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TMI Blog2012 (7) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal filed by the appellant/department against the order dated 16.02.2000 passed by the Commissioner of Income Tax (Appeal) [for short 'the CIT (A)], Raipur, was partly upheld. 2. The appeal was admitted on 20.08.2010 for hearing on the following substantial questions of law: ( i ) Whether the warrant of authorization issued in the name of the firm enables authorities under the Act to conduct search in the premises of the partner and make an assessment under section 158 BC of the Act validly? ( ii ) Whether on the facts and in the circumstances of the case and on a proper construction of section 64(2) of the Finance Act 1997 the appellant was precluded from making a declaration under the V.D.I.S. scheme 1997 in respect of the sum of Rs. 4,00,000/- as held by the Tribunal. 3. The facts, in brief, as projected by the appellant are that the appellant is a partner of the partnership firm namely M/s. Mahavir Construction Company, Dhamtari. A search and seizure operation was carried out in case of the partnership firm under section 132 of the Income Tax Act, 1961 (for short 'the Act') on 11.11.1997. A search was also initiated against the appellant. The appellant was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction of the concerned authority, which is a prerequisite for issue of warrant of authorization in the instant case. Shri Dubey would further submits that under the Scheme, 1997, the certificate issued by the Commissioner is final and confers immunity upon the declarant which the AO had no jurisdiction to dispute or doubt or ignore the same. He would next contend that the question of jurisdiction can be raised at any stage. In support of his contention, Shri Dubey relies on a decision of the Supreme Court in Manish Maheshwari v. Asstt. CIT [2007] 159 Taxman 258 (SC), Asstt. CIT . v. Hotel Blue Moon [2010] 188 Taxman 113 (SC), C.I.T. v. Smt. Vandana Verma [2010] 186 Taxman 88 (All.). 6. Shri Dubey would further contend that in the instant case, no notice under section 158 BC (a)(ii) of the Act was issued by the AO. The assessee filed return in form 2-B on 18.08.1989 for the block period as before the assessment order, no notice under section 143(2) of the Act, which is mandatory, was issued before making assessment on the return filed. The satisfaction with regard to the fact that undisclosed income belonging to the assessee was not recorded. There was no noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector of Inspector [1974] 93 ITR 505 and State of Punjab v. Baldev Singh [Appeal (crl.) No-396 of 2010, dated 21-7-1999]. 10. In respect of second question of law, Shri Shrivastava would submit that the issue is squarely covered by the decision of this Court in Smt. Anita Parakh5. In respect of the contention of the appellant/assessee that the assessment ought to have been done under section 158 BD of the Act, 1961, it is submitted that it was not applicable in the facts of the case as the warrant of authorization was issued in the name of the assessee. The provisions of section 158 BD is applicable only in case of those assesses, wherein search and assessment was not done on the basis of warrant of authorization. It is next contended that the appellant is estopped from raising a new ground in this appeal filed under section 260A of the Act, 1961. He relies on a decision of this Court in Durga Prasad Verma v. Union of India . 11. Now, we proceed to consider the rival submissions made by learned counsel for the parties. 12. Shri Dubey submitted that since there was no warrant of authorization issued in the name of the appellant individually, the entire proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all, so far as may be, apply; ( c ) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; ( d ) the assets seized under Section 132 or requisitioned under Section 132-A shall be dealt with in accordance with the provisions of Section 132-B. 158-BD. Undisclosed income of any other person.-Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 or whose books of account or other documents or any assets were requisitioned under Section 132-A, then, the books of account, other 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 under Section 158- BC against such other person and the provisions of this Chapter shall apply accordingly." 14. The Tribunal found that identical facts and circumstances had been decided by the Bench in the case of Smt. Anita Parekh, by its consolidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the methodology for computation of undisclosed income of the block period. Section 158-BC prescribes the procedure for making the block assessment of the searched person. Section 158-BD enables assessment of any person, other than the searched person. 19. Section 158-BC stipulates that the Chapter would have application where search has been effected under Section 132 or on requisition of books of accounts, other documents or assets under Section 132-A. By making the notice issued under this section mandatory, it makes such notice the very foundation for jurisdiction. Such notice under the section is required to be served on the person who is found to be having undisclosed income. The section itself prescribes the time-limit of 15 days for compliance. In respect of searches on or after 1-1-1997, the time-limit may be given up to 45 days instead of 15 days for compliance. Such notice is prescribed under Rule 12(1-A) which in turn prescribes Form 2-B for block return. 20. Section 158-BC(b) is a procedural provision for making a regular assessment applicable to block assessment as well. Section 158-BC(c) would require the assessing officer to compute the income as well as tax on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per provisions of VDIS, 1997 the declaration accepted by the CIT by issue of a certificate u/s. 68(2) of the Scheme was final and the AO was not, therefore, entitled to dispute or disbelieve the same to deny the immunity and to bring to tax the said declared sum, as undisclosed income within the ambit of Chapter XIV-B read with section 158 BB." 22. Ultimately, the CIT (A), deleted the addition of Rs. 4 lacs made by the AO. The CIT (A) found that the notice under section 158 BC served on the assessee by the DCIT, Circle, Bhilai, was withdrawn vide letter dated 22.01.1999 on the ground that the case of the assessee was transferred to the office of the Assistant Commissioner of Income Tax, Circle Raipur and the notice issued by the DCIT, Circle Bhilai, was withdrawn. Thereafter, no notice was issued and as such, withdrawal of the notice on 22.01.1999 constituted dropping of the block assessment proceedings and once such block assessment proceedings had been withdrawn on 22.1.1999, the assessment under section 158 BC passed by the AO was set aside and the appeal was allowed. The department preferred an appeal before the Tribunal challenging the action of the CIT (A) on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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