Case Law Details
Brief Facts of the case:
A search was conducted in the premises of Mr Manoj Agarwal on 03-08-2000 and documents were seized.The present assesses were issued a notice on 22.03.2004 alleging that the same has been issued on account of opinion formation in terms of sec 158BB of Manoj Aggarwal’s assessing Officer. The opinion was read as under:
“1) Various diaries have been seized from the possession of Sh. Manoj Aggarwal which establish that Radhey Shyam Bansal is a mediator for providing accommodation book entries by Sh. Manoj Aggarwal. The quantum of transaction done by him as per these documents is given in Annexure-A. Photocopies of these paper are enclosed in Annexure-B.
2) There are evidences of cash having been received by Mr. Manoj Aggarwal from Radhey Shyam Bansal.The summary of the amounts so received as per various seized documents is given in Annexure-C. The photocopies of these documents are provided as per Annexure-D.”
This case reaches ITAT who by taking the reference of the judgement Manish Maheshwari V.ACIT 2007 289ITR 341(SC) announced that the requirement of sec158BB has not complied with. The revenue challenged the order of ITAT in ITA582/2008.
The revenue also argued that the opinion as required u/s 158BB was recorded on the date of assessment order of Mr Manoj Aggarwal i.e on 29-08-2002 but the respondent argued that the opinion has been made after the date of assessment order on the basis of the fact that if the opinion has been made on the date of assessment order then there is no need to record again the opinion on 26-06-2002 and also the contents and language of the opinion reveals that the same has been made after the date of assessment order .So opinion is antedated
Also the main condition of forming an opinion is “satisfaction” which was missing from the opinion ,there were just facts in the opinion not even single evidence was produced that supports the facts mentioned in the opinion .
With this the appeal of the revenue is dismissed.
Contention of the Assessee:
Assessee is of the opinion that the opinion which the assessing officer has given u/s 158BB is antedated because if the original opinion has been given with in the time limit mentioned under the respective section then the AO should not have given another opinion on 26-11-2002.
Assessee also argued that if the opinion has been made on 29-08-2002 then the record pertaining the present assessee should have been transferred to the AO of the present assessee who was different officer at that time than the officer of searched person.
Assessee also raises question on the “satisfaction” of the note which is must u/s 158BD,because ,firstly,in the note is mentioned that there were book entries between Mr Manoj aggarwal and the present assessee,but there were no evidence that the present assessee has taken some money in the form of commission or in any other way. Secondly there was in the note that Mr manoj aggarwal had taken cash from present assessee but no document was produced before ITAT.
So the required conditions of time limit and opinion formation has not been complied with.
Contention of the Revenue:
The revenue’s contention on that occasion was that the actual satisfaction had been recorded on the file by the assessing officer of Manoj Aggarwal on 29.8.2002 i.e on the date of assessment order.Revenue also contended that the opinion can be made even after the completion of assessment as in the case of tribunal in SMC Share Brokers Ltd.(supra) in.Revenue is also of the opinion that though the note has not been produced before ITAT but the same should be treated as a part of evidence on record and dealt with it as per the rule of code of civil procedure .
Held by High Court :
Hon’ble High Court is of the opinion that the note written by the AO lacks satisfaction as required u/s 158BD.In other words there is lack of the satisfaction of the AO that there is material that the respondent assessee had undisclosed income. AO has just written the facts that there was book entries between Mr Manoj Aggarwal and the respondent and also Mr Manoj Aggarwal had accepted cash from the respondent but there was not any evidence which supports the allegations of the Assessing officer. So the appellant /revenue has not discharged the onus that there was valid satisfaction as required under Section 158BD. Therefore, the irresistible conclusion is the pre-requisite of “satisfaction” as engrafted under Section 158B for the purpose of initiation of block assessment proceeding is non-existent or absent.
So the appeal is dismissed.
