Case: Manish Maheshwari Vs. Asstt.Commnr.Of Income Tax

been searched or whose documents and other assets had been requisitioned under Section 132A of the Act. 13. A taxing statute, as is well-known, must be construed strictly. In Sneh Enterprises v. Commissioner of Customs, New Delhi [(2006) 7 SCC 714] , it was held: "While dealing with a taxing provision, the principle of Strict Interpretation should be applied. The Court shall not interpret the statutory provision in such a manner which would create an additional fiscal burden on a person. It would never be done by invoking the provisions of another Act, which are not attracted. It is also trite that while two interpretations are possible, the Court ordinarily would interpret the provisions in favour of a tax-payer and against the Revenue." 14. Yet again in J. Srinivasa Rao v. Govt. of A.P. & Another [2006 (13) SCALE 27 ], it was held: "In a case of doubt or dispute, it is well-settled, construction has to be made in favour of the taxpayer and against the Revenue." 15. In M/s. Ispat Industries Ltd. v. Commissioner of Customs, Mumbai [JT 2006 (12) SC 379 : 2006 (9) SCALE 652 ], this Court opined: "In our opinion if there are two possible interpretations of a rule, one which subserves the object of a provision in the parent statute and the other which does not, we have to adopt the former, because adopting the latter will make the rule ultra vires the Act." 16. Law in this regard is clear and explicit. The only question which arises for our consideration is as to whether the notice dated 06.02.1996 satisfies the requirements of Section 158BD of the Act. The said notice does not record any satisfaction on the part of the Assessing Officer. Documents and other assets recovered during search had not been handed over to the Assessing Officer having jurisdiction in the matter.17. No proceeding under Section 158BC had been initiated. There is, thus, a patent non-application of mind. A prescribed form had been utilized. Even the status of the assessee had not been specified. It had only been mentioned that the search was conducted in the month of November 1995. No other information had been furnished. The provisions contained in Chapter XIVB are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, it would bear repetition to state, only if a raid is conducted. When the provisions are attracted, legal presumptions are raised against the assessee. The burden shifts on the assessee. Audited accounts for a period of ten years may have to be reopened. 18. A large number of decisions of various High Courts have been cited at the bar. We would, at the outset, refer to a decision of the Gujarat High Court in Khandubhai Vasanji Desai and Others v. Deputy Commissioner of Income-Tax and Another [(1999) 236 ITR 73]. Therein, it was clearly held: "This provision indicates that where the Assessing Officer who is seized of the matter and has jurisdiction over the person other than the person with respect to whom search was made under s. 132 or whose books of account or other documents or any assets were requisitioned under s. 132A, he shall proceed against such other person as per the provisions of Chapter XIV-B which would mean that on such satisfaction being reached that any undisclosed income belongs to such other person, he must proceed to serve a notice to such other person as per the provisions of s. 158BC of the Act. If the Assessing Officer who is seized of the matter against the raided person reaches such satisfaction that any undisclosed income belongs to such other person over whom he has no jurisdiction, then, in that event, he has to transmit the material to the Assessing Officer having jurisdiction over such other person and in such cases the Assessing Officer who has jurisdiction will proceed against such other person by issuing the requisite notice contemplated by S.158BC of the Act." 19. Similar view has been taken by the Gujarat High Court in Rushil Industries Ltd. v. Harsh Prakash [(2001) 251 ITR 608], Priya Blue Industries P. Ltd. v. Joint Commissioner of Income-Tax [(2001) 251 ITR 615], Premjibhai and Sons v. Joint Commissioner of Income-Tax [(2001) 251 ITR 625], and by Kerala High Court in Commissioner of Income-Tax v. Deep Arts [(2005) 274 ITR 571], Commissioner of Income-Tax v. Don Bosco Card Centre [(2006) 205 CTR 500] and by Madhya Pradesh High Court in Commissioner of Income-Tax v. Smt. Maya Chotrani [(2007) 288 ITR 175] . 20. We may, however, notice that Mr. A.K. Chitale, relied upon a decision of the Delhi High Court in Commissioner of Income Tax v. Pushpa Rani [(2005) 193 CIR (Del) 256] wherein a Division Bench of the said Court held: "The Tribunal on the material placed before it, arrived at a conclusion that there were no search warrants in the name of the assessees and hence it accepted the contention of the learned counsel that the proceedings initiated under s. 158BC in the cases of the assesses were ab initio void and without jurisdiction. The learned counsel for the Department was unable to furnish any clarification and stated before the Tribunal that the facts stated by the assesses regarding non-issuance of the search warrant in the case of the two ladies were correct. It is in view of this that the Tribunal has held that unless a search warrant is issued, the Assessing Officer cannot invoke the provisions of s. 158BC for initiation of block assessment proceedings under Chapter XIV-B. However, so far as the bank locker is concerned, it is submitted that the officer was armed with the search warrant and, therefore, whatever the property was found, namely, jewellery, money and bonds, etc., the assesses ought to have assessed and the Tribunal ought not to have interfered with the order made by the CIT (A)." 21. We are of the opinion that the said decision has no application in the instant case.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]12. The conditions precedent for invoking the provisions of Section 158BD, thus, are required to be satisfied before the provisions of the said chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under Section 132A of the Act.Law in this regard is clear and explicit. The only question which arises for our consideration is as to whether the notice dated 06.02.1996 satisfies the requirements of Section 158BD of the Act. The said notice does not record any satisfaction on the part of the Assessing Officer. Documents and other assets recovered during search had not been handed over to the Assessing Officer having jurisdiction in the matter.17. No proceeding under Section 158BC had been initiated. There is, thus, a patentof mind. A prescribed form had been utilized. Even the status of the assessee had not been specified. It had only been mentioned that the search was conducted in the month of November 1995. No other information had been furnished. The provisions contained in Chapter XIVB are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, it would bear repetition to state, only if a raid is conducted. When the provisions are attracted, legal presumptions are raised against the assessee. The burden shifts on the assessee. Audited accounts for a period of ten years may have to be reopened.