PAPER BOOK 13 A-2 30/33 4,34,350/- 12 PG 339 TO 344 OF THE PAPER BOOK 14 A-2 21/93 63,60,000/ 12 PG 339 TO 344 OF 24 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 - THE PAPER BOOK 3.2.3 THAT ON APPRAISAL OF THE AFORESAID SUBMISSION S, IT WOULD BECOME CLEAR THAT THE DOCUMENTS SEIZED DOES NOT DEPICT UNDISCLOSED IN COME OF THE ASSESSEE AND THUS, THE SATISFACTION SO RECORDED IS MERELY A PURPORTED AND SUBJECTIVE SATISFACTION. IT IS ALSO IMPORTANT TO NOTE THAT MERE SEIZURE OF DOCU MENT (AS IS IN THE INSTANT CASE), WOULD NOT ENTAIL POWERS TO THE ASSESSING OFFICER TO INITIATE PROCEEDINGS UNDER SECTION 158BD OF THE ACT, AS THE PROVISIONS OF SECT ION 158BD ARE IS SHARP CONTRAST WITH THE NEWLY INSERTED PROVISIONS OF SECT ION 153C OF THE ACT, WHEREIN ONLY SEIZURE OF DOCUMENT BELONGING TO OTHER PERSON FROM THE PREMISES OF THE SEARCHED PERSON IS ENOUGH TO INITIATE PROCEEDINGS U NDER SECTION 153C OF THE ACT, WHEREAS, SITUATION IS ENTIRELY DIFFERENT UNDER THE PROVISIONS OF SECTION 158BD OF THE ACT AS HAS BEEN EXPLAINED BY HONBLE DELHI HIGH COURT IN THE JUDGMENT ON SSP AVIATION VS. DCIT REPORTED IN 346 ITR 177. 7.2. REFERRING TO THE DOCUMENTS FILED IT WAS FURTHE R SUBMITTED THAT THE SLP FILED BY THE REVENUE AGAINST THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN J.M. TRADING HAS BEEN DISMISSED. FURTHER RELYING UPON O N THE ABOVE FACTS AND ADDRESSING THE SPECIFIC PARA 18 OF THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT SSP AVIATION VS DCIT (CITED SUPRA) WHICH BRING OUT THE DISTINCTION BETWEEN SECTION 158BD AND SECTION 153A, IT WAS CONTENDED TH AT THESE DECISIONS FURTHER STRENGTHEN THE IMPUGNED ORDER. FOLLOWING SUBMISSIO NS ON FACTS AND LAW IN SUPPORT OF THE IMPUGNED ORDER WERE ALSO MADE :- 3.2.4 THUS, IT IS SUBMITTED THAT SINCE THE DOCUMENT S WERE SEIZED FROM THE SEARCH BEING CONDUCTED ON RESIDENTIAL OF THE ASSESS EE-RESPONDENT AND AS SUCH, THERE HAD BEEN A FAILURE ON THE PART OF AO TO FRAME ASSESSMENT U/S 158BC OF THE ACT. THE NOTICE ISSUED U/S 158BD OF THE ACT WA S ISSUED AS AN AFTERTHOUGHT AND THAT TOO BY WITHOUT SATISFYING THE STATUTORY PR ECONDITIONS AS ENVISAGED UNDER THE ACT (I.E. WITHOUT RECORDING OBJECTIVE NOT E OF SATISFACTION) AND HAD BEEN RIGHTLY QUASHED BY LD. CIT(A). 3.3 THAT WITHOUT PREJUDICE TO OUR EARLIER SUBMISSIO NS AND TO THE ABOVE, IT IS SUBMITTED THAT (NO BOOKS OF ACCOUNTS OR ANY OTHER D OCUMENTS BELONGING) TO THE ASSESSEE HAVE BEEN SEIZED FROM THE PERSON SEARCHED. ON THE CONTRARY, ALL DOCUMENTS REFERRED TO IN ALL ALLEGED SATISFACTION N OTE (KINDLY SEE PAGE 38 OF PAPER BOOK) HAVE BEEN FOUND FROM THE RESIDENCE OF T HE ASSESSEE-RESPONDENT AGAINST WHOM THE PROCEEDINGS U/S 158BD HAS BEEN INI TIATED AND NOT FROM THE PREMISES OF SEARCHED PERSON I.E. M/S VATIKA LANDBAS E P. LTD. 25 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 3.3.1 THAT, IN SUCH-CASES, THE PROVISIONS OF SECTIO N 158BD OF THE ACT COULD NOT BE INVOKED AND, THE REVENUE CAN AT THE BEST INI TIATE PROCEEDINGS AGAINST THE ASSESSEE-RESPONDENT U/S 147 OF THE ACT. IT IS FURT HER, SUBMITTED THAT, THERE IS A CONCEPTUAL DIFFERENCE BETWEEN TWO CLASSES OF CASE, ONE WHERE AS A RESULT OF SEARCH CONDUCTED, THE BOOKS OF ACCOUNTS AND OTHER D OCUMENTS HAVE BEEN FOUND FROM THE PERSON SEARCHED BUT ARE FOUND BELONGING TO PERSON OTHER THAN THE PERSON SEARCHED, AND SECONDLY, A CASE WHERE AS A RE SULT OF SEARCH CONDUCTED ON THE PERSON SEARCHED, THE BOOKS OF ACCOUNTS AND O THER DOCUMENTS HAVE THOUGH BEEN FOUND BUT NOT FROM THE PERSON SEARCHED (BUT ARE FOUND FROM THE PERSON AGAINST WHOM THE PROCEEDINGS ARE BEING INITI ATED U/S 158BD OF THE ACT). IT IS SUBMITTED THAT IN THE LATTER CLASS OF CASES, PROVISIONS OF SECTION 158BD OF THE ACT ARE INAPPLICABLE. 3.3.2 THUS, ALL WHAT THE ASSESSEE HAS SUBMITTED IS THAT, EVEN ASSUMING THERE WAS NO SEARCH ON THE ASSESSEE THEN TOO, SINCE THE D OCUMENTS HAVE BEEN SEIZED FROM THE ASSESSEE-RESPONDENT AND NOT FROM THE PERSO N WHO HAD BEEN SEARCHED, ACTION U/S 158BD OF THE ACT WAS WRONGLY INITIATED A ND HENCE THE ASSESSMENT MADE IS WITHOUT JURISDICTION AND HAS RIGHTLY BEEN Q UASHED BY LD. CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD ALONGWITH WRITTEN SUBMISSIONS FILED ON BEHAL F OF THE PARTIES BEFORE THE BENCH. ON A CAREFUL CONSIDERATION OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE WHEREIN THE REVENUE HAS DEEMED IT APPROPRIATE TO ASSAIL THE IMPUGNED ORDER EFFECTIVELY ONLY ON THE GROUNDS THAT :- A) THE CIT( A) HAS ERRED IN QUASHING THE PROCEEDINGS WHEN THE VALIDITY OF THE PROCEEDINGS WE RE NOT CHALLENGED BEFORE THE AO; AND B) NO REMEDY WAS SOUGHT BY THE ASSESSEE AT ANY OTHER LEVEL WE ON CONSIDERATION OF THE FACTUAL AND LEGAL ASPECTS THER EON PRIMARILY DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. ALTHOUGH THE SPE CIFIC GROUND HAS BEEN EXTRACTED RIGHT AT THE OUTSET IN THIS ORDER, WE FOR THE SAKE OF READY-REFERENCE STILL FILL THE NEED TO REPRODUCE THE SAME HEREUNDER AGAIN:- 1. THE ORDER OF THE LD. CIT(APPEALS) IS NOT CORRECT I N LAW AND FACTS; 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN QUASHING THE BLOCK ASSESSMENT COMPLETED UNDER SECTION 158BC READ WITH SECTION 158BD OF INCOME TAX, 1961 WHEREAS NEITHER OBJECTION WAS RAISED AGAINST LEGAL VALIDITY OF PROCEEDINGS BEFORE THE AO NOR ANY REMEDY WAS SOUGHT AT ANY, OTHER LEVEL; 26 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING O F THE APPEAL. 8.1. ON A CONSIDERATION OF THE SPECIFIC WORDING OF GROUND NO-1 REPRODUCED ABOVE, WE ARE OF THE VIEW THAT IT MAY BE POSSIBLE T O ADVANCE THE ARGUMENT THAT BY THE SAID GROUND THE GRIEVANCE IS POSED TO THE IMPUG NED ORDER IN TOTO AND HAD IT BEEN ADVANCED IT WOULD HAVE BEEN INCUMBENT UPON US TO CONSIDER THE SAME, HOWEVER THE FACT REMAINS THAT NO SUCH ARGUMENT WAS ADVANCED ON BEHALF OF THE REVENUE. THE OBSERVATION IS BEING MADE IN THE BACK GROUND THAT IT HAS BEEN THE VEHEMENT AND REPEATED STANCE ON BEHALF OF THE ASSES SEE THAT THE GRIEVANCE POSED BY GROUND NO-2 IS FACTUALLY INCORRECT AND MISPLACED AS SUCH THE IMPUGNED ORDER NOT HAVING BEEN CHALLENGED ON ANY OTHER GROUND THE APPE AL BE DISMISSED. IN THESE CIRCUMSTANCES THE REVENUE IF IT HAD SO FELT THE NEE D TO DO SO COULD HAVE TAKEN REMEDIAL MEASURES WHICH EVIDENTLY IS NOT THE POSITI ON. DESPITE THIS REPEATED ARGUMENT, WE NOTE THAT NO EFFORT HAS BEEN MADE TO C ANVASS THAT GROUND NO-1 THOUGH GENERALLY WORDED IS BEING ADDRESSED. WE ALS O NOTE THAT NO REQUEST HAS BEEN MADE FOR SEEKING PERMISSION TO MODIFY OR ALTER ANY GROUND RAISED BE GRANTED BY RESORTING TO GROUND