Income Tax Act, 1961 – ss.158BD – Undisclosed income belonging to any person other than the searched person – Jurisdiction of assessing officer under s.158BD – Held: Notice under s.158BD can be issued to a person with respect to whom search was not conducted but undisclosed income was found as belonging to such person from the material seized from the residence or business premises of the person with respect to whom search was made under s.132 – s.158BD speaks of the condition that “where the Assessing Officer is satisfied that any undisclosed income belongs to any person other than the searched person”, which means that the Assessing Officer must have to be satisfied that any undisclosed income belongs to any person other than the searched person – In the instant case, it is not in dispute that the Assessing Officer, who is assessing the Firm as well as the Appellant, is the same person – In other words, the same Assessing Officer having jurisdiction over the searched person can proceed against the present Appellant – Therefore, the Assessing Officer had jurisdiction to proceed against the present Appellant to make a block assessment under Chapter XIV-B of the IT Act, as he was prima facie satisfied that any undisclosed income belongs to the appellant.
Income Tax Act, 1961 – ss.158BC – Jurisdiction of Assessing Officer under s.158BC – Held: Before issuing the notice under s.158BC against the searched person, no satisfaction that undisclosed income belongs to the searched person is necessary as s.158BC speaks of a condition that where any search had been conducted under s.132 or books of accounts or other documents or assets or requisition under s.132A in case of any person, then, the Assessing Officer shall serve notice to such person requiring him to furnish within specified time a return in the prescribed form. Dismissing the appeal, the Court
HELD: 1. Notice under Section 158BD can be issued to a person with respect to whom search was not conducted but undisclosed income was found as belonging to such person from the material seized from the residence or business premises of the person with respect to whom search was made under Section
132. There must be prima facie satisfaction on the part of the Assessing Officer on the basis of searched books of accounts or other documents or assets that any undisclosed income belongs to any person other than the searched person. The jurisdiction under Section 158BD is based on the satisfaction of the Assessing Officer that:- (a) there is undisclosed income; (b) such undisclosed income does not belong to the person with respect to whom action under Section 132 was taken and; (c) such undisclosed income belongs to some other person. Therefore, mere disclosure made by the assessee before the authority cannot be the basis for reaching a satisfaction that any undisclosed income belongs to him unless the seized books of accounts or other documents or assets are perused, examined or verified by the concerned Assessing Officer. In the instant case, only after being satisfied that the appellant fell within the ambit of Section 158BD, a notice was issued by the Assessing Officer. [Paras 8, 9][343-F-G; 344D-F]
2. A conjoint reading of Sections 158BC and 158BD made it clear that no satisfaction to the effect that undisclosed income belongs to the searched person is necessary before issuing the notice under Section 158BC against the searched person as Section 158BC speaks of a condition that where any search had been conducted under Section 132 or books of accounts or other documents or assets or requisition under Section 132A in case of any person, then, the Assessing Officer shall serve notice to such person requiring him to furnish within specified time a return in the prescribed form. [Para 10][344-F-G]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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