- (1.) WE have heard Shri Bharat Ji Agarwal, Senior Counsel assisted by Shri Shambhu Chopra for Commissioner of Income Tax, Allahabad and the Director of Income Tax (Investigation), Income Tax Office, Kanpur. Shri S.K. Garg assisted by Shri Ashish Bansal appears for the respondent.
(2.) THE Income Tax Appeal No. 174 of 2000 under Section 260-A of Income Tax Act, 1961 arises out of an order dated 8.12.1999 passed by the Income Tax Appellate Tribunal, Allahabad in ITA No. 1390 (Alld) of 1997 for the block period upto 14.9.1996 raising following substantial questions of law:- "(1) Whether the Income Tax Appellate Tribunal has jurisdiction to decide the validity of the search under Section 132 of Income Tax Act, 1961 in an appeal arising out of the block assessment order passed under Section 158-BC of the Act by Assessing Officer on 30.9.1997 after obtaining approval of the Commissioner of Income Tax? (2)Whether Income Tax Appellate Tribunal hearing the appeal under Section 253 (1B) of the Act can direct the department to produce the 'satisfaction note' to examine the satisfaction of the Competent Authority under the Act authorising the search?. The Writ Petition No. 223 of 2000 has been filed by Director of Income Tax (Investigation), Kanpur with prayers to quash the order dated 29.11.1999 of Income Tax Appellate Tribunal under Section 255 (4) and the order dated 14.2.2000 passed by the Judicial Member (Third Member) of the Tribunal to which the matter was referred on account of difference of opinion between two Members, on the question, that the Tribunal can, while hearing the appeal, consider the validity of the search operations. The revenue has also challenged the opinion of the third Member of the Income Tax Appellate Tribunal under Section 255 (4) of the Act which constituted majority opinion, holding that the Assessing Officer can call for and scrutinize the validity of the 'satisfaction note', when called upon to do so by assessee, and which can also be scrutinized by Appellate Authority including the Tribunal. The revenue has also prayed for directions to quash the directions of Income Tax Appellate Tribunal dated 14.2.2000 to produce all relevant records relating to and upto the date of issue of search warrant by the concerned authority.
(3.) BRIEFLY stated the facts giving rise to Income Tax Appeal and the Writ Petition by the revenue, are that a search and seizure operation was carried out in September, 1996 under Section 132 (1) in the case of Dr. A.K. Bansal, who is the proprietor of 'Jeevan Jyoti Hospital'. Similar operations were carried out in the premises of his wife Dr. (Smt.) Bandana Bansal including residential as well as Nursing home. A notice was issued under Section 158-BC of the Act on 24.4.1997 by the Assistant Commissioner of Income Tax, Circle Allahabad requiring the assessee to prepare a true and correct return of his total income including the undisclosed income in respect of which he is the individual/HUF/firm/company/AOP/body of individuals/local authority for the block period mentioned in Section 158 B(a) of the Act.;