Satyanarayan P.Lahoti & Others(AOP), Surat V. The Dy.CIT., Circle-3, Surat

ITSSA 174/AHD/2007

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9229 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-06-2010
• Assessment Year: misc
• Appeal Filed On: 28-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV BATHAM
• Keywords: Loose papers; Principle of natural justice; Block assessment; Documents seized
• Section: 147; 131; 132

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, JM AND D.C.AGRAWAL, AM SHRI SATYANARAYAN P. LAHOTI & OTHERS (AOP), C-203, SONA APARTMENT, B/H KAKADIA COMPLEX, GHOD DOD ROAD, SURAT. VS. DY. CIT, CIRCLE-3, SURAT. (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI RAMESH MALPANI, AR REVENUE BY:- SHRI GAURAV BATHAM, DR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUNDS :- (1) THAT THE HONBLE CIT(A) HAS ERRED IN SUSTAINING THE ASSESSMENT MADE BY LD. AO U/S 158BD OF THE I.T. ACT WHICH IS W RONG, TIME-BARRED, BAD-IN-LAW AND BEYOND THE LAW. (2) THAT THE HONBLE CIT(A) HAS ERRED IN SUSTAINING THE ASSESSMENT OF A MUTUAL CLUB IN STATUS OF PRESUME A.O.P. WHER EAS IT WAS CLEAR FROM THE PAPERS SEIZED THAT SAME PERTAIN TO A SCHEME OF MUTUAL CLUB, WHICH IS NOT A TAXABLE ENTITY AS PER W ELL ESTABLISHED LAW. (3) THAT THE HONBLE CIT(A) HAS ERRED IN SUSTAINING ADD ITION OF RS.71,29,000/- AS UNDISCLOSED INCOME WHICH WAS CONT RIBUTIONS MADE BY MEMBERS OF MUTUAL CLUB WHICH IS NOT AN INCO ME ON THE DOCTRINE OF MUTUALITY. IT(SS)A NO.174/AHD/2007 BLOCK ASST. YEAR 1997-98 TO 2002- 03 UPTO 13/6/2002 2 (4) WITHOUT PREJUDICE ABOVE GROUNDS OF APPEAL THE HONB LE CIT(A) HAS ERRED IN NOT ALLOWING EXPENSES & LOSSES FROM TH E AMOUNT OF CONTRIBUTION RECEIVED FROM MEMBERS. IN ADDITION TO THIS, THE ASSESSEE HAS RAISED FOLLOW ING ADDITIONAL GROUND :- (5) THAT THE BLOCK ASSESSMENT ORDER PASSED BY LD. AO U/ S 158BD OF THE ACT IN THE CASE OF THE APPELLANT IS WRONG AND B AD-IN-LAW AS THE SAME HAS BEEN PASSED WITHOUT ISSUING ANY NOTICE U/S 14392) OF THE I.T. ACT, 1961 AS PER THE PROVISIONS OF SAID SECTION 14392) OF THE ACT. 2. THE FACTS OF THE CASE ARE THAT THE PREMISES OF O NE SHRI HARIPRASAD MALPANI WERE SEARCHED U/S 132 OF THE ACT ON 13.06.2 002. IN THE COURSE OF SEARCH OF RESIDENTIAL PREMISES OF SHRI MALPANI, CER TAIN BOOKS OF ACCOUNTS AND PAPERS MARKED AS ANNEXURE-6 TO THE PANCHNAMA DA TED 13.6.2002 WERE SEIZED. IT WAS CLAIMED THAT PAGES 67-89 OF ANN EXURE-6 PERTAINED TO THE ASSESSEE AND CONTAINED TRANSACTIONS RELATING TO THEM. THE ASSESSMENT OF THE PERSON SEARCHED WAS COMPLETED ON 30.6.2004. THE AO IN THE CASE OF THE PERSON SEARCHED RECORDED SATISFACTION UNDER SECTION 158BD AS UNDER:- SATISFACTION NOTE FOR ISSUE OF NOTICE U/S 158BD OF THE IT ACT IN THE CASE OF SHRI SATYANARAYAN PRAHALADRAM LAHOTI & OTHERS. BLOCK PERIOD: F.Y 1996-97 TO 2001-02 AND UPTO THE D ATE OF SEARCH I.E. 13.06.2002. 1. DURING THE COURSE OF SEARCH IN MALPANI GROUP OF CASES, AT THE RESIDENCE OF SHRI HARIPRASAD MALPANI, CERTAIN LOOSE PAPERS WERE FOUND AND SEIZED. PAGE 67 TO 89 OF ANNEXURE A-6 CONTAINED THE DETAILS REGARDING SOME SCHEME RUN BY FOUR PERSONS NAMELY - 3 (1) SHRI SATYANARAYAN PRAHALADRAM LAHOTI (2) SHRI RAMESHCHANDRA PRAHALADRAM LAHOTI (3) SHRI SANJEEV GYANCHAND SHETH AND (4) SHRI BHARATBHAI DOLATSINGH DHARIYA 2. THE PAPERS CONTAINED THE DETAILS OF SCHEME ORGAN IZED BY THE FOUR PERSONS, WHEREIN RS.2,000/- WAS CONTRIBUTED BY EACH MEMBER. AT THE END OF EVERY MONTH, THE SCHEME WAS DRAWN AND THE PERSON IN WHOSE NAME THE PRICE WAS DECLARED HAD NOT TO PAY THE CONTRIBUTION FOR REMAINING PERIOD. FROM PAGE 87 IT IS OBSERVED THAT THE NET RECEIPTS O F RS.48,97,450/-. IT IS ALSO OBSERVED THAT RS.22,00,000/- ARE SHOWN TO HAVE BEEN GIVEN TO SURBHI PRINTS MILLS. IT IS PERTINENT TO MENTION THAT SURBH I PRINTS BEING RUN BY SHRI SATYANARAYAN LAHOTI. THE COLLECTIONS DONE BY A FORESAID FOUR PERSONS ARE NOT VERIFIABLE. THE SEIZED PAPERS HAVE BEEN CLA IMED TO BELONGING TO THE GROUP OF FOUR PERSONS NAMED ABOVE AND THE COLLE CTION MADE ARE NOT VERIFIABLE. IT IS ALSO PERTINENT TO MENTION THAT TH E AMOUNT COLLECTED HAVE BEEN USED IN THE CONCERNS RUN BY ONE OF THE MEMBERS . THE GROUP HAS THEREFORE, UNDISCLOSED INCOME WHICH HAS NOT BEEN OF FERED TO TAX. 3. IN VIEW OF THE ABOVE, I AM SATISFIED THAT UNDISC LOSED INCOME HAS BEEN EARNED BY THE GROUP OF FOUR PERSONS I.E. SHRI SATYANARAYAN LAHOTI AND OTHERS (AOP) I.E. THE PERSONS OTHER THAN THE PE RSONS COVERED U/S 132 OF THE IT ACT AND THE DOCUMENT SHOWING THE UNACCOUN TED INCOME HAS BEEN FOUND AND SEIZED DURING THE COURSE OF SEARCH. HENCE , THE NOTICE U/S 158BC OF THE I.T. ACT IS REQUIRED TO BE ISSUED IN T HE CASE OF SHRI SATYANARAYAN LAHOTI AND OTHERS. 4. ACCORDINGLY, I FORWARD HEREWITH THE COPY OF SEIZ ED DOCUMENTS AND STATEMENTS OF SHRI SATYANARAYAN LAHOTI RECORDED U/S 131 OF THE I.T. ACT DATED 19.04.2004 TO THE A.O. CONCERNED FOR INITIATI NG NECESSARY ACTION U/S 158 BD OF THE I.T. ACT. SD/- R.N.POONIA ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, SURAT. DATE 23.08.2004. 4 3. THE ASSESSMENT U/S 158BC READ WITH SECTION 158BD IN THE CASE OF THIS ASSESSEE WAS FINALLY PASSED ON 24.1.2007 DETER MINING UNDISCLOSED INCOME AT RS.71,29,000/-. 4. THE ASSESSEE RAISED THE ISSUE OF INVALIDITY OF B LOCK ASSESSMENT IN THE CASE OF PRESENT ASSESSEE BEFORE LD. CIT(A). HOW EVER, THE LD. CIT(A) REJECTED THE CONTENTIONS OF THE ASSESSEE BY OBSERVI NG AS UNDER :- 6.1 REGARDING PROCEEDINGS HAVING BECOME TIME-BARRE D, THE ARGUMENTS OF THE A.R. ARE BASELESS AND HENCE, NOT ACCEPTABLE. THE PROCEEDINGS UNDER SECTION 158BD HAVE NO CONNECTION WITH THE PRO CEEDINGS UNDER SECTION 147 OF THE INCOME-TAX ACT. EVEN THOUGH THE PROCEEDINGS UNDER SECTION 147 MAY HAVE BECOME BARRED BY LIMITATION OF TIME YET, AS PER THE ACT, IT WAS STILL OPEN TO THE A.O. TO INITIATE PROC