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TMI Blog2022 (3) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... h as well as after completion of the assessment under section 158BC, is certainly beyond the time limit of two years as provided under section 158BE. Taking note of the same, the Tribunal rightly allowed the appeal filed by the respondent / assessee on the ground that the notice issued under section 158BD is barred by limitation. Though the learned counsel for the appellant /Revenue contended that there is no time limit prescribed in the statute for completion of block assessment in respect of persons other than the person on whom search was made and therefore, the notice issued under section 158BD of the Act by the Assessing Officer is valid, this court is not inclined to accept the same, as it is settled law that where limitation is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rying business. After scrutiny of the same, the assessing officer completed the assessment under section 158BD r/w 143(3) of the Income-tax Act (in short, 'the Act') on 28.02.2007 making addition of ₹ 1,70,00,010/- as income from sand quarrying business. 2.2. Challenging the aforesaid order of assessment, the respondent / assessee preferred an appeal before the CIT (A), Salem in ITA No.52/07-08. The first appellate authority by order dated 20.01.2009, confirmed the order of the assessing officer, on the premise that there exists an AoP for the sand quarrying business carried on by R.Ganesan and hence, the income of sand quarrying business is assessable in the hands of AoP. 2.3. Aggrieved against the order of the first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 158BD to the respondent / assessee only on 17.02.2005, requiring them to file return of income in respect of the sand quarrying business carrying by them in the capacity as AoP. As such, the notice issued after three years from the date of search as well as after completion of the assessment under section 158BC, is certainly beyond the time limit of two years as provided under section 158BE. Taking note of the same, the Tribunal rightly allowed the appeal filed by the respondent / assessee on the ground that the notice issued under section 158BD is barred by limitation. 6.Though the learned counsel for the appellant /Revenue contended that there is no time limit prescribed in the statute for completion of block assessment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is profitably extracted below: 9. In the case on hand, block assessment in respect of the Sree Gokulam Chits and Finance Company Limited was proceeded under Section 158BC of the Act. It is only on the basis of the block assessment of the person with respect to whom search was made under Section 132 of the Act, proceedings under Section 158BD of the Act in respect of any other person can be initiated. Therefore, the provisions of Sections 158BD and 158BC are intertwined. In other words, the jurisdiction to issue notice under Section 158BD of the Act to any person, other than the person with respect to whom search was made, and the consequent time limit prescribed under Section 158BE of the Act in respect of third parties, would certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut any period of limitation. Instead of this, the approach of the Tribunal appears to have been to hold the Assessing Officer (of the searched person) who primarily possessed jurisdiction over the subject matter, including the jurisdiction to record a satisfaction that the third party also had to file block assessment and was subject to such notice under section 158BD, to complete the assessment and also to record satisfaction within the basic period of two years. This interpretation, in the opinion of the court, not only furthers the intention of Parliament, but also subserves the larger public interest in that it places reasonable fetters upon the jurisdiction of the concerned Assessing Officer who might otherwise be left with uncontrolle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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