Law:

Section:

Section 158BD of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income of any other person - Block period 1-4-1989 to 14-12-1999 - A search was conducted in case of GCB in course of which certain documents/papers were seized belonging to assessee - Assessing Officer in case of GCB completed assessment and forwarded assessment order pertaining to GCB to Assessing Officer of assessee for necessary action - Assessing Officer of assessee having initiated proceedings under section 158BD, passed block assessment order - On appeal, Tribunal set aside said assessment order on ground that mandatory procedure contained in section 158BD was not followed - On revenue's appeal, it was noted that no where any satisfaction was recorded by Assessing Officer of GCB stating that he was satisfied that income for relevant block period in respect of assessee had escaped assessment - It was also noted that records seized during search and seizure operation were not sent, instead Assessing Officer of GCB merely stated that those records were available with him which could be "perused" by concerned Assessing Officer during office hours - Whether on facts, impugned order of Tribunal setting aside block assessment order was to be upheld - Held, yes FACTS A search was conducted in the case of GCB. Certain documents/papers were seized during the search which allegedly related to the two assessees namely 'S' and 'R'. Since these two assessees were the third person i.e., the persons other than those whose premises were searched, after the search, statement of 'S', a chartered accountant by profession, was also recorded. The Assessing Officer in the case of GCB completed the assessment, forwarded the assessment order pertaining to GCB as well as statement of 'S' recorded after the search and seizure operation, to the Assessing Officer of assessees for necessary action. The notices to the assessees were initially issued under section 158BC of which proceedings were dropped and thereafter notices under section 158BD were issued to these two assessees directing them to file the returns for the block period 1-4-1989 to 14-12-1999 respectively. The assessment made by…

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