MAHENDRA KUMAR AGARWAL (HUF), ALLAHABAD V. ACIT (CENTRAL CIRCLE), ALLAHABAD

ITA 129/ALLD/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3363 (ITAT-ALLAHABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 18-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Search and seizure; Opportunity of being heard; Principle of natural justice; Period of limitation; Question of law; Assessment record; Block assessment; Time period of passing order; Condonation of delay; Revised return; Set aside; FORM 2B; CHAPTER XIVB
• Section: 68; 69; 148; 132; 144; 139; 142(1); 119(2)(b); 143(2); 158BC(c); 158BC; 158B(b); 158B(a); 113; 43; 158BD; 119; 22

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRIVIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA Nos.128/Alld./2017 Assessment Year: Block Period 01/04/1988 to 23/08/1998 Smt. Asha Agrawal W/o Sri Mahendra Kumar Agrawal 447,Malviya Nagar, Allahabad-211003, U.P. v. Asst. Commissioner of Income Tax, Central Circle, Aayakar Bhawan, Allahabad-211001, U.P. PAN:AARPA1322Q (Appellant) (Respondent) ITA Nos. 129/Alld./2017 Assessment Year: Block Period 01/04/1988 to 23/08/1998 M/s. Mahendra Kumar Agrawal(HUF) 447,Malviya Nagar, Allahabad-211003, U.P. v. Asst. Commissioner of Income Tax, Central Circle, Aayakar Bhawan, Allahabad-211001, U.P. PAN:AAGHM3561E (Appellant) (Respondent) ITA Nos.130/Alld./2017 Assessment Year: Block Period 01/04/1988 to 23/08/1998 M/s. Mahabir Prasad Agrawal (HUF) 77, Khuldabad Allahabad-211003, U.P. v. Asst. Commissioner of Income Tax, Central Circle, Aayakar Bhawan, Allahabad-211001, U.P. PAN:AAEHM2447M (Appellant) (Respondent) Appellant by: Shri R.C. Agrawal C.A. along withShri K.K. Srivastva, Adv. Respondent by: Shri Ramendra Kumar Vishwakarma, CIT DR Date of hearing: 15.03.2022 Date of pronouncement: 29.04.2022 ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 2 O R D E R PER Bench: These three appeals in ITA Nos.128,129 &130/Alld./2017 for the Block Period 01.04.1988 to 23.08.1998 , were filed by three different assessee’s namely Smt. Asha Agrawal, M/s. Mahendra Kumar Agrawal(HUF) and M/s. Mahabir Prasad Agrawal (HUF) respectively, and these three appeals are directed against three different appellate order(s) all dated 16.02.2017 in Appeal No(s).120/ACIT/R-II/ALLD/10-11, 114/ACIT/R-II/ALLD/10-11 and 116/ACIT/R- II/ALLD/10-11 respectively, all passed by learned Commissioner of Income Tax (Appeals), Allahabad (hereinafter called "the CIT(A)"),for Block Period 01/04/1988 to 23/08/1998, the appellate proceedings had arisen before learned CIT(A) from separate Block Period assessment order(s)all dated 30.05.2002 passed by learned Assessing Officer (hereinafter called "the AO") for Block Period 01.04.1988 to 23.08.1998 , under Section 158BC(c) read with Section 158BD of the Income-tax Act,1961(hereinafter called “ the Act”)respectively , with respect to all these three assessee’s . Since these three appeals involve similar issues and common grounds of appeal(s), these three appeals were heard together and are disposed off by this common appellate order. We have heard both the parties through physical hearing mode in Open Court. 2(a). First , we shall take up assessee’s appeal in ITA No. 128/Alld/2017, for Block Period 01.04.1988 to 23.08.1998. The grounds of appeal raised by assessee in her appeal in ITA No. 128/Alld./2017, for Block Period 01.04.1988 to 23.08.1998 in memo of appeal filed with Income-Tax Appellate Tribunal, Allahabad Bench , Allahabad(hereinafter called “ the tribunal”) , reads as under:- “1. Because the learned CIT(A) had erred in fact and law to pass the impugned order dated 16.02.2017 confirming the additions of Rs. 14,55,537 made by ACIT Central circle Allahabad whereas the fact is that the appeal order has already been passed by the then CIT(A), Allahabad by his order dated 28.09.2006 and he had ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 3 granted full relief and as such second order passed by CIT(A) dated 16.02.2017 is bad in law and against the principle of natural justice and the same deserves to be quashed. 2. Because the learned CIT(A) had erred in fact and law to pass the impugned order dated 16.02.2017 whereas the fact is that the departmental appeal dated 26.12.2006 is pending before the Income Tax Appeal Tribunal Allahabad for its disposal and as such second order passed by CIT(A) dated 16.02.2017 is bad in law and against the principle of natural justice and the same deserves to be quashed. , 3. Because the learned CIT(A) has erred in fact and law to reject the appeal of the appellant without considering the fact that the departmental appeal is pending before the ITAT. Even on merit, without considering the facts of the case and grounds of appeal taken on original appeal he has dismissed the appeal by taking the pretext one or other and as such the order passed by him on dated 16.02.2017 is erroneous, bad in law and against the principle of natural justice and the same deserves to be quashed. 4. Because the learned CIT(A) vide its order dated 16.02.2017 has mentioned in para no. 4.1 of his order that since the block return was filed late without seeking extension of time to file the return, the same is invalid return and as such mandatory notice u/s 143(2) of IT Act is not required to be issued which is his own thought and far from the facts and as such the order passed by the CTT(A) dated 16.02.2017 is erroneous, bad in law and against the principle of natural justice and the same deserved to be quashed. Without prejudiced to above, even if it is considered that the return was invalid, the assessing officer cannot pass any order on invalid return. 5. Because the departmental appeal dated 27.12.2006 is pending before this Hon'ble ITAT for hearing. 6. Because detailed submissions were made and the copies of the relevant documents were filed during the course of initial hearing, regarding merits of the case, the findings of the learned C1T (A) that' since no specific submissions were made before me in this regard' are contrary to the facts and material on record. 7. Because the Ld. CIT(A) has erred in law and on facts in confirming the following additions made by the Ld. Assessing Officer:- S.No Particulars Amount (Rs.) ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 4 1 Addition u/s 68 in AY 19964997 10,000 2 Addition u/s 69 in AY 1998-1999 as unexplained investment. 31,725 3 Addition in AY 1998-1999 as undisclosed income from share trading. 30,200 4 Addition in AY 1998-1999 as undisclosed brokerage income. 16,000 5 Addition in AY 1998-1999 as undisclosed interest income. 6,210 6 Addition u/s 69 in AY 1997-1998 as unexplained investment. 5,02,000 7 Addition u/s 69 in AY 1997-1998 as investment from unexplained source. 2,04,500 8 Addition u/s 69 in AY 1995-1996 as investment from unexplained source. 10,000 9 Addition u/s 69 in AY 1995-1996 as unexplained investment 5,50,000 10 Addition u/s 68 in AY 1991-1992 94,902 Total 14,55,537 8. Because the Ld. CIT(A) has erred in law and on facts in accepting the findings of the learned Assessing officer to the effect that- "after examination of seized books of accounts and documents the Joint Commissioner of Income Tax (Assessment) Special Range, Allahabad was satisfied that undisclosed Income as was recorded in some of such seized books of accounts pertained to M/s Agrawal Bros, and 9 others (petitioners in the writ) and he therefore recorded the reasons for initiating proceedings under section 158 BD of the IT Act, 1961 in all these 10 cases of the petitioners vide his satisfaction note dated 26.04.2000" and the proceedings that had been initiated vide notice dated 05.05.2000, where the proceedings under section 158 BD of the Act and accordingly time limit was available to pass the block assessment order till 31st May, 2002. 9. Because the Ld. CIT(A) has failed to appreciate and take note of vital facts , like; a) the Notice dated 05.05.2000 as had been issued by the Ld. Joint Commissioner of Income Tax (Asst.) Special Range , Allahabad , hereinafter referred to as 'JCIT' (who held the jurisdiction in the case of the appellant at ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 5 the relevant time) was clearly super scribed by the phraseology , "notice under section 158 BC of the Income -Tax Act 1961"; b) as in terms of the said notice ( super scribed as notice under section 158 BC), the time allowed for filling the return in Form 2B " within 16 days", the appellant had sought for extension of time in terms of letter dated 24th May, 2000, on grounds mentioned therein; c) in response to the said petition, the Ld. JCIT again directed the appellant, vide his communication dated 31st May , 2000 to file return in compliance with the “Notice issued u/ s 158 BC(a) of Income -tax Act 1961"; d) the appellant filed the return in prescribed Form No. 2 B on 16.08,2000 , 'under protest' , the ground of protest being , inter alia , that the assessee was never subjected to search under section 132(1). e) the said objection was reiterated vide letter dated 22.08.2000 addressed to the Ld. JCIT; f) at no stage of the proceedings , the appellant was ever informed that the proceedings had been initiated under section 158 BC , which would have been the instant response of the Ld. JCIT , to the appellant's objection that its case did not fall under sections 132(1) as there was no warrant of authorization in its case; g) simultaneous notices were issued, captioned as " Notice under section 158 BC of the Income-tax Act 1961" in all other cases ( even the cases where the block assessment order tinder section 158 BC had duly passed on 31.08.2000 " h) although, no Notice under section 143(2) was issued by the Ld. JCIT, even after the appellant had filed the Block return under protest in Form No. 2B, the appellant had duly appeared before the Assessing Officer (Id. JCIT) and there was not even a whisper, at any point of time , that the proceedings ( that had been going on before him) were the proceedings under section 158 BD ; i) even before filing the return on 16.08.2000, the counsel of the appellant had appeared in the other cases (in pursuance of which the satisfaction is stated to have been recorded on 26th April , 2000 ) and in case of the appellant itself, and there was not even slightest of inkling that the proceedings has been initiated under section 158 BD; and j) plethora of other material; ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 6 which led to the inescapable conclusion that no satisfaction as such was recorded on 26th April, 2000 and /or could be so recorded, so as to hold that the Notice dated 05.05.2000 was the notice under section 158 BD. 10. Because, even after expiry of the time limit for passing the block assessment order under section 158 BC (under which notice had been issued by the Ld. JC1T) on 31.08.2000 , the appellant was never informed that the proceedings had been initiated under section 158 BD, not even in response to the appellant's petition dated 03th October, 2000 when it had applied for copies of the order sheet entries and on a due consideration of this fact, as also totality of facts and circumstances of the case, it could not have been said or held that the proceedings by way of Notice dates 05.05.2000 had been initiated under section 158BD of the Act and time limit for completion of assessment there under was available upto 31st May, 2002. 11. Because the so called satisfaction , said to have been recorded on 26th April, 2000 by the Ld. Joint Commissioner of Income -tax constituted the , material which affect the very assumption of jurisdiction under section 158 BD and in the absence of the said material being made available to the appellant at the appropriate stage, the proceedings stood wholly vitiated and the time limit for contemplation of block assessment order , was liable to be held to have expired on 31.08.2000 itself and all the proceedings that have taken place thereafter (including the completion of block assessment Order on 31st May, 2000) are bad in law and accordingly deserved to be quashed. 12. Because the view taken by the Ld. C1T(A), to the effect that the proceedings had been initiated under section 158BD in consequence of the satisfaction recorded by the Ld. JCIT on 26th April, 2000, is wholly inconsistent with the material and information on record, and time limit for completion of block assessment order, was not available beyond 31st August, 2000. 13. Because the Ld. CIT(A) has erred in law and on facts in holding that there was merely an irregularly in issuing the requisite notice (for fling the block return) which stood saved by the provision of Section 292B and accordingly the assessment in the instant case, could be completed by 31st May, 2002. 14. Because there was inherent illegality in issuing the requisite notice and In assumption of jurisdiction to pass the block assessment order after 31st August, 2000 and provisions of section 292 B are not applicable. 15. Because the Ld. CIT(A) has erred in law and on facts in holding that the provisions of sections 143(2), were not applicable to the block assessment proceedings and non-issuance of the said notice within a period of one year from the date of filing the block return on 16.08.2000 (in compliance with the (Notice dated 05.05.2000 under section 158 BC) did not affect the jurisdiction to complete ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 7 the block assessment order within a period of two years, from the end of the month in which Notice dated 05.05.2000 had been issued. 16. Because the notice under section 143(2) was mandatory in nature and non issuance of the same within a period of one year from the month in which return had been filed in Form 2B i.e. August 2000, had the effect of terminating the proceedings with the expiry of August 2001 and the proceedings that were kept alive by issuing various Notices thereafter, are bad in law. 17. Because none of the aforesaid items of addition fall within the definition of undisclosed income as envisaged in Section 158B(B) of the I.T.Act 1961. 18. Because in any case various additions, as are comprised in the impugned block assessment order, are vitiated in law as the same have been made without giving the appellant a due and effective opportunity of being heard. 19. Because source of each and every investment as had been made by the appellant stood fully explained and various additions as mentioned at serial nos. (a) to (j) are wholly erroneous and even inconsistent with the material and information on record. 20. Because return for the assessment year 1998-99 had not fallen due on 23.08.1998 (which is the last date of the block period) and additions for sums aggregating Rs. 52,410.0Q( 30,200.00+16,000.00+6,210.00) are wholly erroneous. 21. Because the appellant is not liable for interest under section 158 BFA 22. Because the penalty proceedings under section 158 BF A (2) have wrongly been initiated. 22.(sic.23) Because the order appealed against is contrary to fact, law and principles of natural justice. 23.(sic.24) Because on the facts and circumstance of the case the appellant deserves full relief from the stage of Hon'ble Income Tax Appellate Tribunal. Full relief is sought for. 24.(sic.25) The appellant craves the right to add/modify/alter any others grounds of appeals during the course of hearing of the appeal. 2(b).The assessee has further raised following additional grounds of appeal , vide application dated 17 th June, 2021 filed before the tribunal, , as detailed hereunder:- ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 8 “7. Hence , the appellant with due permission of the Hon’ble Bench and after inspection of the relevant record, would like to raise the following “Additional Grounds of Appeal” which goes to the very root of the matter. In this regard the appellant seeks support from the judgment of Hon’ble Supreme Court in the case of NTPC Vs. Union of India reported in 229 ITR page 383 and Gedore Tools (P) Ltd. Reported in 238 ITR 268(Del). recorded “ADDITIONAL GROUNDS OF APPEAL” 1. Because after inspection of the Block Assessment file of Smt. Asha Agrawal and from the certified copy of "Order Sheet Entry" as provided by the Department, it is established beyond any doubt that there is no " Satisfaction Note" recorded in the case record of the appellant as required under section 158BD of the I.T.Act,1961 for proper assumption of jurisdiction by the Id. Assessing Officer before passing Block Assessment Order dated 30.05.2002. Hence, the Assessment Order dated 30.05.2002 as passed under section 158BC(c) stated to be read with Section 158 BD of the I.T.Act, 1961( for the first time written in the block assessment order) is also bad in law and without jurisdiction. 2. Because, the impugned appellate order dated 16.02.2017 as passed under section 250(6) confirming the said illegal block assessment order dated 30.05.2002 is also patently illegal, without jurisdiction and bad in law and, therefore, deserves to be quashed by this Hon'ble Court. The appellate order is also not sustainable for the reason that there is no application of mind by the Id. CIT(A) himself but simply relied upon the findings as recorded by the Assessing Officer on all the issues which is against the provisions of Section 250(6) of the I.T.Act,1961. 3. Because the time limit for completion of block assessment order was also liable to be held to have expired on 31.08.2000 itself and all the proceedings that have taken place thereafter (including completion of block assessment order dated 30.05.2002) is bad in law and accordingly deserves to be quashed by this Hon'ble Bench. 4. Because the view taken by the Id. CIT (A), to the effect that the proceedings had been initiated under section 158BD in consequence of the satisfaction recorded by the Id. JCIT on 26 th April, 2000, is wholly unsustainable as the same is against the material and information on record and the law laid down by the Hon'ble Apex Court as well as jurisdictional High Court, accordingly, such an illegal order deserves to be set-aside.” 