Shri Dharamshibhai H. Patel, Ahmedabad V. The Income Tax Officer, Ward-4(4), Ahmedabad

ITSSA 199/AHD/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2149 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 06-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A KHAN
• Assessee Lawyers: S V AGARWAL; S N SOPARKAR
• Keywords: Unexplained investment; Document seized; Opportunity of being heard; Peak credit; Additional evidence; Block assessment; Documents seized; Set aside
• Section: 131; 132; 10; 90; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.(SS)A. NO.199/AHD/2014 (BLOCK PERIOD : 1990 TO 2000 (01.04.1990 TO 20.10.2 000)) DHARAMSHIBHAI H. PATEL A-1/2, JIVAN PARK CO-OP. HOUSING SOCIETY, OPP. SAMRATNAGAR, ISNAPUR, AHMEDABAD 380 443. VS. INCOME TAX OFFICER, WARD 4(4), ASHRAM ROAD, AHMEDABAD 380 009. [ PAN NO. AAMPP 6622 P ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S. N. SOPARKAR & S. V. AGARWAL, A.R. RESPONDENT BY : SHRI M. S. A. KHAN, CIT-D.R. DATE OF HEARING 27.03.2019 DATE OF PRONOUNCEMENT 24.06.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 21.03.2014 PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS) XVI, AHMADABAD ARISING OUT OF THE ORDER DATED 28.12.2010 PASSED BY THE ASSTT. COMMISSIONER OF INCOME TAX, CI RCLE 6, AHMEDABAD FOR BLOCK PERIOD 1990 TO 2000 (01.04.1990 TO 20.10.2000) UNDER SECTION 158BD R.W.S. 254 OF THE INCOME TAX AC T, 1961 (HEREINAFTER REFERRED AS TO THE ACT) WITH THE FOLLOWING GROUND S: IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 2 - THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)- XVI, AHMEDABAD [CIT(A)] CONFIRMING ADDITION MADE BY AO IS BAD IN LAW AS WELL ON FACTS ON THE FOLLOWING GROUNDS: 1) THE LD CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.98,01,000/- MADE BY AO IN BLOCK ASSESSMENT U/S 1 58BD R.W.S. 254 IN AS MUCH AS. I) AO DID NOT ALLOW CROSS EXAMINATION OF SEARCHED PART Y JIVRAJ V. DESAI (JVD) THOUGH SPECIFICALLY DIRECTED BY HON. ITAT IN ITS ORDER. II) JVD HAD BY ITS LETTER DATED 11.12.2010 TO AO CATEGORICALLY DENIED ANY TRANSACTIONS WITH APPELLAN T. III) HON. ITAT HAD IN CASE OF JVD HELD THAT SEIZED DAIRY A-1 IS RECORD OF FINANCE TRANSACTIONS. TREATING SAME AS LAND TRANSACTION IS WRONG. IV) THE LAND TRANSACTION IS BETWEEN VIRABHAGAT CO-OP HOUSING SOCIETY (SELLER) AND NEW VIRABHAGAT CO-OP HOUSING SOCIETY (BUYER). SALE OF LAND IS AFTER PERM ISSION AND AT RATE DIRECTED BY STATE CO-OP. REGISTRAR. PAY MENT IS MADE BY NEW VIRABHAGAT SOCIETY BY ACCOUNT PAYEE CHEQUE. THERE IS NO EVIDENCE OF UNACCOUNTED MONEY P AID BY APPELLANT. NEW VIRABHAGAT SOCIETY MAY BE INQUIRE D FOR UNACCOUNTED INVESTMENT. 2) WITHOUT PREJUDICE TO GROUND NO.1 SINCE HON. ITAT HA D HOLD THAT DIARY ANNEX A-1 PAGE 45 IS RECORD OF FINANCE T RANSACTIONS, THE PEAK CREDIT MAY BE CONSIDERED. 3) THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION MADE BY AO OF SURCHARGE OF RS.9,99,702/- ON TAX. 4) THE LEARNED CIT(A) HAS ERRED IN CONFIRMING INTEREST CHARGED BY AO U/S 158BFA(1) OF RS.16,03,272/- SINCE DELAY IN F ILING BLOCK RETURN IS NOT ATTRIBUTABLE TO APPELLANT. 5) THE ASSESSEE CARVES LIBERTY TO AMEND, MODIFY AND AD D ANY GROUNDS OF APPEAL OR FURNISH ADDITIONAL EVIDENCES. IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 3 - 2. THE ADDITIONAL GROUNDS OF APPEAL WAS ALSO TAKEN BY THE ASSESSEE IN THE SAID APPEAL BEFORE US: (1) THE LD CIT(A) HAD ERRED IN CONFIRMING ACTION O F AO WHO ERRED IN PASSING ORDER U/S 158BD WITHOUT FORMING/NO TING OR SPECIFYING THE SATISFACTION NOTE, AND SEARCH RECORD S WERE NOT FORWARDED AS WELL BY ADIC. THE SATISFACTION OF ADIT IS NOT SUFFICIENT FOR BLOCK ASSESSMENT U/S 158BD. THEREFOR E, THE BLOCK ASSESSMENT IS INVALID & WITHOUT LAW REQUIRES TO BE QUASHED. 3. THE ADDITIONAL GROUND SINCE TOUCHES THE VERY ROO T OF THE MATTER CHALLENGING THE FOUNDATION OF THE PROCEEDING UNDER SECTION 158BD, AS ARGUED BY THE LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE, WE PROPOSE TO CONSIDER THE SAME FIRST. 4. THIS CASE HAS A CHEQUERED HISTORY. INITIALLY A S EARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED UPON ONE MA STER GROUP ON 20.10.2000 WHERE ONE SHRI JIVRAJBHAI V DESAI (JVD) WAS REPORTEDLY THE MAIN PERSON OF THE SAID MASTER GROUP. CONNECTED SEA RCH WAS ALSO CONDUCTED AT THE RESIDENCE OF ONE SHRI ARVIND A SHA H (AAS) BEING THE ACCOUNTANT OF THE JVD GROUP, WHEREIN DOCUMENTS INTE R ALIA A DAIRY DESCRIBED AS ANNEXURE-A-1 WAS SEIZED. THE ASSESSEE S NAME APPEARED AT PAGE 45 OF THE SAID DAIRY. THE DAIRY ALSO CONTAINED THE DETAILS OF SHARAFI FINANCE BUSINESS CONDUCTED BY THE SAID GROUP. HOWEV ER, AS PER THE STATEMENT RECORDED U/S 131 OF THE SAID AAS ON 19.09 .2002 WHILE EXPLAINING THE LEDGER ACCOUNT OF PAGE-45 OF THE SAI D DAIRY, IN LAND DEALS TRANSACTION WAS DONE BETWEEN THE ASSESSEE AND ONE V IRBHAGAT CO-OP SOCIETY. FURTHER FIELD INQUIRIES CONDUCTED BY THE L EARNED ACIT, CENTRAL IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 4 - CIRCLE 1(1), AHMEDABAD INDICATED THAT THE MASTER GROUP HAS SOLD LAND IN ISANPUR ON WHICH NEW VIRBHAGAT SOCIETY WAS BUILT . THIS NEW VIRBHAGAT SOCIETY WAS CARRIED OUT OF LAND OF VIRBHA GAT SOCIETY. THEREAFTER, UPON RECEIPT OF SATISFACTORY NOTE THROU GH A CONFIDENTIAL LETTER DATED 29.10.2002 ISSUED BY THE LEARNED ACIT, CIRCLE 