High Court Of Madhya Pradesh
CIT vs. Smt. Maya Chotrani
Section 158BB, 158BD
Block period 1987-88 to 1997-98
Arun Mishra & S.C. Sinho, JJ.
MAIT No. 14 of 2001
18th August, 2006
Counsel Appeared :
Sanjay Lal, for the Petitioner : A.P. Shrivastava, for the Respondent
JUDGMENT
Arun Mishra, J. :
This appeal has been preferred by the CIT, Bhopal. It is not in dispute that search and seizure operations were carried out in the month of October, 1996. During the course of search and seizure operations at the various residential premises, certain incriminating documents pertaining to Smt. Maya Chotrani were seized. Action under s. 158BC of the IT Act, 1961 (for short “the Act”) was initiated in her case. It is also not disputed that Smt. Maya Chotrani is NRI resident of Dubai. No search was conducted at her premises.
2. Assessment under s. 158BD r/w s. 143(3) of the Act for the block period 1987-88 to 1997-98 was completed on 30th Nov., 1998 determining total undisclosed income for the block period at Rs. 5,06,380. An order (Annex. A) was passed by the office of the Asstt. CIT (Inv.) Circle-I, Bhopal. Assessee preferred an appeal before Tribunal, Indore Bench. The learned Tribunal as per Order (Annex. B), dt. 23rd March, 2001 set aside the order on the ground that AO/Asstt. CIT (Inv.) Circle-I, Bhopal had no jurisdiction, assessment should have been framed by regular AO having jurisdiction under s. 158BD of the Act. It was directed that the relevant material be handed over to the concerned AO who has jurisdiction over such other person. Aggrieved by the order passed by Tribunal, this appeal has been preferred. It has been admitted on the following substantial questions of law as per order dt. 29th Oct., 2001 :
“(i) Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was justified in law in annulling the assessment order by observing that in the instant case, the AO did not have valid jurisdiction over the assessee whereas the case of the assessee being connected with the case of Shri Purushottam Khatri where search and seizure operation was carried out as per warrant of authorization under s. 132 of the Act and in view of the Notification No. 1 NOTEN/BPL/1995-96 dt. 28th April, 1995, the jurisdiction over the assessee vested with Asstt. CIT (Inv.) Circle-1, Bhopal and the assessment in the assessee’s case, completed under s. 158BD r/w s. 143(3) of the IT Act by the Asstt. CIT (Inv.) Circle-I, Bhopal was valid, legal and within jurisdiction ?
(ii) Whether, on the facts and in the circumstances of the case, and in view of the provisions of s. 158BB(1) and 158BB(1)(c) of the IT Act, the Hon’ble Tribunal was justified in law in holding that if the total income in those assessment years, in which the return was not filed before the search was conducted is below the taxable limit after claiming the deduction under s. 80L of the Act, the income of that year shall not be considered as part of the undisclosed income and whether such decisions of the Tribunal is not contrary to the scheme of IT Act ?
(iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that if the total income in those assessment years, in which the return was not filed before the search was conducted is below the taxable limit after claiming the deduction under s. 80L of the Act, the income of that year shall not be considered as part of the undisclosed income even when s. 158BB(1)(c) provided that for computation of total undisclosed income of the block period. Nil credit for income is to be given for those assessment years where the due date for filing return of income has expired but no return has been filed ?”
Substantial question of law Nos. (ii) and (iii) are covered by judgment of this Court in MAIT No. 7 of 2001 (CIT vs. Vimla Khatri) decided on 25th Jan., 2006 [reported at (2007) 208 CTR (MP) 296—Ed.] is not disputed at Bar. Questions have been decided against the Revenue, consequently for the reasons stated in the judgment dt. 25th Jan., 2006 passed in MAIT No. 7 of 2001. The substantial questions of law Nos. (ii) and (iii) are answered against the appellant.
Coming to the substantial question of law No. (i), in view of the undisputed fact that search was not made in the premises of respondent/assessee, in such a situation in case of undisclosed income of any other person, s. 158BD of the Act provides thus : “158BD. Undisclosed income of any other person.—Where the AO is satisfied that any undisclosed income belongs to any 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, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO shall proceed against such other person and the provisions of this chapter shall apply accordingly.” Respondent-assessee was other person as contemplated under s. 158BD of the Act. She was clearly a person other than the person with respect to whom search was made under s. 132 of the Act which is not disputed on facts. Thus, as per the aforesaid s. 158BD, the relevant material ought to have been handed over to the AO having jurisdiction over such other person and that AO shall proceed against such other person as provided under s. 158BD of the Act. In view of the facts which are not disputed clearly s. 158BD of the Act is attracted, thus, Asstt. CIT (Inv.) Circle-I, Bhopal was not having jurisdiction; thus, the order passed by the Tribunal is found to be correct. Direction issued to hand over the relevant material to the AO having jurisdiction over such other person is found to be proper, thus, no case for interference in this appeal is made out. Substantial question of law No. (i) is also answered against appellant.
Resultantly, the appeal is hereby dismissed. No order as to costs.
[Citation : 288 ITR 175]
