Income Tax Appellate Tribunal - Delhi
Jaswant Rai,, New Delhi vs Assessee
I.T.(SS)A. No.09 /Del/08
1/4
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'D' NEW DELHI)
BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER
AND
SHRI A.K. GARODIA, ACCOUNTANT MEMBER
I.T.(SS). A. No.09 /Del/2008
Block period from 1.4.1990 to 4.2.2001
Shri Jaswant Rai, ACIT,
N-94, Panchsheel Park, Circle-23 (1),
New Delhi. V. New Delhi.
Appellant) (Respondent)
PAN /GIR/No.AEAPR-2849-Q
Appellant by : Shri R.C. Roi, C.A.
Respondent by : Shri B.K. Gupta, Sr. DR.
ORDER
PER A.K. GARODIA, AM:
This is an assessee's appeal directed against the order of Ld CIT(A)-XVII, New Delhi dated 7.11.2007 for block period from 1.4.1990 to 4.2.2001.
2. Ground No.1 of the appeal reads as under:-
"On the facts and in the circumstances of the case as well as in law, the Ld CIT(A) -XVII, grossly erred in upholding the order of Ld Assessing Officer in spite of the fact that the order of Ld Assessing Officer is ab initio void, illegal and untenable in law due to of non recording of satisfaction by Ld ACITCC-9."
3. It was submitted by the Ld AR of the assessee that the present assessment is completed after invoking the provisions of section 158 BD of the . I.T.(SS).A. No.09/Del/08 2/4 Act. It is also submitted that as per provision of section 158 BD, the satisfaction has to be recorded by the Assessing Officer of the searched person. It is also submitted that in the present case no such satisfaction has been recorded by the Assessing Officer of the searched person and notice u/s 158BD was issued by the Assessing Officer of the present assessee on the basis of letter dated 17.5.2004 issued by the Assessing Officer of the searched person. It is also submitted that the search in the case of Usha Group was carried out in the month of February, 2001 and hence the assessment was time barred in that case by February, 2003 and hence even if this letter dated 17.5.2004 is considered as a satisfaction recorded by the Assessing Officer of the searched person, it is after the completion of block assessment in the case of searched person and as per the decision of the Special Bench of the Tribunal rendered in the case of Manoj Agarwal as reported in 113 ITD 377 (SB), satisfaction has to be recorded by the Assessing Officer of the searched person before completion of block assessment in the case of the searched person. It is also submitted that for these reasons, the present assessment is bad in law and void ab initio and the same should be quashed.
4. Ld DR of the revenue submitted that the date of block assessment in the case of the searched person i.e. Usha Group is not available and hence it is not known as to whether the impugned letter dated 17.5.2004 is before completion of block assessment in the case of searched person or not.
5. We have heard the rival submissions and have gone through the material available on record. We find that it is stated by the Assessing Officer of the searcher person in his letter dated 17.5.2004 that the seized documents were found and seized on 19.3.2001. As per the provisions of section 158 BE, block assessment has to be completed within two years from the end of the month in which last Panchnama was made. It may be that the search which was initiated on 14.2.2001 in the case of Usha Group might have been completed after a lapse of some time but it is unlikely that the same might have continued till May, . I.T.(SS).A. No.09/Del/08 3/4 2002 i.e. for more than 14 months. Hence, we feel that even in the absence of the actual date of completion of block assessment in the case of Usha Group i.e. the searched person, it can safely be held that the impugned letter dated 17.5.2004 written by the Assessing Officer of the searched person i.e. Usha Group is after the completion of block assessment in that case. In the case of Manoj Agarwal (supra), it was held by the Special Bench that if, in the course of section 158BC proceedings, the Assessing Officer of the person searched does not give a finding that any part of undisclosed income belongs to a person other than the person searched, section 158 BD can never be invoked. It was held that if there is a time limit for passing the block assessment order u/s 158BC, there is an implied time limit for giving a finding as to the person to whom the undisclosed income belongs which under no circumstances can be beyond time limit set out in section 158 BE of the Act. If there is no such finding is given in the order u/s 158BC, the provisions of section 158BD stand ousted at the expiry of the said time limit for the reason that such a finding is very basis for invoking the section 158BD. In the present case, there is no material brought on record by the authorities below that any satisfaction was recorded by the Assessing Officer of the searched person before completion of block assessment in the case of the searched person i.e. Usha Group. The only material brought on record is a letter dated 17.5.2004 issued by the Assessing Officer of the searched person to the Assessing Officer of the present assessee. The same appears to be much after the time limit allowed for completion of block assessment in the case of the searched person i.e. Usha Group and hence the conditions set out in section 158 BD are not complied with as per this decision of the Special Bench of the Tribunal rendered in the case of Manoj Agarwal (supra). Respectfully following this decision of the Special Bench of the Tribunal, we quash the impugned block assessment order for the reason that the conditions precedent as required u/s 158BD were not complied with. However, we would like to observe that in case, it is found that the block assessment in the case of the searched person i.e. Usha Group was completed on or after 17.5.2004 being the date of letter issued by the Assessing Officer of the searched person to the Assessing Officer of the . I.T.(SS).A. No.09/Del/08 4/4 present assessee, the revenue is at liberty to move a misc. application before the Tribunal for recall of the present order and the Tribunal should decide the Misc. application of the revenue as per law if such Misc. application is moved by the revenue within the period allowed as per law. With these observations, we allow ground No.1 of the assessee and the impugned block assessment order is quashed for non compliance of the conditions precedent as prescribed in section 158BD of the Act.
6. Since while deciding the ground No.1 of the assessee, we have quashed the block assessment order, no adjudication is called for with regard to other grounds on merit raised by the assessee,
7. In the result, the appeal of the assessee is allowed.
8. Order pronounced in the open court on the date of hearing i.e. 15th April, 2010.
Sd/- Sd/- (RAJPAL YADAV) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dt.15.4.2010. HMS Copy forwarded to:- 1. The appellant 2. The respondent 3. The CIT 4. The CIT (A)-, New Delhi.
5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi. True copy.
By Order (ITAT, New Delhi).