1(1), AHMEDABAD, THE LEARNED DCIT, CIRCLE 6, AHMEDABAD PROCEEDED TO PASS THE ORDER U/S 158BC R.W.S. 158BD ON 30.11.2004 AFTER ISSUING NECESSARY NOTICES U/S 158BD IN THE CASE OF THE APPE LLANT BEFORE US. ADDITION TO THE TUNE OF RS.98,01,000/- WAS MADE BY THE LEARNED AO WHICH WAS IN TURN DELETED BY THE LEARNED CIT(A). TH E HONBLE ITAT IN APPEAL, PREFERRED BY THE DEPARTMENT, BY WAY OF A RE ASONED ORDER DATED 07.08.2009 IN IT(SS)A NO.91/AHD/2007 RESTORED THE M ATTER TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR DOING THE ASSESSM ENT DE NOVO IN ACCORDANCE WITH LAW AND AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS REQUIRED UNDER THE LAW INCLUDING CROSS EXAMINATION OF THE PARTIES CONCERNED. ULTIMATELY, THE SAID ASSESSMENT WAS FINALIZED DE NOVO ON 28.12.2010 BY THE LEARNED ACIT, CIRCLE -6, AHMED ABAD, UPON MAKING ADDITION OF RS.98,01,000/- AS UNEXPLAINED IN VESTMENT OF THE ASSESSEE WHICH WAS IN TURN CONFIRMED BY THE LEARNED CIT(A) IN APPEAL PREFERRED BY THE ASSESSEE. HENCE, THE INSTANT APPEA L BEFORE US. 5. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ADDITIONAL GROUND TAKEN BEFORE US WAS ALSO TAKEN BE FORE THE LEARNED IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 5 - CIT(A) CHALLENGING THE AUTHORITY OF THE LEARNED AO WHO INITIALLY PASSED THE ORDER U/S 158BD WITHOUT FORMING/NOTING, SPECIF YING THE SATISFACTION NOTE; THE SEARCH RECORDS WERE ALSO NOT FORWARDED BY THE LEARNED ACIT IN TERMS OF THE STATUTORY PROVISION U/S 158BD. FURTHER MORE, THE SATISFACTION OF THE ACIT IS NOT SUFFICIENT FOR BLOCK ASSESSMENT U/S 158BD WHICH GOES TO THE ROOT OF THE MATTER AND THUS VITIATES THE ENT IRE PROCEEDINGS THE ASSESSMENT IS THEREFORE LIABLE TO BE QUASHED AS THE CASE MADE OUT BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY AS AL SO BEFORE US BY WAY OF AN ADDITIONAL GROUND. APART FROM THAT IT WAS ALSO C ONTENDED BY THE LEARNED SENIOR COUNSEL THAT THE NOTICE INTIMATING C HANGE OF JURISDICTION OF THE ASSESSING OFFICER THOUGH OUGHT TO HAVE BEEN ISSUED AND SERVED BY THE AUTHORITY UNDER SECTION 127 OF THE ACT HAS NOT BEEN COMPLIED WITH RENDERING THE ENTIRE PROCEEDING BAD IN LAW AND THUS LIABLE TO BE SET ASIDE. IN SUPPORT OF HIS ARGUMENT HE RELIED UPON A JUDGMEN T PASSED BY THE HONBLE BOMBAY HIGH COURT IN THE MATTER OF CIT, NAG PUR-VS-LALITKUMAR BARDIA. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER PASSED BY THE AUTHORITIES BEL OW. 6. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE ON RECORDS. IT APPEARS FROM THE RECORDS T HAT WHILE RESTORING THE MATTER TO THE FILE OF THE LEARNED AO FOR DE NOVO PR OCEEDING ON 07.08.2009 THE HONBLE ITAT OBSERVED AS FOLLOWS: 'WE HAVE PERUSED THE MATERIAL ON RECORD AND HEARD T HE RIVAL PARTIES. IN OUR CONSIDERED VIEW, THE AUTHORITIES BELOW HAVE NOT APPLIED THEIR MIND AND PROVIDED OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. IT IS TRUE THAT ASSESSING OFFICER HAS NOT ALLOWED CROSS-EXAMINATION OF JVD AND AAS OF IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 6 - THE BASIS OF WHOSE STATEMENTS, IN ADDITION TO PAGE NO. 45 OF DIARY A-1, THE ASSESSING OFFICER IS TRYING TO MAKE ADDITION. B UT, IT IS ALSO TRUE THAT NOTICE U/S 158BD WAS SERVED ON THE ASSESSEE ON 18/1 1/2002 AND RETURN OF BLOCK ASSESSMENT WAS FILED ON 08/11/2004 ON NIL INCOME. THUS, THE ASSESSEE ALSO WASTED ALMOST TWO YEARS IN FILING RET URN OF UNDISCLOSED INCOME AT NIL. THE REASON APPARENTLY WAS THAT PHOTOCOPIES OF THE DOCUMENTS ON WHICH A.O. WAS REPLYING WERE NOT PROVI DED, BUT IF ASSESSEE, HAS NO RELATION WITH THE SEIZED DOCUMENTS I.E. PAGE NO. 45 OF SEIZED DAIRY FILING THE A-1 AND IT DID NOT CONTAIN .THE TRANSACTION OF THE ASSESSEE THAN QUESTION OF FILING THE RETURN U/S 158 BD SO LATE COULD NOT BE APPRECIATED. IT IS GIVING AN IMPRESSION THAT THE ASSESSEE ALSO WANTED TO DELAY THE PROCEEDINGS FOR ITS ADVANTAGE. IT IS N OT A CASE THAT DIARY OF ANNEXURE A-1 OF PAGE 45 HAS A RECORD OF IMAGINARY T RANSACTIONS. PAGE 239 TO 241 OF PAPER BOOK FILED BY THE ASSESSEE SHOW ED COPY OF PAGE NO. 45 OF ANNEXURE A-1 INCLUDING ENGLISH TRANSACTION OF THE PAGE WRITTEN IN GUJARATI. IT SHOWED THE NAME OF NEW VIRABHAGAT AS W ELL AS THE NAME OF DHARAMSINBHAI OF ISANPUR I.E. THE ASSESSEE. IT RECO RDED A CREDIT OF GS.109.85 LACS BEING THE AMOUNT OF CHEQUE PAID IN R ESPECT OF LAND PURCHASED BY NEW VIRABHAGAT SOCIETY. TO OUR MIND, T RANSACTION RECORDED IN DIARY A-1 AND IN PARTICULAR PAGE NO.45. CANNOT BE SAID TO BE IMAGINARY AS NO SUCH STAND HAS BEEN TAKEN EITHER BY AAS OR JVD. THEIR STATEMENTS HAVE BEEN RECORDED AND NO STAGE THEY HAVE DENIED OR AVERTED THAT TRANSACTIONS RECORDED IN DIARY A.1 ARE IMAGINARY OR HAVE NOT TAKEN PLACE. IN ADDITION, WE HAVE EXAMINED PAGE NO.45 OF ANNEXURE 'A-1' AND WE ALSO NOTICED THAT THERE IS NO THING WHICH COULD INDICATE THAT RECORDING ON THAT PAGE WOULD BE IMAGI NARY OF FALSE. THUS, THERE IS NO MATERIAL TO HOLD THAT WHAT WAS RECORDED BY AAS IN THE DIARY, ATLEAST ON PAGE NO.45 WOULD BE UNREAL TRANSA CTIONS. A PRIMA- FACIE IMPRESSION OF THE PAGE SHOWS THAT IT HAS BEE N RECORDED IN NATURAL COURSE OF EVENTS. HAD IT BEEN THE TRAN SACTIONS OF ONLY NEW VIRABHAGAT SOCIETY, THEN QUESTION OF RECORDING THE NAME SHRI DHARMASINBHAI OF ISANPUR IN ADDITION TO THE NAME OF NEW VIRABHAGAT WOULD NOT HAVE ARISEN. FURTHER, THE RELATIONSHIP