Commissioner Of Income Tax v. K.n. Aggarwal

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.162 of 2010 Date of decision: 24.2.2011 Commissioner of Income Tax Vs. K.N. Aggarwal. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Ms. Urvashi Dhugga, Sr.Standing Counselfor the appellant. for the appellant. Mr. S.K. Mukhi, Advocate andMs. Jyoti, Advocatefor therespondent. --- ADARSH KUMAR GOEL, J. 1.This appeal has been preferred by the revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against order of the Income Tax Appellate Tribunal, New Delhi inI.T.A. No.101/Del/1998 for the block period from 1.4.1986 to 14.8.1996 proposing following substantial questions of law:- “I.Whether, on the facts and in the circumstances of thecase, the findings recorded by the Ld. ITAT isperverse and contrary to the evidence available onrecord as the Assessing Officer had initiated theproceedings u/s 158 BD of the Income Tax Act, 1961after recording requisite satisfaction for the purpose ofcase, the findings recorded by the Ld. ITAT isperverse and contrary to the evidence available onrecord as the Assessing Officer had initiated theproceedings u/s 158 BD of the Income Tax Act, 1961after recording requisite satisfaction for the purpose of II. III. initiating proceedings u/s 158BD of the Income TaxAct, 1961 in the case of the assessee?” Whether, on the facts and in the circumstances of thecase, the Ld. ITAT was right in law in holding that inthe absence of recording of satisfaction in the file ofthe person searched, the assessment made in thehands of this assessee on the basis of notice issuedu/s 158BD without recording necessary satisfaction isbad in law and is liable to be annulled even though thefindings recorded by the Ld. ITAT are perverse in sofar the detailed proceedings and reasoning given inthe assessment order itself evidences impliedsatisfaction which is also borne out from the additionsin the assessment order and even the sameAssessing Officer in whose case search wasconducted on 14.08.1996 and also having jurisdictionover the case of the Directors of M/s Glory SecuritiesLtd. Shri A.N. Pahuja, Addl. Commissioner of IncomeTax i.e. Special Range, Faridabad had issued noticesas per the provisions of law and having jurisdictionover the case of M/s Manu Fin Lease Ltd., M/s GlorySecurities Ltd. (See Annexure A & B & C)?Whether, on the facts and in the circumstances of thecase, the Ld. ITAT was right in law in allowing appealof the assessee and not confirming the order of theAssessing Officer?” 2.On receiving information about tax evasion, a searchwas conducted on 14.8.1996 by the Income Tax Department on aGroup of companies which included on M/s Manu Finlease Ltd.,M/s Goodwill Investment and M/s Glory Securities. The assessee is director of M/s Glory Securities. M/s Goodwill Investment andM/s Glory Securities has common office at Faridabad. Variousincriminatory documents were found and seized, which led toproceedings under Section 158BD of the Act for blockassessment. Notice was issued to the assessee but no returnhaving been filed, assessment was made adding about a sum of`2 crores in his hands as undisclosed income. The addition wasset aside by the Tribunal on the ground that there was noevidence of satisfaction having been reached that addition at thehands of the assessee was on account of material found duringthe search as required in terms of law laid down by the Hon’bleSupreme Court inManish Maheshwari v. Asstt. Commissioner of Income Tax(2007) 289 ITR 341. 3. We have heard learned counsel for the parties. of Income Tax(2007) 289 ITR 341. 3. We have heard learned counsel for the parties. 4. Learned counsel for the revenue submits that theAssessing officer was satisfied that proceedings against theassessee were required as a result of material seized duringsearch and the order of assessment itself indicated the saidmaterial. It is further submitted that even in proceedings forassessment of the searched persons namely M/s GoodwilInvestment and M/s Glory Securities, satisfaction has beenrecorded. Copies of the assessment orders in the said caseshave been shown to us. 5. Learned counsel for the assessee submits that thesaid assessment orders of the searched persons were notproduced before the Tribunal. 6. In view of the fact that the assessment orders in thecase of searched persons were not produced before the Tribunal,in absence of which the Tribunal assumed that the requisitesatisfaction had not been recorded, we are of the view that thematter will require fresh consideration by the Tribunal after takinginto account the orders of block assessment referred to above. 7. We answer the questions accordingly, set aside theimpugned order of the Tribunal and remand the matter for freshdecision in accordance with law. The parties may appear before the Tribunal for furtherproceedings on 23.5.2011. (ADARSH KUMAR GOEL) JUDGE February 24, 2011ashwani ( AJAY KUMAR MITTAL ) JUDGE JUDGE