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TMI Blog2016 (4) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that initiating proceeding under Section 158BFA(2) may not be justified. Even otherwise, there are two views possible in this case. One view is that the partner and partnership-firm are one and the same person, therefore, recording of satisfaction may not be necessary. This view is somewhat similar to that of same officer assessing the income of searched person and the person other than the searched person. The CBDT clarified that even though the Assessing Officer is one and the same for the searched person and the person other than searched person, satisfaction need to be recorded. Similarly, even though the partner and partnership-firm are one and same under common law, they are being assessed separately under Income-tax Act, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l by the assessee, the CIT(Appeals) confirmed the addition to the extent of ₹ 23,45,873/- for the block period. This Tribunal has also confirmed the order of the CIT(Appeals). The Assessing Officer levied penalty under Section 158BFA(2) of the Act by an order dated 28.11.2008 and the CIT(Appeals) has confirmed the penalty. According to the Ld. representative, the addition was made only on the basis of statement said to be recorded from the partner of the assessee-firm and not on the basis of seized material. The assessment being made under Section 158BD of the Act, the Assessing Officer has not recorded any satisfaction as required under Section 158BD of the Act. In the absence of any material found during the course of search operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, according to the Ld. representative, it is not a fit case for levy of penalty under Section 158BFA(2) of the Act. 5. On the contrary, Shri R. Mohan, the Ld. Departmental Representative, submitted that during the course of search operation, sales bills for the financial years 1994-95 to 1997-98 were obtained. These bills show unaccounted sales for the block period. Inspite of several opportunities given, the assessee could not reconcile the amount shown in the sales bills. The partner of the firm Shri Mukundan was also examined. As per the modus operandi, once a report is taken out from the billing machine, all the billed amounts prior to that point of time are erased from the memory of the machine. Referring to the contention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfaction that the seized material found during the course of search operation relates to assessee. 7. We have carefully gone through the judgment of Apex Court in Manish Maheshwari v. ACIT (2007) 289 ITR 341. In the case before the Apex Court, there was search in the premises of one Shri Rameshwar H. Maheswari and his wife Smt. Lalita Devi on 21.11.1995. Several incriminating materials were found relating to the business of the firm, namely, M/s Indore Construction Company (Pvt.) Ltd. During the course of assessment proceeding, it was found that the satisfaction was not recorded by the Assessing Officer as required under Section 158BD of the Act. Considering the nature of proceeding under Chapter XIV-B of the Act, the Apex Court foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action was not recorded. 8. This Tribunal is of the considered opinion that penalty proceeding is different than the assessment proceeding. The authorities under Income-tax Act are expected to re-appreciate the material available on record and find out whether penalty can be imposed for concealment of income. This Tribunal is of the considered opinion that when the satisfaction was not recorded by the Assessing Officer for initiating proceeding under Section 158BD of the Act, it cannot be said that there is any concealment of income by the assessee. In those circumstances, this Tribunal is of the considered opinion that initiating proceeding under Section 158BFA(2) may not be justified. Even otherwise, there are two views possible in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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