Ita/5013/2009 Of The Commissioner Of Income Tax v. Ssk Tulajabhavani Kalyan Mantap

IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD DATED THIS THE Q DAY OF OCTOBER 2012 PRESENT THE HON’BLE MR. JUSTICE K. L. MANJUNATHANDTHE HON’BLE MR. JUSTICE B.MANOHARI.T.A. No. 5013/2009 BETWEEN" 1.The Commissioner of Income Tax,C.R. Building, Navanagar, Hubli.C.R. Building, Navanagar, Hubli. 2.The Asst. Commissioner ofIncome Tax, Central Circle,Belgaum.Income Tax, Central Circle,Belgaum. (by Sri Y.V. Raviraj, Advocate) "Appellants and ook Tulajabhavani KalyanMantap Kattad Samithi,Dajibanpeth, Hubli. (by Sri Shashank 8S. Hegde, Advocate "Respondent THIS APPEAL IS FILED U/SEC.260-A OF THE INCOMETAX ACT, 1961, AGAINST THE ORDER DATED 2059.03.20PASSED IN M.P. NO.84(BNG) UN IT (SS)A NO.38 (BNG)/04! ONTHE FILE OF THE INCOME TAX APPELLATE TRIBUNAL, ‘A’BENCH, BANGALORE, AND ETC, THIS APPEAL COMING ON FOR FNAL HEARING THIS DAY,K.L.MANJUNATH, J,DELIVERED THE FOLLOWING:- JUDGMENT 1.The revenue has preferred this appeal beingagerieved by the order passed by the Income TaxAppellate Tribunal dated 28.05.2008 passed in IT (SS)A.No.38/Bang/2004andalsothe.rejectionotMiscellaneous Petition filed by the appellant in M.P.NO.84/BANG/2008 dated 13.03.2009. a2The facts leading to this appeal are as under: A search was conducted by the Revenue on thehouse of one M.M. Meharwade and a huge cash wasfound 1nthehouse. It|WaScontendedbyM.M.Meharwade that a sum of Rs.25,00,000/- foundduring the search was that of the respondent which is asamithi running Kalyan Mantap. Notice undersec. 158BC r/w Sec.158BD of the Income Tax Act, waissued to the respondent. Thereafter the assessee filedits return of income in response to the notice disclosingthe income as nil. The order of assessment was passed bringing tax on undisclosed income of Rs.53,04,000/-by its order dated 19.06.2002, against which theaSSCSSEEfiled|appealbeforethe|appellateCommissioner, which order was confirmed. 3.Agerieved by the concurrent findings, the assesseefiled a second appeal before the Tribunal mainlycontending that no satisfactory reasons were recordedby the Assessing Officer. Therefore the Tribunaldirected the revenue to produce the reasons recorded bythe Assessing Authority to satisfy himself to issue noticeto the assessee. More than an year time was granted tothe revenue. Inspite of such an opportunity, therevenue did not produce the satisfaction recorded by theAssessing Officer. Therefore the Tribunal drawing anadverse inference allowed the appeal of the assesseeand set aside the order of assessment, 4Thereafter a Miscellaneous Petition was filed byproducing the xerox copy of the satisfaction recorded by the Assessing Officer. The Miscellaneous Petition alsocame to be rejected on the ground that inspite ofsufficient opportunity granted to the revenue same wasnot utilized and there are no reasons to allow theMiscellaneous Petition. It was further held that thesatisfaction recorded was not sulificient accordinglMiscellaneous petition came to be dismissed on meritsalso. These orders are called in question in this appeal. 5.The appeal was admitted on 08.03.2012 to answerthe following substantial question of law; “Whether the Tribunal was correct in holdingthat the Assessing Officer has not recorded asatisfaction for invoking Section 158BD ofthe Act without verifying the order sheetmaintained by the Assessing Officer, whereinsatisfaction has been recorded before issuingnotice under Sectionlo&8BC r/w 158BD otheActandconsequentlyrecordedaperverse finding?” 6.We have heard the counsel for the parties. Wehave also seen the copy of the satisfaction recorded bythe Assessing Officer, which reads as hereunder’ 5.The appeal was admitted on 08.03.2012 to answerthe following substantial question of law; “Whether the Tribunal was correct in holdingthat the Assessing Officer has not recorded asatisfaction for invoking Section 158BD ofthe Act without verifying the order sheetmaintained by the Assessing Officer, whereinsatisfaction has been recorded before issuingnotice under Sectionlo&8BC r/w 158BD otheActandconsequentlyrecordedaperverse finding?” 6.We have heard the counsel for the parties. Wehave also seen the copy of the satisfaction recorded bythe Assessing Officer, which reads as hereunder’ “There was search and seizure of the houseof Shri M.M. Meharwade. In the course otfsaid action some documents related toassessee were found and seized. ‘Thereforethe jurisdiction over the assessee has beenassigned to the circle by the C.I.T. Hubli videorder No. F.No.109/CIT, HBL/99-2000 dated=[th]March 2OOO. Therefore as in view of thatthe provisions of Section 158BD applied tothe assessee. Notice U/s 158 BC issued.” T.On perusal of the same we are of the opinion, nosatisfactory reasons are assigned by the Assessing Officer inorder to issue a notice u/S 1908BD as held by the TribunalIn addition, we have also seen that the revenue did not showany reasons for non production of the reasons recorded for the satisfaction of the Assessing Officer to issue notice u/S158BD before the Tribunal when time was granted for oneyear to the revenue to produce the same. Even in thisappeal, no explanation is offered except stating that reasonswere recorded. When there is no explanation offered by theRevenue for non production of the document before theTribunal for more than an year and having held that reasonsrecorded would not constitute satisfactory reasons, we donot see any merits in this appeal. Accordingly, the questionof law framed is answered against the revenue. In the result,the appeal is dismissed. Sd/- JUDGE DVV Sd/- JUDGE