2(c)The assessee has also further raised following additional grounds of appeal for Block Period 01.04.1998 to 23.08.1998 before tribunal, vide application dated 22.02.2022 filed with tribunal , as detailed hereunder : ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 9 “In the course of filing grounds of appeal before the Hon’ble Tribunal in the memorandum of Appeal the appellant could not raise the following grounds which goes to the very root of the matter. The Appellant has been advised by his counsel that the following grounds of appeal are very important for proper adjudication of the appeal before your honours. In this regard the appellant rely upon the judgment of Hon’ble Supreme Court in the case of NTPC Vs Union of India reported in 229 ITR 383 and Gedore Tools (P) Ltd. Reported in 238 ITR page 268(Del). Legal Grounds 25.(sic.26) Because the Ld. Commissioner of Income Tax(Appeals) , Allahabad was duty bound to adjudicate the appellant’s case in his order dated 16.02.2017 as per the provisions contained in section 250(6) of the Income Tax Act, 1961 which reads as under:- “........250(6) The order of the Commissioner(Appeals) disposing of the appeal shall be in writing and shall state the points for determination , the decision thereon and the reason for the decision.” The relevant portion of finding recorded by the CIT(A) on the aforesaid issue reads as under:- “Since no specific submissions have been made before me in this regard, I have no reasons to interfere with the detailed finding given by the A.O. These while making the impugned additions are based on the seized/search material . The addition so made are, therefore, confirmed.” 26.(sic.27) Because the Ld. CIT(A) failed to take into account the submission as made by the counsel before his Ld. Predecessor at the time hearing of appeal on 28.09.2006 which was still alive. Non-consideration and/or non-discussion of the same while confirming the additions in the impugned order dated 16.02.2017 amounts to denial of natural justice to the appellant. 27.(sic.28) Because the assessee was never served with any notice u/s 158BD by the assessing officer on the appellant consequently all the subsequent proceedings as flowing therefrom lacks jurisdiction and liable to be declared as illegal and void-abinitio by this Hon’ble Court. ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 10 28.(sic.29) Because the Ld. CIT(A) has failed to appreciate the fact that the addition as made by the Ld. AO is beyond the purview of the assessment completed u/s 158BC of the Act, as same is not based on any document/material found as a result of search , thus, the additions so made is beyond the scope of provisions of section 158BC and should have been deleted as such.” 3. The brief facts of the case are that there was a search and seizure operations conducted by the Revenue under Section 132(1) of the 1961 Act, on 23rd August, 1998 at various residential premises in the following cases, detailed as hereunder: Residential premises i. Sri Surendra Prasad Agarwal, Sri Mahendra Prasad Agarwal 447,Malviya Nagar, Allahabad. ii Sri Manoj Kumar Agarwal, K.P. Kakkar Road, Allahabad. iii. Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahabad ` iv. Sri Amar Nath Agarwal/ Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad v. Sri Pramod Kumar Agarwal, Zero Road, Allahabad vi. Sri Mahabir Prasad Agarwal, Roashan Bagh, Allahabad 3.2 The search operations under the provisions of Section 132(1) of the 1961 Act were also conducted by Revenue at the places where above noted person(s) were carrying out their business activities. During the course of search operation conducted by Revenue u/s 132(1) of the 1961 Act, various books of accounts and documents were found and seized by Revenue . The jurisdiction of the above cases were with the Joint Commissioner of Income Tax (Assessment)Special Range, Allahabad. After examination of the seized books of accounts and documents, the Joint Commissioner of Income-tax(Assessment), Special Range, Allahabad was satisfied that the undisclosed income as was recorded in some of such seized books of accounts pertained to the assessee,and he recorded the reasons for initiating proceedings under Section 158BD of the ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 11 1961 Act, in the case of the assessee vide his satisfaction note dated 26th April, 2000. Incidentally , the aforesaid Joint Commissioner of Income- tax(Assessment), Special Range, Allahabad who was the AO of the persons searched by Revenue u/s 132(1) on 23.08.2008 as detailed above in the preceding para’s of this order , was also the AO of the assessee.Thus, the AO of the persons searched by Revenue u/s 132(1) was also the AO of the assessee. The assessee was, however, not searched by Revenue 3.3 Notice dated 05.05.2000 under Section 158BC of the 1961 Act was issued by the AO viz. JCIT(Assessment), Special Range, Allahabad , to the assessee which was claimed by Revenue to have been served on the assessee , on 08 th May, 2000 , requesting assessee to file a true and correct return of total income including undisclosed income , for the Block Period ending on 23.08.1998 , within 16 days of service of notice. The assessee did not filed the return of income for the block period 01.04.1988 to 23.08.1998 within 16 days as provided in the notice dated 5th May, 2000 issued by the AO under Section 158BC of the 1961 Act, but rather the assessee moved an application on 24th May, 2000 seeking extension of time for filing of return of income for Block Period 01.04.1988 to 23.08.1998 . The AO was pleased to reject the aforesaid application of the assessee for grant of extension of time for filing of return of income for Block Period 01.04.1988 to 23.08.1998, vide letter dated 31st May, 2000, which was claimed by Revenue to have been served on the assessee on 5th of June, 2000. The assessee moved another application dated 1st June, 2000 seeking copy of seized material, copy of income-tax records etc.. The AO in reply vide letter dated 12th June, 2000 intimated to the assessee that copy of seized material had already been provided to the assessee, and so far as with regard to the certified copy of income-tax record , the AO requested assessee to furnish the Zerox copy of acknowledgement of receipt of the return of income filled by the assessee with the Revenue. The ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 12 assessee on its part did not furnish return of income for the Block Period. Thereafter, the AO issued detailed notice and a notice under Section 142(1) on 25th July, 2000 to the assessee, which was claimed by Revenue to have been served on assessee, on 26th July, 2000. The AO vide aforesaid notice raised various queries and the assessee was asked to give replies on every issue so raised by AO in the aforesaid notice. Subsequently, on 3rd August, 2000 return of total income including undisclosed income, for the block period 01.04.1988 to 23.08.1998 was filed by the assessee in the prescribed form, showing total undisclosed income of the assessee for Block Period 01.04.1988 to 23.08.1998 , at Rs. Nil. On 4th of August, 2000, the case of the assessee was partly heard by the AO, and the assessee vide letter dated 4th of August, 2000 raised objections to the proceedings so initiated by Revenue against the assessee. 3.4 . Thereafter, the case of the assessee was centralized by Revenue with ld. ACIT , Central Circle , Allahabad , vide order of ld. CIT, Allahabad , dated 03rd of October, 2001. The case of the assessee was , thereafter, fixed for hearing before Ld. ACIT, Central Circle , Allahabad , on 14th February , 2002. The assessee , on 14 th February, 2002 moved a petition dated 13 th February, 2002, wherein the assessee raised following issues: “i. the notice under section 158BC was issued on 5.5.2000. the return was filed on 3.8.2000. The assessment should have been completed by 31.8.2000 and since the block assessment was not completed by above date the present proceedings were wholly without jurisdiction. ii. Further in any case notice under section 143(2} was required to be issued within a period of one year from the end of the month in which return was filed and on that basis no notice under section 143(2} could have been issued after 31.08.2001. Since the statutory period had expired so no further proceedings could be taken up. Reliance was also placed on CBDT circular No.717 dated 14.08.95.” ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 13 3.5 On 14th Feb, 2002, the case of the assessee was discussed by the AO with assessee, and the AO vide order sheet entry dated 14.02.2002 asked the assessee to give replies to issues raised in the order sheet itself , and various books of accounts and seized annexures viz. A-11, A-145, A-150 and A-180 were confronted by AO to the assessee and clarifications were sought by AO from the assessee. Similarly , another Annexure A-109(page 24-29, 53 to 69) which was seized by Revenue from the residence of Shri Surendra Prasad Agrawal was also confronted to the assessee by the AO and clarifications were sought by AO from assessee. The case of the assessee was adjourned by AO to 27th Feb, 2002 . It was further adjourned to 15.03.2002 and 22.03.2002 at request, as there was no compliance on the part of the assessee. Fresh notice was issued by AO on 29.04.2002 fixing hearing on 03.05.2002 , but again there was no compliance by assessee on this date as no body attended on behalf of the assessee. However, on 07 th May, 2002 , Shri Sidharth Pathak, Advocate attended and reply dated 07 th May, 2002 was filed on behalf of the assessee. The AO discussed the case with ld. Counsel for the assessee. The AO asked assessee to produce Shri Ram Krishna Agrawal , to give confirmation of Shri Mahendra Agrawal and to give copy of pass book of Smt. Deepa and Sri Ashish , to whom the gifts were given by the assessee. The assessee was also directed by AO to give replies to all the queries as were made vide order sheet entry dated 14th February, 2002. The case was adjourned by AO to 09th May, 2002 . Nobody attended on behalf of the assessee on 09th May, 2002.Thus, the AO was left with no option but to complete the assessment on the basis of seized materials available with the AO, material available on record, various statements recorded at the time of search. The AO observed that throughout the course of assessment proceedings, the assessee never attended though specific directions were issued by AO that personal appearance was desired. The AO on 10th May, 2002 , issued Show Cause Notice(SCN) to the assessee which was claimed by Revenue to have been duly served on the assessee ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 14 proposing that the undisclosed income for the Block Period is proposed to be assessed as per SCN. The case was fixed by AO for hearing on 17 th May, 2002. The ld. Counsel for the assessee Shri Siddharth Pathak, Advocate attended on 17 th May, 2002 , wherein he filed letter dated 17th May, 2002 along-with copy of order of Hon’ble Allahabad High Court , dated 09th May, 2002 . From the perusal of the order of the Hon’ble Allahabad High Court, the AO observed that on 09th May, 2002, the assessee along-with 9 other persons of this group filed a writ petition before the Hon’ble Allahabad High Court which was decided by Hon’ble Allahabad High Court on 9th May, 2002 itself, and the order passed by Hon’ble Allahabad High Court , read as under: "the question of limitation raised by the petitioners shall be decided as a preliminary one before passing any further order in the proceedings pending before the Respondents. The Respondents shall dispose off the case after hearing the Writ Petitioners recording reasons. The Writ Petition stands disposed off with the above observations. It is made clear that - we have not adjudicated on merits and contentions raised in the Writ Petition. Sd/- C.J. Dated : 09.05.2002 Sd/- J.” 3.6. Thus, as can be seen from above, the assessee challenged the proceedings under Section158BC read with Section 158BD on the ground of limitation, and these issues concerning limitation are to be decided as preliminary issue by the AO before passing any further order of the proceedings pending with the AO , vide orders of Hon’ble Allahabad High Court dated 09 th May , 2002 The AO after considering the objections raised by the assessee on the issue of limitation , disposed off such objections vide order u/s 158BE of the 1961 Act , dated 28.05.2002 , which is reproduced as hereunder: “OFFICE OF THE ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL) ALLAHABAD ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 15 Name and address of the assessee: Smt. Asha. Agrawal Status: Individual Block Period 01.04.88 to 23.08.98 Time limit for completion of block assessment- Section 158 BE of the I.T. Act- Order regarding issue of limitation as per directions of Hon'ble High Court Of Allahabad in civil Misc. writ petition No. 1708 of 2002- M/s Agrawal Brothers and nine others, Vs AC1T (C.C.), Allahabad ---------------------------------------------------------------------------------------------------------------------- Dated : 28-5.2002 M/s Agrawal Bros., 174, Meerganj, Allahabad and 9 others had filed a combined writ before the Hon'ble High court of Allahabad vide civil Misc. writ petition No. 1708 of 2002. The above writ petition was decided by the Hon'ble High Court on 9.5.2002 and the orders are as under :- “Heard Sri Rajesh Kumar, Ld. Advocate for the petitionersand Sri S. Chopra. Ld. Standing counsel for the respondent. The question of limitation raised by the petitioners shall be decided as a preliminary one before passing any further order in the proceedings pending before the Respondents. The Respondents shall dispose off the case after hearing the Writ Petitioners recording reasons. The Writ Petition stands disposed off with the above observations. It is made clear that we have not adjudicated on merits and contentions raised in the Writ Petition.'' Sd/-C.J. Sd/- J. Dated : 09.05.2002 In view of the above directions of the Hon'ble High Court, the issue of limitation was discussed with Sri Siddhartha Pathak, Advocate for the petitioners. In fact, the petitioners had inter-alia pleaded before the hon'ble High Court that proceedings initiated u/s 158BC of the I.T. Act dated 05.05.2000 was barred by limitation and it was also pleaded that since no notice u/s 143(2) was issued within one year from the filing of the return so the proceedings were barred by limitation. In fact during the course of block assessment proceedings also the assessee had raised following objections vide his application dt. 13.02.2002 filed on 14.02.2002: I. The notice under Section 158BC was issued on 5.5.2000. the return was filed on 3.8.2000. The block assessment, on the basis of notice under Section 158BC, should have been completed by 31.8.2000 and since the block assessment was not completed by above date the present proceedings were wholly without jurisdiction. ii. Further in any case notice under section 143(2) was required to be issued within a period of one year from the end of the month in which return was filed and on that basis no notice under section 143(2) could have been issued after 31.08.2001. Since, the statutory period had expired so no further proceedings could be taken up, Reliance was also placed on CBDT circular No.717dntcd 14.08.95. ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 16 The case was discussed at length with Sri Siddhartha Pathak, Advocate, Authorized representative for the assessee/ petitioners. In fact, it is seen that the correct facts were not brought even, before, the Hon'ble’ High Court. Section 158 BC of the I.T. Act reads as under:- " Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132 A In the case of any person, then,- (a) the Assessing Officer shall - (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) In respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but nor more than forty five days, as may be specified in the notice a return in the prescribed form and verified In the same manner as a return under clause (i) of sub section (1) of section 142, setting forth his total income including the undisclosed income for the block period; Provided that no notice under section 148 Is required to be issued for the purpose of proceeding under this chapter.: Provided further that a persons who has furnished a return under this clause shall not be entitled to file a revised return; (b) the A.O shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158 BB and the provisions of section 142, sub sections (2) and (3) of section 143 and section 144 shall so far as may be, apply; (c)the A.O. on determination of the undisclosed income of the block period in accordance with this chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) the assets seized under section 132 or requisitioned under section 132A shall be retained to the extent necessary and the provisions of section 132B shall apply subject to such modifications as may be necessary and the reference to “regular assessment" or “reassessment" In section 132B shall be construed as references to "block assessment". So section 158 BC of l.T. Act is very clear that it comes into play in a case where a search had been conducted u/s 132 etc. The assessee is fully aware that in his case no warrant was issued u/s 132(1) of the I.T. Act. In fact Search and seizure action U/S 132(1) of the Income Tax Act, 1961, was conducted on 23.08.98 at various premises pertaining to Sri Surendra Prasad Agrawal Group of cases and warrant under Section 132(1) of the I.T. Act were issued in following cases : Residential Premises ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 17 (i) Sri Surendra Prasad Agrawal, Sri Mahendra Prasad Agarwal 447, Malgviya Nagar, Allahabad. (ii) Sri Manoj Kumar Agarwal, K.P. Kakkar Road, Allahabad. (iii) Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahabad. (iv) Sri Amar Nath Agarwal/Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad. (v) Sri Promod Kumar Agarwal, Zero Road, Allahabad (vi) Sri Mahabir Prasad Agarwal, Roshan Bagh, Allahabad. Search was also conducted at the places where above noted persons were carrying out their business activities. During the course of search various books of accounts and documents were found