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TMI Blog2012 (4) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has been recorded by the AO. 2. That the ld. CIT(A) has erred in law and facts in ignoring the para 2 and 3 of the assessment order where the AO has recorded satisfaction for issue of notice u/s. 158BD on the basis of documents found in office of M/s. Jain Industries. 3. That the ld. CIT(A) has erred in law and facts in applying the ratio of case of Manish Maheshwari vs. CIT 289 ITR 341 (SC) when the facts of the two cases are different, in the instant case, the AO having jurisdiction over both the persons was the one and the same, therefore, the requirement of handing over the records and recording of satisfaction for another AO was not necessary and he himself rightly proceeded u/s. 158BD of the I.T. Act. 4. That without prejudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with section 143(3) before the ld. CIT(A) and it was submitted that the AO has not recorded any satisfaction required u/s. 158BD of the Act before initiating the proceedings. Therefore, the impugned order is wholly without jurisdiction. Several decisions were relied upon in support of the contention including decision of Hon'ble Supreme Court in the case of Manish Maheshwari vs. ACIT, 289 ITR 341. The ld. CIT(A) called for the remand report from the AO and the AO in the remand report submitted that he has examined the records of all the persons searched but no reasons were traceable. The AO, however, referred to para 3 of the block assessment order to show that AO was satisfied for issuing notice u/s. 158BD after considering the seized diar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son with respect to whom search was made under section 132 or whose books of accounts or other documents or any assets were requisitioned under section 132A, then the books of accounts, 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 158BC against such other person and the provisions of this Chapter shall apply accordingly." 5.1 Chapter XIV-B provides for special procedure in assessment in search cases. Section 158BC provides for block assessment in the cases in which search has been conducted under section 132 or documents requisitioned under section 132A. However, another provision under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries and the Assessing Officer in his nothing had clearly indicated that it required further investigation in-depth scrutiny and there was nothing to indicate that he had recorded in writing that he was satisfied about the action required to be initiated. Even in the affidavit in reply it was not stated that the Assessing Officer was satisfied and hence issued notice. On the contrary, it revealed that to arrive at a satisfaction notice was issued and that was clear from the affidavit of the Assessing Officer. The property which was referred to for initiating proceedings had already been disclosed in the return of income. The notices issued under section 158BD were not valid and were liable to be quashed." 6.1 ITAT, special Bench, Bangal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the authorities below had proceeded against the assessee firm under section 158BC, therefore, the authorities below had not cared to mention anywhere that the Assessing Officer was satisfied that any undisclosed income belonged to such person other than the person who was searched under section 132. It was an undisputed fact that the search material was never handed over to the Assessing Officer who was having jurisdiction over the assessee firm. Therefore, there was no auestion of his satisfaction at all as required under section 158BD (Para 15)" 6.3 ITAT, Delhi Bench in the case of Navin Verma; 283 ITR (AT)83 held that recording of satisfaction is a pre-requisite condition under section 158BD. Satisfaction can be recorded separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only question which arises for our consideration is as to whether the notice dated February 6m 1996, satisfies the requirements of section 158BD of the Act. The said notice does not record any satisfaction on the part of the Assessing Officer. Documents and other assets recovered during search had not been handed over to the Assessing Officer having jurisdiction in the matter." It was further held- "As the Assessing Officer has not recorded his satisfaction, which is mandatory; nor has he transferred the case to the Assessing Officer having jurisdiction over the matter, we are of the opinion that the impugned judgments of the High Court cannot be sustained, which are set aside accordingly. The appeals are allowed. However, in the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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