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ITAT quashed proceedings as no "satisfaction note" was recorded u/s 158BD (of Income Tax Act, 1961)
ITAT quashed proceedings as no "satisfaction note" was recorded u/s 158BD (of Income Tax Act, 1961)
After search in premises of M/s Rama Newsprint & Papers, block assessment u/s 158BC (of Income Tax Act, 1961) was passed, and notices u/s 158BD (of Income Tax Act, 1961) r.w.s. 158BC (of Income Tax Act, 1961) were issued in assessees’ case. AO held on-money was paid by assessees for purchase of a flat. AO made addition on purchase from unaccounted/undisclosed income. ITAT held that no "satisfaction note" was recorded u/s 158BD (of Income Tax Act, 1961) by AO in M/s Rama Newsprint’s case, so entire proceedings initiated u/s 158BD (of Income Tax Act, 1961) was bad in law.-500635
1. A search u/s 132(1) (of Income Tax Act, 1961) was carried out in the premises of M/s Rama Newsprint & Papers Pvt. Ltd.
2. A block assessment u/s 158BC (of Income Tax Act, 1961) was passed in the case of M/s Rama Newsprint & Papers Pvt. Ltd.
3. Subsequently, notices u/s 158BD (of Income Tax Act, 1961) r.w.s. 158BC (of Income Tax Act, 1961) were issued in assessees’ case, requiring them to file return of income for the block period.
4. During search, certain loose papers containing details of on-money paid by assessees for purchase of a residential flat was found.
5. AO concluded that flat was purchased from unaccounted/undisclosed income.
6. AO made addition on 'substantive basis', and on 'protective basis'.
On appeal, the ITAT held as under:
7. The aforesaid ratio and principle laid down by the Hon'ble Apex Court has been reiterated and followed in catena of cases some of which has also been referred before us.
8. Thus, we hold that, in absence of any "satisfaction note" recorded u/s 158BD (of Income Tax Act, 1961) by the AO of the persons searched i.e. M/s Rama Newsprint & Papers Pvt. Ltd., in whose case the assessment u/s 158BC (of Income Tax Act, 1961) has been completed, the entire proceedings initiated u/s 158BD (of Income Tax Act, 1961) by issuance of notice dated 05.09.2005 is bad in law and same deserves to be quashed.
9. Thus, in both the appeals the impugned assessment orders are quashed, being without jurisdiction.
Case Reference - Ms. Pooja D Ramsinghani Vs. Deputy Director of Income Tax.
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "C", MUMBAI
BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER
AND SHRI AMIT SHUKLA, JUDICIAL MEMBER
IT(SS) No. : 22/Mum/2011
Block period 01.04.1995 to 31.07.2001
(A.Y. 1996-97 to 2002-03)
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