NO-3 RAISED BEFORE US BY THE RE VENUE. IN THE ABOVE BACKGROUND WHERE THE SUBMISSIONS ADVANCED ARE AVAIL ABLE ON RECORD IN WRITING CONSIDERING GROUND NO-1 RAISED AS BEING A GENERAL N ON-SPECIFIC GROUND AND GROUND NO-3 NOT HAVING BEEN INVOKED AS SUCH PRIMA F ACIE REQUIRES NO ADJUDICATION, WE PROCEED TO ADDRESS GROUND NO-2 RAI SED BEFORE US. 8.2. ON CONSIDERATION OF THE FACTS AVAILABLE ON REC ORD AND THE SUBMISSIONS OF THE PARTIES QUA GROUND NO-2, WE FIND THAT THE GRIEVANCE POSED BY THE REVENUE IS FACTUALLY NOT CORRECT. A PERUSAL OF PAPER BOOK PAG E 15 WHICH IS A LETTER DATED 11.06.2005 ADDRESSED BY THE ASSESSEE TO THE ACIT, C IRCLE-20 (RECEIVED AS PER THE STAMP OF THE SAID OFFICE ON 13.06.2005) SHOWS THAT THE ASSESSEE LET ALONE DURING 27 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 THE ASSESSMENT PROCEEDINGS EVEN AT THE NOTICE STAGE HAS NOT KEPT THE DEPARTMENT IN DARK ABOUT ITS INTENTIONS, GRIEVANCE AND AWARENESS OF THE LEGAL POSITION. A PERUSAL OF THE SAID LETTER SHOWS THAT THE ASSESSEE SPECIFIC ALLY REQUESTS THE SAID AUTHORITY FOR THE DOCUMENTS TAKEN INTO CONSIDERATION FOR THE ISSU ANCE OF NOTICE AND THE SATISFACTION NOTE REQUIRED AS PER LAW TO HAVE BEE N RECORDED BY THE AO OF THE SEARCHED PERSON. FOR READY-REFERENCE, WE REPRODUCE THE RELEVANT EXTRACT FROM THE LETTER DATED 11.06.2005:- A NOTICE DATED 31.5.2005 HAS BEEN SERVED ON ME ON 1.6.2005 PURPORTED TO BE A NOTICE U/S 158BD OF THE INCOME TA X ACT, 1961. IT HAS BEEN STATED THAT WHEREAS A SEARCH & SEIZURE OPERATION WAS CONDUCTED ON VATIKA GROUP OF COMPANIES ON 8.5.2003 AND ON THE BASIS OF PAPERS/DOCUMENTS FOUND AND SEIZED IN PURSU ANCE OF THE PROVISIONS OF SECTION 158BD, I AM REQUIRED TO PREPA RE A TRUE AND CORRECT RETURN OF MY UNDISCLOSED INCOME. IT IS SUBM ITTED THAT I DO NOT HAVE ANY UNDISCLOSED INCOME. HOWEVER, BEFORE I FILE A RETURN IN FORM NO.2B AS DIRECTED, YOU ARE REQUESTED TO PLEASE FURNISH TO ME A NOTE OF SATISFACTION WHICH IS REQUIRED TO BE RECORD ED IN WRITING BY YOU AS HAS BEEN HELD BY THE HON'BLE DELHI HIGH COUR T IN THE CASE OF AMITY HOTELS REPORTED IN 272 ITR 75. I SHALL BE HIGHLY GRATEFUL IF YOU COULD PLEASE FURNISH TO ME A NOTE OF SATISFACTION ON THE BASIS OF WHICH YOU PROCEEDED TO ISSUE NOTICE TO ME DIRECTING ME TO FURNISH A RETURN OF MY UNDISCLOSED INCOME BY 17 TH JUNE, 2005. I SHALL BE GRATEFUL, IF THIS NOTE OF SATISFACTION IS SERVED ON ME AS ALSO THE DOCUMENTS ON THE BASIS OF WHICH YOU ARE SATISFIED THAT THERE IS AN UNDISCLOSED INCOME BELONGS TO ME. I SHALL BE GRATEFUL IF THE NEEDFUL IS DONE EXPEDITIOUSLY SO THAT I DO NOT DELAY IN FURNISHING THE RETURN AS DIRECTED BY YOU. (EMPHASIS PROVIDED IN THE PRESENT PROCEEDINGS) 8.3. IT IS FURTHER SEEN THAT THE SAID WRITTEN REQUE ST WAS FOLLOWED BY ANOTHER WRITTEN REQUEST DATED 29.06.2005 ADDRESSED TO THE V ERY SAME AUTHORITY REITERATING THE SAME WITH GREATER ELABORATION. COPY OF THE SAM E IS AVAILABLE AT PAPER BOOK PAGE 16 TO 18, RELEVANT EXTRACT THEREOF IS REPRODUC ED HEREUNDER:- 1. IN THE INSTANT PROCEEDINGS, A NOTICE DATED 31.05.20 05 HAD BEEN ISSUED ON ME AND SERVED ON 01.06.2005 PURPORTED TO BE A NOTICE U/S 28 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 158BD OF THE INCOME-TAX ACT, 1961. IN THE SAID NOTI CE, IT IS STATED THAT WHEREAS, A SEARCH & SEIZURE OPERATION WAS CONDUCTED ON VATIKA GROUP OF COMPANIES ON 08.05.2003 AND ON THE BASIS O F PAPERS/ DOCUMENTS FOUND AND SEIZED IN PURSUANCE OF THE PROV ISIONS OF SECTION 158 BD , I AM REQUIRED TO PREPARE A TRUE AND CORRECT RETUR N OF MY UNDISCLOSED INCOME. 2. SIR, IN ORDER TO COMPLY WITH YOUR DIRECTION TO FILE A RETURN U/S 158BD, I REQUESTED YOU VIDE MY LETTER DATED 11 TH JUNE, 2005 FILED IN YOUR OFFICE ON 13 TH JUNE, 2005 TO PROVIDE ME:- I) A NOTE OF SATISFACTION WHICH IS REQUIRED TO BE RECORDED IN WRITING BY YOU AS HAS BEEN HELD BY THE HON'BLE DELH I HIGH COURT IN THE CASE OF AMITY HOTELS REPORTED AS 272 ITR 75 AS ALSO II) COPIES OF ALL SUCH DOCUMENTS ON THE BASIS OF WH ICH YOU ARE SATISFIED THAT THERE IS AN UNDISCLOSED INCOME WHICH BELONGS TO ME (EMPHASIS SUPPLIED). 3. AFTER HAVING WAITED FOR ABOUT 15 DAYS OF TH E ABOVE REFERRED LETTER DATED 11.06.2005, I PERSONALLY CONTACTED YOU IN YOUR OFFICE ON 27.06.2005 WHEN YOU VERBALLY EXPRESSED YOUR RELUCTA NCE TO SERVE THE SATISFACTION NOTE AT THIS STAGE, AND DIRECTED ME TO TAKE THE PHOTOCOPIES OF SUCH DOCUMENTS AS I WISH OUT OF THE SEIZED RECORDS (EMPHASIS SUPPLIED) . 4. WITH GREAT RESPECT, IT IS MOST RESPECTFULLY SUBMITTED TH AT THE PROCEEDINGS HAVE BEEN INITIATED ON THE BASIS OF SAT ISFACTION OF THE ASSESSING OFFICER HAVING JURISDICTION OVER THE PERS ON WHO HAS BEEN SEARCHED. FURTHER, SUCH SATISFACTION HAS BEEN REACH ED ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEIZED EVIDENCE ON SUCH THIRD PERSON. IT IS THUS EVIDENT THAT I HAVE TO EXAMINE S UCH EVIDENCE AND PREPARE MY REPLY ACCORDINGLY. IT IS THUS RESPECTFUL LY SUBMITTED THAT IN THE INSTANT CASE, PROVISIONS OF SECTION 158BD HA VE BEEN INVOKED. YOU WILL VERY KINDLY FURNISH ME SUCH EVIDENCE WHICH SATISFIED THE ASSESSING OFFICER TO ASSUME THAT AN UNDISCLOSED INC OME HAD BEEN EARNED AND THAT IT BELONGED TO ME. I THUS REQUEST Y OU TO PLEASE FURNISH SUCH EVIDENCE OR PASS SUCH ORDER ON THIS AP PLICATION AS YOU CONSIDER APPROPRIATE ACCORDING TO LAW. IT IS THUS S UBMITTED THAT UNLESS THE DEPARTMENT FURNISHES SUCH DOCUMENTS AND PROVIDES COPIES THEREOF TO ME, IT WOULD BE CONTRARY TO THE P RINCIPLES OF NATURAL JUSTICE & FAIR PLAY TO EXPECT THE ASSESSEE TO FILE A RETURN O F AN ALLEGED UNDISCLOSED INCOME, (AND THAT TOO CONSID ERING THE SAME AS TRUE AND CORRECT) WITHOUT ANY EVIDENCE SUPPLIED IN THIS BEHALF. 