and seized. The jurisdiction over these case lied with Joint Commissioner of Income- tax,(Assessment)Special Range , Allahabad. After examination of seized books of accounts and documents the Joint Commissioner of Income-tax,(Assessment) Special Range, Allahabad was satisfied that undisclosed income as was recorded in some of such seized books of accounts pertained to M/s Agrawal Bros, and 9 others ( petitioners in the writ) and he therefore recorded the reasons for initiating proceedings under section 158BD of the l. T. Act ,1961 . In all these 10 cases of the petitioners vide his satisfaction note dated 26.04.2000. Notice under section 158BC of l.T. Act was, accordingly, issued on 5.5.2000 and was served, with the request to file a true and correct return of total income including undisclosed Income within 16 days of service of notice . The assessee moved application dated 01.06.2000 seeking copy of seized materials, copy of Income-tax records etc. In reply vide letter dated 12.06.2000 it was intimated to assessee that copy of seized material had already been provided and with regard to certified copy of Income-tax records he was requested to furnish zerox copy of acknowledgement receipt of returns filed by her. The assessee did not furnish the return for the block period. Thereafter detailed notice and notice under section 142(1) was issued and , subsequently on 16.8.2000 return for block period was filed showing total undisclosed income at NIL Thus it is clear that the proceedings were initiated u/s 158 BD of the l.T. Act on the basis of seized materials which were found and seized during the course of search initiated in the cases as noted above. Section 158BD of l.T. Act is very clear and it speaks that where the A.O is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 or whose books of account or other documents or any asset were requisitioned u/s 132A then, such books of account or assets etc. shall be handed over to the A.O having jurisdiction over such other person and that A.O shall proceed against such other persons and the provisions of this chapter shall applied accordingly. Presently in these cases the jurisdiction vested with the same A.O namely Joint C.I.T., (Assessment) Special Range, Allahabad who had initiated proceedings u/s 158 BD of l.T. Act The Act does not envisage that notice has to be issued under section 158 BD itself. The Act only provides that the provisions of chapter XIV B shall apply accordingly. In the cases under consideration notices were duly issued and these were captioned as notice u/s 158 BC of the I.T. Act. The assessee has proceeded on the wrong presumption that since, notices were issued u/s 158 BC of the I.T. Act so these were barred by the limitation as the date of original search was 23.08.98.In this connection attention is invited to the judgment delivered by Hon'ble ITAT, Madras A-Bench in the case of L. Saroja Vs. A.C.I.T. (Madras) reported at 71 TTJ ( 2001) in which it has been held that once section 158 BD is invoked , the only notice to be given ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 18 to such person or persons would be u/s 158 BC and non mentioning of section 158 BD in the notice u/s 158BC issued to a person or persons in consequence of search of another person is not fatal to assumption of jurisdiction. Since the notice u/s 158BC were issued on 05.05.2000, so the limitation to complete block assessment expires on 31.5.2002. The contention of the assessee that the proceedings are barred by limitation is therefore has no merit and is rejected. Discussion on the issue of notice under Section 143(2) of the I.T. Act. The second contention of the assessee is that no notice u/s 143(2) was issued within the period of 12 months from the end of the month in which the return is furnished. The assessee in this context has invited attention to Boards circular No. 717 of 14.05.1995 also. This circular provides that the A.O. shall proceed to determine the undisclosed income of the block period and the provisions of the Section 142, sub section 2 and 3 of Section 143 and 144 shall apply accordingly. I have considered the contention of the assessee in this regard also. Section 143 (2) provides as under “(2) where a return has been made under Section 139, or in response to a notice under Sub Section (1) of the Section 142, the A.O. shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.’ So section 143 (2) mainly applies where return of income is filed u/s 139 or in response to a notice u/s 142(1). Presently in the cases under consideration notice was issued u/s 158 BC of l. T. Act (invoking section 158 BD of l. T. Act) for filing return of undisclosed income for the block period. Even the return of undisclosed income as was filed by the assessee was beyond the time limit as was provided by the A.O as was specified in the notice u/s 158 BC of I.T. Act. Apart from this, section 158 BC(b) of I.T. Act is again very specific that the provisions of section 142, sub section 2 and 3 of section 143 and section 144 shall, so far as may be, apply. So presently in this case there is no infringement of law by not issuing notice u/s 143 (2) within the period of 12 months from the end of the month in which the return of block income was filed. Notwithstanding, notice u/s 143(2) was issued in this case on 24.01.2002 and served on 06.02.2002. Further more, the above view gets strength from the provisions of section 292-B of the I.T. Act where it has been specifically emphasized that any proceedings under I.T. act will not be invalid merely by reason of any mistake in notice etc. The intent and purpose should be inconformity with the provisions of the I. T. Act. The language of section 292B is reproduced here under: ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 19 '292-B --No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act'. Further non issue of notice under section 143(2) of the I.T. Act within the 12 month from the end of the month in which return was filed does not effect the legality of the Block Assessment Proceedings. In view of the above discussion the contention of the assessee that block assessment proceedings has become barred by limitation is rejected. Hence, I proceed to complete the block assessment proceedings in the case of the assessee under section I58BC of the IT Act read with section 158BD of the I.T. Act. (S.K.Sarkar) Asstt. Commissioner of Income Tax(Central Circle) Allahabad Copy to the assessee. Sd/- ACIT(Central Circle), Allahabad” 3.7 So far as show cause notice dated 10 th May, 2002 issued by the AO ( placed in paper book filed on 22 nd February, 2021 by assessee, on Page No. 20-21), the assessee chose not to file any reply whatsoever before the AO . The AO observed that the assessee has nothing to say on merits and is agreeing on the proposed additions as per SCN , dated 10.05.2002. These additions were mainly proposed by the AO based on the seized material . The AO was constrained to make the additions to the income of the assessee on merits to the tune of Rs. 14,55,537/- as undisclosed income for the block period 01.04.1988 to 23.08.2008 under various heads, vide Para No. 8 to 17 of the assessment order dated 30.05.2002 passed by the AO u/s 158BC(c) read with Section 158BD of the 1961 Act. The additions as were made by AO on the merits of the issue in the assessment order dated 30.05.2002 , are summarized hereunder: a) An addition of Rs. 10,000/- was made by the AO with respect to credit appearing in the name of Sri Ram Krishna Agarwal as the assessee could not ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 20 demonstrate compliance of Section 68 of the 1961 Act. The AO asked assessee to produce Sri Ram Krishna Agarwal , but the assessee failed to produce him before the AO. The assessee also did not submit any reply with respect to the aforesaid credit of Rs. 10000 in the name of Shri Ram Krishna Agarwal, which led AO to invoke provision of Section 68 and make addition to the income of the assessee as undisclosed income for ay:1996-97 under Chapter XIVB of the 1961 Act, vide Block Period assessment order dated 30.05.2002. b) The AO made addition of Rs. 31,725/- being difference between the cost of property purchased by assessee at Malviya Nagar, Allahabad as is reflected in her Balance Sheet as at 31.03.1998, and the costs arrived at by the AO after considering the expenses on registration of aforesaid property as are recorded in the Seized material A-109,page 24 to 29 , page 53 to 69 , which as per AO is to be further enhanced by registration charges 2% of the purchase price of the property not recorded in the amount declared in the Balance Sheet as at 31.03.1998, which led to total additions to the income of the assessee to the tune of Rs. 31,725/- being undisclosed income under Chapter XIVB of the 1961 Act , for assessment year(ay) :1998-99 by the AO by invoking provisions of Section 69 of the 1961 Act, vide Block Period assessment order dated 30.05.2002 . c)The AO made addition of Rs. 30,200/- towards profit made on the difference between purchase price and sale price of investments in shares trading , being undisclosed income for ay:1998-99 under Chapter XIVB of the 1961 Act added to income of the assessee by invoking provisions of Section 69 of the 1961 Act, vide Block Period assessment order dated 30.05.2002.The additions were made by AO based on seized material A-11, page 4-6. The AO noted in the assessment order based on afore-stated seized material that the assessee did not invested in shares but earned the differential profits on share trading. The AO noted in the assessment order that the assessee did not file any reply on this issue.The AO ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 21 also noted that the return for ay: 1998-99 was not filed in time and hence the same is treated as non-est. d) The AO made addition of Rs. 16,000/- being brokerage income earned by the assessee which was not disclosed by the assessee, which stood added to the income of the assessee as an undisclosed income for ay: 1998-99 by the AO under Chapter XIVB of the 1961 Act,vide Block Period assessment order dated 30.05.2002. e) The AO made addition of Rs. 6,210/- being interest income earned by the assessee which was not disclosed by the assessee, which stood added to the income of the assessee as an undisclosed income for ay: 1998-99 by the AO under Chapter XIVB of the 1961 Act,vide Block Period assessment order dated 30.05.2002. f) The AO made addition of Rs. 5,02,000/- (Rs. 52,000/- + Rs. 60,000/- + Rs. 13,000/- + Rs. 60,000/- + Rs. 60,000/- + Rs. 2,57,000/- ) to the income of the assessee as undisclosed income for ay: 1997-98 under Chapter XIVB of the 1961 Act by invoking provisions of Section 69 of the 1961 Act , as the assessee could not explain the sources of investment made , vide Block Period assessment order dated 30.05.2002. The AO noted that the assessee has received brokerage income of Rs.16,155/- from Paced Capital Investment Consultant as per page 14 of seized annexure A-11, on these investments . The AO also observed that the assessee could not explain identity, creditworthiness and genuineness of the persons in whose name the investments were made. g) The AO made addition of Rs. 2,04,500/- to the income of the assessee as undisclosed income under Chapter XIVB of the 1961 Act for ay: 1997-98 by invoking provisions of Section 69 of the 1961 Act , as the assessee could not explain the sources of fixed deposit being unexplained deposits made by the assessee in the name of different persons, vide Block Period assessment order ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 22 dated 30.05.2002. The AO noted that the assessee has received brokerage of Rs.10,225/- from Goel Financial AIDs INC , Allahabad for fixed deposits procured by assessee, but the assessee did not quantified the amount and the names of persons in whose name the fixed deposit were made as per page 17 of seized annexure A-11 . The AO also observed that the assessee did not give any reply on this issue, which led AO to make addition in the hands of the assessee to the tune of Rs. 2,04,500/- u/s 69 of the 1961 Act as undisclosed income for ay: 1997-98 by invoking Chapter XIVB of the 1961 Act. h) An addition of Rs. 10,000/- was made by the AO to the income of the assessee as an undisclosed income under Chapter XIVB of the 1961 Act for ay: 1995-96 with respect to loan in the name of Shri Mahendra Kumar Agarwal by invoking provisions of Section 69 of the 1961 Act, as the assessee did not submit any reply before the AO as also the AO asked the assessee to file confirmation from Shri Mahendra Kumar Agarwal which was also not submitted by the assessee before the AO, vide Block Period assessment order dated 30.05.2002 . i) The AO made addition of Rs. 5,50,000/- to the income of the assessee as undisclosed income under Chapter XIVB of the 1961 Act for ay: 1995-96 by invoking provisions of Section 69 of the 1961 Act as an unexplained investment as it was observed by the AO as per seized material A-11, page 56 that the assessee made investment of Rs. 5,50,000/- in the PNB MF ELSS and PNB MF Premium Plus , of which sources could not be explained and also that the assessee did not give any reply before the AO despite being specifically asked by the AO, the additions of Rs. 5,50,000/- to the income in the hands of the assessee were made by the AO as undisclosed income under Chapter XIVB of the 1961 Act , vide Block Period assessment order dated 30.05.2002. j) An addition of Rs. 94,902/- (Rs. 50,000/- + Rs. 44,902/- ) was made by the AO to income of the assessee being undisclosed income for ay: 1991-92 with ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 23 respect to non-explanation of sources of credit of Rs. 50,000/- and Rs. 44,902/- as appearing in seized material ( page 6 of seized annexure A-180) , which was alleged by AO to be received by assessee in cash from M/s. M. K. Brothers. On being asked by the AO to give assessment particulars of M/s. M.K. Brothers, the assessee submitted vide reply dated 07.05.2002 that she is not concerned with this concern namely M/s M.K. Brothers , which led AO to make aforesaid additions as in view of the AO , the reply of the assessee is evasive. 4.1 Aggrieved by Block Period Assessment order dated 30.05.2002 passed by AO under the provision of Section 158BC(c) read with Section 158BD of the 1961 Act, the assessee filed first appeal before ld. CIT (A) . The Ld. CIT(A) passed an appellate order dated 28.09.2006 in appeal No. 40/ACIT/CC/Alld/ 2003-04 , wherein Ld. CIT(A) quashed the Block Period assessment order dated 28.09.2006. It is pertinent to mention here that this appellate order was passed by Shri R. K. Jain on 28.09.2006, who has claimed to be holding charge of CIT(A) , Allahabad, but as we see later in this order that he infact did not held the charge of CIT(A), Allahabad, on 28 th September , 2006, when he passed the said appellate order . 4.2 Thereafter, at the behest of Revenue in a connected matter in the case of ITA No. 14 of 2008 titled Dr. Vinod Kumar Rai v. ITAT , Allahabad & others ii) ITA No. 476 of 2007 titled Sri Subhash Chandra Kesarwani v. ITAT , Allahabad (302 ITR 148), the Hon’ble Allahabad High Court passed judgment and order dated 14 th March, 2008( reported in (2008) 302 ITR 148(All. HC) ) wherein Hon’ble Allahabad High Court observed that ld. CIT(A) namely Shri R.K.Jain who was holding charge of CIT(A), Allahabad was transferred to CIT, ITAT, Allahabad, by Ministry of Finance , Government of India, Department of Revenue, New Delhi , vide orders dated 31.05.2006. The said Shri R K Jain approached Hon’ble Central Administrative Tribunal(In short “CAT”) . The Hon’ble Allahabad High Court observed that the said Shri R K Jain representation before Central Board of Direct Taxes(in Short “ CBDT”) ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 24 submitted in pursuance of direction of Hon’ble CAT , was dismissed by CBDT , vide orders dated 22.09.2006 which was served on him on 26.09.2006. On the same day successor in office Shri Assem Kumar assumed charge as CIT(A), Allahabad, which led to inference that order of transfer dated 31.5.2006 became operative after rejection of the representation of the then CIT(A), Shri R K Jain i.e. on and after 22.9.2006 , or at least when the said order was communicated to him i.e. 25.09.2006 , and since then he had no authority or jurisdiction to function as CIT(A) , Allahabad . Instead he was obliged to assume his duty as CIT, ITAT , Allahabad where he was transferred . The Hon’ble Allahabad High Court held in the matter before it that , on 03.10.2006 , when Shri R K Jain passed appellate order as CIT(A), he did not had the jurisdiction whatsoever to function as CIT(A), Allahabad. 5. Since, the appellate order u/s 250(6) of the 1961 Act, dated 28.09.2006 passed by the aforesaid Shri R K Jain claiming to be CIT(A), Allahabad in the case of the instant assessee, in the view of Department , was a nullity in-limine, and therefore the then officer who was holding the position as ld. CIT(A) proceeded to pass fresh appellate order dated 16th February, 2017 in ITA no. 120/ACIT/R-II/Alld/10-11 u/s 250 of the 1961 Act. The ld. CIT (A) after hearing the assessee vide appellate order dated 16 th February, 2017 held that the so called appellate order passed by Shri R K Jain claiming to be CIT(A), Allahabad in the case of instant assessee was a nullity in-limine. The ld. CIT(A) further held that the impugned proceedings in the instant cases were in- fact proceedings u/s 158BD of the 1961 Act , and the proceedings were initiated against the assessee through the issue of notice u/s 158BC of the 1961 Act . The ld. CIT(A) observed that merely not mentioning the fact that the said notice was issued read with Section 158BD, would not vitiate the proceedings. Reference was made by ld. CIT(A) to the decision of Madras- tribunal in the case of L Saroja v. ACIT 71 TTJ(2001) ((2001) 76 ITD 344(Mad.-trib.), as the Ld. CIT(A) observed that satisfaction was duly recorded by the AO on 26.04.2000 , the conditions for issue of notice was duly fulfilled. ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 25 Thus, the ld. CIT(A) upheld the notice dated 05 th May, 2000 issued by the AO u/s 158BC and also upheld that the said notice was issued by AO with in the limitation period prescribed under the statute . So far as the grievance of the assessee that notices under Section 143(2) was not issued within the prescribed time, the ld. CIT(A) observed that the notice u/s 158BC was issued on 05.05.2000 by AO requesting the assessee to file return of total income including undisclosed income for the Block Period 01.04.1988 to 23.08.1998 in prescribed form , within 16 days of service of notice. The assessee did not file the return of total income including undisclosed income for Block Period 01.04.1988 to 23.08.1998 ,within the stipulated time and the AO had initiated the assessment proceedings by issuance of notice u/s 142(1) of the 1961 Act, dated 25.07.2000. The assessee filed its return of total income including undisclosed income for block period 01.04.1988 to 23.08.1998 , on 16.08.2000. The ld. CIT(A) observed that the assessee did not filed its return of total income including undisclosed income for block period within 16 days of service of notice nor any extension of time for filing of return of total income including undisclosed income for Block Period was sought nor extension of time for filing of return of total income including undisclosed income for Block Period was granted by the AO . The ld. CIT(A) observed that the assessee’s return of total income including undisclosed income filed was not a valid return of income. The ld. CIT(A) observed that the mandatory notice u/s 143(2) is to be issued only when a valid return of income has been filed by the assessee and since, in the instant case, no valid return of income was filed, there was no requirement to issue notice u/s 143(2) of the 1961 Act. So far as the issues of additions so made by the AO on merits are concerned , the ld. CIT(A) observed that since the assessee has not made any submissions before him on merits of the additions to the income made by the AO, there is no reasons for him to interfere with the detailed findings given by the AO . The ld. CIT(A) observed that the additions were made by AO based on the incriminating material found and seized during the course of search ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 26 operations conducted by Revenue u/s 132(1), and the additions as were made by the AO stood confirmed by ld. CIT(A). 6. Aggrieved by an appellate order dated 16 th February, 2017 passed by ld. CIT(A) u/s 250(6) of the 1961 Act, the assessee has come in an appeal before the tribunal. The appeal was heard in physical hearing mode by Division Bench of Allahabad-tribunal in the Open Court. The Ld. Counsel for the assessee opened arguments before the Division Bench of the tribunal and submitted that search operations were carried on by Revenue u/s 132(1), on 23 rd August, 1998 , in the Case of Sri Surendar Prasad Agrawal and other persons.The ld. Counsel for the assessee submitted that the assessee was not searched by Revenue . The Ld. Counsel for the assessee also submitted before the Bench that additional grounds of appeal has been filed by the assessee , and prayers were made to admit these additional grounds of appeal raised by assessee. The ld. Counsel for the assessee submitted that it transpired only after inspection was carried out by the assessee of the records that that there was no satisfaction note recorded by Revenue before invoking provisions of Section 158BD of the 1961 Act. The ld. Counsel for the assessee submitted that no notice under Section158BD was issued by AO. It was submitted that the Department is not able to provide satisfaction note recorded before invoking provision of Section 158BD read with Section 158BC of the 1961 Act. The ld. Counsel for the assessee submitted that order-sheet entries as recorded by Department are placed on record which clearly reveals that no satisfaction note was prepared by Revenue (Placed at Page No. 9 to 12 of the paper book filed on 17 th June, 2021).The Ld. CIT-DR submitted in rebuttal that Department has filed a reply of the AO , dated 23.12.2021 , on 15 th March, 2022 with tribunal that satisfaction notes is not traceable and the same is not readily available, while effort is still made to trace the same. The ld. CIT DR submitted that the matter is very old around 22 years as the satisfaction was recorded by the AO of the searched persons, on 26 th April, 2000, which is discernible from this fact being recorded in the assessment order itself . The ld. CIT DR drew our attention to the assessment order , ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 27 dated 30 th May, 2002 , wherein factum of recording of satisfaction note on 26.04.2000 is clearly stated, but however it is submitted by ld. CIT-DR that now after twenty two years when the assessee has asked for the satisfaction note to be produced, the same is not readily traceable / available in the file as the matter being very old. On being asked by the Bench, the Ld. Counsel for the assessee submitted that this ground of not recording of satisfaction note was raised before ld. CIT(A) , vide ground number 1. It was submitted by ld. Counsel for the assessee that no reasons for initiating proceedings u/s 158BD are recorded in the assessment order. It was submitted by ld. Counsel for the assessee that assessment order passed by AO was barred by limitation. It was submitted that the assessee was confronted with seized material. The ld. CIT DR submitted in rebuttal that the issue of non recording of satisfaction note was not raised by assessee earlier , and it is now raised for the first time before the tribunal. It was also submitted by ld. CIT DR that the additions were made based on seized material found during the course of search operations conducted by Revenue u/s 132(1) of the 1961 Act. The ld. Counsel for the assessee fairly submitted that the AO who claimed to have recorded satisfaction as stated in assessment order was the same AO of the persons who were searched by Revenue u/s 132(1) , as well he was the also the AO of the assessee. Later on the jurisdiction of the assessee was transferred to a different AO . The ld. Counsel for the assessee relied upon the judgment and order of Hon’ble Allahabad High Court in the case of CIT v. Anil Kumar Chadha in ITA no. 86 of 2011, dated 18 th February, 2015 . The ld. Counsel for the assessee drew our attention to order sheet entry and submitted that there is no mention of Section 158BC/158BD in the said order sheet entry. The ld. Counsel for the assessee relied upon following judgment and orders to support its contentions, as under: a) Hon’ble Supreme Court judgment and order dated 24.04.2018 in the case of Tapan Kumar Dutta v CIT , in Civil Appeal No. 2014 of 2007 ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 28 b) Judgment and order dated 07.08.2014 of Hon’ble Delhi High Court in the case of Pepsi Foods Private Limited v. ACIT, in W.P. (C) 415/2014 & CM 823/2014 & Ors. c) Judgment and order dated 30.05.2011 of Hon’ble Delhi High Court in the case of CIT v. Radhey Shyam Bansal & Ors., in ITA no. 582/2008 & Ors.. d) Judgment and order dated 02 nd December, 2014 of Hon’ble Karnataka High court in the case of CIT v. Srinivasa & Brothers , in ITA no. 817 of 2009. 6.2 The ld. Counsel for the assessee next raised the contention that no notice u/s 143(2) was issued by the AO within the limitation period and hence the entire proceedings are bad in law. The ld. Counsel for the assessee relied upon the decision of Hon’ble Supreme Court in the case of ACIT v. Hotel Blue Moon(2010)321 ITR 362(SC). It was submitted that return of income for the block period was submitted on 03.08.2000, while notice u/s 143(2) was issued on 24.01.2002, which is clearly barred by limitation. The ld. Counsel for the assessee submitted that issue of limitation of issuance of notice u/s 143(2) was decided by AO, by passing order u/s 158BE, vide order dated 28.05.2002. The said order is placed in paper book filed with tribunal on 22.02.2021 with tribunal, at page number 16-19. 6.3 The ld. CIT DR pointed out that notice u/s 158BC was issued by AO on 05.05.2000, directing assessee to file return of income for block period , within 16 days of service of notice . The assessee did not file return of income for Block Period in the time provided in the notice. Notice u/s 142(1) was issued by AO on 25.07.2000. The assesse filed return of income for Block Period , on 03.08.2000. It was submitted that return of income for Block Period was not filed by assessee, in time. 6.4 The ld. Counsel for the assessee submitted that cryptic non speaking appellate order was passed by ld. CIT(A) . Reference was drawn to provisions of Section 250(6) of the 1961 Act. It was submitted that no purpose is going to be served by setting aside the ld. CIT(A) appellate order, as almost twenty two years have now passed since notice u/s ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 29 158BC was issued by Revenue . No arguments were advanced by ld. Counsel for the assessee even before us, on merits of the additions to income, as similar findings are coming from the orders of both the authorities below viz. the AO and ld. CIT(A), that the assessee has chosen not to give any replies on the merits of the issues on which additions were made by the AO. 6.5 The ld. CIT-DR submitted that assessment records are available with the department , but only satisfaction note is not available. 7. We have heard both the parties and perused the material on record. The brief facts of the case are that there was a search and seizure operations u/s 132(1) conducted by Revenue against Surendra Prasad Agrawal group of cases , on 23.08.1998. The aforesaid search and seizure operations conducted by the Revenue under Section 132(1) of the 1961 Act, on 23rd August, 1998 at various residential premises in the following cases, detailed as hereunder: Residential premises i. Sri Surendra Prasad Agarwal, Sri Mahendra Prasad Agarwal 447,Malviya Nagar, Allahabad. ii Sri Manoj Kumar Agarwal, K.P. Kakkar Road, Allahabad. iii. Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahabad ` iv. Sri Amar Nath Agarwal/ Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad v. Sri Pramod Kumar Agarwal, Zero Road, Allahabad vi. Sri Mahabir Prasad Agarwal, Roashan Bagh, Allahabad The search operations under the provisions of Section 132(1) of the 1961 Act were also conducted by Revenue at the places where above noted person(s) were carrying out their business activities. During the course of search operation conducted by Revenue u/s 132(1) of the 1961 Act, various books of accounts and documents were found and seized by Revenue . The jurisdiction of the above cases were with the Joint Commissioner of Income Tax (Assessment)Special ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 30 Range, Allahabad. After examination of the seized books of accounts and documents, the Joint Commissioner of Income-tax(Assessment), Special Range, Allahabad was satisfied that the undisclosed income as was recorded in some of such seized books of accounts pertained to the assessee,and he recorded the reasons for initiating proceedings under Section 158BD of the 1961 Act, in the case of the assessee vide his satisfaction note dated 26th April, 2000. Incidentally , the aforesaid Joint Commissioner of Income- tax(Assessment), Special Range, Allahabad who was the AO of the persons searched by Revenue u/s 132(1) on 23.08.2008 as detailed above in the preceding para’s of this order , was also the AO of the assessee.Thus, the AO of the persons searched by Revenue u/s 132(1) was also the AO of the assessee. The assessee was, however, not searched by Revenue. Notice dated 05.05.2000 under Section 158BC of the 1961 Act was issued by the AO viz. JCIT(Assessment), Special Range, Allahabad , to the assessee which was claimed by Revenue to have been served on the assessee , on 08 th May, 2000 , requesting assessee to file a true and correct return of total income including undisclosed income , for the Block Period ending on 23.08.1998 , within 16 days of service of notice. The assessee did not filed the return of income for the block period 01.04.1988 to 23.08.1998 within 16 days as provided in the notice dated 5th May, 2000 issued by the AO under Section 158BC of the 1961 Act, but rather the assessee moved an application on 24th May, 2000 seeking extension of time for filing of return of income for Block Period 01.04.1988 to 23.08.1998 . The AO was pleased to reject the aforesaid application of the assessee for grant of extension of time for filing of return of income for Block Period 01.04.1988 to 23.08.1998, vide letter dated 31st May, 2000, which was claimed by Revenue to have been served on the assessee on 5th of June, 2000. The assessee moved another application dated 1st June, 2000 seeking copy of seized material, copy of income-tax records etc.. The AO in reply vide letter dated 12th June, 2000 intimated to the assessee ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 31 that copy of seized material had already been provided to the assessee, and so far as with regard to the certified copy of income-tax record , the AO requested assessee to furnish the Zerox copy of acknowledgement of receipt of the return of income filled by the assessee with the Revenue. The assessee on its part did not furnish return of income for the Block Period. Thereafter, the AO issued detailed notice and a notice under Section 142(1) on 25th July, 2000 to the assessee, which was claimed by Revenue to have been served on the assessee, on 26th July, 2000. The AO vide aforesaid notice raised various queries and the assessee was asked to give replies on every issue so raised by AO in the aforesaid notice. Subsequently, on 3rd August, 2000 return of total income including undisclosed income, for the block period 01.04.1988 to 23.08.1998 was filed by the assessee in the prescribed form, showing total undisclosed income of the assessee for Block Period 01.04.1988 to 23.08.1998 , at Rs. Nil. The complete reference to proceedings before the AO are enumerated in detail by us in the preceding para’s 3.4 to 3.7 of this order, which are not repeated again to avoid duplication. The AO finally passed assessment order dated 30 th May, 2000 , u/s 158BC(c) read with Section 158BD of the 1961 Act, computing undisclosed income of the assessee under Chapter XIV-B of the 1961 Act for the Block Period 01.04.1988 to 23.08.1998, at Rs. 14,55,537/-. The AO also passed an order u/s 158BE (reproduced in para 3.6 above in this order and is not repeated to avoid duplication) holding that the Block Period Assessment Order , can be passed within 2 years from the end of the month in which notice u/s 158BC , dated 05 th May, 2000 was issued to the assessee. The AO also held that the return of total income including undisclosed income for the Block Period 01.04.1988 to 23.08.1998 was not filed by assessee in time and hence the same was not a valid return of income, thus there was no requirement of issuance of notice u/s 143(2) of the 1961 Act. The assessee filed first appeal with ld. CIT(A), which was firstly allowed by Shri R K Jain claiming himself to be CIT(A) , Allahabad, vide orders dated 28.09.2006.The Hon’ble Allahabad High Court in a ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 32 connected matter in the case of Dr. Vinod Kumar Rai v.ITAT , Allahabad & Ors. in ITA no. 14 of 2008( 2008) 302 ITR 148(All. HC) (ii) ITA No. 476 of 2007, Shri Subhash Chandra Kesarwani v. ITAT, Allahabad , held that Shri R K Jain, ceased to hold office on 22.09.2006 or at least when order of CBDT dismissing his representation stood served on him on 25.09.2006. In the case of the assessee, the said appellate order was passed by Shri R K Jain, claiming to be CIT(A), Allahabad , on 28.09.2006, which is beyond the period when he ceased to hold charge of CIT(A), Allahabad,as held by Hon’ble Allahabad High Court in a connected matter(Refer to preceding para’s 4.1 and 4.2 of this order which is not repeated to avoid duplication) . Later, the then CIT(A) ultimately dismissed the first appeal of the assessee, vide impugned appellate order dated 16.02.2017(Refer to preceding para 5 of this order for details which are not repeated to avoid duplication) . The assessee has raised as many as thirty three grounds of appeal including additional grounds of appeal , in its appeal filed with tribunal. We are admitting the additional grounds of appeal raised by the assessee as these involves mixed question of law and facts , moreover we have also kept in mind while admitting these additional grounds of appeal that these litigations are pending for more than two decades at different forum , and in order to redress grievance of assessee with a view to end litigation and do complete justice between rival parties, all the additional grounds of appeal raised by assessee stood admitted. We have also observed that the Revenue has not raised any objections to the admission of these additional grounds of appeal. Having admitted these additional grounds of appeal raised by assessee as well considering the original grounds of appeal raised by assessee in memo of appeal filed with tribunal , we have observed that these grounds of appeal are repetitive and argumentative in nature, thus we have summarized the main grievances of the assessee in nutshell which we are now called upon to adjudicate , are as under: ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 33 a) That no satisfaction note was recorded by AO, while initiating proceedings under Chapter XIV-B against the assessee, and hence the proceedings are bad in law liable to be quashed. b) That there was no search conducted by Revenue against the assessee , u/s 132(1) of the 1961 Act and no warrant of authorization was issued by Revenue against the assessee, and hence no Block Period assessment under Chapter XIV-B could be framed by Revenue against the assessee. c) That no notice u/s 158BD of the 1961 Act was issued by AO. That notice dated 05.05.2000 , u/s 158BC was issued without mentioning section 158BD in the notice , nor the assessee was informed by AO that proceedings were initiated