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TMI Blog2014 (4) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... as issued u/s.158BD on 29/03/2006, i.e. after a lapse of nearly six years - Proceedings are required to be initiated within a reasonable time even if there is no limitation is provided - As per section 158BE(1) of Act, order u/s.158BC is required to be passed within 2 years from end of month in which last of authorizations for search under section 132 was executed - In respect of assessment made u/s.158BD of Act, two years from end of month in which notice under this Chapter was served on such other person - However, there is no limitation for issuing a notice u/s.158BD is provided under Act, but this cannot be construed as proceedings can be initiated even after lapse of many years or after indefinite period – Decided in favour of Assessee. - I.T(ss).A. No.34,35/Ahd/2009 - - - Dated:- 25-10-2013 - N S Saini And Kul Bharat, JJ. For the Appellant : Shri M K Patel, AR For the Respondent : Shri T P Krshnakumar, CIT-DR ORDER:- PER : Kul Bharat Both these appeals by the different assessees are directed against the separate orders of the Ld.Commissioner of Income Tax(Appeals)-II, Surat ('CIT(A)' for short) both dated 16/03/2009 for the Block Period form 01/04/1990 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eyond the reasonable period and thirdly, no reasonable opportunity is granted by the authorities below to cross-examine Shri Shashikant V.Tamakuwala on the basis of whose statement the impugned addition has been made. He further submitted that the issue is squarely covered by the decision of the Special Bench of Delhi Tribunal rendered in the case of Manoj Aggarwal vs. DCIT reported at (2008) 113 ITD 337 (Del.)(SB) as well as the judgement of Hon'ble Jurisdictional High Court rendered in the case of Chandrakantbhai Amratlal Thakkar vs. Dy.CIT Anr. reported at (2011) 55 DTR 249 (Guj.). He submitted that admittedly the AO of the searched party had recorded satisfaction in respect of M/s.Sarkar Plywood (P) Ltd. He submitted that on the basis of the satisfaction of the searched party, notice u/s.158BD was issued and the proceedings were initiated but those proceedings were dropped by the concerned AO as M/s.Sarkar Plywood (P) Ltd. was not incorporated at the relevant time. He submitted that therefore there was no satisfaction in respect of the appellant. It was only the AO of M/s.Sarkar Plywood (P) Ltd. who had informed to the AO of the appellant through the additional Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ramesh Ambalal Vaghasia vs. ACIT in IT(ss)A No.80/Ahd/2007, dated 07/11/2008. The ld.counsel for the assessee submitted that even otherwise also the assessment made u/s.158BD of the Act cannot be sustained in view of the fact that the assessee was not granted opportunity of cross-examination. He submitted that the right to cross-examine is a legal right and cannot be denied. In support of his contention, he relied upon a decision of Hon'ble Apex Court in the case of Kishinchand Chellaram vs. CIT reported at 125 ITR 713(SC) :: (1980) 4 Taxman 29 (SC). 3.1. On the contrary, ld.CIT-DR supported the orders of the authorities below. He submitted that originally the satisfaction was recorded in respect of M/s.Sarkar Plywood (P) Ltd. since the Sarkar Plywood (P) Ltd. was promoted by the appellant on future date and at that point of time the land was purchased in the name of the company but such company was not in existence, therefore, the concerned AO referred this matter to the AO of the appellant. He submitted that any lapse with regard to satisfaction is only procedural and cannot vitiate the entire proceedings. He further submitted that there is no limitation provided under the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Chapter shall apply accordingly. The ld.CIT(A) failed to appreciate the fact that company is having distinct entity. We find force in the contention of the ld.counsel for the assessee that even if the Revenue wanted to proceed against the appellant, the AO of the searched party should have recorded his statement. Undisputedly, this has not been done. In our considered view, under the facts and circumstances of the present case, the satisfaction as recorded by the AO is not valid in view of the fact that the satisfaction has been recorded by the AO other than the AO of the searched party. Therefore, ratio laid down by the Hon'ble Jurisdictional High Court in the case of Chandrakantbhai Amratlal Thakkar vs. Dy.CIT Anr. reported at (2011) 55 DTR 249 (Guj.) would apply. Respectfully following the same, the assessment made is required to be quashed on this basis alone. It is also undisputed fact that in this case, search was conducted on 27/04/2000 and notice was issued u/s.158BD of the Act on 29/03/2006, i.e. after a lapse of nearly six years. The contention of the AR is that strangely ld.CIT(A) has not followed the binding precedent of the Special Bench rendered in the case of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id person and once such a finding is given the provisions of section1 158BD come into operation. This, therefore, involves assumption of jurisdiction and cannot be constructed as a procedural mater. In the absence of a finding in this behalf, there is no jurisdiction to the other Assessing Officer at all to proceed further in the matter. As the time-limit set in section 158BE apples to such finding, ti is only logical that the said time-limit automatically applies for invoking the provisions of section 158BD and it is for this reason that the Parliament did not find it necessary to specify a separate time-limit for the same, as the enactment itself shows that both sections 158BC and 158BD are inter-linked, interlaced and interwinded and both form part and parcel of the same chapter." 4.1. Respectfully following the aforesaid decision, the action of the authorities below cannot be sustained on this ground as well and the same is hereby quashed. We also find force in the contention of ld.counsel for the assessee that Revenue ought to have given opportunity of cross-examination since the cross-examination is a legal right of any person against whom some material is being used/collec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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