The Commissioner of Income-tax, Davangere / The Assistant Commissioner of Income-tax Central Circle, Belgaum v. Sreenivasa Enterprises
[Citation -2014-LL-0916-61]

Citation 2014-LL-0916-61
Appellant Name The Commissioner of Income-tax, Davangere / The Assistant Commissioner of Income-tax Central Circle, Belgaum
Respondent Name Sreenivasa Enterprises
Court HIGH COURT OF KARNATAKA
Relevant Act Income-tax
Date of Order 16/09/2014
Judgment View Judgment
Keyword Tags undisclosed income • block assessment • satisfaction • issuance of notice
Bot Summary: 2.THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, BELGAUM. APPELLANTS AND SREENIVASA ENTERPRISES, C/O SRI S. RUDRAMUNIYAPPA, OPPOSITE TO KEB OFFICE, THYAGARAJANAGAR EXTENSION, CHITRADURGA ROAD, CHALLAKERE. RESPONDENT This Income Tax Appeal is filed under Section 260-A of Income Tax Act, 1961 praying to formulate the 2 substantial questions of law and to allow the appeal and set aside the Order dated 20.12.2007 passed by the ITAT, Panaji Bench in IT A. No. 03/PNJ/2005 and confirm the order passed by the Assessing Authority. This Income Tax Appeal coming on for Hearing this day, N. Kumar J., delivered the following: JUDGMENT The revenue has preferred this appeal challenging the order passed by the Tribunal holding that as the Assessing Authority has not recorded any satisfaction in writing before initiating proceedings under Section 158BD of the Income Tax Act, 1961 and the very initiation of proceedings and the consequential orders are all bad in law. The revenue has raised in this appeal, the following substantial questions of law: 1. Whether the reasons recorded in the case of the assessment order itself would constitute the 3 satisfaction as contemplated under Section 158 BD of the Act 3. The Apex Court in the case of MANISH MAHESHWARI vs- ASSISTANT COMMISSIONER OF INCOME TAX reported in 289 ITR 341 has categorically held at paras-11 and 22 as under: 11. As the Assessing Officer has not recorded his satisfaction, which is mandatory; nor has he transferred the case to the Assessing Officer having jurisdiction over the matter, we are of the opinion that the impugned judgments of the High Court cannot be sustained, which are set aside accordingly. In view of the aforesaid law declared by the Apex Court, the substantial questions of law raised in this appeal are answered in favour of the assessee and against the revenue.


1 IN HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS 16th DAY OF SEPTEMBER, 2014 PRESENT HON BLE MR. JUSTICE N.KUMAR AND HON'BLE MRS. JUSTICE RATHNAKALA Income Tax Appeal No 755/2008 BETWEEN 1.THE COMMISSIONER OF INCOME TAX 284, PARK VIEW BUILDING, 4TH MAIN, P.J. EXTENSION, DAVANGERE-2. 2.THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, BELGAUM. APPELLANTS (BY SRI E.I. SANMATHI, ADVOCATE) AND SREENIVASA ENTERPRISES, C/O SRI S. RUDRAMUNIYAPPA, OPPOSITE TO KEB OFFICE, THYAGARAJANAGAR EXTENSION, CHITRADURGA ROAD, CHALLAKERE. RESPONDENT (BY SRI A. SHANKAR & M.LAVA, ADVOCATES) This Income Tax Appeal is filed under Section 260-A of Income Tax Act, 1961 praying to formulate 2 substantial questions of law and to allow appeal and set aside Order dated 20.12.2007 passed by ITAT, Panaji Bench in IT (SS) A. No. 03/PNJ/2005 and confirm order passed by Assessing Authority. This Income Tax Appeal coming on for Hearing this day, N. Kumar J., delivered following: JUDGMENT revenue has preferred this appeal challenging order passed by Tribunal holding that as Assessing Authority has not recorded any satisfaction in writing before initiating proceedings under Section 158BD of Income Tax Act, 1961 and very initiation of proceedings and consequential orders are all bad in law. 2. revenue has raised in this appeal, following substantial questions of law: 1. Whether reasons is to be recorded in writing before issue of notice under Section 158 BD of Act? 2. Whether reasons recorded in case of assessment order itself would constitute 3 satisfaction as contemplated under Section 158 BD of Act? 3. Apex Court in case of MANISH MAHESHWARI vs- ASSISTANT COMMISSIONER OF INCOME TAX reported in (2007) 289 ITR 341 has categorically held at paras-11 and 22 as under: 11. condition precedent for invoking block assessment is that search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. said provision would apply in case of any person in respect of whom search has been carried out under section 132A or documents or assets have been requisitioned under section 132A. Section 158BD, however, provides for taking recourse to block assessment in terms of section 158BC in respect of any other person, conditions precedent wherefor are: (i) satisfaction must 4 be recorded by Assessing Officer that any undisclosed income belongs to any person, other than person with respect to whom search was made under section 132 of Act; (ii) books of account or other documents or assets seized or requisitioned had been handed over to Assessing Officer having jurisdiction over such other person; and (iii) Assessing Officer has proceeded under section 158BC against such other person. 22. As Assessing Officer has not recorded his satisfaction, which is mandatory; nor has he transferred case to Assessing Officer having jurisdiction over matter, we are of opinion that impugned judgments of High Court cannot be sustained, which are set aside accordingly. appeals are allowed. However, in 5 facts and circumstances of case, there shall be no order as to costs. 4. In view of aforesaid law declared by Apex Court, substantial questions of law raised in this appeal are answered in favour of assessee and against revenue. Accordingly, appeal is dismissed. 5. Office is directed to show name of Sri E.I. Sanmathi as Counsel appearing for revenue and to return original records produced in this case by learned Counsel. Sd/- Judge Sd/- Judge Nsu/- Commissioner of Income-tax, Davangere / Assistant Commissioner of Income-tax Central Circle, Belgaum v. Sreenivasa Enterprise
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