Ita/694/2009 Of The Commissioner Of Income Tax v. M/S R & M Trust

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE| DATED THIS THE O1 DAY OF DECEMBER, 2014| PRESENT| THE HON’BLE MR. JUSTICE N. KUMAR. AND THE HON’BLE MR. JUSTICE B.MANOHAR| INCOMETAXAPPEALNo.694OF2009 BETWEEN 1.THE COMMISSIONER OF INCOME TAX|CR BUILDINGQUEENS ROADBANGALORE.CR BUILDINGQUEENS ROADBANGALORE. 2.THE ASST. COMMISSIONER OF INCOME TAXCENTRAL CIRCLE-1(4)CR BUILDING, QUEENS ROAD.BANGALORE.CENTRAL CIRCLE-1(4)CR BUILDING, QUEENS ROAD.BANGALORE. ... APPELLANTS | (BY SRI: K V ARAVIND, ADV)| AND M/S R & M TRUST13 FLOOR, RAHEJA TOWERS w MG ROAD, |BANGALORE - 560 OOL. .. RESPONDENT (RESPONDENT SERVED) THIS ITA JIS. FILED UNDER SECTION 260-A OI.T.ACT, 1961 ARISING OUT OF ORDER DATED 28-05-2009PASSEDINMP.No.129/Bng/2008(IN|IT(SS)ANo.89/BNG/2006), FOR THE BLOCK ASSESSMENT PERIOD.29/05/1991 TO 29/05/2001, PRAYING TO FORMULATE THESUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND|ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED.BY THE ITAT BANGALORE IN MP No.129/Bng/2008 (In.IT(SS)ANo.89/BNG/2006),dated28-05-2009,AND)CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER,CONFIRMING THE ORDER PASSED BY THE ASSISTANT.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4),.BANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY. THIS ITA COMING ON FOR FINAL HEARING, THIS)DAY|N,. KUMARDELIVERED THE FOLLOWING: JUDGMENT The revenue Nas preferred this appeal againstthe order passed by the Tribunal nolding that beforeissuance of notice under Section 158-BD to the!assessee, there is no such satisfaction recorded. TheSatisfaction has been recorded as part of Office Notealongwith assessment order in the case of Sri.Arjun. Menda, obviously subsequent to issuance of notice|under Section 158-BD, which is contrary to law and.therefore, the entire proceedings was held to be.without jurisdiction and accordingly, it is set aside. 2.|Tne substantial question of law raised in.this appeal reads as under: “Whether the Tribunal was correctin holding when exercising jurisdiction|under Section 254(2) of the Act that no|satisfaction Nad been recorded by the|Very Same|AssessingOfficerpefore Initiating proceedingsunder|Section158BD of the Act under the guise of)rectifyingIts earlier|order.dated|04.07.2008 and without following the|procedure prescribed and consequently|exercised jurisdiction not vested in it?” ‘3.Tne facts are not in dispute. A searcn was.conducted in the premises of Arjun Menda on.29.05.2001. The incriminating materials were found. The block assessment order has been passed as. againstNim|On)29.05.7003.However,tneproceedings were initiated against the assessee on tnebasis of satisfaction disclosed in the said searcn|against the assessee. f[hnerefore, proceedings wereInitiated under Section 158-BD on 03.01.2003. The so|called satisfaction recorded by the assessing authorityis found erroneous and assessment order was passed.on 29.05.2003. Therefore, it is obvious no satisfactionwas recorded in writing before 03.01.2003 i.e., beforeinitiation of the proceedings under Section 158-BD. | 4Tne Apex Court nas held recording of|satisfaction in writing is a condition precedent for.initiation of proceedings under Section 158-BD and.that condition is not fulfilled. Therefore, the Tribunalwas justified in passing the impugned order, wnicn isin accordance with law. Therefore, the substantialquestion of law is answered in favour of the asseseeand against the revenue. - ���B57<4:����50@5��465�3;;53=�<:�2<:B<::52���� ������2)%����������������������������������2)%�������������������K>10)%