By K. B. Bhujle | Advocate
New Page 1
Reported :
43 Block assessment :
Proceedings u/s.158BD of Income-tax Act, 1961 : Proceedings u/s. 158BD initiated
on the basis of statement recorded during search and not on any books of account
or asset : Proceedings u/s.158BD not legal.
[CIT v. Late Raj Pal
Bhatia, 237 CTR 1 (Del.)]
Search was carried out at
the premises of one C. No books of account or other documents or assets pertaining to assessee were found or seized during the search. The
Assessing Officer initiated proceedings u/s.158BD of the Income-tax Act, 1961
against the assessee on the basis of the statement of C recorded during the said
search operation. The Tribunal held that the initiation of the proceedings
u/s.158BD against the assessee was illegal.
On appeal by the Revenue,
the Delhi High Court upheld the decision of the Tribunal and held
as under :
“(i) In the present
case, admittedly, during the search carried out at the premises of C, no
books of accounts or other documents or other assets pertaining to the
assesses herein were found or seized. The entire foundation of the block
assessment u/s.158BD, insofar as assesses are concerned, was the statement
of C recorded during the course of search. Admittedly, statement of C is
neither ‘books of accounts’ nor ‘assets’. Statement was not the document
which was found during search. In fact this was the document which came to
be created during the search as the statement was recorded at the time of
search. Therefore, it cannot be said that the statement was ‘seized’ during
the search, and thus, would not qualify the expression ‘document’ having
been seized during the search. In such a scenario, proper course of action
was reassessment u/s.147.
(ii) The Tribunal has
deleted the addition taking a view that the very provision of S. 158BD
invoked by the Assessing Officer and initiating block assessment proceedings
itself was illegal. Therefore, no substantial question of law arises and
accordingly these appeals are dismissed in limine.”