O F THE ASSESSEE WITH M/S MAHADEV CONSTRUCTION PVT. LTD, OF WHOM HE IS ON E OF THE TWO DIRECTORS ALONG WITH HIS SON AND THE RELATIONSHIP O F M/S MAHADEV CONSTRUCTION PVT. LTD. WITH NEW VIRABHAGAT SOCIET Y IS NOT SO REMOTE TO BE IGNORED OR TO BE NOT WORTH OF PROPER EXAMINATION. IT SEEMS THAT FOR THE REASONS UNKNOWN, THE ASSESSING OFFICER CHOSE TH E SLEEP OVER THE MATTER AND DID NOT FOLLOW THE PROCEDURE FOR FRAMING A PROPER IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 7 - ASSESSMENT BY NOT PROVIDING PHOTOCOPIES OF DOCUMENT S IN TIME AND THEN BY INITIATING PROPER ASSESSMENT PROCEEDINGS ONLY AF TER FILING OF THE RETURN BY THE ASSESSEE AND NOT IMMEDIATELY AFTER TH E EXPIRY TIME ALLOWED TO THE ASSESSEE TO FILE THE RETURN. THE ASSESSEE AL SO THOUGHT TO AVOID TO REMAIN PRESENT BEFORE THE ASSESSING OFFICER TO AVAI L THE OPPORTUNITY OF CROSS - EXAMINATION. HE CHOSE THE REMAIN ABSENT FOR ATTENDING A SOCIAL FUNCTION BETWEEN 22/12/2004 TO 27/10/2004 (AND, ASS ESSMENT GETTING BARRED BY LIMITATION ON 30/10/2004). IN OUR CONSIDE RED VIEW, ON WORTHWHILE CROSS - EXAMINATION OF JVD/AAS COULD BE FEASIBLE IN ABSENCE OF THE ASSESSEE, EVEN IF THE ASSESSING OFFI CER THOUGHT IT TO GIVE SUCH AN OPPORTUNITY TO HIM. IN THE STATEMENT OF THE ASSESSEE THE ASSESSEE RECORDED BY THE ASSESSING OFFICER, NOWHERE ANY INDI CATION OF ANY ANIMOSITY, DISCORD OR REVENGE WITH EITHER JVD OR AA S HAS BEEN INDICATED. IT IS ALSO A FACT THAT NEW VIRABHAGAT SO CIETY FLOATED BY M/S MAHADEV CONSTRUCTION PVT. LTD, RECEIVED THE CONTACT TO SUPERVISE OF CONSTRUCTION FLATS FOR NEW VIRABHAGAT SOCIETY AND T HAT THE ASSESSEE SIGNED ON THE PURCHASE - DEED AS A WITNESS INDICATI NG THAT HE WAS TO SOME EXTENT PRIVY TO THE TRANSACTIONS OF PURCHASE O F LAND BY NEW VIRABHAGAT SOCIETY. FURTHER THE LD. CIT(APPEALS) HA S APPARENTLY IGNORED TO EXAMINE THE CONTENTS OF PAGE.45 OF ANNEX URE 'A-1' SO AS TO ARRIVE AT A REASONABLE CONCLUSION THAT PAGE NO. 45 OF DIARY ANNEXURE 'A-1' IS A RECORD OF IMAGINARY / SUPERFLUOUS OR REA L TRANSACTIONS. HIS POWER IS CO-TERMINUS WITH THAT OF ASSESSING OFFICER . HE COULD HAS ALSO GIVEN AN OPPORTUNITY OF CROSS-EXAMINATION. SUPPORT IS DERIVED FROM THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CI T VS. KANPUR COAL SYNDICATE (1964) 53 ITR 225 (SC). WE NOTE THAT NON- ALLOWING CROSS- EXAMINATION HAS NOT BEEN TAKEN AS MAIN ARGUMENT BY THE ASSESSEE AGAINST THE ORDER OF THE ASSESSING OFFICER WHICH HA S BEEN ACCEPTED BY THE LD. CIT(A) WITHOUT CONSIDERING THE LEGAL POSITI ON THAT IF FOR A CERTAIN REASONS, THE ASSESSING OFFICER WAS NOT ABLE TO ALLOW CROSS- EXAMINATION, THEN HE IS DUTY BOUND TO ALLOWED THE S AME. IN OUR CONSIDERED VIEW, NOT ALLOWING CROSS-EXAMINATION OF JVD AND AAS IS ONLY A PROCEDURAL DEFECT AND CANNOT VITIATE THE ASSESSMENT ORDER AND CROSS-EXAMINATION. WITNESSES, JVD AND AAS, BEFORE FILING THE RETURN BY THE ASSESSEE COULD NOT HAVE SERVED AN Y USEFUL PURPOSE BECAUSE CONTENTS OF THE RETURN WOULD HAVE BEEN RELE VANT FOR CONSIDERING THE EXAMINATION AND CROSS-EXAMINATION. THE ASSESSEE CHOSE THE FILE THE RETURN OF BLOCK ASSESSMENT ALMOST TWO YEARS, AFTER ISSUANCE OF NOTICE U/S 158 BD OF THE I.T. ACT, 1961, THUS LEAVING NO WORTH WHILE TIME TO THE IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 8 - ASSESSING OFFICER TO FOLLOW STRICTLY THE RULE OF EV IDENCE BY CONFERRING THE OPPORTUNITY OF CROSS-EXAMINATION. WE MAY NOTE IN TH IS CHEMICALS LTD. VS. ACIT (2001) 248 ITR 318 (ALIA.) THAT IT IS NOT NECESSARY THAT THERE MUST BE ALWAYS A CROSS-EXAMINATION OF A WITNESS BEF ORE DISCARDING HIS EVIDENCE. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF T. DEVASAHAY NADAR VS. CIT (1964) 51 ITR 20 ( MAD.) HELD THAT IT CANNOT BE LAID DOWN AS A GENERAL PROPOSITION OF LAW THAT IT. DEP ARTMENT CANNOT RELY UPON ANY EVIDENCE WHICH HAS NOT BEEN SUBJECTED TO C ROSS-EXAMINATION. THEREFORE, NOT ALLOWING THE CROSS-EXAMINATION OF JV D AND AAS WILL NOT BE FATAL TO THE ASSESSMENT PROCEEDINGS, BUT WILL ON LY CREATE CURABLE IRREGULARITIES FOR WHICH, IN OUR CONSIDERED VIEW, T HE ASSESSEE IS EQUALLY RESPONSIBLE AND WHICH DEFICIENCIES CAN BE CURED BY RESTORING, THE MATTER THE MATTER TO THE ASSESSING OFFICER. IN OUR CONSIDERED VIEW, WE HAVE TO STRIKE A BALANCE BETWEEN INDIVIDUAL INTERES T AND PUBLIC INTEREST AND WHERE PUBLIC INTEREST IS DISALLOWED TO SUFFER B Y THE TWO PARTIES EITHER BY DELAYING TACTICS AS BY THE ASSESSEE OR BY SHOWING INDIFFERENCE AS IN THE PRESENT CASE BY THE ASSESSING AUTHORITIES , THEN COURTS ARE NOT SUPPOSED TO SUPPORT THE STAND OF EITHER OF THE PART IES. AS THE ID. CIT(A) HAS ALSO NOT CONSIDERED THE GENUINENESS OF TRANSACT IONS RECORDED IN THE DIARY, HIS ORDER CANNOT BE UPHELD. WE, THEREFORE, RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DOING THE ASS ESSMENT DE NOVO ACCORDING TO LAW AND AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, AS REQUIRED UNDER THE LAW INCLUDING CROSS - EXAMINATION OF THE PARTIES CONCERNED. HOWEVER, WHEN THE ADDITIONAL GROUND OF APPEAL WAS P REFERRED BY THE ASSESSEE BY AND UNDER THE LETTER DATED 21.08.20 13, THE ASSESSEE REPLIED TO THE REMAND REPORT SUBMITTED BY THE LEARN ED AO IN CONNECTION WITH THE SAID GROUND WITH THE FOLLOWING SUBMISSION: IN THIS CASE, ADDITIONAL GROUND OF APPEAL WAS FILE D IN YOUR OFFICE ON 21/11/2011 VIDE LETTER DATED OF SAME DATE, AS UNDER ; ADDITIONAL GROUND OF APPEAL (1) THE LEARNED A.O. HAS ERRED IN PASSING ORDER U/S. 15 8BD WITHOUT FORMING / NOTING OR SPECIFYING THE SATISFAC TION NOTE, AND SEARCH RECORDS WERE NOT FORWARDED AS WELL BY IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 9 - ADIT. THE SATISFACTION OF ADIT IS NOT SUFFICIENT FO R BLOCK ASSESSMENT U/S. 158 BD. THEREFORE, THE BLOCK ASSESS MENT IS INVALID & WITHOUT LAW REQUIRES TO BE QUASHED. THE HON. CIT(APPEAL) DIRECTED THE A.O. TO SEND SATI SFACTION NOTE IN THE CASE OF ABOVE ASSESSEE AND COMMENT ON ADDITIONAL GR OUND RAISED BY ASSESSEE. THE A.O. HAS ALONGWITH HIS REMAND REPORT, SENT THE COPY OF THE SATISFACTION NOTE ISSUED BY ACIT, CEN. CIR. 1(1), A HMEDABAD FOR INITIATING PROCEEDINGS U/S. 158BD OF THE ACT. HOWEV ER, THE A. O. HAS NOT COMMENTED UPON THE ADDITIONAL GROUND RAISED BY THE ASSESSES. OBJECTION AGAINST REMAND REPORT THE ADDITIONAL GROUND IS RAISED THAT THE ASSESSING OFFICER, WITHOUT FORMING / NOTING OR SPECIFYING THE SATISFACTION NOT E, CANNOT ISSUE NOTICE U/S. 158BD. SEC. 158BD PROVIDES THAT, '158BD. WHERE THE ASSESSING OFFICER IS SATISFIED TH AT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THA N THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY AS SETS 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 JURISDI CTION OVER SUCH OTHER PERSON- AND THAT ASSESSING OFFICER SHALL PROCEED - [UNDER SECTION 158BC] AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. ' HERE, IN SEC. 158BD, FOR MAKING ASSESSMENT UNDER TH AT, SECTION, FIRST OF ALL, A.O. OF OTHER PERSON IS REQUIRED TO PREPARE SA TISFACTORY NOTE AND THEREAFTER ISSUE NOTICE U/S. 158BC/158BD TO MAKE AS SESSMENT UNDER THAT SECTION. IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 10 - SEC. 158BD SPECIFICALLY PROVIDES THAT THE A. O. OF THE SEARCHED PARTIES SHALL HAND OVER TO THE ASSESSING OFFICER HAVING JUR ISDICTION OF OTHER PERSON AND ASSESSING OFFICER OF THE OTHER PERSON SH ALL PROCEED AGAINST SUCH OTHER PERSON TO MAKE ASSESSMENT U/S. 158BD, AF TER RECORDING HIS SATISFACTION NOTE. SEC.158BD DO NOT PROVIDE THAT THE A.O. OF THE SEARC HED PARTY SHALL ALSO SEND THE SATISFACTORY NOTE TO THE A.O. OF THE OTHER PERSON. SEC. 158BD PROVIDES THAT BOOKS OF ACCOUNTS, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE A. O. HAV ING JURISDICTION OVER OTHER PERSON AND HE SHALL PROCEED TO MAKE ASSESSMEN T AGAINST SUCH OTHER PERSON. SEC. 158BD RELATES TO ASSESSMENT OF OTHER PERSON AN D NOT THE SEARCHED PARTY. THEREFORE, THE SATISFACTION OF A.O. REFERRED TO IN BEGINNING OF SEC. 158BD IS, SATISFACTION OF A.O. OF OTHER PARTY AND N OT SATISFACTION OF A.O. OF SEARCHED PARTY. IN THE PRESENT CASE, A. O. OF ASSESSEE (OTHER PERSO N) HAS NOT PREPARED SATISFACTION NOTE BEFORE ISSUE OF NOTICE U /S. 158BD AND THEREFORE, ASSESSMENT MADE U/S. 158BD IN CASE OF AS SESSEE IS BAD IN LAW AND ASSESSMENT IS REQUIRED TO BE ANNULLED. IT ALSO APPEARS THAT AFTER TAKING INTO CONSIDERATIO N THE OBJECTION RAISED BY THE ASSESSEE WHILE ADDRESSING THE ISSUE R AISED BY THE ASSESSEE BY WAY OF THE ADDITIONAL GROUND ON THE NON-COMPLIAN CE OF MANDATORY COMPLIANCE OF RECORDING SATISFACTION BEFORE ISSUANC E OF NOTICE U/S 158BD BY THE CONCERNED LEARNED AO THE LEARNED CIT(A) OBSE RVED AS FOLLOWS: 5.0 A PERUSAL OF DISCUSSIONS MADE IN PARA-2.2 ABO VE, INDICATES THAT THROUGH ADDITIONAL GROUND THE APPELLANT HAS ATTEMPT ED TO STRIKE AT THE VERY FOUNDATION OF THE BLOCK ASSESSMENT RAISING SER IOUS ISSUES ABOUT LEGALITY THEREOF. THE APPELLANT HAS ARGUED THAT IN HIS CASE THE AO HA S NOT RECORDED HIS MANDATORY SATISFACTION BEFORE THE ISSUE OF NOTICE U/S. 158BD. IT HAS BEEN ARGUED THAT LAW PROVIDES THAT SA TISFACTION OF THE A O WHO IS ASSESSING THE ASSESSEE IS REQUIRED AND THE S ATISFACTION OF THE A O WHO ASSESSED THE ORIGINALLY SEARCH PARTY IS NOT SUF FICIENT. IT HAS BEEN IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 11 - SUBMITTED THAT CONSEQUENTLY THE ASSESSMENT HAS BECO ME INVALID AND THEREFORE DESERVES TO BE ANNULLED. THE APPELLANT HA S ALSO INDICATED IN THE ADDITIONAL GROUND THAT THE SATISFACTION WAS REC ORDED BY ADIT, WHICH IS NOT SUFFICIENT FOR INITIATION FOR VALID AS SESSMENT PROCEEDING U/S. 158BD, IN SUPPORT OF ITS CONTENTIONS, THE APPELLANT HAS PLACED RELIANCE UPON DECISIONS OF HON'BLE CALCUTTA HIGH COURT IN TH E CASE OF SUBHASHCHAND BHANIRAMKA 320 ITR 349, OF HON'BLE GUJ ARAT HIGH COURT IN THE CASE OF HYNOOP FOOD & OIL INDUSTRIES A ND FEW OTHER DECISIONS TO DRAW HOME HIS POINT THAT THE BLOCK ASS ESSMENT ORDER PER SE SUFFERS FROM SERIOUS LEGAL INFIRMITIES AND DESERVES TO BE ANNULLED. 5.1 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE IN THE LIGHT OF SUBMISSIONS MADE BY THE APPELLANT, THE ARGUMENTS TA KEN BY THE ASSESSING OFFICER & MATERIAL AVAILABLE ON RECORDS. BEFORE PROCEEDING FURTHER, IT IS PERTINENT TO POINT OUT STATUTORY PRO VISIONS GOVERNING THE MATTER. SECTION 158 BD UNDISCLOSED INCOME OF ANY OTHER PERS ON. 158BD. WHERE THE ASSESSING OFFICER IS SATISFIED THA T ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOO KS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UN DER SECTION 132A, THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESS ING OFFICER SHALL PROCEED 95[UNDER SECTION 158BC] AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. SECTION 2 DEFINITION OF DIFFERENT WORDS AND PHRASES USED IN THE ACT 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIR ES, [(7A) ASSESSING OFFICER' MEANS THE ASSISTANT COMMI SSIONER 27[OR DEPUTY COMMISSIONER] 28[OR ASSISTANT DIRECTOR] 27[O R DEPUTY DIRECTOR] OR THE INCOME-TAX OFFICER WHO IS VESTED W ITH THE RELEVANT JURISDICTION BY VIRTUE OF DIRECTIONS OR ORDERS ISSU ED UNDER SUB-SECTION (1) OR SUBSECTION (2) OF SECTION 120 OR ANY OTHER PROVISION OF THIS ACT, AND THE 29[ADDITIONAL COMMISSIONER OR] 30[ADDITIONA L DIRECTOR OR] 31 IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 12 - [JOINT COMMISSIONER OR JOINT DIRECTOR] WHO IS DIREC TED UNDER CLAUSE (B) OF SUB-SECTION (4) OF THAT SECTION TO EXERCISE OR PERFORM ALL OR ANY OF THE POWERS AND FUNCTIONS CONFERRED ON, OR ASSIGNED TO, AN ASSESSING OFFICER UNDER THIS ACT;] 5.2 UPON RECEIPT OF ADDITIONAL GROUND FROM THE APP ELLANT THE SAME WAS FORWARDED TO THE A O CALLING FOR A REMAND REPOR T VIDE LETTER NO CIT(A)-XVI/REMAND REPORT/2013-14 DT 14-03-2012. THE A O WAS REQUESTED TO EXAMINE THE VERACITY OF CONTENTIONS RA ISED BY THE APPELLANT AND TO FILE HIS REMAND REPORT. CONSEQUENTLY, THE A O CURRENTLY HAVING JURISDICTION OVER THIS CASE BEING ITO, WARD-4(4), A HMEDABAD SUBMITTED HIS REPORT DATED 31/05/2013 INTER ALIA PROVIDING CO PY OF SATISFACTION NOTE RECORDED BY ACIT, CENTRAL CIRCLE-1 (1), A'BAD DT 29-10-2002 WHICH WAS CONVEYED TO ACIT, CIR-6, A'BAD THROUGH CO NFIDENTIAL LETTER NO ACIT/CC.1(1)/MASTER/02-03 DT 29-10-20002. 5.3 THE ARGUMENTS TAKEN BY THE APPELLANT HAVE ACCO RDINGLY BEEN ANALYZED IN DETAIL IN THE LIGHT OF FACTS AVAILABLE ON RECORDS AS WELL AS CONTEMPORARY STATUTE. THE ARGUMENT OF THE APPELLANT IS THAT ACTION UNDER SECTION 158BD CAN BE TAKEN PROVIDED THE A O I SSUING NOTICE U/S. 158BD IS SATISFIED THAT THE APPELLANT IS GUILTY OF POSSESSING SOME UNDISCLOSED INCOME. IN THE ADDITIONAL GROUND OF APP EAL THE APPELLANT HAS ALSO ARGUED THAT SATISFACTION OF ADIT IS NOT SU FFICIENT FOR MAKING BLOCK ASSESSMENT U/S. 158BD. THUS, IT IS ALSO A CAS E OF THE APPELLANT THAT IN THIS CASE THE SATISFACTION FOR INITIATING P ROCEEDINGS U/S. 158BD WAS RECORDED BY THE ADIT. THERE IS APPARENTLY NO ME RIT IN THE SAID ARGUMENT OF THE APPELLANT. THE REMAND REPORT DT 31- 5-2013 SUPRA, CLEARLY INDICATES THAT THE SATISFACTION FOR INITIAT ION OF PROCEEDINGS U/S. 158BD AGAINST THE APPELLANT WAS RECORDED BY ACIT, C ENT.CIR. 1(1), A'BAD. THERE IS NOTHING ON RECORDS WHICH CONCLUSIVELY ALLU DES RECORDING OF ANY SATISFACTION NOTE U/S. 158BD AGAIN ST APPELLANT BY ANY OFFICER OF THE LEVEL OF ADIT. WITHOUT PREJUDICE TO THE SAME, IT IS WORTHWHILE TO MENTION THAT APPARENTLY NO DEFECT WOULD HAVE COME IN THE ASSESSMENT ORDER OF THE AO HAD SATISFACTION U/S. 158BD WAS RECORDED BY ANY OFFICER OF THE RANK OF ADIT. THIS O BSERVATION IS MADE IN VIEW OF THE CATEGORICAL STATUTORY STIPULATION CO NTAINED IN SUB SECTION 7A OF SECTION 2 REPRODUCED ABOVE WHICH PROV IDES THAT THE PHRASE A O WOULD INCLUDE OFFICERS DESIGNATED AS ADS IT / DDSLT. IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 13 - THUS, THERE WOULD HAVE BEEN NO IMPERFECTION IN THE ORDER HAD ANY SATISFACTION U/S. 158BD WAS RECORDED BY ANY ADIT. 5.4 WITHOUT PREJUDICE TO ABOVE, THE ARGUMENT OF TH E APPELLANT THAT THE A O WHO HAS ISSUED NOTICE U/S. 158BD BEING DCIT , CIRCLE-6, A'BAD AND COMPLETED SUBSEQUENT ASSESSMENT PROCEEDINGS OUG HT TO HAVE RECORDED HIS SATISFACTION AND THAT SINCE NO SUCH SA TISFACTION WAS RECORDED BY HIM THEREFORE THE ASSESSMENT ORDER BECO MES INVALID, ILLEGAL HAS BEEN ANALYZED IN DETAIL AND FOUND TO BE BEREFT OF ANY MERITORIOUS CONSIDERATION. PRESUMABLY THE APPELLANT IS TRYING T O READ AND INTERPRET LAW PRESCRIBED U/S. 158BD IN A FASHION SO AS TO SUI T HIS PARTICULAR INTEREST. THE SAME IS IMPERMISSIBLE SINCE IT IS A S ETTLED PRINCIPLE OF LAW AS LAID DOWN BY HONOURABLE APEX COURT AND REITERATE D BY SEVERAL HIGH COURTS THAT IF THE PROVISIONS OF LAW ARE UN AMBIGUO US AND CLEAR THEN NO INTERPRETATION IS TO BE APPLIED. HON'BLE APEX COURT IN THE CASE OF SMT TARULATA SHYAMV VS CIT (1977) 108 ITR 345 OBSERVED THAT 'TO US THERE APPEARS NO JUSTIFICATION TO DEPART FROM THE NORMAL RULE OF CONSTRUCTION ACCORDING TO WHICH THE INTENTION OF LE GISLATURE IS PRIMARILY TO BE GATHERED FROM THE WORDS USED IN THE STATUTE'. IN THE SAID CASE, THE COURT OBSERVED VIEWS OF ROWLATT J IN CASE OF 'CAPE BRANDY SYNDICATE' THAT ' IN A TAXING ACT ONE HAS TO LOOK MERELY AT WHAT IS CLEARLY SAID. THERE IS NO ROOM FOR ANY INTENDMEN T, THERE IS NO EQUITY ABOUT THE TAX, THERE IS NO PRESUMPTION AS TO A TAX. NOTHING IS TO BE READ IN, NOTHING IS TO BE APPLIED. ONE CAN ONLY LOO K FAIRLY AT THE LANGUAGE USED. 'AGAIN IN THE CASE OF PADMA SUNDARRAO VS STATE OF TAMILNADU (2002) 255 ITR 147 AND ALSO IN THE CASE OF PRAKASHNATH KHANNA VS CIT (2004) 266 ITR 1 (SC) HON'BLE APEX CO URT OBSERVED THAT 'ONCE IT IS SHOWN THAT THE CASE OF THE ASSESSEE COM ES WITHIN THE LATTER OF THE LAW, HE MUST BE TAXED, HOWEVER GREAT THE HARDSHIP MAY APPEAR TO THE JUDICIAL MIND TO BE'. IT IS FURTHER SEEN THAT IN SEVERAL OTHER JUDGEMENTS AS IN THE CASES QUOTED AT 40 ITR 142(SC) , 72 ITR 286(SC), 222 ITR 831 (GUJ) ETC IT HAS BEEN HELD TIME AND AGA IN THAT ONCE THE PROVISIONS OF A STATUTE ARE CLEAR, NO MEANINGS OR I NTENTIONS ARE REQUIRED TO BE ATTACHED THEREIN AND THAT THEY HAVE BE FOLLOW ED IN THE LETTER AND SPIRIT. IT HAS BEEN HELD THAT AN INTERPRETATION OF LAW IS TO BE ATTEMPTED ONLY WHEN THE STATUTE SUFFERS FROM ANY AMBIGUITY. 5.5 THE STATUTORY CONDITIONS LAID DOWN U/S. 158BD REPRO DUCED ABOVE ALLUDES TOWARDS A SCENARIO IN WHICH AN A O WHILE CO MPLETING SEARCH IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 14 - ASSESSMENT AGAINST A PERSON OVER WHOM HE EXERCISES VALID JURISDICTION, FINDS THAT THE DOCUMENTS SEIZED DURING THE SEARCH A GAINST SAID PERSON ALSO CONTAIN SOME INFORMATION OF UNDISCLOSED INCOME IN RESPECT OF SOME OTHER PERSON (OVER WHOM HE DOES NOT EXERCISE HIS JU RISDICTION), THEN THE SAID A O WOULD PASS ON THE REQUISITE INFORMATION AB OUT INCRIMINATING DOCUMENTS AND POSSIBLE UNDISCLOSED INCOME TO THE A O OF THE PERSON IN RESPECT OF WHOM SAID INFORMATION PERTAINS TO. THE PHRASE USED IN SECTION 158BD IS WHERE THE A O IS SATISFIED' ALLUD ES TOWARDS ACT OF ARRIVING AT SATISFACTION OF THE FIRST ORIGINAL A O THAT THE INCRIMINATING DOCUMENT PERTAINS TO A PERSON, THAT THE SAID PERSON IS ASSESSED UNDER A PARTICULAR A O AND THAT THE INCRIMINATING DOCUMEN T CONTAINS DETAILS OF SOME UNDISCLOSED INCOME. 5.6 THE ARGUMENT OF THE APPELLANT THAT THE A O ISSUING NOTICES U/S. 158BD IS REQUIRED TO RECORD SATISFACTION BEFORE ISS UING SAID NOTICE IS TOTALLY INCORRECT. THERE IS NO SUCH LEGAL STIPULATI ON. CONTEMPORARY LAW OF SECTION 158BD, ONLY PROVIDES THAT UPON ARRIVAL O F SATISFACTION AND RECEIPT OF INCRIMINATING DOCUMENTS FORWARDED BY THE FIRST AO, THE SECOND AO WOULD PROCEED TO COMPLETE ASSESSMENT U/S. 158BD RWS 158BC. THERE IS NO MANDATE FOR RECORDING OF ANY SA TISFACTION BY THE SECOND AO WHICH IS RESPONSIBILITY OF THE FIRST A O. AS PER FACTS OF THE CASE SATISFACTION FOR INITIATION OF PROCEEDINGS U/S . 158BD WAS RECORDED BY ACIT, CENT CIR.1(1) A'BAD THROUGH HIS SATISFACTI ON DT 29-10-2002. THE SAME WAS DONE BY HIM WHILE CONDUCTING BLOCK ASS ESSMENT PROCEEDINGS IN THE CASE OF JVD. CONSEQUENTLY ACIT, CENT CIR.1(1), A'BAD HAS DISCHARGED THE ONUS PLACED UPON HIS SHOUL DERS U/S. 158BD AND NO FAULT CAN BE FOUND. THUS, IT IS CLEAR THAT T HERE IS NO LEGAL INFIRMITY IN THE ASSESSMENT U/S. 158BD DONE BY THE ACIT, CIRCLE-6, A'BAD. THE ARGUMENTS OF THE APPELLANT ARE THEREFORE REJECT ED AND THE ADDITIONAL GROUND OF APPEAL RAISED IS DISMISSED. UPON A PLAIN READING OF THE OBSERVATION MADE BY THE LEARNED CIT(A) WE FOUND THAT THE CASE OF THE REVENUE IN ORD ER TO DEFEND THE CONTENTION MADE BY THE ASSESSEE IS THIS THAT THE S ATISFACTION AS MENTIONED IN SECTION 158BD REFERS TO THE ACT OF ARR IVING AT SATISFACTION BY THE FIRST ORIGINAL ASSESSMENT OFFICER THAT THE I NCRIMINATING DOCUMENT IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 15 - PERTAINS TO THE PERSON, THE SAID PERSON IS ASSESSED UNDER A PARTICULAR AO AND THE INCRIMINATING DOCUMENTS CONTAINS DETAILS OF SOME UNDISCLOSED INCOME. ACCORDING TO THE LEARNED CIT(A) THE FIRST A O IS REQUIRED TO BE SPECIFIED ON THE FACTUAL ASPECT THAT THE INCRIMINAT ING DOCUMENTS PERTAIN TO THAT PERSON AND UPON ARRIVAL OF SUCH SATISFACTIO N AND UPON RECEIPT OF INCRIMINATING DOCUMENTS FORWARDED BY THE FIRST AO T HE SECOND AO WOULD PROCEED TO COMPLETE THE ASSESSMENT U/S 158BD R.W.S. 158BC. NO MANDATORY RECORDING OF ANY PERSONAL SATISFACTION BY THE SECOND AO IS STIPULATED IN THE PROVISION U/S 158BD; THE RESPONSI BILITY TO PREPARE A SATISFACTION LIES UPON THE FIRST AO AND NOT THE CON CERNED AO AS THE CASE SOUGHT TO BE MADE OUT BY THE REVENUE BEFORE US. ACCORDING TO THE LEARNED CIT(A) SECTION 158BD CLEAR LY PROVIDES JURISDICTION OF BEING SATISFIED BY ANY OFFICER OF T HE LEVEL OF ADIT AND IT DOES NOT MANDATE FOR RECORDING OF SUCH SATISFACTION BY THE CONCERNED AO WHO ISSUES THE NOTICE U/S 158BC OF THE ACT. BUT THE CASE OF THE ASSESSEE IS THIS THAT ACTION UN DER SECTION 158BD CAN BE INITIATED PROVIDED THE ASSESSING OFFICER ISS UING NOTICE U/S 158BD SPECIFIES THAT THE APPELLANT IS GUILTY OF POSSESSIO N OF SOME UNDISCLOSED INCOME. IN THAT VIEW OF THE MATTER, THE SATISFACTIO N OF ADIT, AS IN THE CASE IN HAND, IS NOT SUFFICIENT FOR MAKING BLOCK AS SESSMENT U/S 158BD. THE SATISFACTION FOR INITIATING PROCEEDING U/S 158B D, SINCE RECORDED BY THE ACIT AND NOT BY THE CONCERNED ASSESSING OFFICER HAVING JURISDICTION IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 16 - TO ASSESS THE CASE OF THE APPELLANT BEFORE US, THE ASSESSMENT ORDER BECOMES ILLEGAL AND BECOME A PRODUCT OF NON COMPLIA NCE OF THE STATUTORY PROVISION U/S 158BD. WE HAVE ALSO GONE THROUGH THE SATISFACTION NOTE FOR INITIATING THE PROCEEDING U/S 158BD FORWARDED BY THE ACIT, CENTRAL CIRCLE 1(1), AHMEDABAD TO ACIT, CIRCLE 6, AHMEDABAD BEING PART OF THE RECORD AT PAGE 215 TO 221 OF THE PAPER BOOK BEFORE US DATED 2 9.10.2002. THE NOTICE U/S 158BC R.W.S. 158BD ISSUED BY THE ACIT, C IRCLE 6, AHMEDABAD DATED 30.10.2002 IS ALSO BEFORE US. IT ALSO APPEARS FROM THE RECORDS THAT THE ASSESSEE MADE AN APPLICATION DATED 27.09.2018 SEEKING INFORMATION UN DER THE R.T.I ACT, 2005 AND ALSO REQUESTED FOR SUPPLY OF THE ORDER U/S 127 OF THE INCOME TAX ACT, 1961 BEING THE INTIMATION OF THE CHANGE OF JURISDICTION FROM ITO, WARD - 6(4), AHMEDABAD TO DCIT, CIRCLE 6 AS REQUIRED BY THE SAID PROVISION OF LAW. HOWEVER, THE CERTIFIED COPY OF TH E SAID ORDER WAS NOT PROVIDED TO THE APPELLANT BY THE CONCERNED AUTHORIT Y BEING THE CPIO AND ITO, WARD 2(1)(4), AHMEDABAD ON THE GROUND THAT S UCH COPY OF THE ORDER U/S 127 OF THE ACT IS NOT AVAILABLE ON RECORD AS IT APPEARS FROM THE REPLY DATED 12.10.2008 BY THE CONCERNED AUTHORITY. HOWEVER, THE DCIT, CIRCLE 6, AHMEDABAD HAS BEEN REQUESTED TO PROVIDE SUCH COPY OF THE ORDER U/S 127 OF THE ACT WHEREBY AND WHEREUNDER HIS JURISDICTION WAS IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 17 - CHANGED FROM THE THEN ITO, WARD 6(4) TO DCIT, CIR CLE 6, AHMEDABAD. THE ASSESSEE PREFERRED AN APPEAL ON 04.12.2018 AGA INST THE ORDER DATED 12.10.2018 PASSED BY THE CPIO AND THE SAID AP PEAL WAS DISPOSED OF BY AND UNDER AN ORDER DATED 04.12.2018 ISSUED BY THE ACIT, RANGE 2(1), AHMEDABAD AND FIRST APPELLATE AUTHORITY UNDER RTI WHEREBY AND WHEREUNDER THE VERY NECESSITY OF ISSUING THE ORDER U/S 127 OF THE ACT UPON THE ASSESSEE INTIMATING CHANGE OF ASSESSING OF FICER HAS BEEN NEGATED WITH THE FOLLOWING OBSERVATION: 4.3 THE CPIO/AO WAS ASKED TO VERIFY THE CASE RECOR DS AND REPORT IN THIS MATTER. TO WHICH THE AO VIDE HIS LETTER DTD. 0 4.11.2018 HAS SUBMITTED HIS COMMENTS AS ON PERUSAL OF THE CASE R ECORD, IT IS FOUND THAT VIDE LETTER DTD. 29.10.2002 RECEIVED FROM ACIT , CENTRAL CIRCLE- 1(1), AHMEDABAD (COPY ENCLOSED), IT IS INFORMED THA T THE JURISDICTION OVER THE ASSESSEE I.E. SHRI DHARAMSHIBHAI HARIJIBHA I PATEL (PAN : AAMPP 6622 P) IS ITO, WARD 6(4), AHMEDABAD AS PER THE DEPARTMENTAL ITD DATABASE. HOWEVER, FOR INITIATION OF PROCEEDING U/S 158BD OF THE ACT, AS PER PROVISIONS OF CHAPTER XIVB THE SEARCH ASSESSMENTS ARE TO BE DONE BY AOS NOT BELOW THE RAN K OF ACSIT. FURTHER JURISDICTION OVER THE ASSESSEE WAS CHANGED FROM WARD 6(4), AHMEDABAD TO CIRCLE 6, AHMEDABAD AND BOTH THE CHA RGES ARE UNDER THE THEN CIT-VI, AHMEDABAD. THE ACIT/DCIT HAS CONCU RRENT JURISDICTION OVER ALL THE CASES OF THE RANGE. THERE FORE, AS PER SECTION 127 OF THE ACT, THERE IS NO NEED TO PASS AN ORDER U /S 127 OF THE ACT FOR CHANGE OF JURISDICTION. IN VIEW OF ABOVE FACTS AND REASONS, THE APPEAL IS D ISPOSED AS ABOVE. IN CASE THE APPELLANT WISHES TO FILE AN APPEAL AGAINST THIS ORDER, HE MAY DO SO WITHIN 90 DAYS OF THE RECEIPT OF THIS ORDER, BEF ORE THE CENTRAL INFORMATION COMMISSION AT THE FOLLOWING ADDRESS: CENTRAL INFORMATION COMMISSION, ROOM NO.305, 2 ND FLOOR, IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 18 - B WING, AUGUST KRANTI BHAWAN, BHIKAJI CAMA PLACE, NEW DELHI 110 066. WHILE DEALING WITH THIS PARTICULAR ISSUE, WE HAVE A LSO CONSIDERED THE RELEVANT JUDGMENT PASSED BY THE HONBLE HIGH CO URT OF BOMBAY IN THE MATTER OF CIT, NAGPURVS-LALITKUMAR BARDIA WHIC H DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE HONBLE COURT OBSERV ED AS FOLLOWS: 13. IT IS UNDISPUTED POSITION THAT THE RESPONDENT/A SSESSEE WAS BEING ASSESSED AT RAJNANDGAON (M.P.). IT WAS AS A CONSEQU ENCE OF SEARCH UPON THE MOTWANI GROUP AT NAGPUR THAT A SEARCH WAS CARRIED ON UPON THE RESPONDENT/ASSEESSEE. IN VIEW OF THE ABOVE, THE COMMISSIONER OF INCOME TAX, RAIPUR FOR FACILITATING DETAILED AND CO ORDINATED INVESTIGATION, PASSED AN ORDER ON 6.7.1999, UNDER SECTION 127 OF THE ACT TRANSFERRING THE RESPONDENT/ASSESSEE'S CASE FROM RA JNANGAON TO NAGPUR. HOWEVER, THE ORDER DATED 6.7.1999 OF THE CO MMISSIONER OF INCOME TAX, NAGPUR WAS QUASHED AND SET ASIDE ON 17. 9.1999 BY THE HON'BLE M.P. HIGH COURT. THE NOTICE U/S.158BC OF TH E ACT WAS ISSUED ON 22.9.1999 I.E. AFTER THE ORDER OF TRANSFER DATED 6.7.1999, U/S.127 OF THE ACT WAS QUASHED AND SET ASIDE. THUS, IT CEASED TO EXIST. CONSEQUENTLY, ON 22.9.1999, WHEN THE DEPUTY COMMISS IONER OF INCOME TAX, NAGPUR CEASED TO HAVE JURISDICTION TO ASSESS T HE RESPONDENT/ASSESSEE AS THERE WAS NO ORDER OF TRANSF ER OF THE RESPONDENT/ASSESSEE'S CASE TO NAGPUR. IN TERMS OF SECTION 2(7A) OF THE ACT, THE ASSESSING OFFICER MEANS 'AN OFFICER OF THE INCOME TAX VESTED WITH JURISDICTION EITHER BY VIRTUE OF SECTION 120 OR ANY OTHER PROVISION OF THE ACT'. ADMITTEDLY, THE DEPUTY COMMISSIONER OF INCOME TAX, NAGPUR DOES NOT HAVE JURISDICTION OVER THE RESPONDE NT/ASSESSEE BY VIRTUE OF SECTION 120 OF THE ACT. HOWEVER, THE CLAIM OF JURISDICTION AS A ASSESSING OFFICER OVER RESPONDENT/ASSESSEE IS THE O RDER DATED 6.7.1999 WHICH HAS BEEN PASSED U/S.127 OF THE ACT, WHILE ISS UING NOTICE ON 22.9.1999, UNDER SECTION 158 BC OF THE ACT. BUT, AS THE ORDER DT.6.7.1999 UNDER SECTION 127 OF THE ACT BY THE COMMISSIONER OF INCOME TAX, RAIPUR WAS SET ASIDE BEFORE ISSUING OF NOTICE, THE DEPUTY COMMISSIONER OF INCOME TAX, NAGPUR CEASED TO BE THE RESPONDENT/ASSESSEE'S ASSESSING OFFICER. IN THE RES ULT, THE NOTICE DATED IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 19 - 22.9.1999 ISSUED U/S.158BC OF THE ACT WAS ISSUED BY THE DEPUTY COMMISSIONER OF INCOME TAX, WHO WAS NOT THE ASSESSI NG 15 ITL127.06.ODT OFFICER OF THE RESPONDENT/ASSESSEE. I T IS THE ASSESSING OFFICER ALONE WHO HAS TO SERVE NOTICE UPON THE ASSE SSEE CALLING UPON HIM TO FURNISH A RETURN IN TERMS OF SECTION 158BC OF THE ACT. THIS NOTICE THE DEPUTY COMMISSIONER OF INCOME TAX COULD NOT ISS UE AS, ON 22.9.1999, HE WAS NOT THE ASSESSING OFFICER. AS A C ONSEQUENCE, THE NOTICE BEING WITHOUT JURISDICTION, ALL THE PROCEEDI NGS SUBSEQUENT THERETO ARE WITHOUT AUTHORITY OF LAW. 14. IN FACT, AS THE APEX COURT HELD IN A.C.I.T. VS. HOTEL BLUE MOON , (2010) 321 I.T.R. 362 (SC) THAT THE ISSUE OF NOTICE UNDER SECTION 158 BC OF THE ACT, CONSEQUENT TO SEARCH IS MANDATORY, A S IT IS THE VERY FOUNDATION FOR JURISDICTION. THEREFORE, THE NOTICE U/S.158 BC OF THE ACT HAS NECESSARILY TO BE ISSUED BY A PERSON WHO IS THE ASSESSING OFFICER AND NOT BY ANY OFFICER OF THE INCOME TAX DEPARTMENT . IN VIEW OF THE ABOVE, ON 22.9.1999, WHEN THE NOTICE UNDER SECTION 158 BC OF THE ACT WAS ISSUED BY DEPUTY COMMISSIONER OF INCOME TAX, NA GPUR, HE WAS NOT THE ASSESSING OFFICER OF THE RESPONDENT/ASSESSEE. T HEREFORE, NO FAULT CAN BE FOUND ON THE ABOVE COUNT WITH THE ORDER OF T HE TRIBUNAL. IT APPEARS FROM THE AFORESAID JUDGMENT THAT THE HO NBLE MP HIGH COURT QUASHED AND SET ASIDE THE NOTICE U/S 127 OF T HE ACT ON THE GROUND THAT THE NOTICE U/S 158BC OF THE ACT WAS ISSUED ON 22.09.1999 I.E. AFTER THE ORDER OF TRANSFER DATED 06.07.1999. THE CONCERN ED AO BEING THE DCIT, NAGPUR CEASED TO HAVE THE JURISDICTION TO ASS ESS THE ASSESSEE WHEN HE HAS ISSUED THE NOTICE U/S 158BC OF THE ACT ON 22 .09.1999. IN THE CASE IN HAND, IT APPEARS THAT UPON RECEIPT OF THE SATISF ACTION NOTE DATED 29.10.2002 ISSUED BY THE ACIT, CIRCLE 1(1), A NOT ICE U/S 158BC R.W.S. 158BD OF THE ACT, 1961 ON 30.10.2002 I.E. ON THE VE RY NEXT DAY. BUT THE SAME WAS SERVED UPON THE ASSESSEE AS IT APPEARS FRO M THE ORDER PASSED BY THE HONBLE HIGH COURT WAS ONLY ON 18.11.2002. NOWH ERE ADMITTEDLY THE IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 20 - ISSUANCE OF THE NOTICE U/S 127 INTIMATING THE ASSES SEE OF SUCH TRANSFER OF JURISDICTION OF AO APPEARED TO HAVE BEEN ISSUED. TH E PLEA IN THIS RESPECT AS TAKEN BY THE REVENUE IS THIS THAT THE JURISDICTI ON OVER THE ASSESSEE THOUGH WAS CHANGED FROM WARD 6(4), AHMEDABAD TO C IRCLE 6, AHMEDABAD, BOTH THE CHARGES ARE UNDER THE THEN CIT- VI, AHMEDABAD. THE ACIT/DCIT HAS CONCURRENT JURISDICTION OVER ALL THE CASES OF THE RANGE. THEREFORE, ADMITTEDLY NOTICE OF INTIMATION O F CHANGE OF JURISDICTION UNDER THE PROVISION OF SECTION 127 HAS NOT BEEN ISSUED TO THE ASSESSEE. IN THIS CASE THE ASSESSEE IS IN A BETTER FOOTING THAN THAT OF THE JUDGMENT CITED ABOVE. NOTICE U/S 127 THOUGH REQUIRE D TO BE ISSUED THE SAME IS NOT IN EXISTENCE AT ALL. FURTHERMORE, THE S ATISFACTION NOTE WAS NEITHER PREPARED BY SUCH ACIT, CIRCLE 6 WHO HAS I SSUED THE NOTICE U/S 158BC R.W.S. 158BD ON 30.10.2002. THE MANDATORY PRO VISION OF ISSUING THE SAID NOTE BY THE CONCERNED AO HAVING JURISDICTI ON TO ASSESS THE CASE OF THE APPELLANT AS THUS NOT BEEN COMPLIED WITH. TH E SATISFACTION NOTE WAS ISSUED BY THE ACIT, CIRCLE 1(1), AHMEDABAD AND NO T THE DCIT, CIRCLE 6 OR THE ACIT, CIRCLE 6. THIS IS THE SETTLED PR INCIPLE OF LAW THAT THE NOTICE U/S 158BD R.W.S. 158BC IS REQUIRED TO BE ISS UED ONLY UPON BEING SPECIFIED THAT THE UNDISCLOSED INCOME BELONGS TO TH E APPELLANT ONLY BY THE CONCERNED AO AND NOT BY ANY OTHER AUTHORITY HAVING THE SAME RANK. THE JUDGMENT AS DISCUSSED ABOVE IN THE MATTER OF ACIT-V S-HOTEL BLUE MOON REITERATES THE SAME PRINCIPLE. SECTION 158BD FURTHE R PROVIDES THE BOOKS OF ACCOUNT OR OTHER INCRIMINATING DOCUMENTS OR ASSE TS CEASED OR REQUISITIONED U/S 132A SHALL BE HANDED OVER TO THE ASSESSING OFFICER IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 21 - HAVING JURISDICTION OF SUCH OTHER PERSON. IN THE IN STANT CASE, THE SAME WAS ALSO NOT COMPLIED WITH BY THE STATUTORY AUTHORITIES . THE ENTIRE PROCEEDING HAS BEEN INITIATED BY THE AUTHORITIES BY NOT APPLYI NG THE PROVISION U/S 127 OF THE ACT BY NOT ISSUING NOTICE INTIMATING THE ASS ESSEE REGARDING TRANSFER OF JURISDICTION OF THE LEARNED AO AND FURTHER BY NO T APPLYING THE PROVISION OF SECTION 158BC R.W.S. 158 BD BY NOT REC ORDING THE SATISFACTION BY THE JURISDICTIONAL AO. IN THAT VIEW OF THE MATTER, WE FIND WHEN THE VERY FOUNDATION OF THE BLOCK ASSESSMENT IS NOT STABLE IN THE ABSENCE OF COMPLIANCE OF THE STATUTORY PROVISIONS A S DISCUSSED ABOVE, THE ENTIRE PROCEEDING INITIATED AGAINST THE ASSESSEE IS VITIATED. UPON CONSIDERING ALL THE ASPECT OF THE MATTER, WE FIND N O MERIT IN THE ORDER PASSED BY THE AUTHORITIES BELOW. FURTHER THAT ON TH E BASIS OF THE ABOVE DISCUSSION AND OBSERVATION WE FIND THE ENTIRE PROCE EDING IS VOID AB INITIO I.E. INVALID FROM THE VERY OUTSET AND THEREFORE IS LIABLE TO BE QUASHED AND HENCE THE ENTIRE PROCEEDING UNDER SECTION 158BD OF THE ACT AS INITIATED BY THE REVENUE AGAINST THE ASSESSEE IS HEREBY QUASH ED. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 24 / 0 6 /201 9 SD/- SD /- ( PRAMOD KUMAR ) ( M S. MADHUMITA ROY ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 24/06/2019 PRITI YADAV, SR.PS IT(SS)A NO.199/AHD/2014 DHARMSHIBHAI H. PATEL BLOCK PERIOD 01.04.1990 TO 20.10.2000 - 22 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-XVI, AHMEDABAD. 5. , , / DR, ITAT, AHMEDABAD 6. !' #$ / GUARD FILE. / BY ORDER , //TRUE COPY// / (DY./ASSTT.REGISTRAR) , !' / ITAT, AHMEDABAD 1. DATE OF DICTATION 31.05.2019 (DICTATION PAGES 6) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04.06.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 07.06.2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER