ACIT, CHENNAI V. M/s. JF Chit Funds Private Limited, CHENNAI

ITSSA 27/CHNY/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7705 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 12-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: G BASKAR
• Keywords: Period of limitation; Block assessment
• Section: 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.(SS) A. NO. 27/MDS/2011 (BLOCK PERIOD : 1.4.1996 TO 15.11.2002) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(4), CHENNAI - 600 034 . (APPELLANT) V. M/S JF CHIT FUNDS PVT. LTD., NO.83, ACHARAPAN STREET, CHENNAI - 600 001. PAN : AAACJ1790K (RESPONDENT) C.O. NO. 13/MDS/2012 (IN I.T.(SS) A. NO. 27/MDS/2011) BLOCK PERIOD : 1.4.1996 TO 15.11.2002 M/S JF CHIT FUNDS PVT. LTD., NO.83, ACHARAPAN STREET, CHENNAI - 600 001. (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(4), CHENNAI - 600 034. (RESPONDENT) REVENUE BY : SHRI ANIRUDH RAI, CIT-DR ASSESSEE BY : SHRI G. BAS KAR DATE OF HEARING : 27.02.2012 DATE OF PRONOUNCEMENT : O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEAL AND CROSS-OBJECTION FILED BY REV ENUE AND ASSESSEE RESPECTIVELY. BOTH ARE DIRECTED AGAINST A N ORDER DATED 2.9.2011 OF COMMISSIONER OF INCOME TAX (APPEALS)-II , CHENNAI. I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 2 2. SHORT FACTS APROPOS ARE THAT PURSUANT TO SEARCH IN THE CASE OF ONE SHRI M.V. NARAYANA GUPTA ON 15.11.2002, A NOTIC E UNDER SECTION 158BD OF INCOME-TAX ACT, 1962 (IN SHORT 'THE ACT') WAS ISSUED TO THE ASSESSEE ON 15.12.2005. THE ORDER OF ASSESSMENT IN THE CASE OF SHRI M.V. NARAYANA GUPTA WAS PASSED ON 31.12.2004, WHICH WAS THE LAST POSSIBLE DAY UNDER SECTION 158BE OF THE ACT FO R COMPLETING THE BLOCK ASSESSMENT. IN RESPONSE TO THE SAID NOTICE U NDER SECTION 158BD, ASSESSEE FILED RETURN FOR THE BLOCK PERIOD 3 .1.2006 WHEREIN NIL INCOME WAS DECLARED. THEREAFTER, THE BLOCK ASS ESSMENT WAS COMPLETED ON 26.12.2007 DETERMINING UNDISCLOSED INC OME OF ` 7,75,98,890/-. 3. ASSESSEE MOVED IN APPEAL BEFORE LD. CIT(APPEALS) . THERE, IT ASSAILED THE JURISDICTION OF THE A.O. TO PASS A BLO CK ASSESSMENT ALONG WITH OTHER GROUNDS TAKEN ON MERITS. AS PER THE ASS ESSEE, THE NOTICE ISSUED UNDER SECTION 158BD WAS AFTER THE BLOCK ASSE SSMENT DONE ON THE SEARCHED PERSON, NAMELY, SHRI M.V. NARAYANA GUP TA. AS PER THE ASSESSEE, IN VIEW OF THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MANOJ AGGARWAL V. DCIT (117 ITD 377), SUCH PROCEEDINGS INITIATED AFTER THE LAST DATE WAS INVAL ID. LD. CIT(APPEALS) SOUGHT A REPORT FROM ASSESSING OFFICER SINCE THE AB OVE ISSUE WAS I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 3 RAISED BY THE ASSESSEE AS AN ADDITIONAL GROUND. T HOUGH THE ASSESSING OFFICER OBJECTED TO THE ADMISSION OF SUCH AN ADDITIONAL GROUND, LD. CIT(APPEALS) PROCEEDED TO ADJUDICATE TH E ISSUE, SINCE ACCORDING TO HIM, THE QUESTION RAISED WAS A QUESTIO N OF LAW AND THE FACTS NECESSARY FOR REACHING A DECISION THEREON WER E ON RECORD. LD. CIT(APPEALS) WAS OF THE OPINION THAT THE NOTICE ISS UED TO THE ASSESSEE UNDER SECTION 158BD WAS NOT VALID SINCE IT WAS ISSUED AFTER COMPLETION OF PROCEEDINGS UNDER SECTION 158BC OF THE ACT AND THE SATISFACTION RECORDED FOR ISSUE OF SUCH A NOTIC E WAS BELATED. HE, THEREFORE, RELYING ON THE DECISION OF SPECIAL BENCH IN THE CASE OF MANOJ AGGARWAL (SUPRA) HELD THAT SUCH A NOTICE AND THE PURSUANT ASSESSMENT ORDER WERE INVALID AND VOID ABINITIO. 4. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF LD. CIT(APPEALS), SUBMITTED THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON, NAMELY, SHRI M.V. NARAYANA GUPTA AND THE AS SESSEE WERE ONE AND THE SAME AND THEREFORE, THE DECISION OF SPE CIAL BENCH IN THE CASE OF MANOJ AGGARWAL (SUPRA) WOULD NOT APPLY. AS PER THE LEARNED D.R., THERE WAS NO TIME LIMIT PRESCRIBED UNDER THE ACT FOR RECORDING A SATISFACTION OR FOR ISSUING NOTICE UNDER SECTION 15 8BD OF THE ACT. FURTHER SUBMISSION OF LEARNED D.R. WAS THAT A CASU S OMISUS CANNOT I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 4 BE PRESUMED TO HAVE BEEN COMMITTED BY LEGISLATURE I N NOT PRESCRIBING A TIME LIMIT. 5. PER CONTRA, LEARNED A.R. STRONGLY SUPPORTED THE ORDER OF LD. CIT(APPEALS) AND SUBMITTED THAT HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. MRIDULA, PROP. M/S DHRU V FABRICS (335 ITR 266) HAD TAKEN THE SAME VIEW AS TAKEN BY THE SPECIA L BENCH IN THE CASE OF MANOJ AGGARWAL (SUPRA). ACCORDING TO HIM, HERE THE SATISFACTION WAS RECORDED MORE THAN ONE YEAR AFTER THE LAST DATE ON WHICH AN ASSESSMENT COULD BE DONE ON THE SEARCHED P ERSON AND THEREFORE, SUCH A SATISFACTION AS WELL AS PURSUANT PROCEEDINGS ON THE ASSESSEE WERE RIGHTLY HELD BY LD. CIT(APPEALS) TO B E INVALID. 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. FACTS WHICH ARE NOT DISPUTED ARE THAT THE PROCEEDIN GS AGAINST ASSESSEE WERE INITIATED UNDER SECTION 158BD OF THE ACT AND NOTICE UNDER SECTION 158BD WAS ISSUED ON 15.12.2005. LEAR NED D.R. HAD HIMSELF ADMITTED THAT THE DATE ON WHICH SATISFACTIO N WAS RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON, NAMEL Y, SHRI M.V. NARAYANA GUPTA WAS 13.12.2005. THE LAST DATE ON WH ICH AN ORDER IN THE CASE OF SHRI M.V. NARAYANA GUPTA COULD BE PASSE D UNDER SECTION 153BC WAS 31.12.2004, AS PER TIME FRAME STI LPULATED IN I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 5 SECTION 158BE OF THE ACT. THUS, OBVIOUSLY THE SATI SFACTION RECORDED IN THE CASE OF THE ASSESSEE WAS ALMOST ONE YEAR AFT ER THE LAST DATE ON WHICH A BLOCK ASSESSMENT COULD BE DONE IN THE CA SE OF SHRI M.V. NARAYANA GUPTA. HONBLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF MRIDULA, PROP. M/S DHRUV FABRICS (SUPRA) HAS HEL D AS UNDER:- THE POINT FOR CONSIDERATION IN THIS APPEAL IS, WHET HER INITIATION OF PROCEEDINGS UNDER S. 158BD OF THE ACT, BY RECORDING SATISFACTION ON 15TH JULY, 2005 AND ISSUING A NOTICE DT. 2ND SEPT., 2005 , WHICH WAS SERVED ON THE ASSESSEE ON 8TH SEPT., 2005, WAS VALID WHEN BLOCK A SSESSMENT AGAINST THE PERSON SEARCHED HAD BEEN FINALIZED UNDER S. 158BC O F THE ACT ON 30TH MARCH, 2005. IT WOULD BE ADVANTAGEOUS TO REFER TO THE PROVISIONS OF S. 158BD OF THE ACT WHICH DEALS WITH CASES OF UNDISCLOSED INCOME OF PER SONS OTHER THAN THOSE AGAINST WHOM SEARCH HAS BEEN CONDUCTED UNDER S. 132 OF THE ACT AND S. 158BE WHICH RELATES TO LIMITATION FOR FRAMING OF AS SESSMENT UNDER S. 158BC IN THECASE OF THE PERSON WHOSE PREMISES HAVE BEEN S EARCHED, AND ALSO UNDER S. 158BD OF THE ACT AGAINST WHOM ACTION UNDER THE S AID SECTION HAS BEEN INITIATED. THE SAID PROVISIONS READ THUS : '158BD. UNDISCLOSED INCOME OF ANY OTHER PERSON.WHE RE THE AO IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO AN Y PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER S .132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUI SITIONED UNDER S. 132A, THEN, THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT AO SHALL PROCEED (UNDER S. 15 8BC) AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APP LY ACCORDINGLY. 158BE. TIME LIMIT FOR COMPLETION OF BLOCK ASSESSMEN T.(1) THE ORDER UNDER S. 158BC SHALL BE PASSED (A) WITHIN ONE YEAR FROM THE END OF THE MONTH IN WH ICH THE LAST OF THE AUTHORIZATIONS FOR SEARCH UNDER S. 132 OR FOR REQUI SITION UNDER S. 132A, AS THE CASE MAY BE, WAS EXECUTED IN CASES WHERE A SEAR CH IS INITIATED OR BOOKS I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 6 OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS ARE REQ UISITIONED AFTER THE 30TH JUNE, 1995, BUT BEFORE THE 1ST DAY OF JANUARY, 1997; (B) WITHIN TWO YEARS FROM THE END OF THE MONTH IN W HICH THE LAST OF THE AUTHORIZATIONS FOR SEARCH UNDER S. 132 OR FOR REQUI SITION UNDER S. 132A, AS THE CASE MAY BE, WAS EXECUTED IN CASES WHERE A SEAR CH IS INITIATED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS ARE REQ UISITIONED ON OR AFTER THE 1ST DAY OF JANUARY, 1997. (2) THE PERIOD OF LIMITATION FOR COMPLETION OF BLOC K ASSESSMENT IN THE CASE OF THE OTHER PERSON REFERRED TO IN S. 158BD SHALL B E (A) ONE YEAR FROM THE END OF THE MONTH IN WHICH THE NOTICE UNDER THIS CHAPTER WAS SERVED ON SUCH OTHER PERSON IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS R EQUISITIONED AFTER THE 30TH JUNE, 1995, BUT BEFORE THE 1ST DAY OF JANUARY, 1997; AND (B) TWO YEARS FROM THE END OF THE MONTH IN WHICH TH E NOTICE UNDER THIS CHAPTER WAS SERVED ON SUCH OTHER PERSON IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS A RE REQUISITIONED ON OR AFTER THE 1ST DAY OF JANUARY, 