COMMISSIONER OF INCOME TAX Vs. SUNIL BHALA

JUDGEMENT

(1.) A search was conducted in the case of Mr. S.K. Jain and M/s GCB Capital Finance P. Ltd. (referred to as "M/s GCB Capital") on 14th December, 1999. Certain documents/papers were seized during the search which allegedly related to the two assessees herein namely Mr. Sunil Bhala and M/s RajGul Credit Investment Pvt. Ltd (referred to as "M/s RajGul Credit"). Since, these two assessees were the third person i.e. the persons other than those whose premises were searched, after the search, statement of Mr. Sunil Bhala, a Chartered Accountant by profession, was also recorded. The Assessing Officer in the case of M/s GCB Capital completed the assessment, forwarded the assessment order pertaining to M/s GCB Capital as well as statement of Mr. Sunil Bhala recorded after the search and seizure operation, to the Assessing Officer of Sunil Bhala and M/s RajGul Credit for necessary action. The exact communication addressed by the Assessing Officer of M/s GCB Capital to the Assessing Officer of these two assesses reads as under:-

(2.) THE notices to these assessees were initially issued under Section 158 BC of the Act which proceedings were dropped and thereafter notices under Section 158 BD of the Act were issued to these two assesses directing them to file the return for the block period 1.4.1989 to 14.12.1999 respectively. The assessment made by the Assessing Officer pursuant to the said notices has been set aside by the Income Tax Appellate Tribunal on the grounds that the mandatory procedure contained in Section 158 BD of the Act was not followed, inasmuch as, (i) there was no satisfaction recorded by the Assessing Officer of M/s GCB Capital while forwarding the case to the Assessing Officer of these two assesses, and (ii) he did not, also, forward the necessary records seized during the search and seizure operation.

(3.) IT is clear from the bare perusal of the aforesaid provision that the satisfaction of the Assessing Officer has to be recorded. It is also clear from the aforesaid provision that while sending the case to the concerned Assessing Officer, who is the Assessing Officer of the person other than the person whose premises are searched, has to hand over the records of the case. We have already reproduced the exact wording of the letter by which the case was forwarded to the Assessing Officer of these respondent. Nowhere any satisfaction is recorded by the assessing Officer of M/s GCB Capital stating that he was satisfied that the income for this block period in respect of assessee had escaped assessment. Further, it is also clear that the records were also not sent instead he merely stated that these records were available with the forwarding Assessing Officer which could be "perused" by the concerned Assessing Officer during the office hours.