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TMI Blog2010 (11) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessees in favour of the aforesaid two purchasers. According to the Department, the actual price received was Rs. 6.5 crores, the consideration shown in the sale deed was only Rs. 1.40 crores. The additions made by the Assessing Officer in their respective assessment were sustained by the CIT (A), however, the Income-Tax Tribunal has deleted the same. 2. The Tribunal in the impugned order has correctly stated the facts under which the Block Assessment proceedings were initiated by the Assessing Officer in respect of these assessees and aforesaid additions made. Therefore, in so far as facts of these cases are concerned, one can safely rely upon the Tribunal‟s order without any fear of contradiction. We are, therefore, referring these facts from the said order. 3. A search was conducted under Section 132 (1) of the Income Tax Act at the residential premises of Shri Sunil Charla and others at 4, Malka Ganj, Delhi. During the course of search statement of Smt. Surksha Charla, wife of Shri Sunil Charla, a co-owner in the property at House No. 112, Golf Links, New Delhi was recorded. Shri Sunil Charla, Smt. Surksha Charla and Shri Sunil Charla HUF have purchased a house prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee also contended that an opportunity to cross-examine the persons whose statement sought to be relied upon, be granted. The assessing Officer concluded that the property which was valued at Rs. 120 lacs on 1.4.1981 would not have been sold after 20 years for a consideration of Rs. 135 lacs only whereas the rates of property have increased manifold during these 20 years. In her statement Smt. Surksha Charla, a co-purchaser had admitted having purchased the property for over Rs. 6 crores. The property bulletins are showing the market rate of Golf Links at Rs. 80,000/- per sq. yard during financial year 1999-2000. The addition was made in the block assessment of Charla family on the basis of these facts and additions have been confirmed by the learned CIT (A). The assessing officer therefore, adopted the consideration over and above the declared one at Rs. 6.5 crores, which was equally divided amongst three appellants and additions were made accordingly. 7. The learned CIT (A) held that Smt. Surksha Charla had given graphic details about the transaction of the property that was the first version given by one of the co-owners of the property. There was no duress while rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have invoked the provisions of section 158 BD read with section 158 BC to frame the assessment for block period as per Chapter XIV-B. Though satisfaction note is not made available to us, the Assessing Officer proceeded with the fact that in view of the statement of Smt. Surksha Charla, action under Section 158 BD was taken. Notice under section 158 BD was issued on 9.5.2003. First statement of Smt. Surksha Charla was recorded on 24.09.2002 which was retracted by her on 26.09.2002 and was also further clarified by her, while deposing before the DDIT (Inv.) on 1.11.2002. No other books of accounts or other documents or assets pertaining to these assessees were found during the course of search. We, therefore, hold that the Assessing Officer could not have validly initiated proceedings under Section 158 Bd. This could have been a matter of regular assessment but not atleast under the provisions of Chapter XIV-B of the Act. The provisions are not invoked in accordance with law and consequently the entire assessment proceedings under Chapter XIV- B being illegal and without jurisdiction are to be cancelled. We hold so." 9. As the Tribunal quashed the assessment proceedings itself, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther documents or assets seized or requisitioned shall be handed over to the Assessing officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and the provisions of this Chapter shall apply according". 11. It clearly emerges from the reading of this provision that before invoking the provisions of Section 158 BD of the Act, the Assessing Officer of the person searched u/s 132 (1) must satisfy himself that some undisclosed income belongs to a person other than the persons with respect to whom search was made under Section 132 (1) of the Act. Such satisfaction must be based on the material found in the course of search. In the absence of any such satisfaction (which is to be recorded in writing) the concerned Assessing Officer does not get any jurisdiction to assess that other person by invoking the section 158 BD of the Act. Further, the satisfaction of the Assessing Officer has to be in respect of the following aspects:- i) there should be "undisclosed income" within the meaning of section 158 (b) referable to the assets or books/documents found seized/requisitioned; ii) there should a finding by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search is no evidence as contemplated under section 158BD of the Act and on that basis no valid proceedings in Chapter XIV-B of the Act could be initiated. 16. However, it is not even necessary to decide this aspect authoritatively in these appeals, inasmuch as, order of the Tribunal warrants to be sustained because of the following reason. 17. The Assessing Officer before issuing notice under Section 158 BD of the Act did not record any satisfaction which is a mandatory requirement as per the said provision. The Tribunal has returned categorical finding to this effect which could not been shaken. We have already reproduced the language of Section 158BD of the Act. It requires that the Assessing Officer is has to be satisfied that any undisclosed income belongs to any third person, i.e. the person whose premises are searched. It cannot be disputed that the recording of "satisfaction" is necessary precondition and, is a must in order to safeguard the otherwise abuse of power and it is inbuilt under the provisions of Section 158 BD of the Income-Tax Act. Such a satisfaction has to be in writing. Since in the discharge of the official function, where a statute requires the satis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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