2012 (2) TMI 716 - AT - Income Tax

Summary

Issues involved: Validity of notice u/s.158BD and assessment order based on the notice.

Validity of notice u/s.158BD:
The appeal was filed by the assessee against the order of Commissioner of Income Tax(A), Salem for the block period 01.04.1996 to 12.12.2002. The notice u/s.158BD was issued on the assessee in the status of 'Association of persons' based on certain documents found during a search operation on Shri R.Ganesan. The Assessing Officer had found that the income belonged to Shri R.Ganesan, and there was no satisfaction that the income belonged to the AOP. The notice u/s.158BD was held invalid as it was beyond the two-year period from the date of search, in line with the decision of the Special Bench of the Tribunal and the Punjab and Haryana High Court. The assessment passed in consequence of the notice u/s.158BD was annulled, and the appeal of the assessee was allowed.

Assessment order based on the notice:
The assessment order of the present assessee's case used the same evidence as in the case of Shri R.Ganesan to make an addition for earnings from the sand quarry business. The Assessing Officer had found that the income belonged to Shri R.Ganesan, and there was no satisfaction that the income belonged to the AOP. The notice u/s.158BD was held invalid as it was beyond the two-year period from the date of search, following the decision of the Special Bench of the Tribunal and the Punjab and Haryana High Court. The assessment passed in consequence of the notice u/s.158BD was annulled, and the appeal of the assessee was allowed.