Proceedings u/s. 158BD are void if referral AO fails to record his satisfaction

CIT Vs Radhey Shyam Bansal and Others (Delhi HC) In the instant case, the referring AO has not recorded satisfaction that any undisclosed income belongs to the assessee. In the letter/communication dated 15 July 2003 by the referring AO to the AO of the assessee, there is no allegation that the assessee was provided with accommodation book entries or the amounts belong to the respondent- assessee. Book entries were provided to third parties. Though the referring AO wrote a letter to the assessee’s AO informing him that the assessee was providing bogus accommodation book entries and the quantum of transactions was given as per the Annexures, the Annexures were missing from the file. Thus, the appellant-revenue has not discharged the onus that there was valid satisfaction as required under s 158 BD. Therefore, the irresistible conclusion is the prerequisite of “satisfaction” as en grafted under s 158B for the purpose of the initiation of the block assessment proceeding is non-existent or absent.

ITA Nos. 582, 398, 578, 583/2008 and 53, 102, 287, 355, 402, 477, 483, 611, 670, 711, 822, 857, 996, 1064, 1075, 1098, 1119, 1163, 1279, 1318, 1329, 1373/2009, 149, 196, 154, 655, 748, 279, 1145, 1420, 1421, 550, 554, 1313, 1326, 777, 75, 198, 237, 374/2010, 212/2011

Decided on: 30 May 2011

IN THE HIGH COURT OF DELHI AT NEW DELHI