INCOME TAX ACT, 1961

Section 158BC read with section 158BD

Search and seizure - Validity of block assessment - AO whether competent to record of satisfaction in case of person other than searched person even after completion of block assessment in case of searched person -

Revenue challenged order of Tribunal holding that assessment order passed under section 158BC read with section 158BD was not valid and was void ab initio on ground that AO of person searched did not record satisfaction before completion of block assessment proceedings under section 158BC. Held: In Calcutta Knitwears, Supreme Court held that AO can record his satisfaction for issuing notice under section 158BD in case of person other than searched person even after completion of block assessment in case of searched person. Thus, satisfaction can even be recorded immediately after completion of assessment proceedings under section 158BC. In instant case, admittedly, satisfaction was recorded after completion of proceedings under section 158BC. However, orders were set aside by Tribunal merely on ground that satisfaction was not recorded before completion of assessment proceedings. Aforesaid finding of Tribunal was contrary to law laid down by Supreme Court in Calcutta Knitwears. Therefore, same could not be sustained in eye of law. Order of Tribunal was quashed and Tribunal was directed to deal with appeal on merits.

Followed:CIT v. M/s. Calcutta Knitwears (2014) 362 ITR 673 (SC) : 2014 TaxPub(DT) 1547 (SC)Distinguished:Manish Maheshwari v. CIT (2007) 289 ITR 341 (SC) : 2007 TaxPub(DT) 1020 (SC)

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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