against the assessee u/s 158BD of the 1961 Act, and hence the proceedings are bad in law liable to be quashed. d) That no notice u/s 143(2) was issued by AO within the limitation period provided under the 1961 Act, and hence the proceedings are bad in law liable to be quashed. e) That Block Period assessment order dated 30.05.2002 framed by AO u/s 158BC was beyond the time limit provided under the 1961 Act, and hence the proceedings are bad in law liable to be quashed. f) That Shri R K Jain , the ld. CIT(A) passed an appellate order dated 28.09.2006 against the assessee quashing the Block Period assessment order framed against the assessee, and the appeal against the said appellate order was filed by Revenue with ITAT which was pending for adjudication , and hence the ld. CIT(A) was debarred from passing second appellate order dated 16.02.2017 u/s 250(6) of the 1961 Act. That the assessee was not made party to the judgment and order , dated 14.03.2008 passed by Hon’ble Allahabad High Court in the case of Dr. Vinod Kumar ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 34 Rai v.ITAT , Allahabad & Ors. in ITA no. 14 of 2008( 2008) 302 ITR 148(All. HC) (ii) ITA No. 476 of 2007, Shri Subhash Chandra Kesarwani v. ITAT, Allahabad and hence the said judgment and order dated 14.03.2008 passed by Hon’ble Allahabad High Court is not binding on the assessee. g) That ld. CIT(A) passed a cryptic and non-speaking appellate order dated 16.02.2017 , u/s 250(6) of the 1961 Act on the merits of the additions made by the AO, and hence the same is liable to be set aside and consequently the additions made by AO to the income of the assessee as undisclosed income, which was later confirmed by ld. CIT(A), on merits are not sustainable in the eyes of law. Now, we will undertake all the grievances of the assessee , one by one , and see whether they hold merit, as under: a) That no satisfaction note was recorded by AO, while initiating proceedings under Chapter XIV-B against the assessee, and hence the proceedings are bad in law liable to be quashed. The assessee has claimed that after it made inspection of the assessment record maintained by Revenue, it transpired that there was no ‘satisfaction note’ folder found in the said assessment record, which conclusively proves that no satisfaction note was ever recorded by AO, before initiating proceedings u/s 158BD of the 1961 Act, against the assessee. The inspection of the assessment record was carried out by assessee in the year 2021 , while the proceedings were initiated against the assessee under Chapter XIV-B by Revenue by issuance of notice u/s 158BC, on 05.05.2000. Thus, around 21 years have elapsed in-between, when the proceedings were initiated by Revenue against the assessee and the inspection carried out by the assessee of the assessment records. The Revenue has taken a stand that the satisfaction was duly recorded by the then AO viz. Joint Commissioner of Income Tax(Assessment), Special Range, Allahabad, on ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 35 26.04.2000 , which found mentioned in the assessment order dated 30.05.2002 passed by AO u/s 158BC(c) read with Section 158BD of the 1961 Act, but the satisfaction folder is presently not readily available mainly owing to long gap of time of almost 21 years. The law as laid down by Superior Courts as also plain reading of Section 158BD is very clear that if no satisfaction was recorded by the AO of the person searched that any undisclosed income as is reflected in the seized material prima-facie belonged to some other person , proceedings under Chapter XIV-B against such other person cannot be lawfully invoked. Reference is drawn to provisions of Section 158BD of the 1961 Act, as it stood at relevant time, which reads as under: “Undisclosed income of any other person. 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than 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 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 Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly.” Reference is drawn to the judgment and orders of Hon’ble Supreme Court in the case of CIT v. Calcutta Knitwears , reported in (2014) 43 taxmann.com 115(SC), the relevant extract concerning satisfaction note are reproduced as hereunder: “39. The opening words of Section 158BD of the Act are that the assessing officer must be satisfied that "undisclosed income" belongs to any other person other than the person with respect to whom a search was made under Section 132 of the Act or a requisition of books were made under Section 132A of the Act and thereafter, transmit the records for assessment of such other person. Therefore, the short question that falls for our consideration and decision is at what stage of the proceedings should the satisfaction note be prepared by the assessing officer: whether at the time of initiating proceedings under Section 158BC for the completion of the assessments of the searched person under Section 132 and 132A of the Act or during the course of the assessment proceedings under Section 158BC of the Act or after completion of the proceedings under Section 158BC of the Act. 40. **** 41. We would certainly say that before initiating proceedings under Section 158BD of the Act, the assessing officer who has initiated proceedings for completion of the assessments under Section 158BC of the Act should be satisfied that there is an ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 36 undisclosed income which has been traced out when a person was searched under Section 132 or the books of accounts were requisitioned under Section 132A of the Act. This is in contrast to the provisions of Section 148 of the Act where recording of reasons in writing are a sine qua non. Under Section 158BD the existence of cogent and demonstrative material is germane to the assessing officers' satisfaction in concluding that the seized documents belong to a person other than the searched person is necessary for initiation of action under Section 158BD. The bare reading of the provision indicates that the satisfaction note could be prepared by the assessing officer either at the time of initiating proceedings for completion of assessment of a searched person under Section 158BC of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisition of books of accounts were made under Section 132A of the Act. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. 42. **** 43. **** 44. In the result, we hold that for the purpose of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under Section 158BC of the Act; (b) along with the assessment 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. 45. We are informed by Shri Santosh Krishan, who is appearing in seven of the appeals that the assessing officer had not recorded the satisfaction note as required under Section 158BD of the Act, therefore, the Tribunal and the High Court were justified in setting aside the orders of assessment and the orders passed by the first appellate authority. We do not intend to examine the aforesaid contention canvassed by the learned counsel since we are remanding the matters to the High Court for consideration of the individual cases herein in light of the observations made by us on the scope and possible interpretation of Section 158BD of the Act.” These are two different things altogether, firstly that no satisfaction was recorded at all by the AO of the searched person that undisclosed income prima facie appearing from the seized material belonged to some other person and consequently no satisfaction note ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 37 was at all prepared, secondly that satisfaction was duly recorded and satisfaction note was prepared that undisclosed income prima facie appearing from the seized material belonged to some other person, but now after a gap of 21 years, the satisfaction note is not available/traceable in the file . Under these circumstances, on the touchstone of preponderance of probabilities , we have to see whether satisfaction was recorded by AO of the persons searched that undisclosed income as is prima-facie reflected in the seized material belonged to the assessee or there was no satisfaction ever recorded by the AO of the persons searched before invoking provisions of Chapter XIV-B of the 1961 Act, against the assessee. Admittedly, satisfaction note could not be produced by Revenue in the proceedings before us in the year 2021-22. There was a search and seizure operations conducted by the Revenue under Section 132(1) of the 1961 Act, on 23rd August, 1998 at various residential premises in the following cases, detailed as hereunder: Residential premises i. Sri Surendra Prasad Agarwal, Sri Mahendra Prasad Agarwal 447,Malviya Nagar, Allahabad. ii Sri Manoj Kumar Agarwal, K.P. Kakkar Road, Allahabad. iii. Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahabad ` iv. Sri Amar Nath Agarwal/ Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad v. Sri Pramod Kumar Agarwal, Zero Road, Allahabad vi. Sri Mahabir Prasad Agarwal, Roashan Bagh, Allahabad The search operations under the provisions of Section 132(1) of the 1961 Act were also conducted by Revenue at the places wher eabove noted person(s) were carrying out their business activities. During the course of search operation conducted by Revenue u/s 132(1) of the 1961 Act, various books of accounts and documents were found and seized by Revenue . The jurisdiction of the above cases were with the Joint Commissioner of Income Tax (Assessment)Special Range, Allahabad. The assessee was not searched by Revenue u/s 132(1) of the ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 38 1961 Act. But admittedly the AO of the searched persons viz. Joint Commissioner of Income Tax (Assessment)Special Range, Allahabad, was also the AO of the assessee. It is recorded in the assessment order dated 30.05.2002 in para 2/page 1 as under: “After examination of seized books of accounts and documents, the Joint Commissioner of Income-tax(Assessment), Special Range, Allahabad was satisfied that the undisclosed income as was recorded in some of such seized books of accounts pertained to Smt. Asha Agarwal, (Individual), the assessee and he therefore recorded the reasons for initiating proceedings under Section 158BD of the I.T. Act , 1961 Act, in the case of the assessee vide his satisfaction note dated 26.04.2000.” Thus, the assessment order was passed in the year 2002, wherein the factum of recording of satisfaction and preparation of satisfaction note in April, 2000 is clearly mentioned, we have no reasons to doubt that the AO being a Government Gazetted Officer will have any reasons to falsify the accounts. Reference is drawn to provisions of Section 11, 16 and 35 of Indian Evidence Act, 1872, which read as under: “11. When facts not otherwise relevant become relevant.––Facts not otherwise relevant are relevant–– (1) if they are inconsistent with any fact in issue or relevant fact; (2) if by themselves or in connection with other facts they make the existence or non-existence of any fact in issue or relevant fact highly probable or improbable. 16. Existence of course of business when relevant.––When there is a question whether a particular act was done, the existence of any course of business, according to which it naturally would have been done, is a relevant fact. 35. Relevancy of entry in public record made in performance of duty.–– An entry in any public or other official book, register or 2 [record or an electronic record], stating a fact in issue or ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 39 relevant fact, and made by a public servant in the discharge of his official duty, or by any other person in performance of a duty specially enjoined by the law of the country in which such book, register or 2 [record or an electronic record], is kept, is itself a relevant fact.” Now, coming to an order passed by the AO u/s 158BE, dated 28.05.2002, which was passed by AO in compliance with directions of the judgment and order of Hon’ble Allahabad High Court , dated 09th May, 2002, in a writ petition filed by the assessee along-with 9 other persons of this group before the Hon’ble Allahabad High Court on 09 th May, 2002, which was decided by Hon’ble Allahabad High Court on 9th May, 2002 itself, and the order passed by Hon’ble Allahabad High Court , read as under: "the question of limitation raised by the petitioners shall be decided as a preliminary one before passing any further order in the proceedings pending before the Respondents. The Respondents shall dispose off the case after hearing the Writ Petitioners recording reasons. The Writ Petition stands disposed off with the above observations. It is made clear that - we have not adjudicated on merits and contentions raised in the Writ Petition. Sd/- C.J. Dated : 09.05.2002 Sd/- J.” Thus, the Hon’ble High Court directed the AO to adjudicate firstly the question of limitation issue as raised by the assessee, before adjudicating on the merits of the issue. There were 10 taxpayers (including assessee) in whose case the proceedings were initiated by the AO under Chapter XIV-B by invoking provisions of Section 158BD read with Section 158BC, although these ten assessee’s were not searched by Revenue u/s 132(1) on 23.08.1998, as detailed hereunder, and the following ten assessee’s approached Hon’ble Allahabad High Court by filing writ petition under Article 226 of the Constitution of India bearing number 1708 of 2002 in Agarwal Brothers & Ors. v. ACIT, Central Circle, Allahabad , on 09 th May , 2002 , raising question of limitation before Hon’ble High Court: 1. M/s Agarwal Brothers , 174 , Meerganj , Allahabad , U.P.(Partnership firm) ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 40 2. Surendra Prasad Agarwal, HUF, 514/447, Malviya Nagar, Allahabad, U.P. 3. Mahabeer Prasad Agarwal, HUF, 77, Khuldabad, Allahabad, U.P. 4. Mahendra Kumar Agarwal , HUF, 514/447, Malviya Nagar, Allahabad, U.P. 5. Manoj Kumar Agarwal, HUFm, 514/447, Malviya Nagar, Allahabad, U.P. 6. Mukesh Kumar Agarwal, HUf, 193-B/151-A, Meerganj,Allahabad, U.P. 7. Lav Kush Agarwal, 14, Gariwan Tola, Allahabad, U.P. 8. Smt. Asha Agarwal , 514/447, Malviya Nagar, Allahabad, U.P. 9. Smt. Sadhna Agarwal, 514/447, Malviyanagar, Allahabad, U.P. 10. Smt. Deepa Agarwal, 514/447, Malviyanagar, Allahabad, U.P. In compliance thereof of the directions of Hon’ble Allahabad High Court, the ld. AO passed an order dated 28 th May, 2002 , u/s 158BE of the 1961 Act in the case of the assessee namely Mrs. Asha Agrawal, deciding question of limitation raised by the assessee before Hon’ble High Court . In this order u/s 158BE , dated 28.05.2002, it is mentioned that satisfaction note in the case of ten petitioners who were before Hon’ble High Court was prepared by the AO of the searched persons. It is also recorded in this order that the AO of the searched persons and the AO of the ten petitioners were the same. The relevant para’s at page 3 of the order dated 28.05.2002, are reproduced hereunder: “So section 158 BC of l.T. Act is very clear that it comes into play in a case where a search had been conducted u/s 132 etc. The assessee is fully aware that in his case no warrant was issued u/s 132(1) of the I.T. Act. In fact Search and seizure action U/S 132(1) of the Income Tax Act, 1961, was conducted on 23.08.98 at various premises pertaining to Sri Surendra Prasad Agrawal Group of cases and warrant under Section 132(1) of the I.T. Act were issued in following cases : Residential Premises (i) Sri Surendra Prasad Agrawal, Sri Mahendra Prasad Agarwal 447, Malgviya Nagar, Allahabad. (ii) Sri Manoj Kumar Agarwal, K.P. Kakkar Road, Allahabad. (iii) Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahabad. ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 41 (iv) Sri Amar Nath Agarwal/Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad. (v) Sri Promod Kumar Agarwal, Zero Road, Allahabad (vi) Sri Mahabir Prasad Agarwal, Roshan Bagh, Allahabad. Search was also conducted at the places where above noted persons were carrying out their business activities.During the course of search various books of accounts and documents were found and seized. The jurisdiction over these case lied with Joint Commissioner of Income-tax,(Assessment)Special Range , Allahabad. After examination of seized books of accounts and documents the Joint Commissioner of Income-tax,(Assessment) Special Range, Allahabad was satisfied that undisclosed income as was recorded in some of such seized books of accounts pertained to M/s Agrawal Bros, and 9 others ( petitioners in the writ) and he therefore recorded the reasons for initiating proceedings under section 158BD of the l. T. Act ,1961 . In all these 10 cases of the petitioners vide his satisfaction note dated 26.04.2000. Notice under section 158BC of l.T. Act was, accordingly, issued on 5.5.2000 and was served, with the request to file a true and correct return of total income including undisclosed Income within 16 days of service of notice . The assessee moved application dated 01.06.2000 seeking copy of seized materials, copy of Income-tax records etc.In reply vide letter dated 12.06.2000 it was intimated to assessee that copy of seized material had already been provided and with regard to certified copy of Income-tax records he was requested to furnish zerox copy of acknowledgement receipt of returns filed by her. The assessee did not furnish the return for the block period. Thereafter detailed notice and notice under section 142(1) was issued and , subsequently on 16.8.2000 return for block period was filed showing total undisclosed income at NIL Thus it is clear that the proceedings were initiated u/s 158 BD of the l.T. Act on the basis of seized materials which were found and seized during the course of search initiated in the cases as noted above. Section 158BD of l.T. Act is very clear and it speaks that where the A.O is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 or whose books of account or other documents or any asset were requisitioned u/s 132A then, such books of account or assets etc. shall be handed over to the A.O having jurisdiction over such other person and that A.O shall proceed against such other persons and the provisions of this chapter shall applied accordingly. Presently in these cases the jurisdiction vested with the same A.O namely Joint C.I.T., (Assessment) Special Range, Allahabad who had initiated proceedings u/s 158 BD of l.T. Act.” This order u/s 158BE was passed in the year 2002, wherein the factum of recording of satisfaction and preparation of satisfaction note in April, 2000 is clearly mentioned, we have no reasons to doubt that the AO being a Government Gazetted Officer will have any reasons to falsify the accounts. Reference is drawn ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 42 to provisions of Section 11, 16 and 35 of Indian Evidence Act, 1872, which read as under: “11. When facts not otherwise relevant become relevant.