EEDINGS UNDER SECTION 158BD R.W.S. 158BC OF THE ACT. SHRI HARIPRASAD MALP ANIS PREMISES WERE SEARCHED ON 13.06.2002 AND THEREFORE, THE RELE VANT BLOCK PERIOD WHICH WAS TO BE TAKEN INTO CONSIDERATION UNDER THE SAID SECTIONS COMMENCED FROM 01.04.1996. THE ACIT, CEN. CIR-1, FI RST EXAMINED THE DOCUMENTS THAT WERE SEIZED FROM THE PREMISES OF SHR I MALPANI WHICH PERTAINED TO THE ASSESSEE, THEN RECORDED THE STATEM ENT OF SHRI SATYANARAYAN P. LAHOTI ON 13.04.2004. IT WAS ONLY A FTER SUCH EXAMINATION AND THE RECORDED OF THE STATEMENT THAT THE ACIT, CEN. CIR.1 WAS IN A POSITION TO FORM HIS BELIEF THAT IT WAS A FIT CASE FOR INITIATING PROCEEDINGS UNDER SECTION 158BD R.W.S. 158BC OF THE INCOME-TAX ACT AGAINST THE AOP. HIS INTIMATION WAS THUS DATED 27.0 8.2004 AND WITHIN A PERIOD 4 MONTHS I.E. ON 11.12.2004 THE DCIT, CIR- 3 ISSUED THE NOTICE UNDER SECTION 158BD TO THE AOP. THEREFORE, IT COULD NOT BE SAID THAT THERE WAS ANY UNREASONABLE OR INORDINATE DELAY IN I NITIATING SUCH PROCEEDINGS. THE INTERIM PERIOD WAS UTILIZED BY THE CONCERNED OFFICERS EXAMINING THE SEIZED MATERIALS AND RECORDING STATEM ENTS. IF THE OFFICERS HAD SHOWN ANY URGENCY IN THE MATTER, THEN THE ASSES SEE WOULD HAVE ARGUED THAT PROPER OPPORTUNITY HAD NOT BEEN PROVIDE D, AND THE PRINCIPLES OF NATURAL JUSTICE HAD BEEN VIOLATED. IN ANY CASE, THE ACT DOES NOT PROVIDE FOR ANY LIMITATION TO THE ISSUE OF NOTICE UNDER SEC TION 158 BD OF THE INCOME-TAX ACT. THEREFORE, THE ARS CLAIM THAT THE PROCEEDINGS HAD BEEN BARRED BY LIMITATION OF TIME IS WITHOUT ANY FACTUAL OR LEGAL BASIS AND IS LIABLE TO BE REJECTED. 5 5. BEFORE US, LD. AR FOR THE ASSESSEE SUBMITTED THA T ASSESSMENT FRAMED IN THE CASE OF ASSESSEE VIDE ORDER DATED 24. 1.2007 IS INVALID BECAUSE SATISFACTION IN THE CASE OF THE ASSESSEE TH AT CERTAIN BOOKS OF ACCOUNTS AND DOCUMENTS SEIZED FROM THE PREMISES OF SHRI HARIPRASAD MALPANI BELONGED TO THE PERSON WAS RECORDED BY THE AO OF SHRI HARIPRASAD MALPANI ON 23.8.2004 WHEREAS IT SHOULD H AVE BEEN RECORDED BEFORE THE CLOSURE OF THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE PERSON SEARCHED IS PROVIDED UNDER SECTION 158BD. THIS VIEW IS COVERED BY THE FOLLOWING DECISIONS IN THE CASES OF - (1) MANOJ AGGARWAL VS. DCIT (2008) 113 ITD 377 (DEL)(SB ) (2) DCIT VS. NITS SOFTECH LTD. (2008) 8 DTR (DEL) 269 (3) ACIT VS. KISHORELAL BALWANTRAI & ORS. (2007) 17 SOT 380 (CHD) (4) MANISH MAHESHWARI VS. ACIT (2007) 289 ITR 341 (SC) 6. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF LD. CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE ISSUE IS COVE RED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF SPECIAL BENCH OF THE TR IBUNAL IN THE CASE OF (I) MANOJ AGGARWAL VS. DCIT (SUPRA), (II) AND THAT OF THE TRIBUNAL CHANDIGARH BENCH IN THE CASE OF ACIT VS. KISHORELAL BALWANTRAIN & ORS.