2014 (2) TMI 903 - HC - Income Tax

Search conducted u/s 132 of the Act - Warrant issued in the name of the assessee - Whether there was a search in the premises of the assessee and the search warrant was made in the name of the assessee Held that - The assessment was made consequent on the seizure of materials in the course of search operation under Section 132 of the Act - The search operation resulted in seizure of various documents pertaining to the assessee s transactions too - the assessee is clear in his understanding of the provisions, under which the block assessment was made and was quite aware of the fact that the assessment under Chapter XIVB was as a result of seizure of materials in the course of search operation in the premises where the assessee lived along with two other persons on whom the search warrant was issued thus, there is no justifiable ground to accept the plea of the assessee that the assessment made is bad in law. Jurisdiction for block assessment u/s 158BC of the Act Held that - The procedure given u/s 158BC is the only procedure given under Chapter XIV-B for making block assessment, the reference to Section 143(3) notice read with proceedings under Section 158BC does not make the assessment as the one not falling under Section 158BD thus, as per the procedure laid down u/s 158BC there is no confusion in the mind of the Officer as to the provision it is proceeded against nor in the mind of the assessee that the assessment was made consequent on the seizure of materials in the course of search operation in the premises the Tribunal had already remitted the matter back to the AO thus, the AO id directed to expedite the matter without any further delay Decided against Assessee.

Issues Involved:
1. Jurisdiction of the Assessing Officer under Chapter XIV B.
2. Consistency in the Tribunal's decisions.
3. Validity of remanding the matter to the Assessing Officer.
4. Recording of satisfaction by the Assessing Officer.
5. Justification of the Tribunal's order based on the materials presented.
6. Acceptance of Tribunal's decisions in similar cases by the department.

Detailed Analysis:

1. Jurisdiction of the Assessing Officer under Chapter XIV B:
The primary issue was whether the Assessing Officer had the jurisdiction to make an assessment under Section 158BC of the Income Tax Act when there was no search under Section 132 in the name of the appellant. The court found that the assessment was made based on materials seized during a search operation at the premises of other individuals residing at the same address as the assessee. The court held that the assessment was valid under Section 158BD, as the materials seized pertained to the assessee's transactions. The procedure under Section 158BC was followed correctly, and the reference to Section 158BC did not invalidate the assessment.

2. Consistency in the Tribunal's decisions:
The assessee argued that the Tribunal should have followed its earlier orders in 41 other cases arising from the same search operation. The court noted that the Tribunal had previously set aside assessments in similar cases but had remanded the matter in the present case. The court found no inconsistency, as the Tribunal's decision to remand was based on the need for further examination of the materials and issues raised by the assessee.

3. Validity of remanding the matter to the Assessing Officer:
The Tribunal's decision to remand the matter to the Assessing Officer was challenged by the assessee. The court upheld the Tribunal's decision, stating that the remand was necessary to address the issues raised by the assessee adequately. The Tribunal had noted the lack of appropriate materials on record for adjudication and provided the assessee with an opportunity to present their case.

4. Recording of satisfaction by the Assessing Officer:
The assessee contended that the Assessing Officer did not record any satisfaction about the books of accounts and other documents indicating undisclosed income. The court found that the assessment was based on materials seized during the search operation, which included documents pertaining to the assessee's transactions. The court held that the Assessing Officer had the requisite jurisdiction and had followed the correct procedure.

5. Justification of the Tribunal's order based on the materials presented:
The assessee argued that the Tribunal overlooked the materials placed before it, which supported the contention that the additions were unwarranted. The court reviewed the records and found that the assessment was made based on the seized materials. The court held that the Tribunal's order was justified and that the remand was necessary for a thorough examination of the issues.

6. Acceptance of Tribunal's decisions in similar cases by the department:
The assessee pointed out that the department had accepted the Tribunal's decisions in 41 other cases where similar questions of law were involved. The court acknowledged this but emphasized that each case must be decided on its own merits. The court found that the Tribunal's decision to remand the matter was appropriate given the specific facts and circumstances of the case.

Conclusion:
The court dismissed the appeal, confirming the Tribunal's order to remand the matter to the Assessing Officer for further adjudication. The court directed the Assessing Officer to expedite the assessment process without further delay. The court found no grounds to accept the assessee's plea that the assessment was bad in law and upheld the validity of the block assessment under the relevant provisions of the Income Tax Act.

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