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TMI Blog2018 (4) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Section 148, but since proceedings under Section 158BD may have monetary implications, such satisfaction must reveal mental and dispassionate thought process of the Assessing Officer in arriving at a conclusion and must contain reasons which should be the basis of initiating the proceedings under Section 158BD. The order dated 14.08.2000, passed by the Additional Commissioner of Income Tax (Appeals), under Section 144A whereby he, inter-alia, directed the Assessing Officer to take the undisclosed income of the Appellant including from the benami business in the name of two other persons at an aggregate sum of ₹ 17 lakhs as against ₹ 14 lakhs declared by the Appellant in his block return was passed in contravention of law and is not sustainable in the eyes of law. Appeal dismissed - Decided against the assessee. - Civil Appeal No. 2014 of 2007 - - - Dated:- 24-4-2018 - R. K. Agrawal And Abhay Manohar Sapre, JJ. JUDGMENT R. K. Agrawal, J. 1) This appeal has been filed against the impugned final judgment and order dated 17.11.2005 passed by the High Court at Calcutta in Income Tax Appeal No. 174 of 2005 whereby a Division Bench of the High Court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod under Section 158BD of the IT Act. Pursuant to the order dated 20.11.2000, a fresh notice under Section 158BC read with Section 158BD of the IT Act was issued to the Appellant to file the block return for the period 1989-90 to 1999-2000. Consequently, the Appellant intimated the Assessing Officer through a letter dated 21.10.2002 that the block return has already been filed for the aforesaid period on 08.11.1999. Further, the issue of fresh notice does not extend the time allowed for completion of the assessment under Chapter XIV of the IT Act. (e) On 29.11.2002, the Assessing Officer passed the assessment order while assessing the undisclosed income of the Appellant to the tune of ₹ 3,48,56,430/-. Being aggrieved, the Appellant preferred an appeal being No. 133/CIT(A)/Bwn/02-03 before the Commissioner of Income Tax (Appeals). Vide order dated 18.09.2003, the Commissioner of Income Tax (Appeals) held that the undisclosed income of the block period in the instant case should be taken in the aggregate sum of ₹ 66,55,911/- as against ₹ 3,48,56,430/- as assessed by the Assessing Officer. (f) Being aggrieved, the Appellant preferred an Appeal being No. IT(SS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enior counsel further submitted that the notice under Section 158BD can be issued to a person with respect to whom search was not conducted but undisclosed income was found as belonging to such person from the material seized from the residence or business premises of the person with respect to whom search was made under Section 132. The Assessing Officer, after recording satisfaction to the effect, rightly issued the notice under Section 158BC read with Section 158BD to the Appellant and assessed the income to the tune of ₹ 3,48,56,430/-. Learned senior counsel further submitted that in the case at hand the satisfaction of the Assessing Officer is apparent and there is no infirmity in the issue of notice under Section 158BC read with Section 158BD of the IT Act to the Appellant. Learned senior counsel finally submitted that the High Court was right in rejecting the claim of the Appellant and no interference is sought for by this Court in the matter. Discussion:- 7) In the instant case, it is a matter of dispute that second notice issued on 20.11.2000 is not valid and competent since the first notice issued by the same Assessing Officer dated 09.09.1999 under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ima facie satisfaction of the Assessing Officer, his order was based upon the material on record that undisclosed income belonged to the present Appellant, when he issued the notice under Section 158BC on 09.09.1999. The jurisdiction under Section 158BD is based on the satisfaction of the Assessing Officer that:- (a) there is undisclosed income; (b) such undisclosed income does not belong to the person with respect to whom action under Section 132 was taken and; (c) such undisclosed income belongs to some other person. Therefore, mere disclosure made by the present assessee before the authority cannot be the basis for reaching a satisfaction that any undisclosed income belongs to him unless the seized books of accounts or other documents or assets are perused, examined or verified by the concerned Assessing Officer. We are of the opinion that in the present case, only after being satisfied that the Appellant fell within the ambit of Section 158BD, a notice was issued by the Assessing Officer. 10) Further, on a conjoint reading of Sections 158BC and 158BD, it is clear that no satisfaction to the effect that undisclosed income belongs to the searched person is necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person with respect to whom the search was made under Section 132 or whose books of accounts or other documents or assets were requisitioned under Section 132A. The very object of the Section 158BD is to give jurisdiction to the Assessing Officer to proceed against any person other than the person against whom a search warrant is issued. Although Section 158BD does not speak of recording of reasons as postulated in Section 148, but since proceedings under Section 158BD may have monetary implications, such satisfaction must reveal mental and dispassionate thought process of the Assessing Officer in arriving at a conclusion and must contain reasons which should be the basis of initiating the proceedings under Section 158BD. 12) Pursuant to the above, we are of the opinion that the order dated 14.08.2000, passed by the Additional Commissioner of Income Tax (Appeals), under Section 144A of the IT Act whereby he, inter-alia, directed the Assessing Officer to take the undisclosed income of the Appellant including from the benami business in the name of two other persons at an aggregate sum of ₹ 17 lakhs as against ₹ 14 lakhs declared by the Appellant in his block retu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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