COMMISSIONER OF INCOME TAX vs. ALKA BHANDARI

We are informed by Shri Santosh Krishan, who is appearing in seven of the appeals that the assessing officer had not recorded the satisfaction note as required under Section 158BD of the Act, therefore, the Tribunal and the High Court were justified in setting aside the orders of assessment and the orders passed by the first appellate authority. We do not intend to examine the aforesaid contention canvassed by the learned counsel since we are remanding the matters to the High Court for consideration of the individual cases herein in light of the observations made by us on the scope and possible interpretation of Section 158BD of the Act.” 2. 2015:DHC:113-DB

The search of one Sh. Manoj Aggarwal was conducted on 03.08.2000, thereafter notice was issued to him. His Assessing Officer considering the block returns submitted by the searched person and the material supplied and forthcoming during the search proceedings completed the assessment by an order dated 29.08.2000. Based upon the materials obtained, the Assessing Officer of the searched person recorded a satisfaction note on 06.03.2003 in the case of both assessees in the present appeals, taking the view that additional income had escaped assessment on the basis of this satisfaction note, which was forwarded to the Assessing Officer of the present assesses. The latter issued notice on 18.06.2003 to the respondent/assessee. After considering their submissions the A.O. completed assessment on 27.06.2005 in both the cases. In the case of assessee in ITA No. 996/2009 an addition of ₹ 36,38,119/- and a further addition of ₹72762/- was made and in the case of assessee in ITA No.1163/2009 an addition of ₹34,73,000/- and further sum of ₹73727/- and further addition of ₹69535/- was ordered. Both these were subject matter of recorded more than six months after the assessment of searched person; the assessment was completed on 29.08.2002 and the satisfaction note was 2015:DHC:113-DB

Since the limitation period for completion of block assessment, or in the case of searched persons as well as the third party who is issued notice is two years, it is reasonable to assume that the revenue can be given latitude of six months which can be considered as “immediate” or immediately proximate in point of time. In the present case, the six month period expired on 28.02.2003; the satisfaction note was recorded on 06.03.2003 and the notice was issued more than 3 ½ months after lapse of the date i.e. 18.06.2003. 5. In these circumstances this Court holds that the notices did not accord with the Supreme Court’s declaration of law and was unduly delayed. They cannot be considered as having been recorded immediately after the completion of assessment proceedings under Section 158BC Income Tax Act. The appeals are accordingly dismissed.