COMMISSIONER OF INCOME TAX Vs. CALCUTTA KNITWEARS

JUDGEMENT

(1.) IN this appeal filed under s. 260A of the Income -tax Act, 1961 (in short "the Act') at the instance of the Revenue, it has been submitted that the following substantial questions of law arise in this appeal for the consideration of this Court, from the order of the Income -tax Appellate Tribunal, Chandigarh Bench, 'B' Chandigarh (for short "the Tribunal") passed

(2.) BRIEFLY , the facts may be noticed. The assessee is a firm engaged in manufacturing hosiery goods in the name and premises of Bhatia Group of cases, namely, M/s Swastic Trading Company and M/s Kavita International Company, on 2008. The AO did not accept the position mentioned in the return and finalized assessment after making the additions of Rs. 16,05,744 on account of unexplained investment and Rs. 5,71,172 of profit element. Feeling dissatisfied, the assessee preferred appeal to the Commissioner of Income -tax (Appeals -II) (in short "the CIT(A)"). The appellate authority, vide order dt. accepted the submissions made on behalf of the assessee and deleted the additions made by the AO.

(3.) THE Revenue thereafter preferred appeal before the Tribunal whereby the assessee also, filed cross -objections. The Revenue as having been rendered infructuous on view of the fact that assessment stood cancelled after the cross - objections were allowed. While doing so, insofar as the validity of issuance of notice under s. 158BD is concerned, Tribunal in unequivocal terms observed that realistic position in the case of the present assessee was pari material to the one of the case of Mridula, a Proprietor of M/s Dhruv Fabrics, Ludhiana and, therefore, for the instant case as well the same view would prevail. As regards the second limb, the time -limit for recording satisfaction and initiation of action in consequence thereof as well, the Tribunal again took cognizance of the fact that in the case of Mridula also, the recording of such satisfaction beyond the period of limitation provided under s. 158BE(1) rendered the issuance of notice under s. 158BD as belated and invalid. The Tribunal, thus, followed the ratio of the judgment in that case and assumption of jurisdiction by the AO to make impugned block assessment as invalid and void. To put in plain words, the assessment framed in the case was, thus, cancelled as lacking in jurisdiction. Hence, this appeal.