––Facts not otherwise relevant are relevant–– (1) if they are inconsistent with any fact in issue or relevant fact; (2) if by themselves or in connection with other facts they make the existence or non-existence of any fact in issue or relevant fact highly probable or improbable. 16. Existence of course of business when relevant.––When there is a question whether a particular act was done, the existence of any course of business, according to which it naturally would have been done, is a relevant fact. 35. Relevancy of entry in public record made in performance of duty.–– An entry in any public or other official book, register or 2 [record or an electronic record], stating a fact in issue or relevant fact, and made by a public servant in the discharge of his official duty, or by any other person in performance of a duty specially enjoined by the law of the country in which such book, register or 2 [record or an electronic record], is kept, is itself a relevant fact.” It is also pertinent to mention here that the additions in the hands of the assessee were mainly made by AO based on seized material, Seized Annexure A-109, page 24 to 29, 53 to 69, Seized Annexure A-11, page 4-6, Seized Annexure A-11, page 14, Seized Annexure A-11, page 17 , Seized Annexure A-180, page 6. It is also pertinent to mention here that in the assessment order as well order passed u/s 158BE it is mentioned that the copies of seized material werr provided to the assessee. The assessee has not disputed or denied that copies of seized material were not furnished to it. One more important aspect is that the assessee is wife of Mr. Mahendra Prasad Agrawal. It is an admitted position that Mr. Mahendra Prasad Agrawal was searched by Revenue on 23.08.1998 , u/s 132(1) of the 1961 Act. Incidentally the residence address of Mr. Mahabir Prasad Agrawal is 447, Malviya Nagar , which property is owned by the assessee, namely Mrs. Asha Agrawal, and the address of the assessee as emanating from the records is also 447, Malviya ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 43 Nagar, Allahabad, U.P.. Even, address of Shri Surender Prasad Agrawal as emanating from records is 447, Malviya Nagar, Allahabad, U.P. The said residential premises 447, Malviya Nagar, Allahabad, U.P. , was searched by Revenue. Once , all these aforesaid assessee’s are residing together and are related to each other, there is a natural phenomenon as well strong possibility that incriminating material pertaining to assessee namely Mrs. Asha Agrawal was found from possession of these aforesaid persons who were searched by Revenue and who are related to each other and living together in the same premises. Thus, keeping in view the entire facts and circumstances, on the touchstone of preponderance of probabilities, it is crystal clear that the satisfaction was duly recorded by the AO of the searched persons ( who incidentally was also the AO of the assessee) that the undisclosed income prima-facie reflecting from the incriminating material found and seized during the search operations conducted by Revenue u/s 132(1) of the 1961 Act on 23.08.2008 on the persons searched, belonged to the assessee, which culminated into recording of satisfaction note dated 26.04.2000, as is found recorded in the assessment order and the order dated 28.05.2002 passed by AO u/s 158BE, in pursuance to direction of Hon’ble High Court. The additions have also been made of undisclosed income in the case of the assessee based on seized material found and seized during the course of search operations. There is no reasons for us to accept that the AO being a Government Gazetted Officer while passing an order u/s 158BE , dated 28.05.2002 in pursuance to direction of Hon’ble High Court and also passing an assessment order dated 31.05.2002 u/s 158BC(c) and 158BD of the 1961 Act , will have any reasons to falsify the records by falsely recording that satisfaction was recorded that income as is emanating from seized material from the persons searched, prima-facie belonged to the assessee. The matter being very old almost 21 years ( satisfaction note dated 26.04.2000), there is every possibility that the said satisfaction note might have been misplaced or might have got tagged with other files ( of the searched persons ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 44 or the other 9 petitioners against whom also the proceedings u/s 158BD read with Section 158BC were initiated). There is also no merit in the contention of the assessee that the order sheet entries in the assessment file of the assessee does not mention about the satisfaction note and presumption should be drawn that no satisfaction was recorded. The assessment file is started with the issuance of notice u/s 158BC dated 5 th May , 2000 , which is post recording of satisfaction note dated 26.04.2000 and reflects the initiation of proceedings against the assessee under Chapter XIV B of the 1961 Act, there is nothing unusual about it, as the satisfaction note could have been recorded by AO in the files of the persons searched, or in a file specially created for the same. Thus, we reject the contentions of the assessee and hold that the satisfaction note was duly recorded by the AO of the person searched(who incidentally was also the AO of the assessee). Reference is also drawn to provisions of Section 11,16 and 35 of The Indian Evidence, 1872. We have also observed that the search was conducted by Revenue u/s 132(1) , on 23.08.1998. The assessment in the case of searched persons were completed by Revenue , in the month of August , 2000 (please see AO letter No. F.No. ACIT/Circle-1/Alld/Mahendra Agarwal Group/2021-22/154, dated 23.12.2021 marked to The Ld. CIT-DR, ITAT , Allahabad , which letter is enclosed by ld. CIT-DR along with its letter dated 15.03.2022 marked to ITAT, Allahabad Bench, Allahabad, in the matter of the assessee in ITA no. 128/Alld/2017). Thus, the assessment in the case of searched persons were completed by the Revenue in the month of August, 2000, while satisfaction note in the case of the assessee was prepared by AO on 26 th April, 2000 , which is prior to completion of assessment in the case of searched persons. Thus, the satisfaction note was prepared in the case of the assessee, even before the assessment was completed in the case of searched persons, and hence the same comply with the interpretation of Hon’ble Supreme Court in the case of Calcutta Knitwears(supra), and is held to be a valid satisfaction note prepared by the AO of the searched persons(incidentally AO of the assessee is ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 45 the same as the AO of searched persons), invoking proceedings under Chapter XIV- B of the 1961 Act. Thus, the grievance of the assessee on this count stood rejected. We order accordingly. b)That there was no search conducted by Revenue against the assessee , u/s 132(1) of the 1961 Act and no warrant of authorization was issued by Revenue against the assessee, and hence no Block Period assessment under Chapter XIV-B could be framed by Revenue against the assessee. Chapter XIV-B provides for special procedure for assessments of search cases wherein undisclosed income in pursuance of search conducted u/s 132, or in the cases where books of account, other document or assets are requisitioned under Section 132A of the 1961 Act , is to be assessed to income-tax. The Block Period is defined u/s 158B(a) of the 1961 Act, while undisclosed income is defined u/s 158B(b) of the 1961 Act. The assessment of undisclosed income is to be done in the manner provided in Chapter XIVB in the case of the person searched in whose case warrant of authorization is issued . Further, Section 158BD provides that where the AO is satisfied that any undis- closed income belongs to any person, other than 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 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 Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly. Section 158 BD of the 1961 Act , is reproduced hereunder:- “Undisclosed income of any other person. 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than 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 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 Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly.” ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 46 Thus, in the instant case, as we have already held in the preceding para of this order that the AO of the searched person (incidentally who also happens to be the AO of the assessee) has recorded satisfaction note dated 26.04.2000 wherein the AO based on seized material from the persons searched observed that the undisclosed income pertained to the assessee, we hold that in view of clear language and mandate of Section 158BD of the 1961 Act, there is no merit in the contention of the assessee that in the absence of warrant of authorisation, no block period assessment can be framed against the assessee within mandate of Chapter XIVB of the 1961 Act. We order accordingly. c)That no notice u/s 158BD of the 1961 Act was issued by AO. That notice dated 05.05.2000 , u/s 158BC was issued without mentioning section 158BD in the notice , nor the assessee was informed by AO that proceedings were initiated against the assessee u/s 158BD of the 1961 Act, and hence the proceedings are bad in law liable to be quashed. This argument of the assessee is again fallacious . The provisions of Section 158BD are substantive provision which provides that where the AO is satisfied that any undis- closed income belongs to any person, other than 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 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 Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly. Thus, once AO is satisfied that undisclosed income as is discernible from the seized material belonged to other persons , the AO has to record satisfaction and then hand over such seized material to the AO of such other person, to enable to proceed to frame Assessment against such other person, and in that eventuality Section 158BD itself provide that the provisions of Chapter XIVB shall apply accordingly. Section 158BD does not refer to any notice, while it is Section 158BC which provides that notice is to be served to such person requiring him to furnish return of income for ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 47 the Block Period in the prescribed form. Section 158BD as was prevalent at the relevant time , read as under: “Undisclosed income of any other person. 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than 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 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 Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply accordingly.” Thus, even in the case of proceedings initiated u/s 158BD , because of clear mandate in Section 158BD , that the provisions of this Chapter shall apply accordingly, the notice is to be issued by AO u/s 158BC , which was rightly done by the AO. Infact this is an admitted position that Notice u/s 158BC, dated 05.05.2000 was issued by the AO, which was served on the assessee on 08 th May, 2000 , requesting assesse to prepare a true and correct return of total income including undisclosed income for the Block Period ending 23.08.1998, in prescribed form and be delivered to the office of AO within 16 days of service of notice u/s 158BC , dated 05.05.2000. Even , if it is accepted that provision of Section 158BD was not mentioned in the said notice, but still the proceedings cannot be held to bad in law , as the assesse was fully aware of the proceedings initiated against her under Chapter XIV-B to compute total income including undisclosed income , for the Block Period from 01.04.1988 to 23.08.1998 , as she regularly participated in the proceedings before the AO. The assesse filed her return of income for Block Period of ten year of total income including undisclosed income in prescribed form, from assessment year 1989-99 to assessment year 1999-00(until date of search 23.08.1998)(placed in paper book filed on 22.02.2021/ page 9). The assessee also filed letter before the AO, dated 24.05.2000 (placed at paper book filed on 22.02.2021/page 10) , seeking extension of time for filing the Block Period return. The assesse had also filed writ petition before Hon’ble Allahabad High Court under Article 226 , challenging on the question of limitation in framing of Block Period assessment . ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 48 Admittedly, the assesse was also furnished seized material by Revenue. Thus , even if Section 158BD is not mentioned in the notice issued u/s 158BC , the proceedings are not vitiated as first of all there is no requirement of mentioning Section 158BD in the notice u/s 158BC because for proceedings initiated u/s 158BD , notice is required to be issued u/s 158BC, secondly , the assesse was fully aware of the proceedings initiated against her by Revenue under provisions of Chapter XIV-B of the 1961 Act and the assesse duly participated in the assessment proceedings , and no such objections were raised by the assesse during the course of assessment proceedings. Moreover, the assesse could not bring any material on record to justify that there was any prejudice cause to her or there was failure of justice, by merely not mentioning of Section 158BD in the notice dated 05 th May, 2000 issued by AO under the provisions of Section 158BC. Further, even if it is presumed to be a defect in the issuance of notice u/s 158BC owing to non mentioning of Section 158BD in the said notice, it is a curable defect as Section 158BC is a procedural section , Reference is drawn to provisions of Section 292B of the 1961 Act . Refernece is also drawn to decision of Special Bench- Amritsar-tribunal decision in the case of Smt. Mahesh Kumari Batra v. JCIT, reported in (2005) 95 ITD 152(ASR)(SB) and decision of Madras-tribunal in the case of L. Saroja v. ACIT, reported in (2001) 76 ITD 344(Mad.) . Thus, there is no merit in the contentions of the assesse which are hereby rejected , and we hold that Notice u/s 158BC, dated 05 th May, 2000 issued by AO , without mentioning Section 158BD , was a valid notice. We order accordingly. d)That no notice u/s 143(2) was issued by AO within limitation provided under the 1961 Act, and hence the proceedings are bad in law liable to be quashed. The Revenue conducted searches against certain persons u/s 132(1) of the 1961 Act , on 23.08.1998. The assessee was not searched by Revenue, as no warrant of authorisation was issued in the case of the assessee. The AO of the persons searched recorded satisfaction , based on incriminating material found and seized during the ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 49 course of searches conducted by Revenue u/s 132(1) against the searched persons, on 23.08.1998 that undisclosed income as is discernable from the incriminating material seized from persons searched, prima facie belonged to the assessee, which led to the recording of satisfaction note by AO of the persons searched on, 26.04.2000. Incidentally AO of the persons searched was also the AO of the assessee. The recording of satisfaction note, dated 26.04.2000 led to invocation of proceedings against assessee under Chapter XIV-B and the AO issued to the assessee notice dated 05.05.2000 u/s 158BC of the 1961 Act. The said notice dated 05.05.2000 issued u/s 158BC was admittedly served on the assessee on 08 th May, 2000. The AO requested assessee to file true and correct copy of return of total income including undisclosed income for the Block Period ended on 23.08.1998, in prescribed form in the office of AO within 16 days of service of notice . The assessee did not filed the return of total income including undisclosed income, for the block period 01.04.1988 to 23.08.1998 within 16 days of service of notice dated 5th May, 2000 issued by the AO under Section 158BC of the 1961 Act, but rather the assessee moved an application on 24th May, 2000 seeking extension of time for filing of return of total income including undisclosed income, for Block Period 01.04.1988 to 23.08.1998 . The AO was pleased to reject the aforesaid application of the assessee for grant of extension of time for filing of return of income for Block Period 01.04.1988 to 23.08.1998, vide letter dated 31st May, 2000, which was claimed by Revenue to have been served on the assessee on 5th of June, 2000. The assessee moved another application dated 1st June, 2000 seeking copy of seized material, copy of income-tax records etc.. The AO in reply vide letter dated 12th June, 2000 intimated to the assessee that copy of seized material had already been provided to the assessee, and so far as with regard to the certified copy of income-tax record , the AO requested assessee to furnish the Zerox copy of acknowledgement of receipt of the return of income filled by the assessee with the Revenue. The assessee on its part did not furnish return of total income including undisclosed ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 50 income, for the Block Period 01.04.1988 to 23.08.1998. Thereafter, the AO issued detailed notice and a notice under Section 142(1) on 25th July, 2000 to the assessee, which was claimed by Revenue to have been served on assessee, on 26th July, 2000. The AO vide aforesaid notice raised various queries and the assessee was asked to give