29 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 5. IT IS MOST RESPECTFULLY PRAYED THAT YOU MAY KINDLY FURNISH THE BASIS FOR INITIATION OF PROCEEDINGS AND ALSO PROVID E A COPY OF 'SATISFACTION NOTE', RECORDED BY THE LEARNED ACIT, ON THE BASIS OF WHICH THE INSTANT PROCEEDINGS HAVE BEEN INITIATED. THIS SUBMISSION IS BEING MADE ON THE BASIS OF VARIOUS JUDICIAL PRON OUNCEMENTS WHEREIN IT HAS BEEN HELD THAT A VALID INITIATION OF PROCEEDINGS CAN BE MADE ON THE BASIS OF A 'SATISFACTION NOTE', RECORDE D BY THE LEARNED ASSESSING OFFICER HAVING JURISDICTION ON THE ASSESS EE WHO HAD BEEN SUBJECTED TO A SEARCH U/S 132(1) OF THE INCOME-TAX ACT. FOR THE SAKE OF CONVENIENCE, THE PROVISION OF SECTION 158BD ARE BEING EXTRACTED HEREIN BELOW- ''158BD. UNDISCLOSED INCOME OF ANY OTHER PERSON WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY U NDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH R ESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED 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 ASSESS ING OFFICER SHALL PROCEED (UNDER SECTION 158BC) AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY 6. FROM THE READING OF THE AFORESAID STATUTORY PROVISI ONS, IT IS A SUBMISSION OF THE ASSESSEE THAT UNLESS THE ASSESSIN G OFFICER HAVING JURISDICTION OVER THE ASSESSEE IS 'SATISFIED' BASED ON THE MATERIAL FOUND AS A RESULT OF SEARCH THERE WAS AN UNDISCLOSE D INCOME BELONGING TO THE INSTANT ASSESSEE, NO VALID PROCEED INGS CAN BE INITIATED AGAINST SUCH AN ASSESSEE. IT IS APPARE NT THAT THE SEARCH UNDER SECTION 132(1) OF THE INCOME-TAX ACT HAD BEEN MADE ON VATIKA GROUP OF COMPANIES ON 08.5.2003 AND ORDERS O F ASSESSMENT HAVE ALSO BEEN MADE ON THEM BY 31.05.2005 AND IN SU CH CIRCUMSTANCES IT IS NOT UNDERSTOOD, HOW CAN A VALID NOTICE BE ISSUED AFTER CULMINATION OF PROCEEDINGS IN THE CASE OF ABO VE NAMED ASSESSEE. 7. THE ASSESSEE SEEKS TO BRING TO YOUR KIND NOTICE THE JUDGEMENT OF THE DELHI HIGH COURT IN THE CASE OF BISHAN CHAND MU KESH KUMAR - VS- U.O.L. REPORTED AS 135 TAXMAN 154(DELHI) WHEREIN ON A WRIT PETITION FILED, THE DEPARTMENT HAD CONCEDED BEFORE THE HIGH COURT THAT IT WOULD FURNIS H THE COPY OF SATISFACTION NOTE AND HENCE THE WRIT PETITION WAS D ISMISSED AS WITHDRAWN. 8. SIR, IT IS BECAUSE OF NON FURNISHING OF EVIDENCE ASSESSEE IS NOT ABLE TO FURNISH THE RETURN AND AS SUCH DELAY IN FIL ING THE RETURN IS NOT ATTRIBUTABLE TO ASSESSEE. IT IS SUBMITTED THAT IN C ASE YOU PROPOSE TO 30 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 PASS AN ADVERSE ORDER, NO INTEREST BE CHARGED ON SU CH UNDISCLOSED INCOME ASSESSED. (EMPHASIS PROVIDED BY THE BENCH) 8.4. THE ABOVE READ ALONGWITH LETTER DATED 14.05.20 07 TAKEN INTO CONSIDERATION BY THE CIT(A) AND CONFRONTED TO THE AO SHOWS THAT N OT ONLY BEFORE THE FILING OF THE RETURN BUT EVEN AFTER FILING THE RETURN THE ASS ESSEE HAS BEEN OBJECTING TO THE VALIDITY OF THE PROCEEDINGS AS PER RECORD. IT IS F URTHER SEEN THAT VIDE LETTER DATED 14.05.2007 THE ASSESSEE AGAIN IN WRITING OBJECTS TO THE PROCEEDINGS U/S 158BD (COPY PLACED AT PAGES 60-72) NOT ONLY VIDE PARA 16 THEREOF AS TAKEN NOTE OF IN THE IMPUGNED ORDER BUT ALSO VIDE SPECIFIC PARAS 1 TO 4. IN PARAS 5 TO 15 THE DOCUMENTS ON THE BASIS OF WHICH SATISFACTION PURPOR TEDLY HAS BEEN RECORDED ON CONSIDERATION TO FORM THE VIEW THAT THEY PERTAINED TO UNACCOUNTED MONEY WAS ASSAILED IN DETAIL. A PERUSAL OF THE SAME WOULD SH OW THAT OBJECTION TO THE VALIDITY OF THE PROCEEDINGS WERE MADE ON MULTIPLE REASONS. HOWEVER, FOR THE PURPOSES OF THE PRESENT PROCEEDINGS ONLY PARA 1 TO 4 ARE BEING REPRODUCED HEREUNDER:- 1. IN THE INSTANT PENDING PROCEEDINGS, A NOTICE U/S 158BD OF THE INCOME TAX ACT DATED 31.5.2005 WAS ISSUED TO THE AS SESSEE AND IN COMPLIANCE OF THE AFORESAID NOTICE WHICH WAS RECEIV ED BY THE ASSESSEE ON 1.6.2005 A RETURN OF INCOME WAS FURNISHED UNDER PRO TEST , ON 20.10.2005. 2. IT MAY BE STATED HERE THAT, ON RECEIPT OF THE AFORE SAID NOTICE BY THE ASSESSEE, A LETTER OF OBJECTION WAS FILED, WHER EIN THE ASSESSEE SOUGHT FOR A COPY OF NOTE OF SATISFACTION ALLEGEDLY RECORD ED, IF ANY, BY THE 'ASSESSING OFFICER', WHO HELD JURISDICTION OVER THE PERSON ON WHICH SEARCH WAS CONDUCTED , ON THE BASIS OF WHICH YOU HAD INITIATED THE PROCEEDINGS ON THE ASSESSEE. THE NOTE OF SATISFACTION SOUGHT FOR WAS OF THE ASSESSING OFFICER, IN WHOSE CASE, THE SEARCH WA S CONDUCTED BY THE ASSESSING OFFICER WHO HELD JURISDICTION OVER THE CA SE OF THAT ASSESSEE. IN THIS CASE, IT APPEARS THAT SEARCH WAS CONDUCTED-ON 8.5.2003 ON 'VATIKA GROUP OF COMPANIES'. THE ASSESSING OFFICER WHO HELD THE JURISDICTION OVER VATIKA GROUP OF CASES WAS THE LEARNED ACIT, CENTRAL CIRCLE-20; WHEREAS THE ASSESSEE WAS BEING ASSESSED BY THE ASSESSING OF FICER, WARD 37(1), NEW DELHI. IT IS SUBMITTED THAT A NOTE OF SATISFACTION WAS REQ UIRED TO BE RECORDED BY THE ACIT, CENTRAL CIRCLE-20, NEW DELHI IN THE COURS E OF PROCEEDINGS IN THAT CASE WHERE THE SEARCH WAS CONDUCTED THAT AS A RESULT OF SEARCH 31 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 CONDUCTED ON SUCH A SPECIFIED ASSESSEE, EVIDENCE HA S BEEN FOUND ON THE BASIS OF WHICH, HE IS SATISFIED , THAT AN UNDISCLOSED INCOME BELONGS I.E. ANY OTHER PERSON, IN THE INSTANT CASE, ME. 3. SIR, YOU WERE HOWEVER KIND ENOUGH TO PROVIDE ME WIT H A COPY OF 'REASONS UNDER SECTION 158BC READ WITH SECTION 158D IN THE CASE OF ANUPAM NAGALIA WHICH IS RECORDED BY THE ACIT, CENTR AL CIRCLE-20, NEW DELHI '. IT IS THE SUBMISSION OF THE ASSESSEE THAT, THIS NOTE OF REASONS HAS BEEN RECORDED BY THE ACIT, CENTRAL CIRCLE-20, NEW D ELHI IS NOT IN THE CASE OF 'VATIKA GROUP OF COMPANIES' BUT IN THE CASE OF THE ASSESSEE & THAT TOO, PROBABLY AFTER CULMINATING THE PROCEEDINGS IN THESE CASES; WHEREAS, IT IS MOST RESPECTFULLY SUBMITTED, THAT A NOTE OF S ATISFACTION, IS REQUIRED TO BE RECORDED BY THE ASSESSING OFFICER WHO HELD JURIS DICTION OVER THAT ASSESSEE, AND IN THE CASE OF THE INSTANT ASSESSEE I .E. ME. FROM THE PERUSAL OF THE 'REASONS' WHICH HAVE BEEN FURNISHED BY YOU, IT IS APPARENT THAT SUCH A NOTE OF REASONS AS HAS BEEN RECORDED BY THE ACIT, CENTRAL CIRCLE- 20, NEW DELHI, IS IN MY CASE AND AS SUCH IT IS SUBMITTED THAT THERE HAS BEEN NO VALID ASSUMPTION OF JURISDICTION AT THE TIM E OF INITIATION OF PROCEEDINGS BY YOU AS THERE HAS BEEN NO NOTE OF SAT ISFACTION RECORDED BY THE ASSESSING OFFICER AS IS CONTEMPLATED IN LAW. COPY OF REASONS WHICH HAS BEEN SUPPLIED TO ME READS AS UNDER:- REASONS U/S 158 BC READ WITH SECTION 158 BD IN THE CASE OF SHRI ANUPAM NAGALIA 'WARRANT WAS ISSUED IN THE NAME OF VATIKA GROUP OF COMPANIES TO SEARCH RESIDENCE OF SH. ANUPAM NAGALIA ON 8.5.2003, WHO WAS DIRECTOR OF SOME OF THE COMPANIES OF VATIKA GROUP AND ALSO A CHARTERED ACCOUNTANT. SCRUTINY OF SEIZED DOCUMENTS REVEALS TH AT ASSESSEE HAD UNACCOUNTED INCOME UNDER THE FOLLOWING HEADS:- 1. REMUNERATION- ANNEXURE A-11, PAGE 33,34,37 AND 38 REVEALS RECEIPT OF UNACCOUNTED REMUNERATION BY SH. ANUPAM N AGALIA. 