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TMI Blog2023 (11) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect was not pressed before the Tribunal, since it, otherwise, has a bearing on the jurisdiction of the AO of the assessee to deal with the matter, it can be raised, in our opinion, before the High Court for the first time. We have no reason to conclude that ground with regard to the AO wrongly assuming jurisdiction was not raised before the Tribunal. This being the factual situation, the issue is no longer res integra and stands concluded by the judgments rendered by the Supreme Court in the cases referred to hereafter. See cases Manish Maheswari vs. ACIT [ 2007 (2) TMI 148 - SUPREME COURT] , Tapan Kumar Dutta [ 2018 (4) TMI 1375 - SUPREME COURT] as held 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 to [of] reasons as postulated in section 148, but since proceedings under section 158BD may have monetary implications, such satisfaction must reveal mental and dispassionate though process of the Assessing Officer in arriving at a conclusion and must contain reasons which should be the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9th August 2004 and framed the following two questions of law: 1. Whether the I.T.A.T. was correct in law in admitting the additional evidence without giving an opportunity to the Revenue to examine the genuineness and correctness of the evidence? 2. Whether the I.T.A.T. was correct in law in deleting the addition by ignoring the provisions of Section 132(4) and (4A) of the Income Tax Act, 1961. 5. It is significant that the above order was passed ex-parte i.e. without notice being served on the Assessees at that stage. 6. It is stated in the applications for condonation of delay that as far as ITA No. 344/2004 is concerned i.e. Revenue's appeal against Amarjit Singh Bakshi (HUF), the paper book was served on the Assessee only on 22nd February, 2008. It is stated that as far as ITA No. 345/2004 is concerned, which is the Revenue's appeal against Amarjit Singh Bakshi (Individual), the copy of the paper book was served on 5 July 2007. It is stated that since the Assessee had succeeded before the ITAT and the additions made for one year i.e. 1995-96 stood deleted by the ITAT, the question of the Assessees filing appeals in this Court did not arise. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Revenue to produce before it on the next date the original files in the matter concerning the initiation of proceedings against the assessee under Section 158BD of the Act . [Emphasis is ours] 3. It appears that it is in this backdrop that another coordinate bench condoned the delay in the appeals preferred by the assessee [ITA 577/2008 and ITA 1291/2008] via order dated 01.11.2017. 4. The important aspect is that while the majority view of the Income Tax Appellate Tribunal [in short, Tribunal ] as reflected by perusing the orders dated 22.04.2003 and 24.06.2003, on merits, is in favour of the assessee, the said view did not deal with the issue concerning assumption of the jurisdiction by the AO of the assessee. 5. It is in this context that the assessee also preferred its appeals, which, as noticed hereinabove, are ITA No. 577/2008 and ITA No. 1291/2008. 6. As is obvious, the revenue being aggrieved by the decision of the majority, on merits, preferred appeals, which, as noticed in the order dated 02.08.2016 of the coordinate bench are ITA No. 344/2004 and ITA No. 345/2004. 7. Therefore, the question of law framed in the appeals preferred by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal also, to our minds, indicate that the aspect concerning the AO wrongly assuming jurisdiction was embedded therein. For the sake of convenience, the relevant parts of the appeal are extracted hereafter: 1. That the learned ACIT has erred both on facts and in law in initiating the proceedings u/s 158 BD of the Income Tax Act on the assessee HUF. The initiation of the proceedings and completion of assessment under the aforesaid provisions is totally untenable both on facts and in law. 2. That the learned ACIT has failed to appreciate that no proceedings could have been initiated against the assessee only on surmises and conjectures and on the basis of certain papers allegedly seized from one Shri N.S. Atwal, without there being any material to support they belong to the assessee. The burden in establishing the aforesaid documents pertains to the assessee since was not satisfied before the initiation of the proceedings no valid proceedings could have been initiated in law against the assessee. 3. That in any case and without prejudice, the learned ACT has failed to appreciate that there was no alleged agreement which had been allegedly entered between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding and completion thereof by the aforesaid order is without satisfying the mandatory requirements of the aforesaid chapter and without fulfilling the pre-conditions for making the order of assessment . [Emphasis is ours] 15. The written submissions dated 05.10.2000 lodged on behalf of the assessee before the Tribunal, would also bear this assertion out. The relevant paragraphs of the same are extracted below: 33. It is also contended that in fact no satisfaction note has been recorded by the Assessing Authority having jurisdiction over Shri. N.S. Atwal as such proceedings initiated are bad in law. This submission is being in view of the order of the Hon ble Tribunal in the case of Ved Prakash Sanjay Kumar 107 Taxman. xxx xxx xxx 37. The Assessing Officer, having jurisdiction overt the assessee with respect to whom, the search was made under Section 132 of the Income Tax Act should be satisfied that any undisclosed income belongs to any other person. (other than the person searched). In other words, the sine qua-non for initiating the proceedings is that the Assessing Officer having jurisdiction over the assessee who has been searched mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under Section 132A of the Act . xxx xxx xxx 22. As the Assessing Officer has not recorded its satisfaction, which is mandatory; nor has it 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 facts and circumstances of the case, there shall be no order as to costs... (ii) Commissioner of Income-Tax vs. Calcutta Knitwears [2014] 362 ITR 673 (SC): 30. In Hepples v. FCT, (1991) 173 CLR 492, the High Court of Australia unequivocally favoured the principle that taxation legislation should be subject to a strict literal interpretation and opined that such an approach was supported by common sense . Therein, the taxpayer, on ceasing to be employed, was paid $40,000 by his employer in exchange for the taxpayer agreeing that he would not carry on or be interested in certain businesses and would not divulge any tra ..... 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