1997. EXPLANATION 1.IN COMPUTING THE PERIOD OF LIMITATIO N FOR THE PURPOSES OF THIS SECTION, (I) THE PERIOD DURING WHICH THE ASSESSMENT PROCEEDI NG IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT; OR (II) THE PERIOD COMMENCING FROM THE DAY ON WHICH TH E AO DIRECTS THE ASSESSEE TO GET HIS ACCOUNTS AUDITED UNDER SUB-S. ( 2A) OF S. 142 AND ENDING ON THE DAY ON WHICH THE ASSESSEE IS REQUIRED TO FUR NISH A REPORT OF SUCH AUDIT UNDER THAT SUB-SECTION; OR (III) THE TIME TAKEN IN REOPENING THE WHOLE OR ANY PART OF THE PROCEEDING OR GIVING AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO S. 129; OR (IV) IN A CASE WHERE AN APPLICATION MADE BEFORE THE SETTLEMENT COMMISSION UNDER S. 245C IS REJECTED BY IT OR IS NOT ALLOWED T O BE PROCEEDED WITH BY IT, THE PERIOD COMMENCING ON THE DATE ON WHICH SUCH APP LICATION IS MADE AND I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 7 ENDING WITH THE DATE ON WHICH THE ORDER UNDER SUB-S . (1) OF S. 245D IS RECEIVED BY THE CIT UNDER SUB-S. (2) OF THAT SECTIO N, SHALL BE EXCLUDED : PROVIDED THAT WHERE IMMEDIATELY AFTER THE EXCLUSION OF THE AFORESAID PERIOD, THE PERIOD OF LIMITATION REFERRED TO IN SUB -S. (1) OR SUB-S. (2) AVAILABLE TO THE AO FOR MAKING AN ORDER UNDER CL. ( C) OF S. 158BC IS LESS THAN SIXTY DAYS, SUCH REMAINING PERIOD SHALL BE EXTENDED TO SIXTY DAYS AND THE AFORESAID PERIOD OF LIMITATION SHALL BE DEEMED TO B E EXTENDED ACCORDINGLY. EXPLANATION 2.FOR THE REMOVAL OF DOUBTS, IT IS HER EBY DECLARED THAT THE AUTHORIZATION REFERRED TO IN SUB-S. (1) SHALL BE DE EMED TO HAVE BEEN EXECUTED, (A) IN THE CASE OF SEARCH, ON THE CONCLUSION OF SEA RCH AS RECORDED IN THE LAST PANCHNAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORIZATION HAS BEEN ISSUED; (B) IN THE CASE OF REQUISITION UNDER S. 132A, ON TH E ACTUAL RECEIPT OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS BY TH E AUTHORIZED OFFICER. SEC. 158BD WAS INSERTED IN CHAPTER XIV BY THE FINAN CE ACT, 1995, W.E.F., 1ST JULY, 1995. THE AFORESAID PROVISION IS MADE APPLICA BLE WHEN THE FOLLOWING CONDITIONS ARE FULFILLED : (A) THERE SHOULD BE UNDISCLOSED INCOME WITHIN THE M EANING OF S. 158B(B) WHICH RELATES TO THE ASSETS OR BOOKS/DOCUMENTS FOUN D AND SEIZED/REQUISITIONED; (B) THE AO SHOULD RECORD A FINDING THAT THERE WAS U NDISCLOSED INCOME IN SUCH ASSETS OR BOOKS OF ACCOUNTS OR DOCUMENTS OF THE SEA RCHED PERSON WHICH BELONGED TO THE PERSON OTHER THAN THE ONE SEARCHED. ACCORDING TO PLAIN READING OF S. 158BD IBID, THE AO , WHILE FRAMING ASSESSMENT OF AN ASSESSEE UNDER S.158BC OF THE ACT AGAINST WHOM ACTION HAS BEEN TAKEN UNDER S. 132 OR 132A OF THE ACT, IS MAND ATORILY REQUIRED TO RECORD SATISFACTION BEFORE ACTION CAN BE INITIATED UNDER S. 158BD OF THE ACT AGAINST SUCH OTHER PERSON. IN OTHER WORDS, THE SATI SFACTION BY THE AO MAKING ASSESSMENT UNDER S. 158BC OF THE ACT, IN THE CASE OF THE PERSON SEARCHED, THAT THERE IS CERTAIN UNDISCLOSED INCOME AS A RESULT OF EXAMINATION OF SEIZED MATERIAL WHICH BELONGS TO SOME OTHER IDEN TIFIED PERSON, IS ESSENTIAL FOR ASSUMING JURISDICTION UNDER S. 158BD OF THE ACT. THE I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 8 SATISFACTION REQUIRED TO BE RECORDED IS PRIMA FACIE SATISFACTION AND IS NOT FIRM OR CONCLUSIVE SATISFACTION AT THAT STAGE. SEC. 158BE OF THE ACT PRESCRIBES TIME LIMIT FOR FRA MING OF ASSESSMENTS UNDER S. 158BC AND 158BD OF THE ACT. THE AO OF THE PERSON AGAINST WHOM ACTION UNDER S. 132 OR 132A OF THE ACT HAS BEEN TAK EN, IS THE AO WHO INITIATES THE PROCEEDINGS UNDER S. 158BD OF THE ACT BY RECORDING SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGS TO SUCH OTHER PERSON SO AS TO TAKE ACTION UNDER S. 158BD OF THE ACT AGAINST TH AT PERSON. THE ACT NOWHERE SPECIFICALLY PRESCRIBES ANY TIME-LIMIT OR L IMITATION FOR INITIATION OF PROCEEDINGS UNDER S. 158BD OF THE ACT OR FOR RECORD ING OF SATISFACTION BEFORE TAKING ACTION UNDER THAT PROVISION. THE PLAI N AND REASONABLE CONSTRUCTION THAT CAN BE PLACED ON THE AFORESAID PR OVISION WOULD BE THAT THE RECORDING OF SATISFACTION FOR TAKING ACTION AGAINST ANY OTHER PERSON UNDER S. 158BD OF THE ACT HAS TO BE BETWEEN INITIATION OF PR OCEEDINGS UNDER S. 158BC AND BEFORE COMPLETION OF BLOCK ASSESSMENT UNDER S. 158BC OF THE ACT IN THE CASE OF THE PERSON SEARCHED. IT WOULD, THUS, MEANS THAT THE ACTION CONTEMPLATED UNDER S. 158BD OF THE ACT AGAINST A TH IRD PARTY TO A SEARCH, IS NECESSARILY TO BE DURING THE COURSE OF BLOCK ASSESS MENT PROCEEDINGS UNDER S. 158BC OF THE SEARCHED PERSON. IT CANNOT BE AFTER TH E CONCLUSION OF THE SAME AS THERE IS NO OCCASION FOR AN AO TO EXAMINE THE SE IZED MATERIAL OR DOCUMENTS OF THE SEARCHED PERSON WHEN THE BLOCK ASS ESSMENT PROCEEDINGS HAVE CONCLUDED AND NO OTHER PROCEEDINGS ARE PENDING BEFORE HIM. IF ANY OTHER TIME-LIMIT IS READ IN THE PROVISIONS/STATUTE, IT SHALL LEAD TO ANOMALY AND WOULD BE ARBITRARY AND UNREASONABLE. IT COULD NOT B E READ IN THE PROVISION THAT WHERE BLOCK ASSESSMENT UNDER S. 158BC OF THE A CT IN THE CASE OF AN ASSESSEE AGAINST WHOM ACTION UNDER S. 132 OR 132A O F THE ACT HAD BEEN CARRIED OUT IS FINALIZED, REVENUE CAN TAKE ACTION A T ANY TIME IN THE ABSENCE OF ANY SPECIFIC LIMITATION PRESCRIBED IN THE STATUT E. A CONSTRUCTION WHICH LEADS TO SUCH AN ANOMALY SHOULD BE AVOIDED. LD. CIT(APPEALS) HAD IN PARA 11 OF HIS ORDER, REPRO DUCED THE PARAS RELEVANT FOR THE ISSUE FROM THE DECISION OF SPECIAL BENCH IN THE CASE OF MANOJ AGGARWAL (SUPRA). MOST PERTINENT PARA OF THE SAID ORDER WHICH WOULD BE RELEVANT IS REPRODUCED HEREUNDER:- I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 9 125. .ADMITTEDLY, THIS NOTE IS AFTER THE DATE OF BLOCK ASSESSMENT IN THE CASE OF MANOJ AGGARWAL WHICH WAS FINALIZED ON 29 TH AUG., 2002. FURTHER, THE NOTE OF SATISFACTION IS N OT RECORDED BY THE DY. CIT, CENTRAL CIRCLE-3, NEW DELHI, ACTING AS THE AO MAKING THE ASSESSMENT UNDER S.158BC OF MANOJ KUMAR AGGARWAL SI NCE THE SAID ASSESSMENT HAS BEEN FINALIZED EARLIER. CLEARLY THE NOTE OF SATISFACTION DT. 19 TH DEC.,2002, IS BEYOND THE DATE OF BLOCK ASSESSMENT IN THE SEC.158BC PROCEEDINGS DT. 29 TH AUG.,2002, IN THE CASE OF SHRI MANOJ AGGARWAL. THEREFORE, THE SATISFACTION RECORDED IS BELATED.IN ORDER TO ASCERTAIN WHETHER IN THE COURSE OF THE ASS ESSMENT PROCEEDINGS IN THE CASE OF MANOJ AGGARWAL UNDER S.1 58BC THERE IS ANY FINDING OF ANY UNDISCLOSED INCOME IN THE CASE OF TH E APPELLANT; EVEN THERE, WE DID NOT COME ACROSS ANY FINDING THAT ANY PART OF UNDISCLOSED INCOME BELONGS TO THE APPELLANT OR ANY REFERENCE TO ANY MATERIAL THEREIN INDICATING THE SAME. IN CIRCUMSTANCES, WE HAVE TO HOLD THAT THE SATISFACTION NOTE DT. 19 TH DEC.,2002, IS NOT THE ONE CONTEMPLATED IN S.158BD AND FURTHER THAT EVEN IF IT IS ASSUMED T O BE IN TERMS OF THE SAID SECTION IT DOES NOT EVEN REMOTELY SHOW THAT TH ERE IS UNDISCLOSED INCOME BELONGING TO THE APPELLANT FIRM CALLING FOR THE ASSUMPTION OF JURISDICTION UNDER S.158BD. IN THE CIRCUMSTANCES, WE HOLD THAT THE SAID NOTE OF SATISFACTION IS NON-ESTABLISHED IN LAW AND FURTHER THAT THE S.158BD PROCEEDING PURSUANT THERETO IS INVALID AND VOID AB INITIO ON THIS GROUND ALSO. 127. WE ARE OF THE FIRM VIEW THAT THE PROCEEDINGS U NDER S.158BD ARE INVALID FOR THE REASONS ABOVE STATED AN D SO THE ASSESSMENT MADE PURSUANT TO THESE PROCEEDINGS IS BA D IN LAW. THE SAME IS ACCORDINGLY LIABLE TO BE CANCELLED. RECORDING A SATISFACTION IS A MUST FOR INITIATING P ROCEEDINGS UNDER SECTION 158BD OF THE ACT AND IT DOES NOT MATTER WHE THER THE ASSESSING OFFICER IS THE SAME OR NOT. HERE, ADMITT EDLY, THE RECORDING OF SATISFACTION WAS MUCH AFTER THE STATUTORY TIME P ERIOD ALLOWED FOR MAKING AN ASSESSMENT IN THE CASE OF SEARCHED PERSON . WE ARE, THEREFORE, OF THE OPINION THAT LD. CIT(APPEALS) WAS JUSTIFIED IN APPLYING I.T.(SS) A. NO. 27/MDS/2011 C.O. NO. 13/MDS/2012 10 THE EXPOSITION OF LAW BY THE SPECIAL BENCH IN THE C ASE OF MANOJ AGGARWAL (SUPRA). WE DO NOT FIND ANY REASON TO INT ERFERE WITH THE ORDER OF LD. CIT(APPEALS). 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. 8. SINCE APPEAL OF THE REVENUE IS DISMISSED, CROSS- OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND SUCH CRO SS-OBJECTION IS DISMISSED AS INFRUCTUOUS. 9. TO SUMMARISE THE RESULT, BOTH THE APPEAL AND CRO SS-OBJECTION ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 2 ND MARCH, 2012. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 2 ND MARCH, 2012. KRI. COPY TO: ASSESSEE/ASSESSING OFFICER/CIT(A)-II, CHE NNAI/ CIT, CENTRAL II, CHENNAI/D.R./GUARD FILE