2. PROFIT IN DANISCO DEAL - ANNEXURE A-1 REVEALS RECEIPT OF UNACCOUNTED PROFIT FROM BUSINESS DEAL WITH M/S DANI SCO INGREDIENTS (INDIA) PVT. LTD. 3. INVESTMENT IN ASSETS - ANNEXURE A-1, PAGE 65 REVEALS UNACCOUNTED INVESTMENT IN LAND AT RAJPUR ROAD, DEHRADUN AMOUNTI NG TO RS.55 LACS, AT VILLAGE BHONDSI (HARYANA) AMOUNTING TO RS. 18 LA CS AND IMMOVABLE PROPERTIES COMPRISING LOANS AND ADVANCES, INVESTMEN T IN SHARES AND DEPOSITS, JEWELLERY ETC. ARNOUNTINQ TO RS.48 LACS. 4. UNACCOUNTED LOAN -ANNEXURE A-2, PAGE 1,2,3,5,6,8,10,13,15 AND 21 REVEALS TRANSACTIONS ON ACCOUNT OF LOANS NOT DISCLO SED FOR THE PURPOSE OF INCOME TAX. IN VIEW OF THE FACTS STATED ABOVE AND MATERIAL AVAI LABLE IN THE FORM OF SEIZED DOCUMENTS, I AM SATISFIED THAT SH. ANUPAM NA GALIA HAD UNDISCLOSED INCOME FOR THE BLOCK PERIOD 1.4.1997 TO 8.5.2003 WHICH WAS 32 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 NOT DISCLOSED IN THE REGULAR RETURN OF INCOME. THEREFORE, NOTICE U/S 158BC READ WITH SECTION 158BD IS ISSUED.' 4. IT IS SUBMITTED AS IS APPARENT THESE ARE REA SONS WHICH HAVE BEEN RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTI ON OVER ME & CAN NOT BE READ TO BE A NOTE OF SATISFACTION; WHICH IS MANDATORILY REQUIRED TO BE RECORDED IN WRITING AS HAS BEEN HELD BY THE APEX COURT IN THE CASE OF MANISH MAHESHWARI V/S ACIT REPORTED AS 289 ITR 341. (EMPHASIS PROVIDED IN THE PRESENT PROCEE DINGS) 8.5. ACCORDINGLY IN THE FACE OF THESE REPEATED EFFO RTS TO SEEK THE REQUISITE INFORMATION AND REFERRING TO VARIOUS DECISIONS INCL UDING MANISH MAHESHWARI RENDERED BY THE SUPREME COURT THE RAISING OF THE AB OVE GROUND BY THE REVENUE IS SURPRISING AND UNFORTUNATE AS THERE CAN BE NO DOUBT THAT THE ASSESSEE HAS CONSTANTLY AND SPECIFICALLY OBJECTED TO THE VALIDITY OF THE PR OCEEDINGS BEFORE THE AO. IN VIEW OF THE ABOVE CHALLENGE POSED TO THE IMPUGNED ORDER ONLY ON THE GROUND THAT NO SUCH OBJECTION WAS RAISED BEFORE THE AO IS FACTUALL Y INCORRECT. 8.6. CONSIDERING AND EXAMINING THE OTHER GRIEVANCE OF THE AO INCLUDED IN GROUND NO-2 RAISED IT HAS SEEN THAT CHALLENGE IS PO SED TO THE IMPUGNED ORDER ON THE GROUND THAT THE ASSESSEE HAS NOT SOUGHT ANY RE MEDY AT ANY OTHER LEVEL, ON CONSIDERATION OF THE SAID GROUND WE ARE CONSTRAINED TO OBSERVE THAT FOR THE AO TO SUBMIT BY WAY OF RAISING OF SUCH A GROUND UNFORTUNA TELY DEMONSTRATES THE STRANGE BELIEF THAT AN ASSESSEE CHALLENGING THE VALIDITY OF THE PROCEEDINGS MUST NECESSARILY INVOKE THE EXTRA-ORDINARY WRIT JURISDICTION OF THE HONBLE HIGH COURT COMPULSORILY AND SUCH A STAND IS MANDATED IN ALL C ASES. THE GRIEVANCE EXHIBITS A SHOCKING LACK OF LEGAL UNDERSTANDING AS THE AO CANN OT ABSOLVE HIMSELF FROM DEALING WITH THE OBJECTIONS OF THE ASSESSEE ON THE VALIDITY OF THE PROCEEDINGS AND CANNOT BE AGGRIEVED BY AN ASSESSEE WHO ON FACTS HAS AVAILED OF THE STATUTORY RIGHT OF APPEAL VESTED IN HIM BY THE STATUTE, NAMELY THE INCOME TAX ACT, 1961. FURTHER THE AO IS NO ONE TO SUGGEST THAT THE ASSESSEE OUGHT TO HAVE INVOKED THE EXTRA 33 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 ORDINARY WRIT JURISDICTION. INFACT IT WOULD NOT BE OUT OF PLACE TO POINT OUT THAT THERE ARE UMPTEEN INSTANCES TO SHOW THAT THE HONBL E HIGH COURT MAY REFUSE TO ENTERTAIN THE WRIT PETITION AND CONSEQUENTLY REFUSE TO EXERCISE THE EXTRA-ORDINARY JURISDICTION VESTED IN THE COURT AND INSTEAD DIRECT THE PETITIONER TO FIRST PETITION THE CONCERNED AUTHORITY AND/OR AVAIL OF THE REMEDY OF T HE STATUTORY REMEDY OF APPEAL AVAILABLE UNDER THE STATUTE. WE MAY REFER HERE TO THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF ADOBE SYST EMS SOFTWARE IRELAND LTD. VS ASSISTANT DIRECTOR OF INCOME TAX (2014) 363 ITR 174 (DEL) WHEREIN THEIR LORDSHIPS HELD THAT EXISTENCE OF JURISDICTIONAL FAC T CANNOT BE EXAMINED IN WRIT PROCEEDINGS AND ASSESSEE WAS DIRECTED TO RESOLVE DI SPUTED QUESTIONS OF FACT IN ALTERNATIVE REMEDIES AVAILABLE UNDER LAW. INFACT T O APPROACH THE COURT WITHOUT FILING THE RETURN WAS CONSIDERED TO HAVE LED THE HO NBLE COURT TO OBSERVE THE CONDUCT OF THE PETITIONER HAS BEEN ONE OF DEFIANCE . ACCORDINGLY THE GRIEVANCE POSED BY THE GROUND IS MISPLACED. 8.7. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE CIT(A) AFTER INVITING THE OBJECTIONS OF THE AO QUA THE PROCEEDINGS HAS PROCEE DED TO DECIDE THE ISSUE VIDE PARA 4.8 OF HIS ORDER AFTER OBTAINING THE REMAND RE PORT. THE REMAND REPORT OF THE AO HAS ALREADY BEEN EXTRACTED BY US IN THE EARL IER PART OF THIS ORDER (SPECIFIC PARA 3.3) A PERUSAL OF WHICH WOULD SHOW THAT VIDE S UB PARA 3.4 OF THE IMPUGNED ORDER AND PARA 3 (D), (E) & (F) OF THE REMAND REPOR T THE AO CONTRADICTS HIMSELF IN THE GROUND RAISED. WE FIRST DEEM IT APPROPRIA TE TO EXTRACT THE SAME ALSO HEREUNDER :- 3.4 IN RESPONSE TO THE SUBMISSIONS MADE BY THE ASS ESSEE, A REMAND REPORT WAS SOUGHT FROM THE AO VIDE OFFICE LETTER NO.F.NO.C IT(A)-1/2008-09/135 DATED 17.09.2008. THE AO SENT HIS REPORT ON 26.08. 2009 WHICH IS BEING EXTRACTED HEREUNDER: KINDLY REFER TO YOUR OFFICE LETTER F.NO.CIT(A)-1/2 008-09/135 DATED 17.09.2008 ON THE ABOVE REFERRED SUBJECT. 2. .. 34 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 3. .: A) .. B) ... C) ... D) THE ASSESSEE COMPLIED WITH THE NOTICES AND FILED WR ITTEN SUBMISSIONS THOUGH RAISED OBJECTIONS RELATING TO ME RITS OF THE SATISFACTION NOTE AS NOT COMMENSURATE WITH THE LEGA L REQUIREMENTS OF SECTION 158BD OF THE INCOME TAX ACT , 1961. E) DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT RAISE THE ISSUE OF BLOCK ASSESSMEN T U/S 158BC BUT OBJECTED TO THE INITIATION OF PROCEEDINGS U/S 1 58BD ON MERITS OF SATISFACTION NOTE. F) THEREFORE, IN VIEW OF PROVISIONS OF SECTION 292BB O F INCOME TAX ACT, 1961, THE ASSESSEE IS PRECLUDED FROM TAKING AN Y OBJECTION IN THE BLOCK ASSESSMENT PROCEEDINGS. (EMPHASIS PROVIDED IN THE PRESENT PROCEEDINGS) 8.8. IN THE LIGHT OF THESE ABOVE CONSISTENT FACTS QUA THE FINDINGS ARRIVED AT IN THE IMPUGNED ORDER AVAILABLE ON RECORD, WE FIND THAT TH E CONCLUSION ARRIVED AT BY THE CIT(A) IN PARA 4.8 REPRODUCED HEREUNDER CANNOT BE F AULTED WITH:- 4.8. THE ASSESSING OFFICER IN THE REMAND REPORT, HAS CONTENDED THAT SINCE THIS OBJECTION WAS NOT RAISED IN THE COURSE OF ASSE SSMENT PROCEEDINGS, THEREFORE, THIS OBJECTIONS MAY NOT BE ENTERTAINED I N VIEW OF SECTION 292BB OF THE ACT. FIRSTLY, THE CONTENTION IS FACTUALLY INCOR RECT AS THE CONTENTION REGARDING VALIDITY OF PROCEEDINGS WAS RAISED BY THE APPELLANT IN THE COURSE OF ASSESSMENT PROCEEDINGS VIDE HIS REPLY DATED 14.5.20 07 AND MOREOVER, SECTION 292BB OF THE ACT HAS NO APPLICATION TO THE FACTS OF THE CASE. SECTION 292BB OF THE ACT PROVIDES THAT WHERE AN ASSESSEE HAS APPEARE D IN ANY PROCEEDINGS OR COOPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM HAS BEEN DULY SERVED UPON HIM IN TI ME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE P RECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDINGS OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS NOT SERVED UPON HIM OR NOTICE WAS NOT SERVED UPON HIM I N TIME OR SERVED UPON HIM IN AN IMPROPER MANNER. IT WILL BE SEEN THAT THE CO NTENTION OF THE APPELLANT IS NEITHER THAT NOTICE WAS SERVED OR NOTICE WAS NOT SE RVED UPON HIM IN TIME OR SERVED UPON HIM IN AN IMPROPER MANNER. ON THE CONT RARY, OBJECTION OF THE APPELLANT IS THAT STATUTORY PRE-CONDITION FOR INVOK ING PROVISIONS CONTAINED IN SECTION 158BD OF THE ACT HAD NOT BEEN SATISFIED IN AS MUCH AS SATISFACTION NOTE SO RECORDED IS NOT RECORDED ON THE BASIS OF SEIZED MATERIAL FOUND FROM THE SEARCHED PERSON I.E VATIKA GROUP OF CASES AND THERE FORE, THERE COULD NOT HAVE 35 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 BEEN VALID ASSUMPTION OF JURISDICTION. IN LIGHT OF THE ABOVE, IT IS HELD THAT SECTION 292BB OF THE ACT HAS NO APPLICATION TO THE FACTS. 