Sampat Karbhari Avhad, Nashik V. Asst. CIT (Central), Circle-3, Nashik

ITA 978/PUN/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1054 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-07-2016
• Assessment Year: misc
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Opportunity of being heard; Validity of assessment
• Section: 143(3); 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO. 978 /PN/20 1 3 BLOCK PERIOD 01.01.1990 TO 22.12.2000 SHRI SAMPAT KARBHARI AVHAD, 4, GOVARDHAN APARTMENT, 4, GOVARDHAN APARTMENT, NEAR MSEB, PASTE ROAD, SINNAR, DIST. NASHIK . / APPELLANT PAN: AATPA5638B VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 3, NASHIK . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI S.K. RASTOGI, CIT / DATE OF HEARING : 2 1 . 0 7 .201 6 / DATE OF PR ONOUNCEMENT: 26 . 0 8 .201 6 / ORDER / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST ORDER OF C I T (A) - II , NASHIK , DATED 04 . 03 .20 1 3 RELATING TO BLOCK PERIOD 01.04.1990 TO 22.12.2000 AGAINST ORDER PASSED UNDER SECTION 158BD R.W.S. 143 (3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) . ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: - 1 . ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) - II IS ERRED IN HOLDING THAT IT IS NOT MANDATORY U / S. 127 OF THE ACT TO GIVE OPPORTUNITY OF BEING HEARD, WHEREAS THE SPECIFIC PLEA OF THE APPELLANT WAS THAT THE NOTICE U/S. 158BC OF THE ACT WAS ISSUED BY ACIT, CENTRAL CIRCLE - 3, NASHIK WITHOUT TRANSFER OF JURISDICTION FROM IT O, WARD 1(1), NASHI K WITH WHOM THE APPELLANT WAS HAVING JURISDICTION. 2 . ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEALS) - II, NASHIK IS NOT JUSTIFIED IN CONFIRMING VALIDITY OF THE ASSESSMENT ORDER. 3 . ON THE BASIS OF FACTS AN D IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEALS) - II, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE RETURNED INCOME OF RS.73,630/ - FOR A.Y. 2000 - 01, WHICH WAS ADDED BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME. 4 . ON THE BASIS OF F ACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX, (APPEALS) - II, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.2,76,477/ - AS UNDISCLOSED INCOME MADE ON ACCOUNT OF INVESTMENT IN M/ S. WILL TO FLY PACKER (I) PVT. LTD. 5 . ON THE BASIS OF THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) - II, NASHIK IS NOT JUSTIFIED I N CONFIRMING THE LEVY OF INTEREST U / S. 158BFA(1) OF THE ACT. 6 . ON THE BASIS OF THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEVY OF SURCHARGE PLEASE BE CANCELLED. OF SURCHARGE PLEASE BE CANCELLED. 3. THE FIRST ISSUE ARISING IN THE PRESENT APPEAL IS JURISDICTIONAL ISSUE, UNDER WHICH THE ASSESSEE IS AGGRIEVED BY THE ORDER OF CIT(A) IN HOLDING THAT UNDER SECTION 127 OF THE ACT, IT IS NOT MANDATORY TO ALL OW AN OPPORTUNITY OF HEARING AS AGAINST THE PLEA OF ASSESSEE THAT THE NOTICE UNDER SECTION 158BC OF THE ACT WAS ISSUED BY ACIT, CENTRAL CIRCLE - 3, NASHIK WITHOUT TRANSFER OF JURISDICTION FROM ITO, WARD 1(1), NASHIK. THE ASSESSEE HAS THUS, QUESTIONED THE VA LIDITY OF ASSESSMENT ORDER PASSED UNDER SECTION 1 58BD R.W.S. 143(3) OF THE ACT. 4. FIRST, WE SHALL TAKE UP THE JURISDICTIONAL ISSUE RAISED BY THE ASSESSEE VIDE GROUNDS OF APPEAL NO.1 TO 2. ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 3 5. BRIEFLY, THE FACTS RELATING TO THE ISSUE ARE THAT DURING THE COURSE OF SEARCH UNDER SECTION 132(1) OF THE ACT IN THE CASE OF M/S. WILL TO FLY PACKERS (I) PVT. LTD., SINNER, DIST. NASHIK WHICH WAS CONDUCTED ON 22.12.2000 , CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND AND SEIZED. NOTICE UNDER SECTION 158BD O F THE ACT WAS ISSUED ON 08.01.2004. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE VIDE LETTER DATED 19.01.2004 REQUESTED THAT THE RETURN OF INCOME FILED EARLIER ON 30.09.2002 BE TREATED AS FILED IN RESPONSE TO NOTICE UNDER SECTION 158BD OF THE ACT. THE AS SESSEE VIDE OFFICE LETTER DATED 04.07.2005 ISSUED BY THE ASSESSING OFFICER, CENTRAL CIRCLE - 3, NASHIK WAS INFORMED THAT THE EARLIER NOTICE UNDER SECTION 158BC DATED 07.03.2001 WAS ISSUED TO FIRM OF M/S. SAMPAT K. AVHAD AND NOT TO SHRI SAMPAT K. AVHAD. THE ORIGINAL RETURN OF INCOME FILED BY HIM ON 30.09.2002 WAS NOT A VALID RETURN OF INCOME AND THE EARLIER PROCEEDINGS INITIATED UNDER SECTION 158BC OF THE ACT AGAINST THE FIRM HAD BEEN ANNULLED BY THE CIT(A), NAGPUR. THEREFORE, THE RETURN OF INCOME FILED BY H IM IN RESPONSE TO NOTICE UNDER SECTION 158BC OF THE ACT COULD NOT BE CONSIDERED AS IF FILED IN RESPONSE TO NOTICE UNDER SECTION 158BD OF THE ACT. HE WAS THEREFORE, DIRECTED TO FURNISH RETURN OF INCOME IN PRESCRIBED FORM FORTHWITH IN RESPONSE TO NOTICE UND ER SECTION 158BD OF THE ACT ISSUED TO HIM. THE REQUEST OF ASSESSEE TO TREAT THE EARLIER RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 158BC OF THE ACT AS FILED IN RESPONSE TO SECTION 158BD OF THE ACT WAS REJECTED AND HE WAS CONSIDERED AS DEFA ULTER UNDER SECTION 158BFA OF THE ACT. THEREFORE, THE ASSESSEE FILED RETURN OF INCOME IN FORM 2B ON 15.07.2005 DECLARING UNDISCLOSED INCOME AT NIL. THE ASSESSMENT IN THE CASE WAS COMPLETED UNDER SECTION 158BD R.W.S. 143(3) OF THE ACT AND UNDISCLOSED INCO ME WAS DETERMINED AT RS. 3,50,10 0 / - . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO DISMISSED THE APPEAL IN THE FIRST ROUND FOR NON - APPEARANCE. THE TRIBUNAL VIDE ORDER DATED 15.03.2007 IN ITA NO.128/PN/2007 RELATING TO BLOCK PERIOD ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 4 01.04.1990 TO 22.1 2.2000 REMITTED THE ISSUE BACK TO THE FILE OF CIT(A). THE CIT(A) IN THE SECOND ROUND OF APPEAL PASSED AN ORDER ON 04.03.2013. 6. THE FIRST ISSUE RAISED BY THE ASSESSEE BEFORE THE CIT(A) WAS AGAINST EXERCISE OF JURISDICTION UNDER SECTION 127 OF THE ACT WHICH WAS DISMISSED AS THERE WAS TRANSFER OF RECORD FROM ONE ASSESSING OFFICER TO ANOTHER ASSESSING OFFICER , SITUATED WITHIN THE SAME CITY, LOCALITY OR A PLACE. THE SECOND OBJECTION RAISED BY THE ASSESSEE WAS AGAINST THE ASSESSMENT ORDER PASSED UNDER SECT ION 158BD R.W.S. 143(3) OF THE ACT. THE CIT(A) NOTED THAT THE ASSESSEE WAS ONE OF THE DIRECTOR IN M/S. WILL TO FLY PACKERS (I) PVT. LTD., SINNAR, NASHIK ON WHOM SEARCH ACTION UNDER SECTION 132(1) OF THE ACT WAS CARRIED OUT ON 22.12.2000. DURING THE COURS E OF