2001 (1) TMI 202 - AT - Income Tax

Summary

Issues involved:
The appeal challenges the assessment order passed by the AO u/s 158BD of the IT Act. Additional grounds of appeal were raised by the assessee regarding the legality of the assessment order and the jurisdiction of the AO under s. 158BD.

Jurisdiction of the AO under s. 158BD:
The search and seizure operation conducted did not involve the premises of the assessee. The counsel argued that the AO lacked jurisdiction to issue notice u/s 158BD as there was no satisfaction about undisclosed income belonging to the assessee. The burden lies on the AO to show such satisfaction, supported by evidence on record.

Validity of Notice under s. 158BD:
The AO issued notice under s. 158BD without proper satisfaction about undisclosed income related to the assessee. The satisfaction note for issuing the notice was withdrawn after objections by the assessee. The notice was deemed invalid as it was issued without proper grounds and evidence linking the undisclosed income to the assessee.

Cancellation of Assessment:
The assessment u/s 158BD was deemed invalid due to the lack of jurisdiction and the invalid notice issued by the AO. The assessment was cancelled as a result, making it unnecessary to consider other grounds of appeal.

Conclusion:
The appeal was allowed, and the assessment under s. 158BD was cancelled due to the lack of jurisdiction and the invalid notice issued by the AO. The cancellation of the assessment rendered other grounds of appeal irrelevant for consideration.