(SUPRA). A SIMILAR ISSUE HAS BEEN DECIDED BY TH E TRIBUNAL IN THE CASE OF ACIT, CIR.3, SURAT VS. SMT. MADHURIKA K. LAKHAN I AND VICE VERSA, IN IT(SS)A NOS.13/AHD/2008 AND IT(SS)A NO.19/AHD/2008 FOR BLOCK PERIOD 1990-91 TO 1999-2000, WHEREIN IT HAS BEEN OB SERVED AS UNDER :- 6. THESE FACTS ARE UNDISPUTED. THE BLOCK ASSESSMEN T IN THE CASE OF PERSON SEARCHED WAS COMPLETED ON 30.11.2001 AND NOT ICE U/S 158BD IN THE CASE OF ASSESSEE WAS ISSUED ON 4.2.2005. THIS I S BELATED BY ALMOST THREE YEARS. IN VIEW OF THESE FACTS, WE ARE OF THE VIEW THAT THE ISSUE IS 6 SQUARELY COVERED BY THE DECISION OF SPECIAL BENCH ITAT DELHI IN THE CASE OF MANOJ AGGARWAL VS. DCIT (2008) 113 ITD 377 (DEL) (SB). WE FIND FROM THE DECISION OF THE SPECIAL BENCH THAT THE ISS UE IS SQUARELY COVERED BY THE FINDING IN PARA 113 TO 118 WHICH READS AS UN DER :- '113. SECTION : 158BD COMMENCES WITH THE WORDS 'WHE RE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO AN Y PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE' AND THUS IT I S CLEAR THAT THE SATISFACTION OF THE ASSESSING OFFICER ASSESSING THE PERSON SEARCHED IS THE FIRST AND FOREMOST REQUIREMENT. THE ASSESSING OFFICER CAN ARRIVE AT THIS SATISFACTI ON ONLY AFTER ASCERTAINING WHETHER THERE IS ANY UNDISCLOSED INCOME AT ALL AND THIS FIN DING CAN BE ARRIVED AT BY HIM ONLY IN THE COURSE OF THE SECTION 158BD ASSESSMENT PROCE EDING. THEREAFTER, HE HAS TO ARRIVE AT A FINDING AS TO THE PERSON TO WHOM SUCH I NCOME BELONGS. THIS FINDING ALSO CAN BE ARRIVED AT ONLY IN THE COURSE OF THE SECTION 158BC PROCEEDING IN THE CASE OF THE PERSON SEARCHED. HE MAY FIND THAT PART OF THE S AID UNDISCLOSED INCOME BELONGS TO THE PERSON SEARCHED AND THE REST BELONGS TO OTHER P ERSON OR PERSONS. AT THIS STAGE, HE HAS TO GIVE A FINDING IN THIS BEHALF AS TO WHICH OF THE UNDISCLOSED INCOME BELONGS TO THE PERSON TO WHOM THE REST OF THE INCOME BELONGS. THIS FINDING TOO HAS TO BE ARRIVED AT IN THE COURSE OF THE SECTION 158BC PROCEEDING. A FTER ARRIVING AT THIS FINDING, HE MAKES AN ASSESSMENT OF THE UNDISCLOSED INCOME RELAT ING TO THE PERSON SEARCHED IN HIS HANDS AND HANDS OVER THE MATERIAL RELATING TO THE U NDISCLOSED INCOME BELONGING TO THE OTHER PERSON OR PERSONS TO THE RESPECTIVE ASSES SING OFFICER. AS SECTION 158BC PROCEEDING IS SPECIFICALLY INTENDED FOR DETERMINING THE UNDISCLOSED INCOME, THE MATERIAL UNEARTHED HAS TO BE EXAMINED IN THE COURSE OF THE SAID PROCEEDING AND IF SUCH EXAMINATION SHOWS THAT THE UNDISCLOSED INCOME BELONGS TO SOME OTHER PERSONS A FINDING IN THIS BEHALF HAS TO BE RECORDED IN THE CO URSE OF THE SECTION 158BC PROCEEDING AS SUCH FINDING HAS TO FORM AN INTEGRAL PART OF THE SAID PROCEEDING AND IN CONFORMITY WITH THE INTENTION BEHIND THE SAID PROVI SION. SO IT IS ESSENTIAL THAT SUCH FINDING HAS TO FORM PART OF THE SECTION 158BC PROCE EDING AND SO MUST FIND A PLACE IN THE ORDER UNDER SECTION 158BC . THE ASSESSING OFFICER ASSESSING THE PERSON SEARCHED HAS TO GIVE A FINDING ON EACH AND EVERY MATERIAL AN D EVIDENCE UNEARTHED AFTER A CAREFUL AND JUDICIOUS EVALUATION AND SUCH EXERCISE INVOLVES FINDING THAT THE UNDISCLOSED INCOME BELONGS TO A SPECIFIED PERSON AS FOUND BY HIM ON THE SECTION 158BD PROCEEDING REVOLVES. IF THEREFORE, IN THE COU RSE OF THE SECTION 158BC PROCEEDINGS THE ASSESSING OFFICER ASSESSING THE PER SON SEARCHED DOES NOT GIVE A FINDING THAT ANY PART OF THE UNDISCLOSED INCOME UNE ARTHED BELONGS TO A. PERSON OTHER THAN THE PERSON SEARCHED, SECTION 158BD CAN NEVER BE INVOKED. IT IS THIS FINING THAT IS AN INTEGRAL PART OF BOTH THE PROCEEDINGS WHETHER UNDER SECTION 15BC OR 158BD, FOR, SUCH FINDING DETERMINES IN WHOSE HANDS THE UND ISCLOSED INCOME UNEARTHED HAS TO BE TAXED. IF THE UNDISCLOSED INCOME BELONGS TO THE PERSON SEARCHED, HE IS SUBJECTED TO BLOCK ASSESSMENT ON SUCH INCOME UNDER SECTION 158BC BUT IF SUCH INCOME OR PART OF SUCH INCOME BELONGS TO A PERSON NOT SEARCHED, SECTI ON 15S8D TAKES OVER. THIS IS THE ESSENCE OF THE ENTIRE ENACTMENT RELATING TO SEARCH. ' 114. SECTION 158BE PROVIDES FOR TIME LIMIT FOR COMP LETION OF BLOCK ASSESSMENT, IT STIPULATES THAT THE ORDER UNDER SECTION 158 BC SHAF T BE PASSED WITHIN TWO YEARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHO RIZATION FOR SEARCH UNDER SECTION 132 WAS EXECUTED OR FOR REQUISITION UNDER SECTION 132A AS THE CASE MAY BE AND SO THE ORDER ENVISAGED UNDER SECTION 158BC HAS NECESSA RILY TO BE PASSED WITHIN THIS 7 TIME FRAME SET IN LAW. IF THERE IS A TIME-LIMIT FOR PASSING OF SUCH ORDER, THERE IS AN IMPLIED TIME-LIMIT FOR GIVING A FINDING AS TO THE P ERSON TO WHOM THE UNDISCLOSED INCOME BELONGS WHICH UNDER NO CIRCUMSTANCES CAN BE BEYOND THE TIME-LIMIT SET IN SECTION 158BE IF THERE IS NO SUCH FINDING GIVEN I N THE ORDER UNDER SECTION 158BC, THE PROVISIONS OF SECTION 158BD STAND OUSTED AT THE EXP IRY OF THE SAID TIME-LIMIT FOR THE REASON THAT SUCH A FINDING IS THE VERY BASIS FOR IN VOKING SECTION 158BD. 115. SECTION 158BD AS SAID EARLIER BEGINS WITH THE EXPRESSION 'WHERE THE ASSESSING OFFICER IS SATISFIED' AND SO VERY SECTION IMPLIES A RECORDING OF SATISFACTION. THE\ SATISFACTION CONTEMPLATED IS A JUDICIOUS SATISFACTI ON AND NOT A' SUBJECTIVE SATISFACTION AND UNLESS THE SAME IS RECORDED IT IS NOT POSSIBLE FOR ANY PERSON TO DISCERN WHETHER THE SATISFACTION MEETS THE REQUIREMENTS OF LAW AT A FT. THE SATISFACTION CAN BE FOUND IN THE ORDER PASSED UNDER SECTION 158BC AND IF NO SUCH ORDER IS PASSED THEN IT WILL HAVE TO BE FOUND IN THE NOTE HANDING OVER THE MATERIAL S EIZED TO THE ASSESSING OFFICER ASSESSING THE OTHER PERSON IN ANY EVENT, IT HAS TO BE IN WRITING AND IN VIEW OF SECTION 158B&, THE SAID RECORDING HAS TO BE MADE BEFORE THE TIME SET IN SECTION 158BE EXPIRES. AFTER THE SAID DATE, IT IS NOT POSSIBLE TO INVOKE SECTION 158BD AT ALL. 116. A VIEW IS EXPRESSED THAT WHEREVER & TIME- LIMIT IS INTENDED, THE PARLIAMENT HAS PROVIDED FOR THE SAME AND IN THE ABSENCE OF A S PECIFIC PROVISION MADE IN THIS RESPECT IT HAS TO BE ASSUMED THAT THERE IS NO TIME- LIMIT INTENDED IN LAW. IT HAS TO BE REMEMBERED THAT THE MATER RELATES TO FIXING HUGE FI NANCIAL AND OTHER CIVIL LIABILITY ON THE PERSON AFFECTED AND IT HAS BEEN REPEATEDLY HELD THAT THERE MUST BE A FINALITY TO ANY PROCEEDING UNDER THE ACT AND THAT A CONCLUDED PROCE EDING CANNOT BE REOPENED AT THE WHIM AND FANCY OF THE ASSESSING OFFICER WITHOUT THE DUE PROCESS OF TAW. STRICT INTERPRETATION OF FISCAL STATUTES IS THE ORDER OF T HE DAY AND AS THE PROVISIONS FOR SEARCH ATE DRACONIAN IN NATURE SUCH PROVISIONS HAVE .NECE SSARILY TO BE STRICTLY CONSTRUED. IT WILL HAVE TO BE REMEMBERED THAT SECTION 158BD PR OVIDES FOR INVOKING JURISDICTION UNDER THE SAID SECTION ENABLING THE ASSESSING OFFIC ER ASSESSING THE OTHER PERSON IN RESPECT OF WHOM THE ASSESSING OFFICER ASSESSING THE PERSON SEARCHED GIVES A FINDING THAT THE UNDISCLOSED INCOME UNEARTHED AS A RESULT O F SEARCH BELONGS TO THE SAID PERSON AND ONCE SUCH A FINDING IS GIVEN THE PROVISIONS OF SECTION 158BD COME INTO OPERATION. THIS, THEREFORE, INVOLVES ASSUMPTION OF JURISDI CTION AND CANNOT BE CONSTRUCTED AS A PROCEDURAL MATTER. IN THE ABSENCE OF A FINDING IN T HIS BEHALF, THERE IS NO JURISDICTION TO THE OTHER ASSESSING OFFICER AT ALL TO PROCEED FURTH ER IN THE MATTER. AS THE TIME-LIMIT SET IN SECTION 158BE APPLIES TO SUCH FINDING, IT IS O NLY LOGICAL THAT THE SAID TIME-LIMIT AUTOMATICALLY APPLIES FOR INVOKING THE PROVISIONS O F SECTION 158BD AND IT IS FOR THIS REASON THAT THE PARLIAMENT DID NOT FIND IT NECESSAR Y TO SPECIFY A SEPARATE TIME-LIMIT FOR THE SAME, AS THE ENACTMENT ITSELF SHOWS THAT BO TH SECTIONS 158BC AND 158BD ARE INTER-LINKED, INTERLACED AND INTER-WINDED AND BOTH FORM PART AND PARCEL OF THE SAME CHAPTER.' IN VIEW OF THE ABOVE FACTS, WE OBSERVE THAT THE NOT ICE U/S 158 BD R.W.S. 158BC OF THE ACT IN THE CASE OF THE ASSESSEE IS ISS UED BELATEDLY BY ALMOST THREE YEARS. THEREFORE, THIS ISSUE IS SQUARELY COVE RED BY THE DECISION OF THE SPECIAL BENCH IN THE CASE OF MANOJ AGGARWAL (SU PRA), AND RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE APPEAL OF THE ASSESSEE AND DISMISS THE APPEAL FILED BY THE REVENUE. 8 SINCE IN THE PRESENT CASE SATISFACTION WAS RECORDED ON 23.8.2004, IT WAS CLEARLY AFTER THE CLOSURE OF BLOCK ASSESSMENT PROCE EDINGS IN THE CASE OF SHRI HARIPRASAD MALPANI AGAINST WHOM ACTION UNDER S ECTION 132 WAS TAKEN AND IN WHOSE CASE BLOCK ASSESSMENT PROCEEDING S UNDER SECTION 158BC WERE CLOSED ON 30.06.2004. THUS RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL, THE ASSESSMENT SO FRAMED BY THE AO IN THE CASE OF ASSESSEE U/S 158BC IS BAD IN LAW AND IS QUASHED. THE APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 02/07/2010 SD/- SD/- (MAHAVIR SINGH) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 02/07/2010 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD