9911796707
TMI Blog2012 (11) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment procedures laid down U/s 158 BC and should have calculated Undisclosed Income as per section 158 BB. 4. The Assessing Officer failed to appreciate that the documents seized from the place, where it is said to be seized from the possession of and are belonging to the assessee, is also the Registered office of the Companies, whose documents are seized and are supposed to keep the records at the registered office of the Companies. In the case the Assessing Officer erred in considering that the appellant has received income on the sales of the group companies. 5. The Assessing Officer failed to appreciate that the assessee stays in a joint family and the warrants for search were in the name of assessee' s brother and one of the group company. Nothing substantial in the form of cash, jewellary, investments were found at the time of search. 6. The Assessing Officer failed to appreciate that the assessee has declared brokerage Income and paid taxes, whenever it is received. 7. The Assessing Officer erred in considering and calculating the brokerage Income on sales at the rate, which is much higher than prevailing in the Market. 8. The Assessing Officer failed to appreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Mr Mangat R , the own brother of the assessee and M/s Guru Synthetic Private Limited on 21/12/99 at the residential as well as business premises. During the course of search and seizure operation, statements of Mr Mangat Arora as well as assessee were recorded. Apart from the statements, certain documents were also seized. A notice under section 158 BD was issued on 11/5/2001 to the assessee. The assessee filed his block return on 22/6/2001 declaring its total undisclosed income at Rs. nil. 4.1 The Assessing Officer framed the block assessment under section 158 BD read with section 143 (3) of the Income Tax Act on 30/5/2003 whereby computing the total undisclosed income of the assessee at Rs.. 1,71,86,170/-. 4.2 The assessee challenged the undisclosed income assessed by the Assessing Officer in the block assessment by filing an appeal before the CIT(A). The Commissioner of Income Tax(Appeals) sustained the addition of Rs..28,68,688/- on account of brokerage income and deleted the addition to the extent of Rs.. 1,36,63,074/-. Apart from this, an addition of Rs. 6,13,021/- on account of commission income was also deleted. Thus, the assessee as well as revenue are aggrieved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Manish Maheshwari v. Asst. Commissioner of Income-tax reported in 289 ITR 341 and submitted that the notice under section 158 BD is contrary to the provisions of law as well as the decision of Hon'ble Supreme Court and therefore is bad in law. The learned A.R. of the assessee has also relied upon the following decisions in support of his contention: i) ACIT vs M N Rajaraman (5 ITR (Trib) 341 ii)CIT v s Anupam Sweets(Del) 321 ITR 485 iii) CITG vs Sunil Bhala 238 CTR (Del) 18 iv) Kundubhai Vasanji Desai vs DCIT 236 ITR 73 (Guj) 5.2 As regards the notice under section 143(2) is barred by limitation, the learned A.R. of the assessee has submitted that the assessee filed its return of income on 22/6/2001 whereas the notice under section 143(2) was issued on 9/5/2003 which is beyond the prescribed statutory period. The learned A.R. has further submitted that the non-issuance of notice within the period prescribed under the statute is not a procedural irregularity; but the same is non-curable illegality. In support of his contention, the learned A.R. of the assessee has relied upon the decision of Hon'ble Supreme Court in case of Assistant Commissioner of Income-tax v. Hotel Blue M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some undisclosed income belongs to the person other than the searched person. The learned DR has further submitted that when the assessee himself has admitted and disclosed the undisclosed income in the statement recorded during the search operation, than there is no question of recording any satisfaction regarding undisclosed income belongs to the assessee. The ld DR has filed a letter dated 10/8/2011 of DCIT 8 (1), Mumbai and submitted that the Assessing Officer of Sri Mangat Arora as well as the assessee is the same and the notice under section 158 BC in case of Sri Mangat Arora and notice under section 158 BD in case of Sri Sanjeev Arora (the assessee) were issued by the DCIT 8 (1), Mumbai. The ld DR has further contended that the notices under section 158 BC and 158 BD as well as the block assessment in case of Sri Mangat Arora and the assessee have been completed by the same assessing authority -DCIT-8 (1), Mumbai. The learned DR has referred and relied upon the various decisions of this Tribunal on the point that when the same Assessing Officer is having jurisdiction over the searched person and the other person, then there is no need of recording any satisfaction and handi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hvati Motors Pvt Ltd (supra) is distinguishable on facts as the issue before the honourable High Court was non-service of notice under section 148 and not the limitation of notice under section 143(2). 6 We have considered the rival submissions of the parties as well as carefully perused the decisions relied upon by both the parties. As regards the validity of notice issued under section 158 BD, the assessee has contended that in the absence of satisfaction recorded by the Assessing Officer having jurisdiction over Mr Mangat Arora, the notice issued under section 158 BD to the assessee is invalid in view of the decision of honourable Supreme Court in case of Manish Maheshwari (supra). On the other hand, the ld DR has forcefully contended that the Assessing Officer, having jurisdiction over Mr Mangat Arora as well as the assessee, is the same, who has issued notices under section 158 BC as well as under section 158 BD. Therefore, there is no requirement of recording of satisfaction by the Assessing Officer and handing over any record to the other Assessing Officer. 6.1 Since this issue has been raised for the time before us by the assessee and in order to decide the validity of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 143(2)/142 and complete the assessment under section 143(3). This section does not provide for accepting the return as provided under section 143(1)(a). The Assessing Officer has to complete the assessment under section 143(3) only. In case of default in not filing the return or not complying with the notice under section 143(2)/142, the Assessing Officer is authorized to complete the assessment ex parte under section 144. Clause (b) of section 158BC by referring to section 143(2) and (3) would appear to imply that the provisions of section 143(1) are excluded. But section 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under section 143(2). However, if an assessment is to be completed under section 143(3) read with section 158BC, notice under section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and the same is not curable and, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code relating to searches, shall so far as may be, apply to searches directed under section 37(2). Reading the two sections together it merely means that the methodology prescribed for carrying out the search provided in section 165 has to be generally followed. The expression Rs.so far as may be' has always been construed to mean that those provisions may be generally followed to the extent possible". The learned counsel for the respondent has brought to our notice the observations made by this court in the case of Maganlal v. Jaiswal Industries, Neemach, [1989] 4 SCC 344 wherein this court while dealing with the scope and import of the expression "as far as practicable" has stated "without anything more the expression Rs.as far as possible' will mean that the manner provided in the Code for attachment or sale of property in execution of a decree shall be applicable in its entirety except such provision therein which may not be practicable to be applied." 6.3 Thus, it has been held by the honourable Supreme Court that the failure on the part of the assessing authority to issue notice under section 143 (2) cannot be a procedural irregularity and is not curable. Therefore, the requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon by the ld D.R, the said provision is applicable only where the return has been filed in pursuant to the proceedings under section 147 and no notice has been served under section 143 (2) within the period prescribed by the proviso to section 143 (2). Thus, the said proviso cannot be applied in the proceedings where the return has been filed in pursuant to the proceedings under section 158BD. 6.8 Even, the irregularity in proper service of notice which can be treated as curable under section 292B of the income tax act is only in the cases where the notice under section 143 (2) was issued properly and within the period of limitation and the assessee did not raise any objection regarding the service of the notice during the assessment proceedings and also participated in the assessment proceedings then at a later stage the assessee is precluded from raising such objection. Therefore, the provisions of section 292B are not applicable in the case where the Assessing Officer has not at all issued notice under section 143 (2) within the period as prescribed. Accordingly, we hold that the block assessment in the case in hand is without jurisdiction and consequently, the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
