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TMI Blog2014 (3) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... riod given to the assessing officer of the searched person under section 158BE (1) of the Act - the terminal date as per the decision of Division Bench of this Court would be the end of the two-year period prescribed in section 158BE (1) of the Act. The assessing officer is bound to record the satisfaction within the meaning of section 158BD of the Income-tax Act, 1961 within the two-year time period stipulated in section 158BE(1) of the said Act - since the satisfaction was recorded beyond that period, the assessment proceedings are without jurisdiction – the order passed by the Income Tax Appellate Tribunal the assessment proceedings are set aside – Decided in favour of Assessee. - ITA 902/2007 - - - Dated:- 6-3-2014 - Badar Durrez ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggarwal) recorded his satisfaction in terms of section 158BD on 07.10.2003 and a notice under section 158BC read with section 158BD was issued to the present assessee on the same date i.e. on 07.10.2003. That notice was however served on the assessee on 30.9.2004. The block assessment in respect of the appellant/assessee was concluded on 31.10.2005. The Commissioner of Income-tax (Appeals) rejected the appellant s appeal on 03.02.2006 and the Income Tax Appellate Tribunal rejected the appellant s further appeal on 31.10.2006. It is against that order that the present appeal under section 260A has been filed. It is evident from the above stated facts that the satisfaction under section 158BD was recorded on 07.10.2003 which was beyond the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that any undisclosed income belongs to such other person so as to take action under section 158BD of the Act against that person. The Act nowhere specifically prescribes any time limit or limitation for initiation of proceedings under section 158BD of the Act or for recording of satisfaction before taking action under that provision. The plain and reasonable construction that can be placed on the aforesaid provision would be that the recording of satisfaction for taking action against any other person under section 158BD of the Act has to be between initiation of proceedings under section 158BC and before completion of block assessment under section 158BC of the Act in the case of the person searched. It would, thus, means that the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel relied upon Section 158BE to suggest that the period of limitation prescribed for completion of block assessment of such third parties commences only from the issuance of notice and ends two years from the end of the month from which such notice is served. So viewed, submitted counsel, the period of limitation in this case was in fact ended much after the assessment was actually completed in 2007. 5. Learned counsel also sought to make distinction between the time limit prescribed for completion of assessment in the case of searched persons - which he stated, is governed by Section 158BE(1) and contrasted the phraseology adopted by that provision with that in Section 158BE(2). He also relied upon Section 124 to argue that the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search conducted of the searched person, the AO (of the searched person) would be left free with untrammelled discretion to take-up the materials which he deems to be incriminating and forward to the concerned AO (of the third party) at his will and pleasure. Surely, such a startling and far-reaching consequence was not intended. The third reason why this Court rejects the Revenue is that the dissection of Section158BE in the manner suggested would mean that Section 158BE(2) would stand on its own without any period of limitation. Instead of this, the approach of the Tribunal appears to have been to hold the AO (of the searched person) who primarily possessed jurisdiction over the subject matter, including the jurisdiction to record a sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the High Court of Punjab Haryana is that the terminal date as per the decision of Division Bench of this Court would be the end of the two-year period prescribed in section 158BE (1) whereas the terminal date as contemplated by the Punjab Haryana High Court would be the date on which the block assessment is completed in respect of the searched person and that date may be prior to the terminal date stipulated in section 158BE(1) of the said Act. 9. We have heard the learned counsel for the parties on these aspects and we find that the issues raised in the present case are entirely covered by the decision of Division Bench of this court by which we are bound. Consequently, following the decision in Umesh Chandra Gupta (supra) the que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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