SEARCH, VARIOUS DOCUMENTS WERE SEIZED AND SOME OF DOCUMENTS RELATED TO THE ASSESSEE. THE ASSESSMENT WAS INITIALLY COMPLETED UNDER SECTION 158BC R.W.S. 143(3) OF THE ACT. THE SAID ORDER WAS QUASHED BY CIT(A) - 1, NAGPUR ON TECHNICAL GROUNDS VIDE ORDER DATED 28.11.2003. HOWEVER, THE CIT(A) MENTIONED THAT THE ASSESSING OFFICER WAS FREE TO INITIATE NECESSARY PROCEEDINGS UNDER SECTION 158BD OF THE ACT IN THE CASE OF ASSESSEE. THE ASSESSING OFFICER THEREAFTER, RECORDED REASONS FOR INITIATING ACTION UNDER S ECTION 158BD OF THE ACT AND THE ORDER WAS PASSED ON 23.12.2005 . THE CIT(A) HELD THAT THE ORIGINAL ASSESSMENT UNDER SECTION 158BC R.W.S. 143(3) OF THE ACT WAS MADE ON 30.12.2002 WHICH WAS QUASHED ON TECHNICAL GROUNDS AND THEREFORE, NOTICE UNDER SECTION 158 BD OF THE ACT WAS SENT ON 18.01.2004. THE CIT(A) IN THIS REGARD OBSERVED THAT IT WAS NOT THE CASE WHERE THE ASSESSEE WAS RECEIVING NOTICE FOR THE FIRST TIME ON 18.01.2004 . IN VIEW THEREOF, THE CIT(A) UPHELD THE VALIDITY OF ASSESSMENT MADE UNDER SECTION 1 58BD OF THE ACT AND DISMISSED THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 5 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THE NOTICE UNDER SECTION 158BD OF THE ACT WAS IS SUED BY ASSESSING OFFICER, WHO HAD NO JURISDICTION. FIRST OF ALL, HE POINTED OUT THAT THERE WAS NO TRANSFER OF JURISDICTION UNDER SECTION 127 OF THE ACT AS THERE IS NO ORDER OF TRANSFERRING THE JURISDICTION UNDER SECTION 127 OF THE ACT. HE STRESSED THAT EARLIER , THE RETURN OF INCOME WAS FILED WITH THE ASSESSING OFFICER, WARD 1(1) AND THE NOTICE ISSUED UNDER SECTION 158BD OF THE ACT WAS WITHOUT JURISDICTION AS THERE WAS NO TRANSFER TO THE ASSESSING OFFICER, CENTRAL CIRCLE - 1, NASHIK. IN THIS REGARD, RELIAN CE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. CALCUTTA KNITWEARS (2014) 362 ITR 673 (SC). HE FURTHER POINTED OUT THAT SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF M/S. WI LL TO FLY PACKERS (I) PVT. LTD. ON 22.12.2000. THE FIRST NOTICE UNDER SECTION 158BC OF THE ACT WAS ISSUED TO THE ASSESSEE ON 07.03.2001. HE FURTHER POINTED OUT THAT SEARCH ASSESSMENT IN THE CASE OF SEARCHED PARTY UNDER SECTION 158BC OF THE ACT WAS COMPLETED ON 30.12.2002 , WHEREAS NOTIC E UNDER SECTION 158BD OF THE ACT WAS ISSUED TO THE ASSESSEE ON THE BASIS OF DIRECTIONS OF CIT(A) VIDE ORDER DATED 28.11.2003, VIDE ISSUE OF NOTICE UNDER SECTION 158BD OF THE ACT ON 08.01.2004. IN THIS REGARD, SUPPORT WAS DRAWN FROM CBDT CIRCULAR ISSUED BY THE BOARD TO REGULATE THE SAID PROVISIONS. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS FIRST JURISDICTIONAL ISSUE AS TO WHETHER THE ASSESSING OFFICER HAD THE POWER TO EXERCISE JURISDICTION UNDER SECTION 158BD OF ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 6 THE ACT. UNDER THE SAID SECTION 158BD OF THE ACT, IT IS PROVIDED THAT IF PURSUANT TO SEARCH ON A PERSON, CERTAIN DOCUMENTS OR ASSETS ARE FOUND OR SEIZED, WHICH BELONG TO SUCH OTHER PERSON, THEN WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON SEARCHED, THEN SUCH DOCUMENTS OR ASSETS SEIZE D WOULD BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED UNDER SECTION 158BC OF