Appeal details
Counselvise Citation
[2018] 122 COUNSELVISE.COM (IT) 3684 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
07-03-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Assessment Year
misc
Appeal Filed On
09-02-2016
Judgement Text
IT (SS) A.NO. 01 /MUM/201 6 LATE SHRI JAGJIT SINGH BAJAJ IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ( ) / IT(SS)A . NO. 01/MUM/2016 ( / ASSESSMENT YEAR S : BLOCK PERIOD 01/04/1988 TO 07/11/1997 ) LATE SHRI J A GJIT SINGH BAJAJ [REPRESENTED BY J ASWINDER SINGH BAJAJ ] 622,DURGA NIWAS 18 TH ROAD, KHAR(W) MUMBAI - 400 052 / VS. DEPUTY COMMISSIONER OF INCOME - TAX 19(1) MUMBAI ./ ./ PAN/GIR NO. A ERPB - 2252 - G ( / APPELLANT ) : ( / RESPONDENT ) A SSESSEE BY : K.K. LALKAKA, LD.AR RE VENUE BY : ABHIJIT PATANKAR , LD. CIT( DR ) / DA TE OF HEARING : 26/02/2018 / DATE OF PRONOUNCEMENT : 07 /03 /2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR BLOCK PERIOD 01/04/1988 TO 07/11/1997 [BLOCK YEAR] CONTEST THE ORDER OF LD. COMMISSI ONER OF INCOME - TAX (APPEALS) - 24 [CIT (A)], MUMBAI, APPEAL NO. CIT(A) - 24/DCIT - IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 2 19(1)/IT 231/2011 - 12 DATED 30/12/2015 BY RAISING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L EARNED CIT (APPEALS) OUGHT TO HAVE HELD THAT REASSESSMENT PROCEEDINGS ARE BAD IN LAW, ILLEGAL, IN EXCESS OF AND/OR IN WANT OF JURISDICTION AND/OR OTHERWISE VOID MORE PARTICULARLY SINCE - (A) SINCE THE CIT(APPEALS) FAILED TO REALIZE THAT PROCEEDINGS SET ASI DE BY THE HONBLE TRIBUNAL WERE DENOVO PROCEEDINGS AND HENCE, ISSUE OF NOTICE UNDER SECTION 143(2) IS A JURISDICTIONAL REQUIREMENT. (B) SINCE THE CIT(APPEALS) FAILED TO REALIZE THAT SECTION 292BB DOES NOT CURE A JURISDICTIONAL EFFECT. (C) SINCE THE CIT (AP PEALS) FAILED TO REALIZE THAT IT WAS NECESSARY FOR THE ASSESSING OFFICER MAKING ASSESSMENT UNDER SECTION 158BC OF THE ACT IN CASE OF A SEARCH PARTY TO CATEGORICALLY RECORD HIS SATISFACTION THAT AS A RESULT OF EXAMINATION OF SEIZED MATERIAL, IT HAS COME TO HIS NOTICE THAT THERE IS CERTAIN UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. (D) S INCE THE CIT (APPEALS) FAILED TO CONSIDER THAT NOTICE UNDER SECTION 158 BC/158BD HAS BEEN ISSUED IN THE NAME OF NON - EXISTENT PERSON NAMELY JAGJIT SINGH BAJAJ DECEASED AN D ASSESSMENT BASED ON SUCH NOTICE IS VOID. (E) S INCE THE CIT (APPEALS) FAILED TO CONSIDER THAT WHEN ASSESSMENT PROCEEDINGS ARE CHALLENGED, IF THERE ARE MULTIPLICITY OF REPRESENTATIVES, ALL MUST BE IMPLEADED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) ERRED IN SUSTAINING THE ORDER OF THE ASSESSING OFFICER BY HOLDING THAT INVESTMENT OF R S .11,15,000/ - IN FLAT NO.103, PRITHVI APARTMENT AND FURTHER INVESTMENT OF R S. 70,000 / - IN APRIL 1993 ON TENANCY BASIS WAS UNAC COUNTED INVESTMENT WITHOUT APPRECIATING THE SPECIAL CIRCUMSTANCES OF THE CASE AND FURTHER HOLDING THAT THE SAID INVESTMENTS WERE UNACCOUNTED INVESTMENTS ON IRRELEVANT AND INCONSEQUENTIAL GROUNDS. GROUND NO. 1(E) NOT BEEN PRESSED DURING HEARING BEFORE US AND THUS THE SAME STANDS DISMISSED IN LIMINE. 2. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DEPUTY COMMISSIONER OF INCOME TAX - CIRCLE 19(1) MUMBAI [AO] U/S 158BD READ WITH SECTION 158BC & 254 OF THE INCOME TAX ACT, 1961 ON 31/12/2009 . THE ASSESSEE IS IN SECOND ROUND OF APPEAL BEFORE US SINCE THE MATTER IN ASSESSEES APPEAL IN THE FIRST ROUND WAS REMITTED BACK TO THE FILE OF LD. AO BY THIS TRIBUNAL IN IT (SS) A NO. 234 /MUM/20 04 ORDER DATED 28/02 /20 08 . THE REVENUE HAD ALSO CONTESTED THE RELIEF GRANTED BY LD . IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 3 CIT(A) BEFORE THIS TRIBUNAL VIDE ITA NO. 274/MUM/2014 ORDER DATED 21/05/2007 BUT THE SAME WAS DISMISSED. 3. FACTS AS EMANATING FROM THE TRIBUNALS ORDER IN THE FIRST ROUND ARE THAT THE ASSESSEE WAS CARRYING ON THE PROPRIETARY BUSINESS IN THE NAME AND ST YLE OF PUNJAB PANEER CENTER . THE ASSESSEE EXPIRED ON 07/11/1997 AND THE BUSINESS THEREAFTER WAS SUCCEEDED BY HIS SON MR. SWARANJIT SINGH BAJAJ . SEARCH & SEIZURE ACTIONS WERE CARRIED OUT U/S 132 ON 10/12/1998 AT THE BUSINESS PREMISES OF M/S PUNJAB SINDH PAN EER CENTER AND ALSO AT THE RESIDENTIAL PREMISES OF MR. SWARANJEET SINGH BAJAJ . SIMULTANEOUSLY, SEARCH ACTION WAS ALSO CARRIED OUT AT THE PREMISES OF PUNJAB PANEER CENTER AND ITS PROPRIETOR JASVINDER SINGH BAJAJ ALSO. DURING THE COURSE OF SEARCH AND SEIZURE CERTAIN CASH, JEWELLERY & BOOKS OF ACCOUNTS WITH OTHER RELATED RECORDS, DOCUMENTS AND PAPERS WERE SEIZED. CONSEQUENTLY, NOTICE U/S 158BD DATED 10/07/2000 WAS ISSUED IN THE NAME OF LATE SH. JAGJIT SINGH BAJAJ THROUGH HIS LEGAL HEIR FOR FILING THE RETURN FO R THE BLOCK PERIOD. PURSUANT TO SAME, THE RETURN REFLECTING UNDISCLOSED INCOME OF RS.3.34 LACS WAS FILED WHICH WAS FINALLY ASSESSED AT RS.65,56,080 AFTER ESTIMATED ADDITION OF RS.62,22,080/ - FROM MILK AND PANEER BUSINESS . THE ASSESSEE, INTER - ALIA, CHALLENG ED THE VALIDITY OF NOTICE ISSUED U/S 158BD WITHOUT ANY SUCCESS BEFORE LD. CIT(A) WHO UPHELD THE VALIDITY OF NOTICE ISSUED U/S 158BD ON THE PREMISE THAT IT WAS NOT OPEN TO THE ASSESSEE TO TAKE UP THE PLEA AT THE APPELLATE STAGE AS A LAST RESORT THAT THE PRO CEEDINGS TAKEN AND THE ASSESSMENT ORDER MADE IN THIS REGARD WERE NULL AND VOID . AGGRIEVED, THE ASSESSEE CONTESTED THE SAME BEFORE THIS TRIBUNAL WHEREIN THE MATTER WAS REMITTED BACK TO THE FILE OF LD. AO WITH FOLLOWING OBSERVATIONS: - IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 4 10. WE HAVE HEAR D THE R IVAL CONTENTIONS AND PERUSED THE RECORDS. IN THE PRESENT CASE, THE SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT THE PREMISES OF MR. JASVINDER SINGH BAJAJ, SON O F LATE JAGJIT SINGH BAJAJ, THE ASSESSEE HEREIN. THE ASSESSEE WAS CARRYING ON THE BUSINESS U NDER THE NAME