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March 2015

Block assessment- Assessment of third person: Section 158BD- Limitation- Notice to third person to be issued immediately after completion of assessment of persons in respect of whom search was conducted- Notice issued to third person more than a year after completion of assessments of persons in respect of whom search was conducted- Notice not valid-

By K. B. Bhujle Advocate
Reading Time 1 mins
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CIT vs. Bharat Bhushan Jain; 370 ITR 695 (Del):

The respondent assessee is a third party who was issued notice u/s. 158BD, pursuant to search proceedings in case of M group. The satisfaction note was record almost a year after the assessment proceedings in the case of M group ware completed. The Tribunal held that notice u/s. 158BD was not valid.

On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under:

“i) Revenue has to be vigilant in issuing notice to the third party u/s. 158BD, immediately after completion of assessment of the person in respect of whom search was conducted.

ii) Notice was not issued in conformity with the requirements of section 158BD and were unduly delayed. Tax appeal is dismissed.”

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