THE ACT AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF CHAPTER SHALL APPLY ACCORDINGLY. IN OTHER WO RDS, IN CASE DURING THE COURSE OF SEARCH ON A PERSON A CERTAIN DOCUMENTS, BOOKS OF ACCOUNT OR ASSETS ARE FOUND AND / OR SEIZED, WHICH DO NOT BELONG TO SEARCHED PERSON BUT BELONGED TO THIRD PARTY, THEN IN CASE THE ASSESSING OFFICER IS SATISFIED THAT ANY U NDISCLOSED INCOME BELONGS TO SUCH OTHER PERSON, THEN THE DOCUMENTS, BOOKS OF ACCOUNT OR ASSETS WOULD BE HANDED OVER TO SUCH ASSESSING OFFICER HAVING JURISDICTION OVER OTHER PERSON , WHO SHALL PROCEED AGAINST SUCH OTHER PERSON, IN VIEW OF PROVISIONS OF SECTI ON 158BC OF THE ACT. 11. THE HONBLE SUPREME COURT IN CIT VS. CALCUTTA KNITWEARS (SUPRA) HAVE LAID DOWN THE RATIO IN RELATION TO EXERCISE OF JURISDICTION UNDER SECTION 158BD OF THE ACT. THE HONBLE SUPREME COURT HELD THAT FOR THE PURPOSE OF SECTION 158BD , 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. THUS, THE SATISFACTION NOTE IS TO BE RECORDED BY THE ASSESSING OFFICER WHO IS IN - CHARGE OF THE SEARCHED PERSON AND BEFORE HANDING OVER THE RECORDS TO THE ASSESSING OFFICER, WHO HAS JURISDICTION OVER SUCH OTHER PERSON, DOCUMENTS OR ASSETS RELATING TO WHOM WERE FOUND DURING THE COURSE OF SEARCH. THE HONBLE SUPREME COU RT FURTHER HELD THAT THE SATISFACTION NOTE COULD BE PREPARED AT EITHER OF THE FOLLOWING STAGES : (A) AT THE TIME OF OR ALONG WITH THE ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 7 INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; (B) ALONG WITH THE ASSESSMENT PROCEE DINGS 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. 12. THE CBDT IN VIEW OF THE PROPOSITION LAID DOWN BY THE HONBLE SUPREME COURT, HAS PASSED TH E CIRCULAR NO.24/ 20 15, DATED 31.12.2015 VIS - - VIS RECORDING OF SATISFACTION NOTE UNDER SECTION 158BD / 15 3 C OF THE ACT. THE CIRCULAR PROVIDES AS UNDER: - 2. THE HON'BLE SUPREME COURT IN THE CASE OF M / S CALCUTTA KNITW E ARS IN IT S DETAILED JUDGMENT IN CIVIL APPEAL NO.39 5 8 OF 2014 DATED 12.3.2014 (AVAILABLE IN NJRS AT 2014 - LL - 0312 - 51 ) HAS LAID DOWN THAT FOR THE PURPOSE OF SECTION 15 8BD OF THE ACT, RECORDING OF A SATISFACTION NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREPARED BY THE A O BEFORE HE TRANS M ITS THE RECORD TO THE OTHER A O WHO HAS JURISDICTION OVER SUCH OTHER PERSON U/S 15 8B D . THE HON'BL E COURT HELD THAT 'THE SATISFACTION NOTE COULD BE PREPARED AT ANY OF THE FOLLOWING STAGES: (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROCEEDING S AGAINST THE SEARCHED PERSON UNDER SECTION 15 8BC OF THE ACT; OR (B) IN THE COURSE OF THE ASSESSMENT P ROCEE DINGS UNDER SECTION 15 8BC OF THE ACT; OR (C) IMMEDIATELY AFTER THE P ROCEE DINGS UNDER SECTION 15 8BC OF THE ACT; OR (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS ARC COMPLETED UNDER SECTION 15 8BC OF THE ACT OF THE SEARCHE D PERSON.' 