AND STYLE OF PUNJAB P ANEER CENTRE WHICH ON HIS DEMISE WAS SUCCEEDED TO BY HIS SON MR. JASVINDER SINGH BAJAJ. HIS OTHER SON WAS ENGAGED IN THE BUSINESS IN THE NAME AND STYLE OF M/S PUNJAB SIND H PANEER CENTRE. SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE SO NS OF THE ASSESSEE ON 10.12.199 8 I.E. AFTER THE DEMISE OF ASSESSEE N 07.11.1997. DURING THE COURSE OF SEARCH, CER TAIN I NCRIMINATING DOC UMENTS WERE FOUND AND NOTICES U/ S 158BD OF THE ACT WERE IS SUED IN THE NAME OF SHRI JAGJIT SINGH BAJAJ, LEGAL HEIR MR. JASVINDER SINGH B AJAJ. 11. SECTION 158 BD OF THE ACT PROVIDES THAT IN C ASE CERTAIN DOCUMENTS RELATING TO A PERSON OTHER THAN THE PERSON S EARCHED ARE FOUND DURING THE COURSE OF SEARCH, THEN THE ASS ESSING OFFICER IS TO RECORD HIS SATISFACTION REGARDING ANY UNDISCLOSED INCOME BELONGING TO SUCH OTHER PERSON AND AFTER RECORDING SUCH SATISFACTION HANDOVER THE BOOS OF ACCOUN T AND / OR ANY OTHER D O CUMENTS AND A SSETS SEIZED BY HIM TO THE ASSESSING OFFICER HAVING JURISDICTION OF SUCH OTHER PERSON. 12. THEIR L ORDSHIPS OF HONBLE SUPREME COURT IN M ANISH MAHESHWARI VS . ACIT (SUPRA) HAVE HELD THAT CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF SECTION 158BD, THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PR OVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISE HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A OF THE ACT . 13 . APPLYING THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN MANISH MAHESHWARI VS. ACIT (SUPRA) TO THE FACTS OF THE PRESENT CASE BEFORE US, WE FIND THAT IT IS NOT CLEAR WHETHER THE CONDITIONS LAID DOWN UNDER SECTION 158BD OF THE ACT HAVE BEEN COMPLIED WITH BEFORE INITIATING THE PROCEEDINGS AGAI NST THE ASSESSEE THEREIN. ACCORDINGLY, WE DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO DETERMINE WHETHER A SATISFACTION HAS BEEN RECORDED IN WRITING BY THE ASSESSING OFFICER IN - CHARGE OF THE BLOCK ASSESSMENT PROCEEDINGS IN THE CASE OF PERSONS FROM WHOSE POSSESSION THE DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND. THE MATTER IS REMITTED BACK TO THE ASSESSING OFFICER TO DETERMINE THE VALIDITY OF THE NOTICE ISSUED UNDER SECTION 158BD OF THE ACT IN LINE WITH THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN MANISH MAHESHWARI VS. ACIT (SUPRA). 14 . IN VIEW OF OUR DECISION IN REMITTING THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR DETERMINING WHETHER THE CONDITIONS LAID DOWN IN SECTION 158BD OF THE ACT HAVE BEEN SATISFIED, WE ALSO SET ASIDE THE ISSUE ON MERITS TO BE DECIDED DE NOVO BY AFFORDING FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSE E. THE ASSESSEE SHALL CO - OPERATE BY PRODUCING THE NECESSARY EVIDENCE IN REGARD TO HIS CLAIM. THE MATTER IS SET ASIDE TO THE FILE OF ASSESSING OFFICER WITH DIRECTIONS AS INDICATED HEREINABOVE. 4. PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL, THE QUANTUM ASSESSMENT ORDER HAS BEEN PASSED ON 31/12/2009 BY LD. AO AFTER MAKING ADDITIONS IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 5 OF RS.11.85 LACS U/S 69. DURING PROCEEDINGS IN SECO ND ROUND, THE ASSESSEE WAS ISSUED ANOTHER NOTICE U/S 158BD READ WITH SECTION 158BC ON 17/12/2009 WHICH WAS FOLLOWED BY NOTICE U/S 142(1). AS TO THE VALIDITY OF T HE PROCEEDINGS U/S 158BC/BD , LD. AO HELD AS UNDER: - 4.2 THE SUBMISSIONS GIVEN BY THE ASSESSEE A RE DULY CONSIDERED. THE ASSESSING OFFICER HAS RECEIVED THE SEARCH & SEIZURE MATERIAL AND AFTER THOUGH THE BOOKS OF ACCOUNTS BELONGING TO PUNJAB PANEER CENTRE GROUP, THE NOTICE U/S.158BD HAS BEEN ISSUED ON THE LEGAL HEIRS. THE NOTICES ISSUED ON THE BASIS OF THE BOOKS RECEIVED WHICH WERE SEIZED DURING SEARCH PROCEEDINGS. AS SUCH THE PROCEEDINGS U/S.158BD HAS ONLY BEEN INITIATED AFTER THE AO HAS REACHED IN A POSITIVE WAY ON THE BASIS OF MATERIAL SEIZED DURING SEARCH THAT THERE WAS INDEED SATISFACTION FOR ISSUE OF NOTICE U/S.158BD. THE SATISFACTION IS BASED ON SEIZED MATERIAL AND DOCUMENTS WHICH IS ALSO MENTIONED IN THE SECOND PARA OF THE ORIGINAL ASSESSMENT ORDER. THE ASSESSEE IN RESPONSE TO THE NOTICE HAS FILED THE BLOCK RETURN OF INCOME DECLARING UNDISCLOSED INCOME OF RS.3,34,000/ - AND HAS NOT RAISED ANY ISSUE REGARDING VALIDITY OF THE NOTICE. HENCE THE ISSUE OF NOTICE IS WITHIN THE PARAMETERS OF SECTION 158BD AS ADJUDICATED BY THE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT 289 JTR 341. 4.3 DURIN G SEARCH PROCEEDINGS, IT WAS FOUND THAT LATE SHRI JAGJITSINGH BAJAJ WAS CONDUCTING BUSINESS FROM 01.04.1989 TO 07.11.0997 (DATE OF DEATH) AND SUBSEQUENTLY HIS BUSINESS HAS BEEN TAKEN BY HIS SON MR. SWARANJIT SINGH BAJAJ. SINCE LATE SHRI JAGJITSINGH BAJAJ W AS STAYING IN THE SAME PREMISES WHERE SEARCH WAS CONDUCTED AND PROPERTIES IN THE NAME OF LATE SHRI JAGJITSINGH BAJAJ WERE CONSIDERED EVEN DURING THE RECORDING STATEMENT U/S.132(4) , THE A O WAS IN POSSESSION OF THIS INFORMATION, WHEN THE SEARCH & SEIZURE MAT ERIAL WAS RECEIVED AND CONSEQUENTLY NOTICE ISSUED. SINCE BOOKS OF ACCOUNTS PRIOR TO 07.11.1997 (DATE OF DEATH OF THE ASSESSEE) WERE ALSO SEIZED, THERE IS INDEED MATERIAL ON RECORD TO PROVE THAT THE APPALLENT HAS UNDISCLOSED INCOME AND ACCORDINGLY NOTICE U/ S.158BD IS VALID AND WITHIN THE PARAMETERS OF LAW AS LAID DOWN BY THE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT 289 ITR 341. 4.4 AS FAR AS ISSUED OF NOTICE TO LATE SHRI JAGJITSINGH BAJAJ IS CONCERNED, IT HAS TO BE MENTIONED THAT THE NOTICE IS ADDRESSED TO THE LEGAL HEIR. SINCE THE ASSESSEE HAS RAISED NO OBJECTION AT THE TIME OF ASSESSMENT PROCEEDINGS AND VOLUNTARILY COMPLIED WITH VARIOUS NOTICES AND ATTENDED VOLUNTARILY BEFORE AO AND ALLOWED THE ASSESSMENT PROCEEDINGS TO CONTINUE AGAINST THE A SSESSEE WITHOUT ANY OBJECTION, IT IS NOT OPEN TO THE ASSESSEE TO TAKE A PLEA THAT THE PROCEEDING CONDUCTED AND ASSESSMENT ORDER MADE AGAINST THE ASSESSEE IS NULL AND VOID. RELIANCE IS PLACED ON DECISION OF CIT VS. SUMANTH BHAI C. MUNSHAW 128 ITR 142. 4.5 A S FAR AS THE VALIDITY OF NOTICE U/S. 158BC IS CONCERNED, IT HAS TO BE STATED THAT THE NOTICES ARE VALIDLY ISSUED AND SERVED WITHIN THE PARAMETERS OF LAW. IN THE CASE OF THE ASSESSEE THE QUANTUM APPEAL WAS DECIDED BY THE CIT(A) DELETING THE ADDITION OF RS.6 2,22,080/ - . AGAINST THE SAID ORDER THE REVENUE PREFERRED AN APPEAL BEFORE THE HONBLE ITAT AND THE HONBLE ITAT VIDE ITA NO. 274/MUM/2004, DATED 21.05.2007 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. SINCE THE HONBLE ITAT HAS DECIDED THE ISSUE ON MERITS IN THE APPEAL OF THE REVENUE WHICH HAS BEEN IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 6 ACCEPTED BY THE ASSESSEE, THERE CANNOT BE ANY LEGAL INFIRMITY IN ISSUE AND SERVICE OF NOTICE U/S. 158 BD R.W.S. 158BC. IN VIEW OF THE SAME THE CONTENTION OF THE ASSESSEE REGARDING VALIDITY OF NOTICE U/S. 158BD IS FOUND NOT VALID. FINALLY, AFTER DUE CONSIDERATION, THE ASSESSEE HAS BEEN SADDLED WITH ADDITION OF RS.11.85 LACS U/S 69. 5. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHOUT ANY SUCCESS BEFORE LD. CT(A) VIDE IMPUGNED ORDER DATED 30/12/2015 WHERE THE ASS ESSEE , INTER - ALIA, CHALLENGED VALIDITY OF ASSESSMENT BY RAISING ADDITIONAL G ROUNDS QUA NON - ISSUANCE OF NOTICE U/S 143(2) . HOWEVER, THE SAME DID NOT FOUND FAVOR WITH LD. CIT(A) WHO UPHELD THE STAND OF LD. AO, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. THE LD. AUTHORISED REPRESENTATIVE FOR ASSESSEE [AR], BY DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN THE PAPER - BOOK AND CASE LAWS CONTESTED THE ASSESSMENT ON LEGAL GROUNDS AS WELL AS ON MERITS WHEREAS LD. DEPARTMENTAL REPRESENTATIVE [DR] HAS SUPPORTED THE STAND OF LOWER AUTHORITIES. 7. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. FIRST OF ALL, WE DEEM IT FIT TO DEAL WITH THE DIRECTIONS GIVEN BY THE CO - ORDINATE BENCH IN THE FIRST ROUND OF APPEAL . IT IS EVIDENT FROM PARA - 13 OF TRIBUNALS ORDER AS EXTRACTED ABOVE THAT THE MATTER WAS REMITTED BACK TO ASCERTAIN WHETHER THE CONDITIONS LAID DOWN U/S 158BD HAS BEEN FULFILLED BEFORE INITIATING THE PROCEEDING AGAINST THE ASSESSEE APPLYING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN MANISH MAHESHWARI VS. ACIT [159 TAXMAN 258] WHERE HONBLE COURT HAS HELD AS UNDER: - '158BD. UNDISCLOSED INCOME OF ANY OTHER PERSON. WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON , OTHER THAN THE PERSON IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 7 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 S HALL 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.' 7. CONDITION PRECEDENT FOR INVOKING A BL OCK ASSESSMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132, OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. THE SAID PROVISION WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT UNDER SECTION 1 32A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. SECTION 158BD, HOWEVER, PROVIDES FOR TAKING RECOURSE TO A BLOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITIONS PRECEDENTS WHEREFOR ARE : ( I ) SATISFA CTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OF THE ACT; ( II ) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQ UISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON; AND ( III ) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. 8. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF SEC TION 158BD, THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTION 1 32A OF THE ACT. HOWEVER, UPON PERUSAL OF ORDERS OF LD. AO AS WELL AS LD. FIRST APPELLATE AUTHORITY, WE FIND THAT BOTH THE AUTHORITIES HA VE FAILED TO BRING ON RECORD THE FACT UM OF RECORDING OF EXPRESS SATISFACTION BY LD. AO OF THE SEARCHED PARTY BEFORE PRO CEEDING U/S 158BD . EVEN DURING PROCEEDINGS BEFORE US, THE REVENUE IS UNABLE TO BRING ON RECORD ANY SATISFACTION NOTE ETC. OF LD. AO OF THE SEARCHED PARTY BEFORE PROCEEDINGS U/S 158BD DESPITE BEING PROVIDED WITH ADEQUATE OPPORTUNITIES. IN TERMS OF THE CIT ED DECISION OF HONBLE APEX COURT, IT WAS NECESSARY FOR THE ASSESSING O FFICER MAKING ASSESSMENT U/S 158 BC IN CASE OF THE SEARCHED PARTY TO RECORD HIS SATISFACTION THAT AS A RESULT OF EXAMINATION OF SEIZED MATERIAL, IT HAS COME TO HIS NOTICE THAT THERE IS C ERTAIN UNDISCLOSED INCOME IN THE HANDS OF THE THIRD PARTY. THE SAID SATISFACTIONS HAS TO BE EXPRESS, IN WRITING AND IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 8 SHOULD REFLECT DUE APPLICATION OF MIND. HOWEVER, UPON PERUSAL OF ORDERS OF LD. AO AS EXTRACTED ABOVE, WE FIND THAT LD. AO IS PRIMARILY THRIV ING UPON IMPLIED SATISFACTION. HOWEVER, THE SAME IN OUR OPINION, DO NOT FULFILL THE STATED REQUIREMENT AND THEREFORE, WAS NOT PROPER AND DO NOT JUSTIFY PROCEEDINGS U/S 158BD SINCE THERE SHOULD BE A POSITIVE AND RECORDED SATISFACTION PIN POINTING THE EXACT MATERIAL WHICH HAS LED TO THE INITIATION OF NOTICE U/S 158BD OF THE INCOME TAX ACT. THE SAID CONCLUSION IS DULY SUPPORTED BY THE CITED JUDGMENT OF HONBLE APEX COURT AS EXTRACTED ABOVE. THEREFORE, BY DELETING THE IMPUGNED ADDITION, WE ALLOW THIS GROUND OF ASSESSEES APPEAL. IN VIEW OF THE SAME, THE OTHER ISSUES RAISED BY ASSESSEE ON LEGAL GROUNDS AS WELL AS ON MERITS BECOME MERELY ACADEMIC IN NATURE AND THEREFORE, NOT DELVED INTO. 8. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE OR DER. ORDER PR ONOUNCED IN THE OPEN COURT ON 07 MARCH, 2018 . SD/ SD/ ( SAKTIJIT DEY ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 07. 03 .2018 SR.PS: - THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPON DENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE IT(SS)A.NO.01/MUM/2016 LATE SHRI JAGJIT SINGH BAJAJ 9 / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
