Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARD :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ACCOUNTING STANDARDS :: TDS :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: VAT RATES :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: VAT Audit
From the Courts »
 Ultratech Cement Ltd vs. ACIT (Bombay High Court)
 Vikram Singh vs. UOI (Delhi High Court)
  CIT vs. Annamalaiar Mills (Supreme Court)
 CIT vs. Equinox Solution Pvt. Ltd (Supreme Court)
 Centaur Helicopter Services P. Ltd. Vs. Commissioner Of Income Tax
 Ashok Chawla Vs. Commissioner Of Income Tax
  CIT vs. Annamalaiar Mills (Supreme Court)
 Kalyani Barter (P) Ltd vs. ITO (ITAT Kolkata)
  Rajendra Goud Chepur vs. ITO (AP & T High Court)
  CIT vs. Annamalaiar Mills (Supreme Court)

CIT vs. Calcutta Knitwears (Supreme Court)
April, 01st 2014

S. 158BC/ 158BD: Law on how & when “satisfaction” has to be recorded by AO to attain jurisdiction over non-searched person explained

A search u/s 132 was carried out in the premises of the Bhatia Group on 05.02.2003 and certain incriminating documents pertaining to the assessee firm were found. The assessment on the Bhatia group was completed on 30.03.2005. Thereafter, on 15.07.2005, the AO recorded his “satisfaction” that the seized papers revealed the undisclosed income of the assessee and the said papers were passed on to the AO of the assessee for making an assessment u/s 158BC read with s. 158BD. The assessee argued that the proceedings initiated again him were invalid as the said “satisfaction note” was prepared after the proceedings in the case of the searched party were completed. The AO and CIT(A) rejected the assessee’s claim though the Tribunal and the High Court upheld it. The Tribunal & High Court held that as the recording of satisfaction by the AO as contemplated u/s 158BD was on a date subsequent to the framing of assessment u/s 158BC in case of the searched person, that is, beyond the period prescribed u/s 158BE(1)(b), the notice issued u/s 158BD was belated and consequently the assumption of jurisdiction by the AO in the block assessment was invalid. On appeal by the department to the Supreme Court HELD by the Supreme Court allowing the appeal:

(i) While it is true that before initiating proceedings u/s 158BD, the AO who has initiated proceedings for completion of the assessments u/s 158BC should be satisfied, on the basis of cogent and demonstrative material, that the seized documents belong to a person other than the searched person, the said satisfaction note could be prepared by the AO either at the time of initiating proceedings for completion of assessment of a searched person u/s 158BC or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the AO cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the AO in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. Further, s. 158BE(2)(b) only provides for the period of limitation for completion of block assessment u/s 158BD in case of the person other than the searched person as two years from the end of the month in which the notice under this Chapter was served on such other person in respect of search carried on after 01.01.1997. The said section does neither provides for nor imposes any restrictions or conditions on the period of limitation for preparation the satisfaction note u/s 158BD and consequent issuance of notice to the other person;

(ii) The result is that for the purpose of s. 158BD a satisfaction note is sine qua non and must be prepared by the AO before he transmits the records to the other AO who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person u/s 158BC of the Act; (b) along with the assessment proceedings u/s 158BC of the Act; and (c) immediately after the assessment proceedings are completed u/s 158BC of the Act of the searched person.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Integrated Software Solutions Integrated Software Development Integrated Software Services Integrated Software Solutions India Integrated Softw

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions