Shri S.K. Bhargava (HUF), New Delhi V. ITO,

ITSSA 28/DEL/2008

AI Insights

This case involves an appeal by Shri S.K. Bhargava (HUF) against the order passed under section 158BD of the Income Tax Act, concerning the block period from April 1, 1996, to July 17, 2002. The appeal was directed against the decision of the CIT(A)-I, New Delhi, which upheld the proceedings initiated following a search and seizure operation conducted on July 17, 2002. The primary contention of the appellant was the absence of recorded satisfaction necessary for the initiation of proceedings under section 158BD, as well as the alleged invalidity of the assessment order due to it being passed beyond the permissible time limit.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302872 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-08-2009
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: G
• Next Hearing Date: 26-02-2023
• Assessment Year: misc
• Appeal Filed On: 10-06-2008
• Other Referred Cases: Manish Maheshwari vs. CIT
• Laws Referred To: Section 158BD of the Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 158BC; 158BD

Judgement Text

IT(SS) APPEAL NO. 28/DEL/08 SH. S.K. BHARGAVA (HUF) 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BECHES : “G” NEW DELHI BEFORE SHRI DEEPAK R. SHAH, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER IT (SS) APPEAL NO. 28 / DEL/ 08 BLOCK PERIOD : 1.4.1996 TO 17.7.2002 Shri S.K. Bhargava (HUF) Vs. ACIT, Central Circle-20, Prop. M/s Vikram Associates New Delhi S-6/9, DLF City-III, Gurgaon Haryana (Appellant) (Respondent) Appellant by : Shri RS Singhvi, CA Respondent by : Shri Ashwani Kumar Mahajan, CIT(DR) PER GEORGE MATHAN, JUDICIAL MEMBER This is an appeal filed by the assessee against the order of the ld. CIT(A)-I, New Delhi in appeal no. 408/06-07 dated 6.12.2007 for the block period 1.4.1996 to 17.7.2002 passed under section 158BD. 2. Shri R.S. Sighvi, CA represented on behalf of the assessee and Shri Ashwani Kumar Mahajan, CIT(DR) represented on behalf of the revenue. 3. At the time of hearing, it was submitted by the ld. AR that there was a search and seizure operation on the assessee on 17.7.2002. The proceedings under section 158BC have been initiated by issuing a notice under section 158BC IT(SS) APPEAL NO. 28/DEL/08 SH. S.K. BHARGAVA (HUF) 2 on 25.9.2002 and the assessee had filed its return of income on 27.4.2004 declaring NIL undisclosed income. The proceedings under section 158BC was subsequently dropped on 19.7.2004 and proceedings under section 158BD was initiated on the assessee by a notice issued on 19.8.2004. It was submitted that the notice under section 158BD had been issued without recording any satisfaction. It was also not coming out of the assessment order or the order of the CIT(A) as to the details of the search as a consequence to which information was available against the assessee for initiating the proceedings under section 158BD. It was further submitted that the Assessing Authority and also the CIT(A) has proceeded on the assessment by taking recourse to the evidences found in the course of search on the assessee on 17.7.2002, which had already been dropped on 19.7.2004. It was further submitted that even assuming that the assessment under section 158BD was being based on the search conducted on the assessee on 17.7.2002. The assessment order having been passed on 31.8.2006 was barred by limitation. 4. It was submitted that in regard to recording of satisfaction, the decision of the Hon’ble Supreme Court of India in the case of Manish Maheshwari reported in 289 ITR 341 would apply and as no satisfaction had been shown to have been recorded for initiating the proceedings under section 158BD in the case of the assessee, the notice under section 158BD was liable to be nulled and consequently the assessment be quashed. 5. In reply to the above, the ld. DR vehemently supported the orders of the Assessing Authority and the CIT(A). IT(SS) APPEAL NO. 28/DEL/08 SH. S.K. BHARGAVA (HUF) 3 6. We have considered the rival submissions. 7. From the assessment order and from the order of the CIT(A), it is not coming out as to the details of the search or the person on whom the search has been conducted or the information which has come to the possession of the Assessing Authority on the basis of which the proceedings under section 158BD has been initiated. Further, the revenue has not been able to produce before us any satisfaction recording for the purpose of initiation of proceedings under section 158BD of the Act in the case of the assessee. 8. In the circumstances, respectfully following the decision of the Hon’ble Supreme Court in the case of Manish Maheshwari (Supra), the notice under section 158BD is found to be bad in law and consequently the same is quashed. 9. As the notice under section 158BD has been found invalid, consequently, the assessment also becomes invalid and the same is quashed. 10. In the circumstances, appeal of the assessee is allowed. The order pronounced on 21.8.2009. (DEEPAK R SHAH) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Copy of the order is forwarded to:- 1. Appellant. 2. Respondent. 3. CIT(A)-I, New Delhi 4. CIT 5. The DR, ITAT, New Delhi By Order Dy. Registrar,ITAT // True copy //