8.9. ON CONSIDERATION OF THE FACTS AVAILABLE ON REC ORD WHICH WE HAVE BROUGHT OUT ABOVE IN DETAIL CONSIDERING THE FINDINGS ARRIVED AT IN THE IMPUGNED ORDER AGAINST WHICH A SPECIFIC GROUND HAS BEEN RAISED BY THE REVE NUE, WE FIND ON CONSIDERING THE GROUND RAISED NO INFIRMITY IN THE IMPUGNED ORDE R AND ACCORDINGLY DISMISSING THE GROUND RAISED AS MISCONCEIVED AND BASED ON NO F ACTS AND AN INCORRECT APPRECIATION OF THE LAW, THE DEPARTMENTAL APPEAL AC CORDINGLY IS DISMISSED. 9. SINCE BEFORE US THE LD. CIT DR DEHORS THE GROUND RAISED HAS ADVANCED VARIOUS ARGUMENTS ASSAILING THE IMPUGNED ORDER WHIC H HAS BEEN COPIOUSLY ADDRESSED BY THE LD. AR WE PROPOSE TO SET OUT THE S PECIFIC REASONING OF THE LD. CIT (A) IN QUASHING THE PROCEEDINGS. THE REASONING OF THE CIT(A) IS REPRODUCED HEREUNDER:- 4. I HAVE GONE THROUGH THE FACTS OF THE CIRCUMSTAN CES OF THE ISSUE AS WELL AS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPEL LANT. SECTION 158BD OF THE ACT PROVIDES AS UNDER:- 'WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT T O WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHE R DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SECTION 132A, THEN, THE BO OKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL B E HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. ' 4.1 ON PLAIN READING OF THE AFORESAID STATUTORY PR OVISIONS CONTAINED IN SECTION 158BD OF THE ACT, IT WILL BE SEEN THAT, IT HAS BEEN PROVIDED THAT, WHERE THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SAT ISFIED 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, THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL B E HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON AND, THEREAFTER THE ASSESSING OFFICER OF SUCH OTHER PERSON SHALL PROCEE D AGAINST SUCH OTHER PERSON. THE, APEX COURT IN THE CASE OF MANISH MAHESHWARI 28 9 ITR 341 HAS HELD THAT, UNLESS THERE IS A VALID SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER OF THE 36 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 SEARCHED PERSON, AFTER GOING THROUGH THE SEIZED DOC UMENTS TO THE EFFECT THAT INITIATION OF PROCEEDINGS U/S 158BD IS CALLED FOR, THERE IS NO JUSTIFICATION, TO INITIATE PROCEEDINGS U/S 158BD OF THE I. T. ACT. I T CONCLUDED THEREIN AS UNDER :- 'THE CONDITION PRECEDENT FOR INVOKING A BLOCK ASSES SMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132, OR DOCUMENTS OR A SSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. THE SAID PROVISIO N WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRI ED OUT UNDER SECTION 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDE R SECTION 132A. SECTION 158BD, HOWEVER, PROVIDES FOR TAKING RECOURSE TO A B LOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE C ONDITIONS PRECEDENT WHEREOF ARE: (I) SATISFACTION MUST BE RECORDED BY THE ASSES SING OFFICER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THA N THE PERSON WITH RESPECT OF WHOM SEARCH WAS MADE UNDER SECTION 132 OF THE ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONE D 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. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISION S OF SECTION 158BD, THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PE RSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS H AD BEEN REQUISITIONED UNDER SECTION 132A OF THE ACT. THE ONLY QUESTION WHICH ARISES FOR OUR CONSIDERATIO N IS AS TO WHETHER THE NOTICE DATED FEBRUARY 6, 1996, SATISFIES THE REQUIREMENTS OF SECTION 158BD OF THE ACT. THE SAID NOTICE DOES NOT RECORD ANY SATISFACTION ON THE PART OF THE ASSESSING OFFICE, DOCUMENTS AND OTHER ASSETS RECOVERED DURING SEARCH HAD NOT BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDI CTION IN THE MATTER. A LARGE NUMBER OF DECISIONS OF VARIOUS HIGH COURTS HAVE BEEN CITED AT THE BAR. WE WOULD, AT THE OUTSET, REFER TO A DECISION OF THE GUJARAT HIGH COURT IN KHANDUBHAI VASANTJI DESAI V. DEPUTY CIT [1999] 236 ITR 73. THEREIN, IT WAS CLEARLY HELD (PAGE 85) 'THIS PROVISION INDICATES THAT WHERE THE ASSESSING OFFICER WHO IS SEIZED OF THE MATTER AND HAS JURISDICTION OVER THE PERSON OTHER T HAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UN DER SECTION 132A, HE SHALL PROCEED AGAINST SUCH OTHER PERSON AS PER THE PROVIS IONS OF CHAPTER XIV - B WHICH WOULD MEAN THAT ON SUCH SATISFACTION BEING RE ACHED THAT ANY UNDISCLOSED INCOME BELONGS TO SUCH OTHER PERSON, HE MUST PROCEE D TO SERVE A NOTICE TO SUCH OTHER PERSON AS PER THE PROVISIONS OF SECTION 158BC OF THE ACT. IF THE ASSESSING OFFICER WHO IS SEIZED OF THE MATTER AGAINST THE RAI DED PERSON REACHES SUCH SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGS TO SUCH OTHER PERSON OVER WHOM HE HAS NOT JURISDICTION, THEN, IN THAT EVENT, HE HAS TO TRANSMIT THE MATERIAL 37 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 TO THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH OTHER PERSON AND IN SUCH CASES THE ASSESSING OFFICER WHO HAS JURISDICTION WI LL PROCEED AGAINST SUCH OTHER PERSON BY ISSUING THE REQUISITE NOTICE CONTEMPLATED BY SECTION 158BC OF THE ACT.' 4.2 ALSO, HON'BLE DELHI HIGH COURT IN THE CASE OF JANKI EXPORTS INTERNATIONAL V UOI REPORTED IN 278 ITR 296 HAS FURTHER HELD AS U NDER :- 'WE FIND THAT SECTION 158BD IS SOMEWHAT ANALOGOUS T O SECTION 147 IN SO FAR AS THE PROCEDURE THAT IS REQUIRED TO BE FOLLOWED. SECT ION 147 CONTEMPLATES THAT IF THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT T HERE IS ESCAPEMENT OF INCOME, THEN NOTICE CAN BE ISSUED UNDER SECTION 148 OF THE ACT. SO FAR AS SECTION 158BD OF THE ACT IS CONCERNED, THE ASSESSING OFFICER HAS TO BE SATISFIED THAT THERE IS UNDISCLOSED INCOME. UPON SUCH SATISFACTION, THE ASS ESSING OFFICER IS REQUIRED TO FORWARD THE RELEVANT DOCUMENTS, PAPERS, ETC., TO TH E ASSESSING OFFICER WHO IS REQUIRED TO ASSESS THE PERSON IN RESPECT OF WHOM TH E UNDISCLOSED INCOME HAS BEEN DISCOVERED. ONCE THIS IS DONE, WE FEEL THAT TH E PERSON WHO IS TO BE PROCEEDED AGAINST UNDER SECTION 158BD AND THEN SECT ION 158BC, MUST BE INFORMED ABOUT THE SATISFACTION OF THE ASSESSING OF FICER WHICH HAS BEEN RECORDED AND HE MUST BE GIVEN A REASONABLE OPPORTUNITY TO OB JECT TO THE SAME. SATISFACTION CAN BE ARRIVED ON SOME MATERIAL. THAT MATERIAL WOUL D PROVIDE THE REASONABLE SATISFACTION. 4.3 THE HON'BLE TRIBUNAL IN THE CASE OF MANOJ AGGA RWAL VS. DCIT REPORTED IN 113 ITD DCIT (SB) (DEL) IN PARA 123 TO 124 HAS H ELD AS UNDER :- '123. HAVING HELD THAT RECORDING OF SATISFACTION IS IMPERATIVE BEFORE ASSUMPTION OF JURISDICTION U/S 158BD, WE MAY NOW TURN TO EXAMI NE THE MEANING OF THE EXPRESSION 'WHERE THE ASSESSING OFFICER IS SATISFIE D' APPEARING AT THE BEGINNING OF SECTION 158BD FOR THE MEANING SO ASCERTAINED GIV ES US A CLUE AS TO THE NATURE OF THE NOTE OF SATISFACTION THAT IS ENVISAGED IN T HE SAID SECTION. . ...................... . 124. . ........................... ON THE OTHER HA ND, THE TERM 'SATISFACTION' IN SECTION 158BD CONNOTES THAT THERE EXISTS UNDISCLOSED INCOME AND THAT SUCH UNDISCLOSED INCOME IS THAT OF THE PERSON NOT SEARCHED. THE USE OF THE EXPRESSION 'SATISFIED' IN SECTION 158BD CANNOT BE READ IN ISOLATION AND IT HA S TO BE UNDERSTOOD IN THE CONTEXT IN WHICH THE SAID TERM APPEARS IN THE SAID SECTION. IT WILL BE SEEN THAT SECTION L58BD STARTS WITH THE EXPRESSION 'WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON O THER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE ..... '. IT IS SIGN IFICANT THAT THE TERM 'SATISFIED' IS NOT USED IN A VACUUM BUT ALONGWITH THE WORDS 'TH AT ANY UNDISCLOSED INCOME BELONGS TO OTHER THAN THE PERSON WITH RESPECT TO WH OM SEARCH WAS MADE .... ' AND THE WORDS IN THE CONTEXT ARE 'UNDISCLOSED INCOME' A ND 'BELONGS TO' WHICH CLEARLY INDICATE THAT AT THAT POINT OF TIME WHEN SATISFACTI ON IS RECORDED BY THE ASSESSING OFFICER THE UNDISCLOSED INCOME IS TO BE IDENTIFIED. FURTHER, THE SAID EXPRESSION 38 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 DOES NOT STOP THERE. IT FURTHER USES THE EXPRESSION 'BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MAD E' WHICH INDICATES THAT THE UNDISCLOSED INCOME IDENTIFIED BY THE ASSESSING OFFI CER IS FOUND TO BE BELONGING TO THE OTHER PERSON. IT WOULD THUS MEAN THAT AT THE STAGE OF RECORDING, THE ASSESSING OFFICER HAS REACHED A FINDING THAT UNDISCLOSED INCOME HAS BEEN DETECTED AS A RESULT OF SEARCH AND ALSO FURTHER THA T SUCH INCOME BELONGS TO THE PERSON NOT SEARCHED. ALL THESE CONSTITUTE FINDINGS AND NOT A MORE BELIEF HELD BY THE ASSESSING OFFICER ON THE EXAMINATION OF THE SEI ZED MATERIAL AND HENCE THE SATISFACTION CONTEMPLATED IN SECTION 158BD IS TOTAL LY DIFFERENT THAN CONTEMPLATED IN SECTION 147. IT IS FUNDAMENTAL THAT THE ASSESSIN G OFFICER FINDS OUT WHETHER THERE IS UNDISCLOSED INCOME. IF HE FINDS THAT THERE EXISTS UNDISCLOSED INCOME, THEN HE HAS TO GIVE A FINDING AS TO WHOM THE SAID INCOME BELONGS. IN THE ABSENCE OF SUCH A FINDING, IT IS NOT POSSIBLE TO CONCLUDE A BL OCK ASSESSMENT UNDER SECTION 158BC. ONLY THEREUPON THE SECTION 158BD PROCEEDINGS IN RESPECT OF THE OTHER PERSON FOR MAKING A SIMILAR BLOCK ASSESSMENT OF SUCH UNDISCLOSED INCOME WOULD COMMENCE. HENCE, IN OUR CONSIDERED VIEW, THE NOTE OF SATISFACTION MUST CONTAIN A POSITIVE FINDING BY THE ASSESSING OFFICER MAKING THE ASSESSMENT UNDER SECTION 158BD INDICATING THEREIN THE UNDISCLOSED INCOME FOUND AS A RESULT OF HIS EXAMINATION OF THE SEIZED MATERIAL, THE PERSON TO W HOM SUCH INCOME BELONGS AND PROCEED ACCORDINGLY AS PROV IDED FOR IN THE SAID SECTION. THE CIRCUMSTANCES ENVISAGED AND THE CONTEX T IN SECTIONS 147 AND 158BD ARE ENTIRELY DIFFERENT DECISION IN THE CASE CITED ( SUPRA) INTO THE SECTION 158BD PROCEEDING FOR THE REASONS DETAILED HEREIN.' 4.4 IN OTHER WORDS, THE BASIC STATUTORY PRE-CONDIT ION FOR INVOKING SECTION 158BD OF THE ACT IS THE SATISFACTION OF THE AO OF T HE SEARCHED PERSON AND, SUCH SATISFACTION IS TO BE RECORDED IN WRITING ON THE BA SIS OF MATERIAL FOUND AS A RESULT OF SEARCH .ON THE SEARCHED PERSON. 4.5. APPLYING THE FOREGOING PRINCIPLES TO THE FACT S OF THE INSTANT CASE, IT WILL BE SEEN THAT IN THE INSTANT CASE, THE BASIS AD OPTED FOR INITIATION OF PROCEEDINGS UNDER SECTION 158BD OF THE ACT IN THE C ASE OF THE APPELLANT IS THAT, THERE HAS BEEN A SEARCH CONDUCTED AT THE PREMISES O F VATIKA GROUP OF COMPANIES (HEREIN AFTER ALTERNATIVELY REFERRED TO A S SEARCHED PERSON) AND AS A RESULT OF SEARCH, SATISFACTION NOTE WAS RECORD ED BY THE LEARNED OFFICER HAVING JURISDICTION OVER VATIKA GROUP OF CASES. THE SATISFACTION NOTE, AS RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTI ON OVER VATIKA GROUP OF CASES READS AS UNDER:- REASONS U/S 158BC READ WITH 158BD IN THE CASE OF S HRI ANUPAM NAGALIA WARRANT WAS ISSUED IN THE NAME OF VATIKA GROUP OF C OMPANIES TO SEARCH RESIDENCE OF SH. ANUPAM NAGALIA ON 8.5.2003, WHO WA S DIRECTOR OF SOME OF THE COMPANIES OF VATIKA GROUP AND ALSO A CHARTERED ACCOUNTANT. SCRUTINY OF 39 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 SEIZED DOCUMENTS REVEALS THAT ASSESSEE HAD UNACCOUN TED INCOME UNDER THE FOLLOWING HEADS:- I. REMUNERATION-ANNEXURE A-11, PAGES 33, 34, 37 AND 38 REVEALS RECEIPT OF UNACCOUNTED REMUNERATION BY SH. ANUPAM NAGALIA. II. PROFIT IN DANISCO DEAL-ANNEXURE A-1 REVEALS RECEIPT OF UNACCOUNTED PROFIT FROM BUSINESS DEAL WITH M/S DANISCO INGREDIE NTS (INDIA) PVT. LTD. III. INVESTMENT IN ASSETS-ANNEXURE A-1, PAGE 65 REVEALS UNACCOUNTED INVESTMENT IN LAND AT RAJPUR ROAD, DEHRADUN AMOUNTI NG TO RS.55 LACS AT VILLAGE-BHONDSI (HARYANA) AMOUNTING TO RS.18 LAC S AND IMMOVABLE PROPERTIES COMPRISING LOANS AND ADVANCES, INVESTMEN T IN SHARES AND DEPOSITS, JEWELLERY ETC. AMOUNTING TO RS.48 LACS. IV. UNACCOUNTED LOAN-ANNEXURE A-2 PAGE 1, 2, 3, 5, 6, 8 , 10, 13, 15 AND 21 REVEALS TRANSACTIONS ON ACCOUNT OF LOANS NOT DISCLO SED FOR THE PURPOSE OF INCOME TAX. IN VIEW OF THE FACTS STATED ABOVE AND MATERIAL AVAI LABLE IN THE FORM OF SEIZED DOCUMENTS, I AM SATISFIED THAT SH. ANUPAM NAGALIA H AD UNDISCLOSED INCOME FOR THE BLOCK PERIOD 01.04.1997 TO 08.05.2003 WHICH WAS NOT DISCLOSED IN THE REGULAR RETURN OF INCOME. THEREFORE, NOTICE U/S 158BC READ WITH SECTION 158BD IS ISSUED. (P.K.SINGH) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, NEW DELHI. 4.6. THE AFORESAID SATISFACTION NOTE WOULD SHOW THAT THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, NEW DELHI HAS REFERRED TO THE FOLLOWING MATERIAL FOR CONCLUDING THAT THERE IS UND ISCLOSED INCOME OF THE APPELLANT:- (A) PAGES 33, 34, 37 AND 38 OF ANNEXURE A-11 (B) ANNEXURE A-11 (C) PAGE 65 OF ANNEXURE A-1 (D) PAGES 1, 2, 3, 5, 6, 8, 10, 13, 15 AND 21 OF ANNEXU RE A-2. 4.7. IT IS ADMITTED POSITION THAT, EACH OF THE AFORESAID PAPERS HAVE BEEN FOUND AS A RESULT OF SEARCH ON THE APPELLANT AND, N OT FROM THE PREMISES OF M/S VATIKA GROUP OF COMPANIES, I.E., SEARCHED PERSON CO NSIDERED BY THE ASSESSING OFFICER FOR ASSUMING JURISDICTION U/S 158BD OF THE ACT. THUS, SINCE SATISFACTION NOTE IS NOT BASED ON ANY SEIZED MATERIAL FOUND FROM THE SEARCHED PERSON I.E. VATIKA GROUP OF CASES, THE BASIC STATUTORY PRECONDI TION FOR INVOKING PROVISIONS CONTAINED IN SECTION 158BD OF THE ACT IS LACKING IN THE INSTANT CASE. THE BURDEN WAS ON THE ASSESSING OFFICER TO ESTABLISH TH AT, A VALID SATISFACTION NOTE 40 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 HAD BEEN RECORDED ON THE BASIS OF MATERIAL FOUND A S A RESULT OF THE SEARCHED PERSON. IN THE INSTANT CASE, THE PERUSAL OF SATISF ACTION NOTE WOULD CLEARLY SHOW THAT, SINCE THERE IS NO MATERIAL FOUND AS A RESULT OF THE SEARCH ON THE SEARCHED PERSON, NO SATISFACTION COULD HAVE BEEN RECORDED UN DER SECTION 158BD OF THE ACT IN THE CASE OF THE SEARCHED PERSON. ON THE CON TRARY, IT IS A CASE WHERE PROCEEDINGS HAVE BEEN INITIATED ON THE BASIS OF MAT ERIAL FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND, NOT ON THE S EARCHED PERSON I.E. VATIKA GROUP OF CASES. IN THESE CIRCUMSTANCES, IT IS EVID ENT THAT, STATUTORY PRECONDITION FOR INVOKING PROVISIONS CONTAINED IN S ECTION 158BD OF THE ACT IS NOT SATISFIED AND THEREFORE, NOTICE UNDER SECTION 1 58BD OF THE ACT IS WITHOUT JURISDICTION. I AM ALSO SUPPORTED HERE BY THE ORDE R OF THE HONBLE TRIBUNAL IN THE CASE OF ACIT VS M/S COZY ENTERPRISES LTD. IN I. T.(SS) A. NO. 249/DEL/2005 WHEREIN IT HAS BEEN HELD AS UNDER:- 6.2. COMING TO THE FACTS OF THIS CASE, A DIARY WAS SEIZED FROM SHRI S.K.JAIN, WHICH CONTAINED THE TRANSACTIONS OF THE A SSESSEE. NO ASSET OR MATERIAL WAS SEIZED FROM SHRI PRAVEEN MITTAL. IN T ERMS OF THE DECISION IN THE CASE OF MANISH MAHESHWARI (SUPRA), THE AO OF SHRI.S.K.JAIN HAD TO RECORD HIS SATISFACTION THAT UNDISCLOSED INCOME IN RESPECT OF TRANSACTIONS WITH THE ASSESSEE WAS THAT OF THE ASSE SSEE AND HANDOVER THE RELEVANT PART OF THE SEIZED MATERIAL TO THE A.O . HAVING JURISDICTION OVER THE MATTER, NAMELY, THE SECOND MENTIONED A.O. IT APPEARS TO US THAT SUCH NOTE AND MATERIAL WERE TRANSMITTED TO THE FIRST MENTIONED A.O. WHO ISSUED A NOTICE UNDER SECTION 158BC READ WITH 1 58BD TO THE ASSESSEE. HOWEVER, NOTHING WAS FOUND IN THE CASE O F SHRI PRAVEEN MITTAL WHOSE A.O. RECORDED THE SATISFACTION NOTE ON THE BASIS OF SUBMISSIONS MADE IN HIS CASE BEFORE HIM. AS NOTHIN G WAS SEIZED FROM HIM, NOTING WAS TRANSMITTED BY THE A.O. OF SHRI PRA VEEN MITTAL TO THE SECOND MENTIONED A.O. WHO HAPPENS TO BE THE SAME OF FICER. THUS, IN VIEW OF THE DECISION IN THE CASE OF MANISH MAHESHWA RI(SUPRA), IT IS HELD THAT PRE-CONDITIONS REQUIRED TO BE SATISFIED BEFORE ASSUMING JURISDICTION UNDER SECTION 158BD IN THE CASE OF THE ASSESSEE WER E NOT SATISFIED. LEARNED DR HAS NOT BEEN ABLE TO SHOW OR REFER TO AN Y MATERIAL WHICH WAS SEIZED IN THE CASE OF SHRI PRAVEEN MITTAL SO AS TO AUTHORIZE HIS A.O. TO RECORD SATISFACTION IN THE CASE OF THE ASSESSEE. THUS, WE ARE IN THE AGREEMENT WITH THE LEARNED COUNSEL, ALBEIT FOR SOME WHAT DIFFERENT REASONS, ON THE ISSUE THAT THE SECOND MENTIONED A.O . DID NOT HAVE THE JURISDICTION TO ISSUE NOTICE UNDER SECTION 158BC RE AD WITH SECTION 158BD ON 15.07.2002. THEREFORE, THE ORDER PASSED O N THE BASIS OF THIS NOTICE IS INVALID IN THE EYE OF LAW. 4.8. THE ASSESSING OFFICER IN THE REMAND REPORT, HAS CONTENDED THAT SINCE THIS OBJECTION WAS NOT RAISED IN THE COURSE OF ASSE SSMENT PROCEEDINGS, THEREFORE, THIS OBJECTIONS MAY NOT BE ENTERTAINED I N VIEW OF SECTION 292BB OF THE ACT. FIRSTLY, THE CONTENTION IS FACTUALLY INCOR RECT AS THE CONTENTION 41 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 REGARDING VALIDITY OF PROCEEDINGS WAS RAISED BY THE APPELLANT IN THE COURSE OF ASSESSMENT PROCEEDINGS VIDE HIS REPLY DATED 14.5.20 07 AND MOREOVER, SECTION 292BB OF THE ACT HAS NO APPLICATION TO THE FACTS OF THE CASE. SECTION 292BB OF THE ACT PROVIDES THAT WHERE AN ASSESSEE HAS APPEARE D IN ANY PROCEEDINGS OR COOPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM HAS BEEN DULY SERVED UPON HIM IN TI ME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE P RECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDINGS OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS NOT SERVED UPON HIM OR NOTICE WAS NOT SERVED UPON HIM I N TIME OR SERVED UPON HIM IN AN IMPROPER MANNER. IT WILL BE SEEN THAT THE CO NTENTION OF THE APPELLANT IS NEITHER THAT NOTICE WAS SERVED OR NOTICE WAS NOT SE RVED UPON HIM IN TIME OR SERVED UPON HIM IN AN IMPROPER MANNER. ON THE CONT RARY, OBJECTION OF THE APPELLANT IS THAT STATUTORY PRE-CONDITION FOR INVOK ING PROVISIONS CONTAINED IN SECTION 158BD OF THE ACT HAD NOT BEEN SATISFIED IN AS MUCH AS SATISFACTION NOTE SO RECORDED IS NOT RECORDED ON THE BASIS OF SEIZED MATERIAL FOUND FROM THE SEARCHED PERSON I.E VATIKA GROUP OF CASES AND THERE FORE, THERE COULD NOT HAVE BEEN VALID ASSUMPTION OF JURISDICTION. IN LIGHT OF THE ABOVE, IT IS HELD THAT SECTION 292BB OF THE ACT HAS NO APPLICATION TO THE FACTS. 4.9. I SEEK TO ADD HERE THAT, UNDISPUTEDLY, A SEARC H HAD BEEN CONDUCTED ON THE PREMISES ON 8.5.2003. HOWEVER, IT IS APPARENT THAT NO ACTION WAS TAKEN ON THE BASIS OF THE SAID SEARCH AS NO NOTICE UNDER SECTION 158BC OF THE ACT WAS EVER ISSUED TO THE APPELLANT. INFACT, EVEN THE INSTANT PROCEEDINGS CANNOT BE TAKEN AS PROCEEDINGS UNDER SECTION 158BC OF THE ACT SINCE FI RSTLY, INITIATION OF PROCEEDINGS WAS UNDISPUTEDLY UNDER SECTION 158BD OF THE ACT AND MOREOVER, LIMITATION FOR FRAMING ASSESSMENT UNDER SECTION 158 BC OF THE ACT EXPIRED ON 31.5.2005 WHICH IS THE DATE ON WHICH, NOTICE UNDER SECTION 158BD OF THE ACT WAS ISSUED TO THE APPELLANT. THE ORDER OF ASSESSME NT IN DATED 21.05.2007, WHICH IS THEN CLEARLY BARRED BY LIMITATION. IN LIG HT OF THE ABOVE, I HOLD THAT, THE PROCEEDINGS INITIATED UNDER SECTION 158BD OF THE AC T WERE NOT LEGAL, VALID AND ARE THEREFORE QUASHED. 