replies on every issue so raised by AO in the aforesaid notice. Subsequently, on 3rd August, 2000 return of income including undisclosed income for the block period 01.04.1988 to 23.08.1998 was filed by the assessee , showing total undisclosed income of the assessee for Block Period 01.04.1988 to 23.08.1998 , at Rs. Nil. Before proceedings further, it will be relevant to understand the scheme of Block Period assessment in case of searches as provided under Chapter XIV-B of the Act which lays down a special procedure for search cases, and is a complete code in itself. It will be also profitable at this stage to refer to judgment and order of Hon’ble Supreme Court in the case of CIT v. Vatika Township Private Limited, reported in (2014) 49 taxmann.com 249(SC), wherein Hon’ble Supreme Court observed, as under: “Scheme of Chapter XIVB 27. Before we proceed to answer the question, it would be necessary to keep in mind the scheme of block assessment introduced in Chapter XIVB to Finance Act, 1995 w.e.f. 1st July, 1995. As already mentioned in brief by us, Chapter XIVB of the Act which deals with block assessment lays down a special procedure for search cases. The main reason for adding these provisions in the Act was to curb tax evasion and expedite as well as simplify the assessments in such search cases. Undisclosed incomes have to be related in different years in which income was earned under block assessment. This is because in such cases, the "block period" is for previous years relevant to 10/6 assessment years and also the period of the current previous year up to the date of the search, i.e., from April 1, 2000, to January 17, 2001, in this case. The essence of this new procedure, therefore, is a separate single assessment of the "undisclosed income", detected as a result of search and this separate assessment has to be in addition to the normal assessment covering the same period. Therefore, a separate return covering the years of the block period is a pre-requisite for making block assessment. Under the said procedure, the Explanation is inserted in section 158BB, which is the computation section, explaining the method of computation of "undisclosed income" of ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 51 the block period. It is now well accepted that this Chapter is a complete code in itself providing for self-contained machinery for assessment of undisclosed income for the block period of 10 years or 6 years, as the case may be. In case of regular assessments for which returns are filed on yearly basis, Section 4 of the Act is the charging section. However, at what rate the income is to be taxed is specified every year by the Parliament in the Finance Act. In contradistinction, when it comes to payment of tax on the undisclosed income relating to the block period, rate is specified in Section 113 of the Act. It remains static at 60% of the undisclosed income which is the categorical stipulation in the Section 113 of the Act. Section 158BA(2) of the Act clearly states that the total undisclosed income relating to the block period "shall be charged to tax" at the rates specified under Section 113 as income of the block period irrespective of previous year or years. Under Section 113 of the Act, the undisclosed income is chargeable to tax at the rate of 60%. 28. From the above, it becomes manifest that Chapter XIVB comprehensively takes care of all the aspects relating to the block assessment relating to undisclosed income, which includes Section 158BA(2) as the charging section and even the rate at which such income is to be taxed is mentioned in Section 113 of the Act. No doubt, Section 4 of the Act is also a charging section which is made applicable on 'total income of previous year'. As per Section 2(45), 'total income' means the total amount of income referred to in Section 5, computed in the manner laid down in the Act. Section 5 of the Act enumerates the scope of total income and prescribes, inter alia, that it would include all income which is received or is deemed to receive in India in any previous year by or on behalf of a person who is a Resident. No doubt, undisclosed income referred to in Chapter XIVB is also an income which was received but not disclosed, therefore, in the first blush, argument of the Department that undisclosed income referred to in Chapter XIVB is also a part of total income and consequently Section 4 becomes the charging section in respect thereof as well. However, a little closer scrutiny leads us to conclude that that is not the position as per the scheme of Chapter XIVB. In the first place, income referred to in Section 5 talks of total income of any 'previous year'. As per Section 2(34) of the Act, 'previous year' means previous year as defined in Section 3. Section 3 lays down that previous year means 'the financial year immediately preceding the assessment year'. Undisclosed income referred to in Chapter XIVB is not relateable to the previous year. On the contrary, it is for the block period which may be 6 years or 10 years, as the case may be. Consequently, as already mentioned, while analyzing the scheme of Chapter XIVB, such Chapter is a complete code in respect of assessments of 'undisclosed income'. Not only it defines what is undisclosed income, it also lays down the block period for which undisclosed income can be taxed. Further, it also lays down the procedure for taxing that income. It is very pertinent to note at this stage that for this purpose, specific provision in the form of Section 158BA(2) is inserted making it a charging section. Thus, a diagnostic of Chapter XIVB of the Act leads to irresistible conclusion that it contains all the provisions starting from charging section till the completion of assessment, by prescribing special procedure in relation thereto, making it a complete Code by itself. Looking it from this angle, the character and nature of 'undisclosed income' referred to in Chapter XIVB becomes quite distinct from ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 52 'total income' referred to in Section 5. It is of some significance to observe that when a separate charging section is introduced specifically, to assess the undisclosed income, notwithstanding a provision in the nature of Section 4 already on the statute book, this move of the legislature has to be assigned some reason, otherwise, there was no necessity to make a provision in the form of Section 158BA(2). It could only be that for assessing undisclosed income, charging provision is Section 158BA(2) alone.” If we see the scheme of assessment of income for the Block period under Chapter XIV-B, as mandated u/s 158BC , the AO can grant time to the assessee of not less than fifteen days from the date of service of notice, and maximum period of forty five days can be granted by the AO , for filing of return of total Income including undisclosed income for Block Period, in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997. In the instant case , the search was conducted by Revenue u/s 132(1) of the 1961 Act, on 23.08.1998, which is after 1 st day of January, 1997. The provision of Section 158BC as were applicable at the relevant time, read as under: “Procedure for block assessment. 158BC. Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then, [(a) the Assessing Officer shall (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period : ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 53 Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter : Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;] (b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, sub-sections (2) and (3) of section 143 and section 144 shall, so far as may be, apply; (c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) the assets seized under section 132 or requisitioned under section 132A shall be retained to the extent necessary and the provisions of section 132B shall apply subject to such modifications as may be necessary and the references to regular assessment or reassessment in section 132B shall be construed as references to block assessment .” As can be seen , in the instant case before us , the AO gave sixteen days time from the date of service of notice dated 05 th May , 2000 u/s 158BC , to the assessee for filing of its true and correct return of total income including undisclosed income, for the Block Period ended on 23.08.1998, in the prescribed form. The notice dated 05 th May , 2000 was admittedly served on the assessee on, 08 th May, 2000. The sixteen days expired on 24 th May, 2000. The assessee did not file its return of income for Block Period ending 23.08.1998 , within the time aforesaid allowed by the AO. The assessee on other hand moved an application dated 24 th May, 2000 before the AO requesting for extension of time, in filing of return of total income including undisclosed income , for Block Period ended 23 rd August, 1998. The AO rejected said application of the assessee seeking extension of time in filing of aforesaid return of income by AO, vide letter dated 31 st May, 2000 , which was served on the assessee on 05 th June , 2000. The AO issued notice u/s 142(1), dated 25 th July, 2000, which was served on assessee on 26 th July, 2000. The AO initiated the assessment proceedings vide aforesaid notice issued u/s 142(1), wherein ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 54 several queries were raised and the assessee was directed to give replies. The upper most period of forty five days as allowed u/s 158BC for filing of return of total income including undisclosed income for Block Period , from the date of service of notice , in the instant case also expired on 22 nd June , 2000 but the assessee did not filed any return of income within the aforesaid period of forty five days which expired on 22 nd June ,2000, while notice u/s 142(1) was issued by AO only on 24 th July, 2000. The assessee did not even filed her return of income for Block Period , even on or before 24 th July, 2000 , and ultimately filed its return of total income including undisclosed income for the Block Period ended on 23 rd August, 1998, on 03 rd August, 2000, which is even much beyond the expiry of the upper limit of forty five days which is permitted under the provisions of Section 158BC of the 1961 Act , for filing of return of total income including undisclosed income for the Block Period. There is no provision under the 1961 Act which permit AO to condone delay in filing of return of total income including undisclosed income , beyond the period of forty five days , as permitted by Section 158BC of the 1961 Act, in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997. In the instant case, the AO allowed sixteen dates from the date of service of notice dated 05.05.2000 issued u/s 158BC of the 1961 Act. The AO rejected application filed by the assessee seeking extension of time for filing of return of total income including undisclosed income , for the Block Period ended on 23.08.1998. The power to condone the delay in filing of return of total income including undisclosed income for Block Period is vested with CBDT under the provision of Section 119 of the 1961 Act. Reference is drawn to judgment and order of Hon’ble Karnataka High Court in the case of CBDT v. Vasudev Adigas Fast Food Private Limited, reported in (2021) 128 taxmann.com 287(Kar.HC), wherein Hon’ble High Court held as under: ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 55 “14. This Court has carefully gone through the order passed by the learned Single Judge, the material on record and heard the learned counsel for the parties at length. 15. In the considered opinion of this Court, in cases where an respondent/assessee faces an hardship, Section 119(2)(b) of the Act empowers the CBDT to issue any general or special order authorizing any income tax authority to admit an application or claim for any exemption, deduction, refund or any other relief under the Act, if the time period for taking the benefit of the same has expired under the Act. Thereafter, the said income tax authority has to examine the return so filed on merits in accordance with law. 16. The Hon'ble Supreme Court in the case of B. M. Malani v. CIT [2008] 174 Taxman 363/306 ITR 196, has held that the term 'genuine hardship' means 'genuine difficulty' and has held that the ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto. Further, the Bombay High Court, in the case of Sitaldas K. Motwani v. DGIT (International Taxation) [2010] 187 Taxman 44/323 ITR 223, has held that while considering an application under section 119(2)(b), the term 'genuine hardship' has to be construed liberally and has held that CBDT cannot examine a refund closely to see if the claim succeeds. All that the CBDT can do is to verify if the case of the respondent/assessee needs consideration and does not suffer from apparent defect. The CBDT is not expected to go deep into the niceties of law. 17. The CBDT, in its order dated 16-1-2018, has not appreciated the reasons given by the respondent/assessee for the delay in filing the return of income nor has taken into consideration the documents produced by the respondent/assessee before rejecting the assessee's application seeking condonation of delay for filing its return of income for the assessment year 2014 - 2015 and that the same was beyond the control of the respondent/assessee. Further, the CBDT has examined the return filed by the respondent/assessee on merits and rejected the claim on the ground that the claim is not genuine, relying on Circular No. 9/2015 dated 9-6-2015, effectively passing an assessment order, contrary to the settled principles of law. The CBDT, in virtually passing an assessment order on the return of income of the respondent, has traversed beyond the scope of its power to condone the delay in filing the return of income under section 119(2)(b) of the IT Act of 1961, and has acted contrary to the provisions of Section 119(2)(b). 18. In respect of Circular No. 9/2015 dated 9-6-2015 it can be safely gathered that it does not apply to the power of CBDT to condone the delay in filing the return of income under section 119(2)(b) of the Act. Section 119(1) of the Act empowers the CBDT to issue orders, instructions and directions to other income tax authorities as it may deem fit for the proper administration of the Act and the power available to the CBDT under section 119(2)(b) is a specific power provided to the CBDT to pass such orders in cases of genuine hardship. 19. The Circular issued by CBDT is binding on the authorities subordinate to it and cannot be binding on itself. Further, the authorities to whom Circular No. 9/2015 dated 9-6-2015 is issued and binding is specified in the said circular itself. A bare reading of Section 119(1) clearly shows that the circulars/orders/instructions are binding on other income tax authorities and that the same are not binding on the CBDT itself. However, despite the above ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 56 settled position of law, the CBDT has relied on Circular No. 9/2015 dated 9-6-2015 and rejected the application of the respondent/assessee. 20. In the present case the CBDT has ignored the recommendations of the jurisdictional authorities to condone the delay in filing the return of income, at the time of considering the application of the respondent/assessee seeking condonation of delay in filing the return of income. The CBDT had sought for a report from the Principal Commissioner of Income Tax-II, as well as the jurisdictional Additional Commissioner of Income Tax. It is pertinent to note that both the Principal Commissioner of Income Tax-II as well as the jurisdictional Additional Commissioner of Income-tax have given a report that the delay in filing the return of income may be condoned. Though the CBDT has referred to the said opinions, but has not taken the same into consideration while deciding the application of the respondent/assessee. 21. In the light of the aforesaid, this Court is of the opinion that the order passed by the learned Single Judge does not warrant interference. 22. However, Sri.Sanmathi, learned counsel for the department has stated before this Court that the present case will become time barred for the purpose of scrutiny and therefore, for the purpose of scrutiny and other proceedings, the right of the revenue to proceed ahead in accordance with law by taking into account the date of limitation from the date the order has been passed by the learned Single Judge may be protected. 23. The prayer made by the learned counsel for the Income-tax department appears to be genuine prayer and therefore, in the present case, for the purpose of scrutiny, if any, and for the purpose of other proceedings also, the limitation shall start from the date the order has been passed by the learned Single Judge.” The assessee in the instant case did not sought any extension of time from CBDT, citing genuine hardship in delay in filing of return of total income including undisclosed income for the Block Period. The return of total income including undisclosed income for the Block Period was filed by the assessee, on 03 rd August, 2000 , which is a non-est/invalid return of income , and hence there is no question of issuing any notice u/s 143(2) of the 1961 Act by the AO. On its part the AO rightly issued notice dated 25.07.2000 u/s 142(1) of the 1961 Act, and thereafter, proceeded to frame assessment for the Block Period. The judgment and order of Hon’ble Supreme Court, in the case of Hotel Blue Moon(supra) has no application, to the facts and circumstances of the case because in the instant case return of total income including undisclosed income for Block Period was not filed within ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 57 the time prescribed by the AO for filing aforesaid return of income and infact it was filed even much beyond a maximum period of forty five days allowed by Section 158BC for filing of the return which is the upper most limit allowed by statute for filing Block Period Return of total income including undisclosed income, and the said return filed by the assessee , on 03 rd August, 2000 is a non-est / invalid return of income . No extension of time for filing aforesaid return was sought by assessee from CBDT under the provisions of Section 119 of the 1961 Act.In the instant case before us , the AO has duly issued notice dated 05 th July , 2000 u/s 142(1) of the 1961 Act before framing assessment and hence principles of natural justice stood duly complied with , before framing Block Period assessment , u/s 158BC(c) read with Section 158BD, vide orders dated 30 th May, 2002 , which assessment order does not suffer from the vice of illegality owing to non issuance of notice u/s 143(2) of the 1961 Act within time provided under the statute. We order accordingly. e)That Block Period assessment dated 30.05.2002 framed by AO u/s 158BC was beyond the time limit provided under the 1961 Act, and hence the proceedings are bad in law liable to be quashed. In the instant case before us, the searches were conducted by Revenue against certain persons u/s 132(1) of the 1961 Act, on 23.08.1998. The assessee was not searched by Revenue, however , the Revenue validly initiated proceedings against the assessee wherein AO of the searched persons recorded satisfaction on 26.04.2000, that income as is discernible from incriminating material seized from persons searched , belonged to the assessee, wherein satisfaction note was prepared by the AO of the searched persons, on 26 th April, 2000.Incidentally, the AO of the searched person is also the AO of the assessee. The assessments in the case of searched persons were concluded in August, 2000. The Revenue invoked provisions of Section 158BD against the assessee. The Notice u/s 158BC of the 1961 Act, was issued by the AO of the assessee , on 05 th ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 58 May, 2000 , which was served on the assessee , on 08 th May, 2000. The assessment is to be completed within a period of two years from the end of month in which notice u/s 158BC of the 1961 Act was served by the AO on the assessee , which in the instant case was served by the AO on the assessee, on 08 th May, 2000, thus, the assessment for the Block Period ended 23.08.1998 , in the instant case is to be completed latest by 31 st May, 2002, as is provided u/s 158BE of the 1961 Act. In the instant case, the assessment order for the Block Period from 01.04.1988 to 23.08.1998 under the provisions of Section 158BC(c) read with Section 158BD, was passed by the AO, on 30 th May, 2002, which is within the aforesaid limitation period of two years from the end of the month in which notice u/s 158BC was served by the AO which in the instant case was served on 08 th May, 2000 . Reference is drawn to the provisions of Section 158BE of the 1961 Act as it stood at relevant time, which reads as under: “Time limit for completion of block assessment. 158BE. [(1) The order under section 158BC shall be passed (a) within one year from the end of the month in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997; (b) within two years from the end of the month in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. (2) The period of limitation for completion of block assessment in the case of the other person referred to in section 158BD shall be (a) one year from the end of the month in which the notice under this Chapter was served on such other person in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997; and ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 59 (b) two years from the end of the month in which the notice under this Chapter was served on such other person in respect of search initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997.] [Explanation 1]. In computing the period of limitation for the purposes of this section, the period (i) during which the assessment proceeding is stayed by an order or injunction of any court, or (ii) commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub- section, shall be excluded.] [Explanation 2. For the removal of doubts, it is hereby declared that the authorisation referred to in sub-section (1) shall be deemed to have been executed, (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.]” The law as it stood at relevant time u/s 158BE is very clear. The proceedings initiated against the assessee were u/s 158BD. The notice u/s 158BC was issued by AO on 5 th May, 2000, which was served on 08 th May, 2000. The time limit for passing assessment for Block Period was two years from the end of month in which notice u/s 158BC was served, i.e. 31 st May, 2002. The Block Period assessment order passed by AO u/s 158BC(c) read with Section 158BD, was dated 30 th May, 2002, which is within limitation period. Thus, the contentions of the assessee are devoid of any merit and are hereby rejected. We order accordingly. f)That Shri R K Jain , the ld. CIT(A) passed an appellate order dated 28.09.2006 against the assessee quashing the Block Period assessment framed against the assessee, and the appeal against the said appellate order was filed by Revenue ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 60 with ITAT which was pending for adjudication , and hence the ld. CIT(A) was debarred from passing second appellate order dated 16.02.2017 u/s 250(6) of the 1961 Act. That the assessee was not made party to the judgment and order , dated 14.03.2008 passed by Hon’ble Allahabad High Court in the case of Dr. Vinod Kumar Rai v.ITAT , Allahabad & Ors. in ITA no. 14 of 2008( 2008) 302 ITR 148(All. HC) (ii) ITA No. 476 of 2007, Shri Subhash Chandra Kesarwani v. ITAT, Allahabad and hence the said judgment and order dated 14.03.2008 passed by Hon’ble Allahabad High Court is not binding on the assessee. The assessment was framed by the AO for the Block Period 01.04.1988 to 23.08.1998 against the assessee, vide assessment order dated 30 th May, 2002 passed u/s 158BC(c) read with Section 158BD of the 1961 Act. The assessee filed first appeal with ld. CIT(A). In the instant case before us, Shri R K Jain who claimed himself to be CIT(A) holding charge of Allahabad , passed the appellate order on 28.09.2006. The said Shri R K Jain who was earlier holding charge as CIT(A) , Allahabad, was transferred to CIT, ITAT, Allahabad, by Ministry of Finance , Government of India, Department of Revenue, New Delhi , vide orders dated 31.05.2006.In one of the other matter , at the behest of Revenue , in the case of ITA No. 14 of 2008 titled Dr. Vinod Kumar Rai v. ITAT , Allahabad & others ii) ITA No. 476 of 2007 titled Sri Subhash Chandra Kesarwani v. ITAT , Allahabad (302 ITR 148), the Hon’ble Allahabad High Court passed judgment and order dated 14 th March, 2008( reported in (2008) 302 ITR 148(All. HC) ) , wherein Hon’ble Allahabad High Court observed that ld. CIT(A) namely Shri R.K.Jain who was holding charge of CIT(A), Allahabad was transferred to CIT, ITAT, Allahabad, by Ministry of Finance , Government of India, Department of Revenue, New Delhi , vide orders dated 31.05.2006. The said Shri R K Jain approached Hon’ble Central Administrative Tribunal(In short “CAT”) . The Hon’ble CAT directed Shri R K Jain to file representation before CBDT. Shri R K Jain submitted his representation before CBDT , which stood dismissed by CBDT vide orders dated 22.09.2006 which was served on him on 26.09.2006. The Hon’ble Allahabad High Court held that the said Shri R K Jain representation before Central Board of Direct ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 61 Taxes(in Short “ CBDT”) , which was submitted in pursuance of direction of CAT , was dismissed by CBDT vide orders dated 22.09.2006 which was served on him on 26.09.2006. On the same day successor in office Shri Assem Kumar assumed charge as CIT(A), Allahabad, which led to inference that order of transfer dated 31.5.2006 became operative after rejection of the representation of the then CIT(A), Shri R K Jain i.e. on and after 22.9.2006 , or at least when the said order was communicated to him i.e. 25.09.2006 , and since then he had no authority or jurisdiction to function as CIT(A) , Allahabad . Instead he was obliged to assume his duty as CIT, ITAT , Allahabad where he was transferred . The Hon’ble Allahabad High Court held that , on 03.10.2006 in that matter which was before Hon’ble High Court in the case of ITA No. 14 of 2008 titled Dr. Vinod Kumar Rai v. ITAT , Allahabad & others ii) ITA No. 476 of 2007 titled Sri Subhash Chandra Kesarwani v. ITAT , Allahabad (302 ITR 148, that when Shri R K Jain passed appellate order as CIT(A) on 3 rd October, 2006, he did not had the jurisdiction whatsoever to function as CIT(A), Allahabad. This judgment and order of Hon’ble Allahabad High Court is concerning discharge of functions by a Public Authority , and is an order in Rem and not an order in persona. This judgment and order will be applicable on all orders which were passed by said Shri R K Jain claiming to be CIT(A), Allahabad, after he vacated his charge. In the instant case before us, the said Shri R K Jain passed appellate order on 28 th September, 2006, which is clearly post vacation of his office as CIT(A), Allahabad, as held by Hon’ble Allahabad High Court. Thus, this appellate order dated 28.09.2006 in the instant case before us, passed by ld. CIT(A) is null and void and non-est without jurisdiction being a complete nullity . This judgment and order passed by Hon’ble Allahabad High Court is an order in rem as it concerns holding of Public Office illegally without any authority and is not merely an order in persona which is passed inter-se between the two parties, and hence it will be applicable on all appellate orders passed by the said Shri R K Jain purported to be as CIT(A), Allahabad, on or after the date specified by Hon’ble High Court in its judgment and order, post his vacation of office as CIT(A) , Allahabad . This appellate ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 62 order was passed by Shri R K Jain on 28.09.2006 which is covered by order of Hon’ble High Court specifying date of vacation of office as CIT(A), Allahabad by said Shri R K Jain and hence this appellate order dated 28.09.2006 is null and void. If the assessee wanted to agitate the order of Hon’ble Allahabad High Court, it could have approached Hon’ble Allahabad High Court or Hon’ble Apex Court, but to agitate the said issue before tribunal ( being a body lower in hierarchy to Hon’ble High Court) once the appellate order dated 28.09.2006 passed by Shri R K Jain is covered by the period declared by Hon’ble High Court when he was not holding the charge of CIT(A), Allahabad, is clearly a misuse and abuse of process of law and is contemptuous on the part of the assessee. Thus, we hold that the ld. CIT(A) rightly proceeded to pass impugned appellate order dated 16 th February, 2017. Thus, there is no merit in the arguments of the assessee, which stand rejected. We order accordingly. g) That ld. CIT(A) passed a cryptic and non-speaking appellate order dated 16.02.2017 , u/s 250(6) of the 1961 Act on the merits of the additions made by the AO, and hence the same is liable to be set aside and consequently the additions made by AO to the income of the assessee as undisclosed income, which was later confirmed by ld. CIT(A), on merits are not sustainable in the eyes of law. We have observed that the assessee has not filed any submissions on merits of the additions made by the AO to the income of the assessee before the ld. CIT(A) , and even before us no submissions were made on the merits of additions made to the income of the assesssee. The ld. CIT(A) passed a non speaking cryptic order confirming additions made by the AO vide appellate order dated 16 th February , 2017, by holding as under: “5. Issue No. 3 On merits: Since no specific submissions have been made before me in this regard. I have no reasons to interfere with the detailed finding given by the AO. These while making the impugned additions are based on the seized/search material. The additions so made are, therefore, confirmed.” ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 63 We have observed that ld. CIT(A) dismissed the appeal of the assessee on the merits of the additions made by the AO in limine without discussing the issues on merits which were raised by the assessee in its appeal filed before ld. CIT(A). The reference is drawn to provision of Section 250(6) of the Act , whereby it is incumbent upon ld. CIT(A) to decide the appeal on merits , after recording his reason for the decision arrived on the issues raised by the assessee in its appeal , but the appellate order in the instant case was passed by ld. CIT(A in limine without discussing the issues on merits wherein he merely confirmed the additions without giving his own reasons for decision by passing a non-speaking and non-reasoned order on merits of each of the additions made by the AO . Thus, the appellate order passed by ld. CIT(A) on the merits of additions made to the income of the assessee by AO ,which is a non-speaking and unreasoned order is clearly not sustainable in the eyes of law. Reference is drawn to provisions of Section 250(6) of the 1961 Act. Even if the assessee does not give replies/explanations before ld. CIT(A), there are wide powers vested with ld. CIT(A) under the law to adjudicate first appeal arising from the assessment framed by the AO, which powers are co-terminus with the powers of the AO. Reference is drawn to the provisions of Section 250(4) and 251(1)(a) of the 1961 Act. The ld. CIT(A) is required to pass a reasoned and speaking order, while adjudicating first appeal, which should reflect his mind on the matter adjudicated by him with reasons, so that both the parties understand as to what weigh in the mind of ld. CIT(A) while adjudicating the matter. Moreover, the appellate order passed by ld. CIT(A) is amenable to appeal before tribunal , and for tribunal to arrive at its decision , it is important that reasoned and speaking order is passed by ld. CIT(A). Reference is drawn to the provisions of Section 250(6) of the 1961 Act. In the instant case before us, the assessee is equally responsible for its woes ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 64 as the assessee did not give any reply before ld. CIT(A) on the merits of the additions so made by the AO to the income of the assessee. Thus, based on facts and circumstances of the case and in the interest of justice and fairness to both the parties, the matter can go back to the file of ld. CIT(A) limited to fresh adjudication of all the issues on merits of additions made by the AO , so raised by the assessee in its appeal filed before ld. CIT(A) on merits in accordance with law. So far as issues raised by assessee on legal grounds, as adjudicated by us in this order, shall remain final and binding on both the parties, per our decision in this order.Thus keeping in view the entire facts and circumstances of the case as discussed above and in fairness to both the parties with a view to grant justice, we are inclined to set aside and remand the matter back to the file of ld. CIT(A) limited to adjudication of issues concerning additions to income made by the AO, to be adjudicated on merits and in accordance with law. Needless to say that ld. CIT(A) will give proper and adequate opportunity of hearing to the assessee in set aside remand proceeding as directed by us limited to adjudication of issues arising from additions to the income made by the AO, in accordance with the principle of natural justice and in accordance with law.The ld. CIT(A) is directed to pass reasoned and speaking order, while adjudicating the appeal of the assessee denovo as directed by us, limited to additions to income as were made by the AO. The evidences /explanations submitted by the assessee shall be admitted by ld. CIT(A) in accordance with law and be adjudicated on merits in accordance with law. We also clarify that we have not commented on the merits of the additions to the income made by the authorities below and all contentions so far concerning the additions to the income , are kept open. In case , the assessee did not co-operate with ld. CIT(A) in the aforesaid set aside remand proceedings, the ld. CIT(A) shall be free to adjudicate the issues concerning ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 65 additions to the income made by the AO based on material on record. The appeal of the assessee in ITA no. 128/Alld/2017 for Block Period 01.04.1988 to 23.08.1998 is partly allowed for statistical purposes. We order accordingly. 8. In the result, appeal filed by the assessee in ITA no. 128/Alld/2017 for Block Period 01.04.1988 to 23.08.1998 is partly allowed for statistical purposes. 9. Since, similar issues are involved in appeal filed in ITA no. 129 and 130/Alld/2017, our decision in ITA no. 128/Alld/2017 , shall apply mutatis mutandis to ITA no(s). 129 & 130/Alld/2017 , both for Block Period 01.04.1988 to 23.08.1998. Thus, appeal(s) of the respective assessee(s) in ITA no. 129 and 130/Alld/2017, both for Block Period 01.04.1988 to 23.08.1998, are partly allowed for statistical purposes. We order accordingly. 10. In the result, all the three appeal(s) filed by the respective assessee’s in ITA no(s). 128, 129 & 130/Alld/2017 , all for Block Period 01.04.1988 to 23.08.1998, are partly allowed for statistical purposes. Order pronounced in the open court on 29/04/2022at Allahabad. Sd/-Sd/- SdSd/- Sd/- [VIJAY PAL RAO] [RAMIT KOCHAR] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29/04/2022 KD Azmi Copy forwarded to: ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 66 1. Appellant –Smt. Asha Agrawal 447, Malviya Nagar, Allahabad-211003, U.P., M/s Mahendra Kumar Agrawal(HUF) 447, Malviya Nagar, Allahabad , U.P. & M/s Mahabir Prasad Agrawal(HUF), 77, Khuldabad, Allahabad, U.P. 2. Respondent –The Assistant Commissioner of Income-tax, Central Circle-II, Allahabad, U.P. 3. CIT(A) –AayakarBhawan, 38, M.G.Marg, Civil Lines, Allahabad,U.P. 4. CIT, AayakarBhawan, 38, M.G.Marg, Civil Lines, Allahabad, U.P. 5. The CIT-DR (ITAT), AayakarBhawan, 38, M.G.Marg, Civil Lines, Allahabad, U.P. By order Assistant Registrar ITA Nos.128, 129 &130/ALLD/2017 Assessment Year Block Period01/04/1988 to 23/08/1998 Smt. Asha Agrawal , M/s Mahendra Kumar Agrawal(HUF) & M/s Mahabir Prasad Agrawal(HUF), Allahabad, U.P. 67