3. SEVERAL HIGH COURTS HAVE HELD THAT THE PROVISIONS OF SECTION 15 3C OF THE ACT ARE SUBST ANTIALLY SIMILAR/PARI - MATERIA TO THE PROVISIONS OF SECTION 158 BD OF THE ACT AND THEREFORE , THE ABOVE GUIDELINES OF THE HON'BLE SC, APPLY TO PROCEEDINGS U/ S 153 C OF THE IT ACT, FOR THE PURPOSE OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PERSON. THIS VIEW HAS BEEN ACCEPTED BY C B DT. 4. THE GUIDELINES OF THE HON'BLE SUPREME COURT AS REFERRED TO IN PARA 2 ABOVE, WITH REGARD T O RECORDING OF SATISFACTION NOTE, MAY BE BROUGHT TO THE NOTICE OF ALL FOR STRICT COMPLIANCE. IT I S FURTHER CLARIFIED THAT EVEN IF THE AO OF THE SEARCHED PERSON AND THE 'OTHER PERSON' IS ONE AND THE SAME, THEN ALSO HE IS REQUIRED TO RECORD HIS SATISFACTION AS HAS BEEN HELD BY THE COUR TS 5 . IN VIEW OF THE ABOVE, FILING OF APPEALS ON THE ISSUE OF RECORDING O F SATISFACTION NOT E SHOULD ALSO BE DECIDED IN THE LIGHT OF THE ABOVE JUDGEMENT. ACCORDINGLY, THE BOARD HEREBY DIRECTS THAT PENDING LITIGATION WITH REGARD TO RECORDING OF SATISFACTIO N NOTE UNDER SECTION 158B D / 153C SHOULD BE WITHDRAWN/NOT PRESSED IF IT DOES NOT MEET THE GUIDELINES LAID DOWN BY THE APE X COURT. 1 3 . THE CIRCULAR ISSUED BY THE CBDT HAS RECOGNIZED THAT THE SATISFACTION NOTE IS A PRE - REQUISITE FOR INITIATING PROCEEDINGS UNDER SECTION 158BD OF THE ACT, WHICH IS TO BE PREPARED BY THE ASSESSING OFFICER BEFORE HE TRANSMITS THE RECORD TO OTHER ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 8 ASSESSING OFFICER, WHO HAS JURISDICTION OVER SUCH OTHER PERSON UNDER SECTION 158BD OF THE ACT. IT IS ALSO PROVIDED IN THE SAID CIRCULA R THAT WHERE THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS ONE AND THE SAME, THE N ALSO HE IS REQUIRED TO RECORD HIS SATISFACTION AS HAS BEEN HELD BY THE COURTS. THE STAGES OF RECORDING OF SATISFACTION NOTE HAS BEEN RECOGNIZED AS LAI D DOWN BY THE HONBLE SUPREME COURT IN CIT VS. CALCUTTA KNITWEARS (SUPRA) IN ALL THREE STAGES AS MENTIONED ABOVE. THE CIRCULAR FURTHER LAYS DOWN THAT THE PROVISIONS OF SECTION 153C OF THE ACT ARE SUBSTANTIALLY SIMILAR / PARAMETRIA TO THE PROVISIONS OF SEC TION 158BD OF THE ACT AND THEREFORE, THE ABOVE GUIDELINES OF THE HONBLE SUPREME COURT WOULD APPLY TO PROCEEDINGS UNDER SECTION 153C OF THE ACT, FOR THE PURPOSE OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PERSON. THE CBDT HAS ACCEPTED THIS VIEW CAT EGORICALLY. FURTHER, DIRECTIONS HAVE BEEN GIVEN BY CBDT VIS - - VIS FILING OF APPEALS ON THE ISSUE OF RECORDING OF SATISFACTION NOTE AND IT IS BEING DIRECTED THAT THE PENDING LITIGATION WITH REGARD TO RECORD ING OF SATISFACTION NOTE UNDER SECTION 158BD / 153 C OF THE ACT SHOULD BE WITHDRAWN OR NOT PRESSED, IF IT DOES NOT MEET THE GUIDELINES LAID DOWN BY THE APEX COURT. 1 4 . NOW, COMING TO THE FACTS OF THE PRESENT CASE BEFORE US, SEARCH ACTION UNDER SECTION 132 OF THE ACT IN THE CASE OF M/S. WI LL TO FLY PACKERS (I) PVT. LTD. TOOK PLACE ON 22.12.2000 . DURING THE COURSE OF SEARCH, VARIOUS DOCUMENTS WERE FOUND , WHICH RELATED TO THE ASSESSEE BEFORE US . THE ASSESSMENT ORDER UNDER SECTION 158BC R.W.S. 143(3) OF THE ACT WAS PASSED IN THE CASE OF THE COMPANY ON 30.12. 