9.1. ON A CONSIDERATION OF THE SAME IN THE LIGHT OF THE ARGUMENTS ADVANCED BY THE PARTIES BEFORE THE BENCH WE FIND OURSELVES UNABLE T O COME TO A CONTRARY FINDING AND ARE OF THE VIEW THAT THE RELIANCE PLACED BY THE ASSESSEE ON THE JUDGEMENT OF THE APEX COURT IN THE CASE OF PARSHURAM POTTERY WORKS L TD. VS. ITO REPORTED IN 106 ITR 1 (SC) IS NOT OUT OF PLACE. INACTION ON THE PA RT OF THE AO FOR NOT ADHERING TO THE STATUTORY PROVISIONS AS ENVISAGED U/S 158BC OF THE ACT CANNOT BE OVERLOOKED AND SOLELY TO BUY TIME THE PROVISIONS AND PROCEDURE S UNDER THE STATUTE CANNOT BE 42 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 ALLOWED TO BE CIRCUMVENTED AND A FRESH LIFE BE GIVE N BY RESORTING TO THE PROVISIONS U/S 158BD. THE RELEVANT OBSERVATIONS OF THE APEX C OURT IN THE AFOREMENTIONED CASE OF PARSHURAM POTTERY WORKS LTD. VS. ITO (CITED SUPRA), IS REPRODUCED HEREUNDER:- IT HAS BEEN SAID THAT THE TAXES ARE THE PRICE THA T WE PAY FOR CIVILIZATION. IF SO, IT IS ESSENTIAL THAT THOSE WHO ARE ENTRUSTED WI TH THE TASK OF CALCULATING AND REALIZING THAT PRICE SHOULD FAMILIARIZE THEMSELVES WITH THE RELEVANT PROVISIONS AND BECOME WELL-VERSED WITH THE LAW ON THE SUBJECT. ANY REMISSNESS ON THEIR PART CAN ONLY BE AT THE COST OF THE NATIONAL EXCHEQ UER AND MUST NECESSARILY RESULT IN LOSS OF REVENUE. AT THE SAME TIME, WE HA VE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINA LITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI-JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. SO FAR AS THE INCOME-TAX ASSESSMENT ORDERS ARE CONCERNED, THEY CA NNOT BE REOPENED ON THE SCORE OF INCOME ESCAPING ASSESSMENT U/S 147 OF THE ACT OF 1961 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR UNLESS THERE BE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. AS AL READY MENTIONED, THIS CANNOT BE SAID IN THE PRESENT CASE. THE APPEAL IS CONSEQUENTLY ALLOWED, THE JUDGMENT OF THE HIGH COURT IS SET ASIDE AND THE IMP UGNED NOTICES ARE QUASHED. THE PARTIES IN THE CIRCUMSTANCES SHALL BE AR THEIR OWN COSTS THROUGHOUT. 9.2. THE DECISIONS RELIED UPON BY THE LD. CIT DR AN D BY THE LD. AR HAVE BEEN TAKEN INTO CONSIDERATION. IT IS SEEN THAT THE DECI SIONS RELIED UPON BY THE REVENUE PROCEED ON DIFFERENT FACTS AND ARE DISTINGUISHABLE. FOR INSTANCE IN THE DECISION OF ACIT VS VINOD GOEL (2008) 111 ITD 76 (ASR) THE PECU LIAR FACT AVAILABLE ON RECORD WAS THAT THEREIN THE VALIDITY OF THE PROCEED INGS HAD ALREADY BEEN SPECIFICALLY CHALLENGED BY THE ASSESSEE BEFORE THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT HAD UPHELD THE SAME IN CWP NO.-9 63 OF 1999 VIDE ITS JUDGEMENT AND ORDER DATED 26.09.2000 AND COGNIZANCE OF THIS FACT HAS BEEN VARIOUSLY TAKEN NOTE OF IN THE ORDER OF THE TRIBUNA L IN PARAS 5, 6 AND 7. 43 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 9.2.1. SIMILARLY IN SMT. NASREEN YUSUF DHANANI VS ACIT (2009) 110 ITD 13(MUM.) HEAVILY RELIED UPON BY THE LD. CIT DR. A PERUSAL OF THE SAME WOULD SHOW THAT THE SUBJECT MATTER OF THE ADDITION THEREI N WAS THE CONTENTS OF THE LOCKER IN THE JOINT NAME OF THE HUSBAND AND WIFE, WHEREIN THE HUSBANDS NAME WAS APPEARING FIRST AND SUBSTANTIVE ADDITIONS HAD BEEN MADE IN THE HANDS OF THE HUSBAND WHO WAS THE SEARCHED PERSON AND ONLY PROTE CTIVE ADDITION HAD BEEN MADE IN THE HANDS OF THE WIFE AND SECTION 158BC HAD BEEN INVOKED WITHOUT FOLLOWING THE MANDATORY PROCEDURES. ON THESE PECULIAR FACTS IT WAS HELD THAT THE PROCEEDINGS WERE TO BE QUASHED AS SATISFACTION WAS FOUND TO BE NOT RECORDED AS LAID BY THE APEX COURT IN MANISH MAHESHWARIS CASE BY THE APEX COURT. 9.3. A PERUSAL OF THE DECISIONS RENDERED BY COURTS AND TRIBUNALS ON THIS POINT CLEARLY BRINGS OUT THE CONSISTENT THREAD WHICH BIN DS THEM THAT IS THE RECORDING OF THE SATISFACTION IS THE SINE QUA NON FOR ASSUMING J URISDICTION U/S 158BD. THE SATISFACTION SO RECORDED MUST NECESSARILY BE BY THE AO OF THE SEARCHED PERSON AND ALTHOUGH THE STATUTE DOES NOT PRESCRIBE ANY SPECIFI C TIME LIMIT TO DO SO AND THERE WERE DECISIONS IN THE PUBLIC DOMAIN OF THE HONBLE HIGH COURTS AND TRIBUNALS THAT THE SATISFACTION NOTE COULD ONLY BE PREPARED BY THE AO DURING THE ASSESSMENT PROCEEDINGS U/S 158BC OF THE ACT AND NOT AFTER THE COMPLETION OF THE SAID PROCEEDINGS HOWEVER THE ISSUE IS NO LONGER RES INTEGRA AS THE HONBLE APEX COURT ESCHEWING THE SAID VIEW IN THE CASE OF CIT VS M/S C ALCUTTA KNITWEARS, LUDHIANA RENDERED ON 12.03.2014 IN C.A.NO.3958 OF 2104 AND O THERS HAS LAID THE CONTROVERSY AT REST AND HELD IN PARA 44 THEREOF TH AT FOR THE PURPOSES OF SECTION 158BD OF THE ACT A SATISFACTION NOTE IS SINE QUA NO N AND MUST BE PREPARED BY THE ASSESSING OFFICER BEFORE HE TRANSMITS THE RECORDS T O THE OTHER ASSESSING OFFICER WHO HAS JURISDICTION OVER SUCH OTHER PERSON. THEIR LOR DSHIPS HAVE HELD THAT THE SATISFACTION NOTE COULD BE PREPARED AT EITHER OF TH E FOLLOWING STAGES: (A) AT THE TIME 44 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 OF OR ALONG WITH INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; (B) ALONG WITH THE ASSESS MENT PROCEEDINGS UNDER SECTION 158BC OF THE ACT; AND (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS ARE COMPLETED UNDER SECTION 158BC OF THE ACT OF THE SEARCHED PERSON. HOWEVER, ON THE SATISFACTION NOTE THEIR LORDSHIPS HAVE BEEN VERY CATEGORIC IN HOLDING THAT UNDER SECTION 158BD THE EXISTENCE OF COGENT AND DE MONSTRATIVE MATERIAL IS GERMANE TO THE ASSESSING OFFICERS SATISFACTION IN CONCLUDING THAT THE SEIZED DOCUMENTS BELONGS TO A PERSON OTHER THAN THE SEARCH ED PERSON IS NECESSARY FOR INITIATION OF ACTION UNDER SECTION 158BD. 9.4. ACCORDINGLY FOR THE DETAILED REASONS GIVEN HER EINABOVE THE APPEAL OF THE REVENUE IS DISMISSED. 10. IT IS SEEN THAT AGAINST THE ADDITIONS MADE BY T HE AO WHICH WERE CHALLENGED BEFORE THE CIT(A) WHO DISMISSED THE SAME AS INFRUCT UOUS VIDE PARA 5 IN VIEW OF HIS FINDINGS IN PARA 4 TO 4.9, THE ASSESSEE HAS RAI SED VARIOUS GROUNDS IN ITS C.O. FILED ASSAILING THE ADDITIONS MADE BY THE AO. HOWE VER BOTH THE PARTIES HAVE NOT ADDRESSED THE SAME AS ARGUMENTS HAVE REMAINED CONF INED TO THE DEPARTMENTAL APPEAL ACCORDINGLY IN VIEW OF THE FACT THAT THE IMP UGNED ORDER HAS BEEN UPHELD BY US THE C.O. FILED BY THE ASSESSEE IS DISMISSED AS I NFRUCTUOUS. 11. IN THE RESULT THE APPEAL OF THE REVENUE AND THE C.O. FILED BY THE ASSESSEE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11 TH OF JULY 2014. SD/- SD/- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:- 11/07/2014 *AMIT KUMAR* 45 C.O. -380/DEL/2010 & I.T.(SS) NO.-36/DEL/2010 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIS TRAR ITAT NEW DELHI