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TMI Blog2008 (1) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... claring undisclosed income at Rs. nil. However, in the block assessment order, the AO determined the undisclosed income for the block period at ₹ 79,87,500 which represented cost of 11,250 equity shares of M/s Mahavir Spinning Mills Ltd. alleged to have been purchased by the assessee using its undisclosed income. 2. On appeal, the CIT(A) held that only 550 shares were purchased with the help of undisclosed income which came to ₹ 3,90,500 and the same was directed to be treated as the undisclosed income of the assessee. Whereas the assessee has come in appeal before the Tribunal stating that at best only 300 shares can be considered to be purchased out of the undisclosed income, the Revenue has come in appeal before the Tribunal questioning the relief given by the CIT(A) by reducing the undisclosed income from ₹ 79,87,500 to ₹ 3,90,500. 3. The assessee in its appeal has filed an additional ground raising three issues. They are as under : 1. That the block assessment as made is liable to be quashed as the same is void and unlawful. To the best of the appellant's knowledge and belief mandatory conditions precedent have not been complied requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised either before the AO or before the CIT(A) who disposed of the appeal on 27th Feb., 2004. However, the judgment of the Supreme Court in the case of Manish Maheshwari vs. Asstt. CIT Anr. (2007) 208 CTR (SC) 97: (2007) 289 ITR 341(SC) was rendered on 23rd Feb., 2007 which was much later than the date on which the CIT(A) disposed of the appeal. The order of the Special Bench, Delhi in the case of Raj Kumar Chawla vs. ITO (2005) 92 TTJ (Del)(SB) 1245: (2005) 94 ITD 1(Del)(SB) which is relevant for additional ground No. 2 was rendered on 31st Jan., 2005 which is also after the date on which the appeal was disposed of by the CIT(A). The present appeal has been filed by the assessee on 30th April, 2004 on which date neither of the aforesaid decisions had been rendered. Therefore, the assessee could not have raised these points in the memorandum of appeal originally filed. Therefore, it cannot be said that there was any lack of vigilance or laches on the part of the assessee in taking up these issues before the Departmental authorities or in the memorandum of appeal originally filed before the Tribunal. So far as the question of admission of the additional grounds is concerned, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-D, D-Block, Vikas Bhawan, I.P. Estate, New Delhi. Dt. 17th April, 2001 The Dy. CIT, Coy. Circle 2(4), New Delhi. Sub : M/s Nauvika Investment and Commercial Ent. Ltd., D-124, Saket, N. Delhi.'Issue of notice under s. 158BD of the IT Act, 1961'Intimation regarding Sir, A survey under s. 133A started on 9th March, 1999 at the premises of M/s A. Nitin Co. was converted in search on 9th March, 1999 itself. Only office premises at 4/9, Asaf Ali Road, were covered under s. 132 of the IT Act. The search was finally concluded on 28th April, 1999. The persons covered under the search under s. 132 are as under : 1. Sh. Nitin Kohli 2. M/s A. Nitin Capital Services Ltd. 3. M/s Vachanvand Investment 4. M/s Penwell Traders Ltd. As reported in the appraisal report, several incriminating documents were found and seized pertaining to your assessee, M/s Nauvika Investment Commercial Ent. Ltd., D-124, Saket, N. Delhi, which is being assessed in your charge at GIR/PA No. AAACN0691B. You are requested to examine the possibilities of issue of notice under s. 158BD of the IT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd with an assurance that further information, if any, will be passed on in due course. 8. In our humble opinion, these two letters do not amount to recording of satisfaction required by s. 158BD. In these letters, the AO has merely referred to the search in the premises of Nitin Co. and the connected four cases and the incriminating documents found pertaining to the present assessee and has thereafter requested the AO having jurisdiction over the assessee's case to examine the possibilities of issuing a notice under s. 158BD and also to inspect the seized material to verify any further concealment of income. In the second letter, the present AO has merely been requested to take appropriate action. There is no satisfaction which can be discerned from these two letters to the effect that the AO assessing the searched persons found any undisclosed income belonging to the present assessee. At best, these two letters are only letters forwarding the relevant seized material and a request to the present AO to examine them and detect concealment of income. This does not meet the requirement of s. 158BD as explained by the Supreme Court in Manish Maheshwari vs. Asstt. CIT Anr. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81/Del/2003] and Asstt. CIT vs. R.P. Singh (2007) 111 TTJ (Del) 880 and also by the Pune Bench 'A' of the Tribunal in Asstt. CIT vs. Aurangabad Holiday Resorts (P) Ltd. (2007) 111 TTJ (Pune) 741. The learned senior Departmental Representative invited our attention to the judgment of the Madras High Court in Areva T D India Ltd. vs. Asstt. CIT (2007) 207 CTR (Mad) 497: (2007) 294 ITR 233(Mad) but we find that in that case, the High Court held that non-issue of a notice under s. 143(2) where the assessment has been reopened under s. 148 does not invalidate the reassessment and should be treated only as a procedural irregularity. Herein, we are concerned not with a case of reassessment under s. 147/148 but with a case of s. 158BD and the Gauhati High Court judgment is the direct authority on the point. No other judgment of any High Court including the jurisdictional High Court taking a contrary view was brought to our notice. In these circumstances, respectfully following the judgment of the Gauhati High Court, we hold that even if it is assumed for the sake of argument that the AO having jurisdiction over the searched persons has recorded the requisite satisfaction under s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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