$ 51 & 54 * IN HIGH COURT OF DELHI AT NEW DELHI Decided on: 8th January, 2015 + ITA 996/2009 COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr.Rohit Madan, Mr.Ruchir Bhatia and Mr.Akash Vajpai, Advs. versus ALKA BHANDARI ..... Respondent Through: Mr.Pradeep Aggarwal and Mr.Anurag Jain, Advs. + ITA 1163/2009 COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr.Rohit Madan, Mr.Ruchir Bhatia and Mr.Akash Vajpai, Advs. versus ASHOK KUMAR & SONS HUF ..... Respondent Through: Mr.Pradeep Aggarwal and Mr.Anurag Jain, Advs. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K.GAUBA MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. present appeals have to be decided pursuant to remittal and directions of Supreme Court in its judgment reported as CIT vs. Calcutta ITA 996 & 1163/2009 Page 1 Knitwears, Ludhina 362 ITR 673 (SC). Court in its judgment had directed as follows: 44. In result, we hold that for purpose of Section 158BD of Act satisfaction note is sine qua non and must be prepared by assessing officer before he transmits records to other assessing officer who has jurisdiction over such other person. satisfaction note could be prepared at either of following stages: (a) at time of or along with initiation of proceedings against searched person under Section 158BC of Act; (b) along with assessment proceedings under Section 158BC of Act; and (c) immediately after assessment proceedings are completed under Section 158BC of Act of searched person 45. We are informed by Shri Santosh Krishan, who is appearing in seven of appeals that assessing officer had not recorded satisfaction note as required under Section 158BD of Act, therefore, Tribunal and High Court were justified in setting aside orders of assessment and orders passed by first appellate authority. We do not intend to examine aforesaid contention canvassed by learned counsel since we are remanding matters to High Court for consideration of individual cases herein in light of observations made by us on scope and possible interpretation of Section 158BD of Act. 2. In present case, ITAT originally had accepted contentions of assessee that satisfaction note recorded, in their case was delayed and also had, inter alia, recorded that satisfaction note did not accord with requirements of Section 158 BD as per judgment of Supreme Court reported as CIT vs. Manish Maheshwari (2007) 289 ITR 341 (SC). In both cases facts are common and are discussed hereinafter. ITA 996 & 1163/2009 Page 2 3. search of one Sh. Manoj Aggarwal was conducted on 03.08.2000, thereafter notice was issued to him. His Assessing Officer considering block returns submitted by searched person and material supplied and forthcoming during search proceedings completed assessment by order dated 29.08.2000. Based upon materials obtained, Assessing Officer of searched person recorded satisfaction note on 06.03.2003 in case of both assessees in present appeals, taking view that additional income had escaped assessment on basis of this satisfaction note, which was forwarded to Assessing Officer of present assesses. latter issued notice on 18.06.2003 to respondent/assessee. After considering their submissions A.O. completed assessment on 27.06.2005 in both cases. In case of assessee in ITA No. 996/2009 addition of 36,38,119/- and further addition of 72762/- was made and in case of assessee in ITA No.1163/2009 addition of 34,73,000/- and further sum of 73727/- and further addition of 69535/- was ordered. Both these were subject matter of appeals to CIT which held in favour of assessee. revenue appeals before ITAT were dismissed. present appeals were originally disposed of in common judgment and order of this Court, reported as CIT vs. Radhey Shyam Bansal 2011 337 ITR 217 (DLI). That judgment was apparently set aside to extent that Supreme Court wants examination of limited question as to whether notices were issued within period mentioned in para 44 of Calcutta Knitwears (supra). It is evident from narration of facts discussed above that satisfaction note was recorded more than six months after assessment of searched person; assessment was completed on 29.08.2002 and satisfaction note was ITA 996 & 1163/2009 Page 3 recorded 06.03.2003. This Court recollects that extended period within which Revenue has been permitted to issue notice under Section 158BD in such cases is subject to condition of it being immediate or contemporaneous to time when assessment of searched persons is completed. 4. Since limitation period for completion of block assessment, or in case of searched persons as well as third party who is issued notice is two years, it is reasonable to assume that revenue can be given latitude of six months which can be considered as immediate or immediately proximate in point of time. In present case, six month period expired on 28.02.2003; satisfaction note was recorded on 06.03.2003 and notice was issued more than 3 months after lapse of date i.e. 18.06.2003. 5. In these circumstances this Court holds that notices did not accord with Supreme Court s declaration of law and was unduly delayed. They cannot be considered as having been recorded immediately after completion of assessment proceedings under Section 158BC Income Tax Act. appeals are accordingly dismissed. S. RAVINDRA BHAT (JUDGE) R.K.GAUBA (JUDGE) JANUARY 08, 2015/mr ITA 996 & 1163/2009 Page 4 Commissioner of Income Tax v. Alka Bhandari