2002. INITIALLY, IN THE CASE OF THE ASSESSEE, THE PROCEEDINGS WERE INITIATED UNDER SECTION 158BC AND ASSESSMENT ORDER UNDER SECTION 158B C R.W.S. 143(3) OF THE ACT WAS PASSED BY ACIT, CENTRAL CIRCLE - 3, NASHIK ON 30.12.2002. THE SAID ORDER WAS QUASHED BY T HE CIT(A), NAGPUR ON TECHNICAL GROUNDS VIDE ORDER DATED 28.11.2003, WHICH ALSO MENTIONED THAT THE ASSESSING OFFICER WAS FREE TO INITIATE ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 9 NECESSARY PROCEEDINGS UNDER SECTION 158BD OF THE ACT AGAINST THE ASSESSEE. THE ASSESSING OFFICER THEREAFTER, RECORDED REASONS FOR INITIATING ACTION AND NOTICE WAS ISSUED ON 08.01.2004. THE SATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFFICER MUCH AFTER COMPLETION OF ASSESSMENT PROCEEDINGS UNDER SECTION 158BC OF THE ACT ON THE SEARCHED PERSON AND ON THE BASIS OF DIRECT IONS OF CIT(A) VIDE ORDER DATED 28.11.2003. THE ASSESSEE IN THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) HAS MENTIONED THE ABOVE FACTUAL ASPECTS THAT THE NOTICE UNDER SECTION 158BD OF THE ACT WAS ISSUED ON 08.01.2004, WHEREAS ORIGINAL ASSESSMENT UNDER SECTION 158BC OF THE ACT IN THE CASE OF M/S. WILL TO FLY PACKERS (I) PVT. LTD., PURSUANT TO WHICH NOTICE UNDER SECTION 158BD OF THE ACT WAS TO BE ISSUED TO THE ASSESSEE, WAS COMPLETED ON 30.12.2002. IN OTHER WORDS, NOTICE UNDER SECTION 158BD OF THE ACT WA S INITIATED AFTER ONE YEAR OF THE DATE OF ORDER IN THE CASE OF M/S. WILL TO FLY PACKERS (I) PVT. LTD. I.E. THE PERSON IN WHOSE CASE SEARCH ACTION WAS TAKEN AND THE ALLEGED INCRIMINATING MATERIAL WAS SEIZED. THE HONBLE SUPREME COURT IN CIT VS. CALCUTTA KN ITWEARS (SUPRA) HAS LAID DOWN THE STAGES AT WHICH THE NOTICE UNDER SECTION 158BD OF THE ACT COULD BE ISSUED TO THE OTHER PERSON. THE FIRST STAGE IS DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEING CARRIED OUT IN THE CASE OF SEARCHED PERSON I.E. IN THE PR ESENT CASE M/S. WILL TO FLY PACKERS (I) PVT. LTD. OR ALONG WITH COMPLETION OF ASSESSMENT IN THE HANDS OF SEARCHED PERSON, WHICH WAS COMPLETED ON 30.12.2002 OR IMMEDIATELY AFTER THE PROCEEDINGS OF SEARCHED PERSON. HOWEVER, IN THE FACTS OF THE PRESENT CASE, NOTICE UNDER SECTION 158BD OF THE ACT WAS INITIATED AFTER ONE YEAR OF THE DATE OF ORDER IN THE CASE OF SEARCHED PERSON. THE SATISFACTION NOTE WAS RECORDED IN THE PRESENT CASE BY THE ASSESSING OFFICER BY ISSUE OF NOTICE UNDER SECTION 158BD OF THE ACT AFTE R THE DIRECTIONS OF CIT(A) VIDE ORDER DATED 28.11.2003 IS BEYOND THE LIMITATI ON PRESCRIBED UNDER THE ACT AND IS INVALID. FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. CALCUTTA KNITWEARS (SUPRA ), WE HOLD THAT NOTICE ITA NO . 978 /PN/20 1 3 SHRI SAMPAT KARBHARI AVHAD 10 ISSUED UNDER SEC TION 158BD OF THE ACT IN THE PRESENT CASE IS INVALID AND HENCE, THE ASSESSMENT COMPLETED UNDER SECTION 158BD R.W.S. 143(3) OF THE ACT IS WITHOUT JURISDICTION AND IS QUASHED. SINCE THE ASSESSEE SUCCEEDS ON THE JURISDICTIONAL ISSUE, THERE IS NO MERIT IN THE ISSUES RAISED AGAINST MERITS OF THE CASE. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 1 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 26 TH DAY AUGUST , 201 6 . S D/ - SD/ - ( R.K. PANDA ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 26 TH AUGUST , 201 6 . GCVSR GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE C I T (A) - II , NASHIK ; 4. / THE C I T - I, NASHIK ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE